Document:

<PAGE>
                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

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                              M.D.C. HOLDINGS, INC.

                       Senior Subordinated Debt Securities

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

                                    INDENTURE

                           Dated as of October 6, 2004

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

                     U.S. Bank National Association, Trustee

================================================================================

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
                                                                                      Indenture
TIA Section                                                                           Section
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<S>                                                                                   <C>
310(a)(1).......................................................................      7.10
   (a)(2).......................................................................      7.10
   (a)(3).......................................................................      N.A.
   (a)(4).......................................................................      N.A.
   (b)..........................................................................      7.08; 7.10; 10.02
311(a)..........................................................................      7.11
   (b)..........................................................................      7.11
   (c)..........................................................................      N.A.
312(a)..........................................................................      2.05
   (b)..........................................................................      10.03
   (c)..........................................................................      10.03
313(a)..........................................................................      7.06
   (b)(1).......................................................................      N.A.
   (b)(2).......................................................................      7.06
   (c)..........................................................................      10.02
   (d)..........................................................................      7.06
314(a)..........................................................................      7.06; 10.02
   (b)..........................................................................      N.A.
   (c)(1).......................................................................      10.04
   (c)(2).......................................................................      10.04
   (c)(3).......................................................................      N.A.
   (d)..........................................................................      N.A.
   (e)..........................................................................      10.05
   (f)..........................................................................      N.A.
315(a)..........................................................................      7.01(b)
   (b)..........................................................................      7.05; 10.02
   (c)..........................................................................      7.01(a)
   (d)..........................................................................      7.01(c)
   (e)..........................................................................      6.11
316(a)(last sentence)...........................................................      2.12
   (a)(1)(A)....................................................................      6.05
   (a)(1)(B)....................................................................      6.04
   (a)(2).......................................................................      N.A.
   (b)..........................................................................      6.07
   (c)..........................................................................      9.04
317(a)(1).......................................................................      6.08
   (a)(2).......................................................................      6.09
   (b)..........................................................................      2.04
318(a)..........................................................................      10.01
</TABLE>

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
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                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.      Definitions......................................................    1
SECTION 1.02.      Other Definitions................................................    4
SECTION 1.03.      Incorporation by Reference of Trust Indenture Act................    4
SECTION 1.04.      Rules of Construction............................................    5

                                   ARTICLE TWO

                                 THE SECURITIES

SECTION 2.01.      Form and Dating..................................................    5
SECTION 2.02.      Execution and Authentication.....................................    7
SECTION 2.03.      Registrar and Paying Agent.......................................    7
SECTION 2.04.      Paying Agent to Hold Money in Trust..............................    7
SECTION 2.05.      Securityholder Lists.............................................    8
SECTION 2.06.      Transfer and Exchange............................................    8
SECTION 2.07.      Replacement Securities...........................................    8
SECTION 2.08.      Outstanding Securities...........................................    9
SECTION 2.09.      Temporary Securities.............................................    9
SECTION 2.10.      Cancellation.....................................................    9
SECTION 2.11.      Defaulted Interest...............................................    9
SECTION 2.12.      Treasury Securities..............................................   10
SECTION 2.13.      CUSIP Numbers....................................................   10
SECTION 2.14.      Deposit of Moneys................................................   10
SECTION 2.15.      Book-Entry Provisions for Global Security........................   10

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.      Notices to Trustee...............................................   11
SECTION 3.02.      Selection of Securities to be Redeemed...........................   12
SECTION 3.03.      Notice of Redemption.............................................   12
SECTION 3.04.      Effect of Notice of Redemption...................................   13
SECTION 3.05.      Deposit of Redemption Price......................................   13
SECTION 3.06.      Securities Redeemed in Part......................................   13
</TABLE>

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                                  ARTICLE FOUR

                                   COVENANTS

SECTION 4.01.      Payment of Securities............................................   13
SECTION 4.02.      Maintenance of Office or Agency..................................   13
SECTION 4.03.      Compliance Certificate...........................................   14
SECTION 4.04.      Payment of Taxes; Maintenance of Corporate Existence;
                       Maintenance of Properties....................................   14

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

SECTION 5.01.      When Company May Merge, etc......................................   15

                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES

SECTION 6.01.      Events of Default................................................   15
SECTION 6.02.      Acceleration.....................................................   17
SECTION 6.03.      Other Remedies...................................................   18
SECTION 6.04.      Waiver of Existing Defaults......................................   18
SECTION 6.05.      Control by Majority..............................................   18
SECTION 6.06.      Limitation on Suits..............................................   18
SECTION 6.07.      Rights of Holders to Receive Payment.............................   19
SECTION 6.08.      Collection Suit by Trustee.......................................   19
SECTION 6.09.      Trustee May File Proofs of Claim.................................   19
SECTION 6.10.      Priorities.......................................................   19
SECTION 6.11.      Undertaking for Costs............................................   20

                                  ARTICLE SEVEN

                                     TRUSTEE

SECTION 7.01.      Duties of Trustee................................................   20
SECTION 7.02.      Rights of Trustee................................................   21
SECTION 7.03.      Individual Rights of Trustee.....................................   22
SECTION 7.04.      Trustee's Disclaimer.............................................   22
SECTION 7.05.      Notice of Defaults...............................................   22
SECTION 7.06.      Reports by Trustee to Holders....................................   23
SECTION 7.07.      Compensation and Indemnity.......................................   23
SECTION 7.08.      Replacement of Trustee...........................................   23
</TABLE>

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<S>                                                                                   <C>
SECTION 7.09.      Successor Trustee by Merger, etc.................................   24
SECTION 7.10.      Eligibility; Disqualification....................................   24
SECTION 7.11.      Preferential Collection of Claims Against Company................   24

                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE

SECTION 8.01.      Defeasance Upon Deposit of Moneys
                        or U.S. Government Obligations..............................   25
SECTION 8.02.      Survival of the Company's Obligations............................   27
SECTION 8.03.      Application of Trust Money.......................................   28
SECTION 8.04.      Repayment to the Company.........................................   28
SECTION 8.05.      Reinstatement....................................................   28

                                  ARTICLE NINE

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 9.01.      Without Consent of Holders.......................................   29
SECTION 9.02.      With Consent of Holders..........................................   29
SECTION 9.03.      Compliance with Trust Indenture Act..............................   30
SECTION 9.04.      Revocation and Effect of Consents................................   30
SECTION 9.05.      Notation on or Exchange of Securities............................   31
SECTION 9.06.      Trustee to Sign Amendments, etc..................................   31

                                   ARTICLE TEN

                                  MISCELLANEOUS

SECTION 10.01.     Trust Indenture Act Controls.....................................   31
SECTION 10.02.     Notices..........................................................   31
SECTION 10.03.     Communications by Holders with Other Holders.....................   32
SECTION 10.04.     Certificate and Opinion as to Conditions Precedent...............   32
SECTION 10.05.     Statements Required in Certificate or Opinion....................   33
SECTION 10.06.     Rules by Trustee and Agents......................................   33
SECTION 10.07.     Legal Holidays...................................................   33
SECTION 10.08.     Governing Law....................................................   33
SECTION 10.09.     No Adverse Interpretation of Other Agreements....................   34
SECTION 10.10.     No Recourse Against Others.......................................   34
SECTION 10.11.     Successors and Assigns...........................................   34
SECTION 10.12.     Duplicate Originals..............................................   34
SECTION 10.13.     Severability.....................................................   34
</TABLE>

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                                 ARTICLE ELEVEN

                                  SUBORDINATION

SECTION 11.01.     Agreement to Subordinate.........................................   34
SECTION 11.02.     Certain Definitions..............................................   34
SECTION 11.03.     Liquidation; Dissolution; Bankruptcy.............................   35
SECTION 11.04.     Default on Senior Indebtedness...................................   35
SECTION 11.05.     Acceleration of Securities.......................................   36
SECTION 11.06.     When Distributions Must Be Paid Over.............................   36
SECTION 11.07.     Notice by the Company............................................   36
SECTION 11.08.     Subrogation......................................................   36
SECTION 11.09.     Relative Rights..................................................   36
SECTION 11.10.     Subordination May Not Be Impaired by the Company.................   37
SECTION 11.11.     Distribution or Notice to the Representative.....................   37
SECTION 11.12.     Rights of the Trustee and Paying Agent...........................   37
SECTION 11.13.     No Fiduciary Duty to Holders of Senior Indebtedness..............   38
</TABLE>

                                      -iv-
<PAGE>

            INDENTURE dated as of October 6, 2004, by and among M.D.C. HOLDINGS,
INC., a Delaware corporation (the "Company"), and U.S. Bank National Association
(the "Trustee").

            Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's debt
securities issued under this Indenture (the "Securities"):

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

            SECTION 1.01. Definitions.

            "Affiliate" means, with respect to any specified Person, 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, the term "control" means (a) the power to direct the management and
policies of a Person, either directly or through one or more intermediaries,
whether through the ownership of voting securities, by contract, or otherwise,
or (b) without limiting the foregoing, ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).

            "Agent" means any Registrar, Paying Agent or co-Registrar or agent
for service of notices and demands.

            "Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.

            "Bankruptcy Law" means title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.

            "Board of Directors" means the board of directors of the Company or
any authorized committee thereof.

            "Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of or in a Person's capital stock or
other equity interests, and options, rights or warrants to purchase such capital
stock or other equity interests, whether now outstanding or issued after the
Issue Date, including, without limitation, all Preferred Stock of such Person if
such Person is a corporation or membership interests if such Person is a limited
liability company and each general and limited partnership interest of such
Person if such Person is a partnership.

            "Capitalized Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.

<PAGE>

            "Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.

            "Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, unless otherwise timely cured, an Event
of Default.

            "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 may be approved by a significant segment of
the accounting profession of the United States, as in effect on the date of this
Indenture.

            "Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.

            "Indebtedness" means (a) any liability of any Person (i) for
borrowed money or (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind (other than a
trade payable or a current liability arising in the ordinary course of
business), or (iii) for the payment of money relating to a Capitalized Lease
Obligation or (iv) for all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; (b) any liability of others described in the preceding clause (a)
that such Person has guaranteed or that is otherwise its legal liability; (c)
all Indebtedness referred to in (but not excluded from) clauses (a) and (b)
above of other Persons and all dividends of other Persons, the payment of which
is secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Security Interest upon or
in property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (d) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types referred
to in clauses (a), (b) and (c) above.

            "Indenture" means this Indenture as amended or supplemented from
time to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.

            "Issue Date" means, with respect to any Series of Securities, the
date on which the Securities of such Series are originally issued under this
Indenture.

            "Non-Recourse Indebtedness" means Indebtedness or other obligations
secured by a lien on property to the extent that the liability for the
Indebtedness or other obligations is limited to the security of the property
without liability on the part of the Company for any deficiency.

            "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

                                      -2-
<PAGE>

            "Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.

            "Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

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

            "Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or with respect to the payment of
dividends.

            "Redeemable Capital Stock" means any Capital Stock of the Company or
any of its Subsidiaries that, either by its terms, by the terms of any security
into which it is convertible or exchangeable or otherwise, (a) is or upon the
happening of an event or passage of time would be required to be redeemed on or
prior to the final stated maturity of the securities or (b) is redeemable at the
option of the holder thereof at any time prior to such final stated maturity or
(c) is convertible into or exchangeable for debt securities at any time on or
prior to such final stated maturity.

            "SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.

            "Securities" means any Securities that are issued under this
Indenture.

            "Series" means a series of Securities established under this
Indenture.

            "Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act of 1933, as amended and the Securities
Exchange Act of 1934, as amended.

            "Subsidiary" means any Person of which at the time of determination
by the Company, directly and/or indirectly through one or more Subsidiaries, the
Company owns more than 50% of the shares of its Voting Stock.

            "TIA" means the Trust Indenture Act of 1939, as in effect from time
to time.

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

            "Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.

            "United States" means the United States of America.

                                      -3-
<PAGE>

            "U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.

            "Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).

            SECTION 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                                                   Defined
Term                                                                              in Section
----                                                                              ----------
<S>                                                                               <C>
"Agent Members"........................................................              2.15
"Business Day".........................................................             10.07
"Custodian"............................................................              6.01
"Depositary"...........................................................              2.15
"Event of Default".....................................................              6.01
"Legal Holiday"........................................................             10.07
"Paying Agent".........................................................              2.03
"Registrar"............................................................              2.03
"Representative".......................................................             11.02
"Senior Indebtedness"..................................................             11.02
</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:

            "Commission" means the SEC.

            "indenture securities" means the Securities.

            "indenture security holder" means a Securityholder.

                                      -4-
<PAGE>

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Trustee.

            "obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.

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

            SECTION 1.04. Rules of Construction.

            Unless the context otherwise requires:

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

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

            (3) "or" is not exclusive;

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

            (5) provisions apply to successive events and transactions.

                                   ARTICLE TWO

                                 THE SECURITIES

            SECTION 2.01. Form and Dating.

            The aggregate principal amount of Securities that may be issued
under this Indenture is unlimited. The Securities may be issued from time to
time in one or more Series. Each Series shall be created by an Authorizing
Resolution or a supplemental indenture that establishes the terms of the Series,
which may include the following:

            (1) the title of the Series;

            (2) the aggregate principal amount (or any limit on the aggregate
      principal amount) of the Series and, if any Securities of a Series are to
      be issued at a discount from their face amount, the method of computing
      the accretion of such discount;

            (3) the interest rate or method of calculation of the interest rate;

            (4) the date from which interest will accrue;

            (5) the record dates for interest payable on Securities of the
      Series;

                                      -5-
<PAGE>

            (6) the dates when, places where and manner in which principal and
      interest are payable;

            (7) the Registrar and Paying Agent;

            (8) the terms of any mandatory (including any sinking fund
      requirements) or optional redemption by the Company;

            (9) the terms of any redemption at the option of Holders;

            (10) the denominations in which Securities are issuable;

            (11) whether Securities will be issued in registered or bearer form
      and the terms of any such forms of Securities;

            (12) whether any Securities will be represented by a global Security
      and the terms of any such global Security;

            (13) if payments of principal or interest may be made in a currency
      other than that in which Securities are denominated, the manner for
      determining such payments;

            (14) provisions for electronic issuance of Securities or issuance of
      Securities in uncertificated form;

            (15) any Events of Default, covenants and/or defined terms in
      addition to or in lieu of those set forth in this Indenture;

            (16) whether and upon what terms Securities may be defeased if
      different from the provisions set forth in this Indenture;

            (17) the form of the Securities, which, unless the Authorizing
      Resolution or supplemental indenture otherwise provides, shall be in the
      form of Exhibit A;

            (18) any terms that may be required by or advisable under applicable
      law;

            (19) whether, upon what terms and by which entities the Securities
      will be guaranteed;

            (20) the percentage of the principal amount of the Securities which
      is payable if the maturity of the Securities is accelerated in the case of
      Securities issued at a discount from their face amount; and

            (21) any other terms in addition to or different from those
      contained in this Indenture.

            All Securities of one Series need not be issued at the same time
and, unless otherwise provided, a Series may be reopened for issuances of
additional Securities of such Series pursuant to an Authorizing Resolution, an
Officers' Certificate or in any indenture supplemental hereto.

                                      -6-
<PAGE>

            The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.

            SECTION 2.02. Execution and Authentication.

            Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature.

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

            A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.

            The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.

            SECTION 2.03. Registrar and Paying Agent.

            The Company shall maintain an office or agency where Securities may
be presented for registration of transfer or for exchange ("Registrar"), an
office or agency where Securities may be presented for payment ("Paying Agent")
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-Registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.

            The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.

            The Company initially appoints the Trustee as Registrar and Paying
Agent.

            SECTION 2.04. Paying Agent to Hold Money in Trust.

            Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.

                                      -7-
<PAGE>

            SECTION 2.05. Securityholder 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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual 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 Securityholders.

            SECTION 2.06. Transfer and Exchange.

            Where a Security is presented to the Registrar or a co-Registrar
with a request to register a transfer, the Registrar shall register the transfer
as requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.

            Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.

            SECTION 2.07. Replacement Securities.

            If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced, including the
acquisition of such Security by a bona fide purchaser. The Company or the
Trustee may charge the Holder for expenses in replacing a Security.

                                      -8-
<PAGE>

            SECTION 2.08. Outstanding Securities.

            Securities outstanding at any time are all Securities authenticated
by the Trustee except for those canceled by it and those described in this
Section. A Security does not cease to be outstanding because the Company or one
of its Affiliates holds the Security.

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

            If, on a redemption date or maturity date, the Paying Agent holds
money sufficient to pay Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.

            Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

            SECTION 2.09. Temporary Securities.

            Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.

            SECTION 2.10. Cancellation.

            The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.

            SECTION 2.11. Defaulted Interest.

            If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or

                                      -9-
<PAGE>

before the date such notice is mailed, the Company shall deposit with the Paying
Agent money sufficient to pay the amount of defaulted interest to be so paid.
The Company may pay defaulted interest in any other lawful manner if, after
notice given by the Company to the Trustee of the proposed payment, such manner
of payment shall be deemed practicable by the Trustee.

            SECTION 2.12. Treasury Securities.

            In determining whether the Holders of the required principal amount
of Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are 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 Securities which the Trustee actually knows
are so owned shall be so considered.

            SECTION 2.13. CUSIP Numbers.

            The Company in issuing the Securities of any Series may use a
"CUSIP" number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.

            SECTION 2.14. Deposit of Moneys.

            Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner which permits the Paying Agent to
remit payment to the Holders on such interest payment date or maturity date, as
the case may be.

            SECTION 2.15. Book-Entry Provisions for Global Security.

            (a) Any global Security of a Series initially shall (i) be
registered in the name of the depository who shall be identified in the
Authorizing Resolution or supplemental indenture relating to such Securities
(the "Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.

            Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization

                                      -10-
<PAGE>

furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.

            (b) Transfers of any global Security shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.

            (c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.

            (d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the global Security, an equal aggregate principal amount of definitive
Securities of authorized denominations.

            (e) The Holder of any global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities of such Series.

                                  ARTICLE THREE

                                   REDEMPTION

            SECTION 3.01. Notices to Trustee.

            Securities of a Series that are redeemable prior to maturity shall
be redeemable in accordance with their terms and, unless the Authorizing
Resolution or supplemental indenture provides otherwise, in accordance with this
Article.

            If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the redemption date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.

                                      -11-
<PAGE>

            If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.

            The Company shall give each notice provided for in this Section 3.01
at least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).

            SECTION 3.02. Selection of Securities to be Redeemed.

            If fewer than all of the Securities of a Series are to be redeemed,
the Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than the minimum
denomination for the Series. Securities and portions of them it selects shall be
in amounts equal to the minimum denomination for the Series or an integral
multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities 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 a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.

            The notice shall identify the Securities to be redeemed and shall
state:

            (1) the redemption date;

            (2) the redemption price;

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

            (4) that Securities called for redemption must be surrendered to the
      Paying Agent to collect the redemption price;

            (5) that interest on Securities called for redemption ceases to
      accrue on and after the redemption date; and

            (6) that the Securities are being redeemed pursuant to the mandatory
      redemption or the optional redemption provisions, as applicable.

            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 deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the

                                      -12-
<PAGE>

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, Securities called for
redemption become due and payable on the redemption date and at the redemption
price as set forth in the notice of redemption. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus accrued
interest to the redemption date.

            SECTION 3.05. Deposit of Redemption Price.

            On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.

            SECTION 3.06. Securities Redeemed in Part.

            Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.

                                  ARTICLE FOUR

                                    COVENANTS

            SECTION 4.01. Payment of Securities.

            The Company shall pay the principal of and interest on a Series on
the dates and in the manner provided in the Securities of the Series. An
installment of principal or interest shall be considered paid on the date it is
due, if on that date the Paying Agent holds money designated for and sufficient
to pay the installment; provided, however, that money held by the Paying Agent
for the benefit of holders of Senior Indebtedness pursuant to the provisions of
Article 11 hereof shall not be considered paid within the meaning of this
Section 4.01.

            The Company shall pay interest on overdue principal at the rate
borne by the Series; it shall pay interest on overdue installments of interest
at the same rate.

            SECTION 4.02. Maintenance of Office or Agency.

            The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior 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 address of the
Trustee.

                                      -13-
<PAGE>

            SECTION 4.03. Compliance Certificate.

            The Company shall deliver to the Trustee within 120 days after the
end of its fiscal year an Officers' Certificate complying with Section 314(a)(4)
of the TIA and stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing persons 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 person signing such certificate,
whether or not the signer knows of any failure by the Company or any Subsidiary
of the Company to comply with any conditions or covenants in this Indenture and,
if such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.

            SECTION 4.04. Payment of Taxes; Maintenance of Corporate Existence;
                          Maintenance of Properties.

            The Company will:

            (a) cause to be paid and discharged all lawful taxes, assessments
      and governmental charges or levies imposed upon the Company or upon the
      income or profits of the Company or upon property or any part thereof
      belonging to the Company before the same shall be in default, as well as
      all lawful claims for labor, materials and supplies which, if unpaid,
      might become a lien or charge upon such property or any part thereof;
      provided, however, that the Company shall not be required to cause to be
      paid or discharged any such tax, assessment, charge, levy or claim so long
      as the validity or amount thereof shall be contested in good faith by
      appropriate proceedings and the nonpayment thereof does not, in the
      judgment of the Company, materially adversely affect the ability of the
      Company to pay all obligations under this Indenture when due; and
      provided, further, that the Company shall not be required to cause to be
      paid or discharged any such tax, assessment, charge, levy or claim if, in
      the judgment of the Company, such payment shall not be advantageous to the
      Company in the conduct of its business and if the failure so to pay or
      discharge does not, in its judgment, materially adversely affect the
      ability of the Company to pay all obligations under this Indenture when
      due;

            (b) cause to be done all things necessary to preserve and keep in
      full force and effect the corporate existence of the Company; provided,
      however, that nothing in this subsection (b) shall prevent a consolidation
      or merger of the Company not prohibited by the provisions of Article Five
      or any other provision or the Authorizing Resolution or supplemental
      indenture pertaining to a Series; and

            (c) at all times keep, maintain and preserve the property of the
      Company in good repair, working order and condition (reasonable wear and
      tear excepted) and from time to time make all needful and proper repairs,
      renewals, replacements, betterments and improvements thereto, so that the
      business carried on in connection therewith may be properly and
      advantageously conducted at all times; provided, however, that nothing in

                                      -14-
<PAGE>

      this subsection (c) shall prevent the Company from discontinuing the
      operation and maintenance of any such properties if such discontinuance
      is, in the judgment of the Company, desirable in the conduct of its
      business and not disadvantageous in any material respect to the ability of
      the Company to pay all obligations under this Indenture when due.

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

            SECTION 5.01. When Company May Merge, etc.

            The Company shall not consolidate with or merge with or into, any
other corporation, or transfer all or substantially all of its assets to, any
entity unless permitted by law and unless (1) the resulting, surviving or
transferee entity, which shall be a corporation organized and existing under the
laws of the United States or a State thereof, assumes by supplemental indenture,
in a form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.

            The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture.

            To the extent that an Authorizing Resolution or supplemental
indenture pertaining to any Series provides for different provisions relating to
the subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.

                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES

            SECTION 6.01. Events of Default.

            An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any one of the
following events occurs:

            (1) default in the payment of interest on any Security of such
      Series when the same becomes due and payable and the continuance of any
      such failure for a period of 30 days;

                                      -15-
<PAGE>

            (2) default in the payment of all or any part of the principal or
      premium, if any, of any Security of such Series when and as the same
      becomes due and payable at maturity, at redemption, by declaration of
      acceleration or otherwise;

            (3) default in the observance or performance of, or breach of, any
      covenant or agreement or warranty of the Company contained in its
      agreements or covenants in, or provisions of the Securities of such
      Series, or this Indenture (unless specifically dealt with elsewhere), and
      continuance of such default or breach for a period of 60 days after there
      has been given, by registered or certified mail, to the Company by the
      Trustee, or to the Company and the Trustee by Holders of at least 25% in
      aggregate principal amount of the outstanding Securities, a written notice
      specifying such default or breach, requiring it to be remedies and stating
      that such notice is a "Notice of Default" hereunder;

            (4) a decree, judgment or order by a court of competent jurisdiction
      shall have been entered adjudging the Company or any of its Significant
      Subsidiaries as bankrupt or insolvent, or approving as properly filed a
      petition in an involuntary case or proceeding seeking reorganization of
      the Company or any of its Significant Subsidiaries under any bankruptcy or
      similar law, or a decree, judgment or order of a court of competent
      jurisdiction directing the appointment of a receiver, liquidator, trustee,
      or assignee in bankruptcy or insolvency of the Company, any of its
      Significant Subsidiaries, or of the assets or property of any such Person,
      or the winding up or liquidation of the affairs of any such Person, shall
      have been entered, and the continuance of any such decree, judgment or
      order unstayed and in effect for a period of 90 consecutive days;

            (5) the Company or any of its Significant Subsidiaries shall
      institute proceedings to be adjudicated a voluntary bankrupt (including
      conversion of an involuntary proceeding into a voluntary proceeding), or
      shall consent to the filing of a bankruptcy proceeding against it, or
      shall file a petition or answer or consent to the filing of any such
      petition, or shall consent to the appointment of a Custodian, receiver,
      liquidator, trustee, or assignee in bankruptcy or insolvency of it or any
      of its assets or property, or shall make a general assignment for the
      benefit of creditors, or shall admit in writing its inability to pay its
      debts generally as they become due, or shall, within the meaning of any
      Bankruptcy Law, become insolvent, or fail generally to pay its debts as
      they become due;

            (6) (i) the acceleration of any Indebtedness (other than
      Non-Recourse Indebtedness) of the Company or any of its Significant
      Subsidiaries (in accordance with the terms of such Indebtedness and after
      giving effect to any applicable grace period set forth in the documents
      governing such Indebtedness) that has an outstanding principal amount of
      $25,000,000 or more individually or $40,000,000 or more in the aggregate
      to be immediately due and payable; provided that, in the event any such
      acceleration is withdrawn or otherwise rescinded (including satisfaction
      of such Indebtedness) within a period of ten business days after such
      acceleration by the holders of such Indebtedness, any Event of Default
      under this clause (6) will be deemed to be cured and any acceleration
      hereunder will be deemed withdrawn or rescinded; or (ii) the failure by
      the Company or any of its Significant Subsidiaries to make any principal,
      premium, interest or other required payment in respect of Indebtedness
      (other than Non-Recourse

                                      -16-
<PAGE>

      Indebtedness) of the Company or any of its Significant Subsidiaries with
      an outstanding aggregate principal amount of $25,000,000 or more
      individually or $40,000,000 or more in the aggregate (after giving effect
      to any applicable grace period set forth in the documents governing such
      Indebtedness); and

            (7) one or more final nonappealable judgments (in the amount not
      covered by insurance or not reserved for) or the issuance of any warrant
      of attachment against any portion of the property or assets (except with
      respect to Non-Recourse Indebtedness) of the Company or any of its
      Significant Subsidiaries, which are $25,000,000 or more individually or
      $40,000,000 or more in the aggregate, at any one time rendered against the
      Company or any of its Significant Subsidiaries by a court of competent
      jurisdiction and not bonded, satisfied or discharged for a period (during
      which execution shall not be effectively stayed) of (i) 60 days after the
      judgment becomes final and such court shall not have ordered or approved,
      and the parties shall not have agreed upon, the payment of such judgment
      at a later date or dates or (ii) 60 days after all or any part of such
      judgment is payable pursuant to any court order or agreement between the
      parties.

            The term "Custodian" means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.

            SECTION 6.02. Acceleration.

            If an Event of Default (other than an Event of Default with respect
to the Company resulting from subclauses (4) or (5) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in subclauses (4) or (5) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.

            No such rescission shall extend to or shall affect any subsequent
Event of Default, or shall impair any right or power consequent thereon.

                                      -17-
<PAGE>

            SECTION 6.03. Other Remedies.

            If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.

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

            SECTION 6.04. Waiver of Existing Defaults.

            Subject to Section 9.02, the Holders of a majority in principal
amount of the outstanding Securities of a Series on behalf of all the Holders of
the Series by notice to the Trustee may waive an existing Default on such Series
and its consequences. When a Default is waived, it is cured and stops
continuing, and any Event of Default arising therefrom shall be deemed to have
been cured; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

            SECTION 6.05. Control by Majority.

            The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial
to the rights of other Securityholders, or (iii) that would involve the Trustee
in personal liability.

            SECTION 6.06. Limitation on Suits.

            A Securityholder of a Series may not pursue any remedy with respect
to this Indenture or the Series unless:

            (1) the Holder gives to the Trustee written notice of a continuing
      Event of Default on the Series;

            (2) the Holders of at least 25% in aggregate principal amount of the
      outstanding Securities of the Series make a written request to the Trustee
      to pursue the remedy;

            (3) such Holder or Holders offer to the Trustee indemnity
      satisfactory to the Trustee against any loss, liability or expense;

                                      -18-
<PAGE>

            (4) the Trustee does not comply with the request within 60 days
      after receipt of the request and the offer of indemnity; and

            (5) no written request inconsistent with such written request shall
      have been given to the Trustee pursuant to this Section 6.06.

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

            SECTION 6.07. Rights of Holders to Receive Payment.

            Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on the Security, on
or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.

            SECTION 6.08. Collection Suit by Trustee.

            If an Event of Default in payment of interest or principal specified
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.

            SECTION 6.09. Trustee May File Proofs of Claim.

            The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements, and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company, its
creditors or its property, and unless prohibited by applicable law or
regulation, may vote on behalf of the Holders in any election of a Custodian,
and shall be entitled and empowered to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same
and any Custodian in any such judicial proceeding is hereby authorized by each
Securityholder to make such payments to the Trustee. Nothing herein shall be
deemed to authorize the Trustee to authorize or consent to or vote for or accept
or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder or to authorize the Trustee to vote in respect of the claim of any
Securityholder except as aforesaid for the election of the Custodian.

            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 for amounts due under Section 7.07;

      Second: to holders of Senior Indebtedness to the extent required by
              Article 11;

                                      -19-
<PAGE>

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

      Fourth: to the Company as its interests may appear.

            The Trustee may fix a record date and payment date for any
payment to Securityholders 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 Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the 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, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Series.

                                  ARTICLE SEVEN

                                     TRUSTEE

            SECTION 7.01. Duties of Trustee.

            (a) If an Event of Default has occurred and is continuing, the
Trustee shall, prior to the receipt of directions from the Holders of a majority
in principal amount of the Securities, exercise its rights and powers and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

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

            (1) 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.

            (2) 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 his Indenture. The
      Trustee, however, 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 or matters stated herein.

                                      -20-
<PAGE>

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

            (1) This paragraph does not limit the effect of paragraph (b) of
      this Section.

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

            (3) The Trustee 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 or any other direction of the
      Holders permitted hereunder.

            (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

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

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

            (g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.

            SECTION 7.02. Rights of Trustee.

            Subject to Section 7.01:

                  (a) The Trustee may rely and shall be protected in acting or
      refraining from acting on any document, resolution, certificate,
      instrument, report, or direction 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, resolution,
      certificate, instrument, report, or direction.

                  (b) Before the Trustee acts or refrains from acting, it may
      require an Officers' Certificate or an Opinion of Counsel or both, which
      shall conform to Sections 10.04 and 10.05 hereof and containing such other
      statements as the Trustee reasonably deems necessary to perform its duties
      hereunder. The Trustee shall not be liable for any action it takes or
      omits to take in good faith in reliance on the Officers' Certificate,
      Opinion of Counsel or any other direction of the Company permitted
      hereunder.

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

                                      -21-
<PAGE>

                  (d) The Trustee shall not be liable for any action taken,
      suffered or omitted by it in good faith and believed by it to be
      authorized or within the discretion or rights or powers conferred upon it
      by this Indenture.

                  (e) The Trustee may consult with counsel, and the written
      advice of such counsel or any Opinion of Counsel as to matters of law
      shall be full and complete authorization and protection in respect of any
      action taken, omitted or suffered by it hereunder in good faith and in
      accordance with the advice or opinion of such counsel.

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

                  (g) For all purposes under this Indenture, the Trustee shall
      not be deemed to have notice or knowledge of any Event of Default (other
      than under Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to
      and working in the Trustee's corporate trust office has actual knowledge
      thereof or unless written notice of any Event of Default is received by
      the Trustee at its address specified in Section 10.02 hereof and such
      notice references the Securities generally, the Company or this Indenture.

            SECTION 7.03. Individual Rights of Trustee.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.

            SECTION 7.04. Trustee's Disclaimer.

            The Trustee makes no representation as to the validity or adequacy
of this Indenture, the Securities or of any prospectus used to sell the
Securities; it shall not be accountable for the Company's use of the proceeds
from the Securities; it shall not be accountable for any money paid to the
Company, or upon the Company's direction, if made under and in accordance with
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 of the Company in this
Indenture or in the Securities other than its certificate of authentication.

            SECTION 7.05. Notice of Defaults.

            If a Default on a Series occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to each Securityholder of the Series
notice of the Default (which shall specify any uncured Default known to it)
within 90 days after it occurs. Except in the case of a default in payment of
principal of or interest on a Series, the Trustee may withhold the notice if and
so long as the board of directors of the Trustee, the executive or any trust
committee of such directors and/or responsible officers of the Trustee in good
faith determine(s) that withholding the notice is in the interests of Holders of
the Series.

                                      -22-
<PAGE>

            SECTION 7.06. Reports by Trustee to Holders.

            Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA Sections 313(a) (but
if no event described in TIA Sections 313(2) has occurred within the twelve
months preceding the reporting date no report need be transmitted). The Trustee
also shall comply with TIA Sections 313(b).

            A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.

            SECTION 7.07. Compensation and Indemnity.

            The Company shall pay to the Trustee or predecessor trustee from
time to time reasonable compensation for their respective services subject to
any written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.

            To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.

            When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01 or in connection with Article
6 hereof, the expenses (including the reasonable fees and expenses of its
counsel) and the compensation for services in connection therewith are to
constitute expenses of administration under any bankruptcy law.

            SECTION 7.08. Replacement of Trustee.

            The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:

                                      -23-
<PAGE>

            (1) the Trustee fails to comply with Section 7.10 after written
      request by the Company or any bona fide Securityholder who has been a
      Securityholder for at least six months;

            (2) the Trustee is adjudged a bankrupt or an insolvent;

            (3) a receiver or other public officer takes charge of the Trustee
      or its property; or

            (4) the Trustee becomes incapable of acting.

            If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for 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. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, 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. A successor trustee shall mail
notice of its succession to each Securityholder.

            SECTION 7.09. Successor Trustee by Merger, etc.

            If the Trustee consolidates with, merges with or into 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.

            This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1). The Trustee shall have a combined
capital and surplus of at least $10,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA Sections
310(b).

            SECTION 7.11. Preferential Collection of Claims Against Company.

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

                                      -24-
<PAGE>

                                 ARTICLE EIGHT

                             DISCHARGE OF INDENTURE

            SECTION 8.01. Defeasance Upon Deposit of Moneys
                          or U.S. Government Obligations.

            (a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).

            (b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii) obligations
listed in Section 8.02, subject to compliance with this Section 8.01. The
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to such
Securities.

            (c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Four and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose 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. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.

            (d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:

                                      -25-
<PAGE>

            (1) The Company shall have irrevocably deposited in trust with the
      Trustee, pursuant to an irrevocable trust and security agreement in form
      and substance reasonably satisfactory to the Trustee, money in U.S.
      dollars or U.S. government obligations or a combination thereof in such
      amounts and at such times as are sufficient, in the opinion of a
      nationally recognized firm of independent public accountants, to pay the
      principal of and interest on the outstanding Securities of such Series to
      maturity or redemption; provided, however, that the Trustee (or other
      qualifying trustee) shall have received an irrevocable written order from
      the Company instructing the Trustee (or other qualifying trustee) to apply
      such money or the proceeds of such U.S. government obligations to said
      payments with respect to the Securities of such Series to maturity or
      redemption;

            (2) No Default or Event of Default shall have occurred and be
      continuing on the date of such deposit;

            (3) Such deposit will not result in a Default under this Indenture
      or a breach or violation of, or constitute a default under, any other
      material instrument or agreement to which the Company or any of its
      Subsidiaries is a party or by which it or any of their property is bound;

            (4) (i) In the event the Company elects paragraph (b) hereof, the
      Company shall deliver to the Trustee an Opinion of Counsel in the United
      States, in form and substance reasonably satisfactory to the Trustee, to
      the effect that (A) the Company has received from, or there has been
      published by, the Internal Revenue Service a ruling or (B) since the Issue
      Date pertaining to such Series, 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 state that, or (ii) in the event the
      Company elects paragraph (c) hereof, the Company shall deliver to the
      Trustee an Opinion of Counsel in the United States, in form and substance
      reasonably satisfactory to the Trustee, to the effect that, in the case of
      clauses (i) and (ii), Holders of the Securities of such Series will not
      recognize income, gain or loss for United States federal income tax
      purposes as a result of such deposit and the defeasance contemplated
      hereby and will be subject to federal income tax in the same amounts and
      in the same manner and at the same times as would have been the case if
      such deposit and defeasance had not occurred;

            (5) The Company shall have delivered to the Trustee an Officers'
      Certificate, stating that the deposit under clause (1) was not made by the
      Company with the intent of preferring the Holders of the Securities of
      such Series over any other creditors of the Company or with the intent of
      defeating, hindering, delaying or defrauding any other creditors of the
      Company or others;

            (6) The Company shall have delivered to the Trustee an Opinion of
      Counsel, reasonably satisfactory to the Trustee, to the effect that, (A)
      the trust funds will not be subject to the rights of Holders of
      Indebtedness of the Company other than the Securities of such Series and
      (B) assuming no intervening bankruptcy of the Company between the date of
      deposit and the 91st day following the deposit and that no Holder of
      Securities of such Series is an insider of the Company, after the 91st day
      following the deposit, the

                                      -26-
<PAGE>

      trust funds will not be subject to any applicable bankruptcy, insolvency,
      reorganization or similar law affecting creditors' rights generally; and

            (7) The Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent specified herein relating to the defeasance contemplated by this
      Section 8.01 have been complied with.

            In the event all or any portion of the Securities of a Series are to
be redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.

            (e) In addition to the Company's rights above under this Section
8.01, the Company may terminate all of its obligations under this Indenture with
respect to a Series when:

            (1) All Securities of such Series theretofore authenticated and
      delivered (other than Securities which have been destroyed, lost or stolen
      and which have been replaced or paid as provided in Section 2.07 and
      Securities for whose payment money has theretofore been deposited in trust
      or segregated and held in trust by the Company and thereafter repaid to
      the Company or discharged from such trust) have been delivered to the
      Trustee for cancellation or all such Securities not theretofore delivered
      to the Trustee for cancellation have become due and payable and the
      Company has irrevocably deposited or caused to be deposited with the
      Trustee as trust funds in trust solely for that purpose an amount of money
      sufficient to pay and discharge the entire Indebtedness on the Securities
      not theretofore delivered to the Trustee for cancellation, for principal
      of and interest;

            (2) The Company has paid or caused to be paid all other sums payable
      hereunder by the Company;

            (3) The Company has delivered irrevocable instructions to the
      Trustee to apply the deposited money toward the payment of the Securities
      at maturity or redemption, as the case may be; and

            (4) The Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, stating that all conditions
      precedent specified herein relating to the satisfaction and discharge of
      this Indenture have been complied with.

            SECTION 8.02. Survival of the Company's Obligations.

            Notwithstanding the satisfaction and discharge of the Indenture
under Section 8.01, the Company's obligations in paragraph 9 of the Securities
and Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).

                                      -27-
<PAGE>

            SECTION 8.03. Application of Trust Money.

            The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.

            SECTION 8.04. Repayment to the Company.

            The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; 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 a newspaper of general circulation in the City of
New York or mail to each such Holder 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 publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Securityholders entitled to the money must look to the Company for
payment as general creditors unless applicable abandoned property law designates
another person and all liability of the Trustee or such Paying Agent with
respect to such money shall cease.

            SECTION 8.05. Reinstatement.

            If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 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
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.

                                      -28-
<PAGE>

                                  ARTICLE NINE

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

            SECTION 9.01. Without Consent of Holders.

            The Company and the Trustee may amend or supplement this Indenture
or the Securities of a Series without notice to or consent of any Securityholder
of such Series:

            (1) to cure any ambiguity, omission, defect or inconsistency;

            (2) to comply with Article Five;

            (3) to provide that specific provisions of this Indenture shall not
      apply to a Series not previously issued;

            (4) to create a Series and establish its terms;

            (5) to provide for uncertificated Securities in addition to or in
      place of certificated Securities; and

            (6) to make any other change that does not adversely affect the
      rights of Securityholders.

            After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.

            SECTION 9.02. With Consent of Holders.

            The Company and the Trustee may amend or supplement this Indenture
or the Securities of a Series without notice to any Securityholder of such
Series but with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each such Series affected by
the amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:

            (1) reduce the amount of Securities of such Series whose Holders
      must consent to an amendment, supplement or waiver;

            (2) reduce the rate of or change the time for payment of interest,
      including defaulted interest, on any Security;

            (3) reduce the principal of or change the fixed maturity of any
      Security or alter the provisions (including related definitions) with
      respect to redemption of Securities pursuant to Article Three hereof or
      with respect to any obligations on the part

                                      -29-
<PAGE>

      of the Company to offer to purchase or to redeem Securities of a Series
      pursuant to the Authorizing Resolution or supplemental indenture
      pertaining to such Series;

            (4) modify the ranking or priority of the Securities of any Series;

            (5) make any change in Sections 6.04, 6.07 or this Section 9.02;

            (6) waive a continuing Default or Event of Default in the payment of
      the principal of or interest on any Security; or

            (7) make any Security payable at a place or in money other than that
      stated in the Security, or impair the right of any Securityholder to bring
      suit as permitted by Section 6.07.

            An amendment of a provision included solely for the benefit of one
or more Series does not affect the interests of Securityholders of any other
Series.

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

            After the issuance of any Securities, an amendment under this
Section or under Section 9.01 may not make any change that adversely affects in
any material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.

            SECTION 9.03. Compliance with Trust Indenture Act.

            Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.

            SECTION 9.04. Revocation and Effect of Consents.

            A consent to an amendment, supplement or waiver by a Holder shall
bind the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.

            The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities of any Series entitled
to consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously

                                      -30-
<PAGE>

given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.

            After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.

            SECTION 9.05. Notation on or Exchange of Securities.

            If an amendment, supplement or waiver changes the terms of a
Security, the Company may require the Holder of the Security to deliver it to
the Trustee, at which time the Trustee shall place an appropriate notation on
the Security about the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.

            SECTION 9.06. Trustee to Sign Amendments, etc.

            Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.

                                   ARTICLE TEN

                                  MISCELLANEOUS

            SECTION 10.01. Trust Indenture Act Controls.

            If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.

            SECTION 10.02. Notices.

            Any order, consent, notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first class mail,
postage prepaid, addressed as follows:

                                      -31-
<PAGE>

            if to the Company:

            M.D.C. Holdings, Inc.
            3600 South Yosemite
            Suite 900
            Denver, CO 80237
            Telecopy No.: (303) 793-2760
            Attention: Chief Financial Officer

            if to the Trustee:

            U.S. Bank National Association
            180 East Fifth Street
            St. Paul, MN 55101
            Telecopy No.: (651) 244-0711 or 12
            Attention: Corporate Trust Administration

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

            Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.

            Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.

            If the Company mails notice or communications to the
Securityholders, it shall mail a copy to the Trustee at the same time.

            SECTION 10.03. Communications by Holders with Other Holders.

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

            SECTION 10.04. 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:

            (1) an Officers' Certificate (which shall include the statements set
      forth in Section 10.05) stating that, in the opinion of the signers, all
      conditions precedent, if any,

                                      -32-
<PAGE>

      provided for in this Indenture relating to the proposed action have been
      complied with; and

            (2) an Opinion of Counsel (which shall include the statements set
      forth in Section 10.05) stating that, in the opinion of such counsel, all
      such conditions precedent and covenants, compliance with which constitutes
      a condition precedent, if any, provided for in this Indenture relating to
      the proposed action or inaction, have been complied with and that any such
      section does not conflict with the terms of the Indenture.

            SECTION 10.05. Statements Required in Certificate or Opinion.

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

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

            (2) 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;

            (3) a statement that, in the opinion of such person, he 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 complied with; and

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

            SECTION 10.06. Rules by Trustee and Agents.

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

            SECTION 10.07. Legal Holidays.

            A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day
on which banking institutions in Denver, Colorado and New York, New York are not
required to be open. 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 for the intervening period. A "Business
Day" is any day other than a Legal Holiday.

            SECTION 10.08. Governing Law.

            The laws of the State of New York shall govern this Indenture and
the Securities of each Series.

                                      -33-
<PAGE>

            SECTION 10.09. No Adverse Interpretation of Other Agreements.

            This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

            SECTION 10.10. No Recourse Against Others.

            All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.

            SECTION 10.11. Successors and Assigns.

            All covenants and agreements of the Company in this Indenture and
the Securities shall bind its successors and assigns. All agreements of the
Trustee in this Indenture shall bind its successors and assigns.

            SECTION 10.12. Duplicate 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 10.13. Severability.

            In case any one or more of the provisions contained in this
Indenture or in the Securities of a Series shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.

                                 ARTICLE ELEVEN

                                  SUBORDINATION

            SECTION 11.01. Agreement to Subordinate.

            The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness and that the subordination
is for the benefit of the holders of Senior Indebtedness.

            SECTION 11.02. Certain Definitions.

            "Representative" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.

            "Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or

                                      -34-
<PAGE>

guaranteed provides that such Indebtedness is not senior or superior in right of
payment to the Securities. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness shall not include (i) any Indebtedness of the
Company to any of its subsidiaries, (ii) any trade payables of the Company or
(iii) guarantees by the Company or any of its Subsidiaries of Indebtedness (a)
outstanding at the date hereof or (b) which may be outstanding in the future,
except that Senior Indebtedness shall include any guarantees as may be listed in
a supplemental indenture and any other present and future guarantees that
provide by their terms that they constitute Senior Indebtedness.

            SECTION 11.03. 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:

            (1) holders of Senior Indebtedness shall be entitled to receive
      payment in full in cash of the principal of and interest (including
      interest accruing after the commencement of any such proceeding) to the
      date of payment on the Senior Indebtedness before Securityholders shall be
      entitled to receive any payment of principal of or interest on Securities;
      and

            (2) until the Senior Indebtedness is paid in full in cash, any
      distribution to which Securityholders would be entitled but for this
      Article shall be made to holders of Senior Indebtedness as their interests
      may appear, except that Securityholders may receive securities that are
      subordinated to Senior Indebtedness to at least the same extent as the
      Securities.

            For purposes of this Article Eleven, a distribution may consist of
cash, securities or other property, by set-off or otherwise.

            SECTION 11.04. Default on Senior Indebtedness.

            Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior Indebtedness, before any payment is made by the
Company or any person acting on behalf of the Company on account of the
principal or interest of the Securities.

            The Company may not pay principal of or interest on the Securities
and may not acquire any Securities for cash or property (other than capital
stock of the Company or other securities of the Company that are subordinated to
Senior Indebtedness to at least the same extent as the Securities) if a default
on Senior Indebtedness occurs and is continuing that permits holders of such
Senior Indebtedness to accelerate its maturity.

            The Company shall resume payments on the Securities and may acquire
them, if this Article otherwise permits the payment or acquisition at that time,
when the default is cured or waived.

                                      -35-
<PAGE>

            SECTION 11.05. Acceleration of Securities.

            If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article Six.

            SECTION 11.06. When Distributions Must Be Paid Over.

            In the event that the Company shall make any payment to the Trustee
on account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.

            If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.

            SECTION 11.07. Notice by the 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 principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.

            SECTION 11.08. Subrogation.

            After all Senior Indebtedness is paid in full and until the
Securities are paid in full, Securityholders shall be subrogated to the rights
of holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.

            SECTION 11.09. Relative Rights.

            This Article defines the relative rights of Securityholders and
holders of Senior Indebtedness. Nothing in this Indenture shall:

                                      -36-
<PAGE>

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

            (2) affect the relative rights of Securityholders and creditors of
      the Company, other than holders of Senior Indebtedness; or

            (3) prevent the Trustee or any Securityholder from exercising its
      available remedies upon a Default or Event of Default, subject to the
      rights of holders of Senior Indebtedness to receive distributions
      otherwise payable to Securityholders.

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

            SECTION 11.10. Subordination May Not Be Impaired by the Company.

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

            SECTION 11.11. Distribution or Notice to the Representative.

            Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness pursuant to this Article Eleven, the distribution may be
made and the notice given to their Representative.

            SECTION 11.12. Rights of the Trustee and Paying Agent.

            Notwithstanding any provision of this Article Eleven or any other
provision of this Indenture, the Trustee and Paying Agent shall not at any time
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee or a Paying Agent or the taking of
any other action (pursuant to this Article Eleven) by the Trustee or a Paying
Agent unless and until the Trustee or such Paying Agent, as the case may be,
shall have received at its office specified in Section 10.02 written notice
thereof from the Company, a Representative or a holder of Senior Indebtedness
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of Sections 7.01 and 7.02, and such Paying Agent, shall be
entitled in all respects conclusively to assume that no such facts exist. The
Trustee or Paying Agent may continue to make payments on the Securities unless
it receives such a notice at least three business days prior to the date upon
which payment is due.

            The Trustee shall be entitled to rely reasonably in good faith on
the delivery to it of a written notice by a person representing himself, herself
or itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.

            In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate

                                      -37-
<PAGE>

in any payment or distribution pursuant to this Article Eleven, the Trustee may
request such person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such person, the extent
to which such person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such person under this Article
Eleven, and if such evidence is not furnished, the Trustee may defer any payment
which it may be required to make for the benefit of such person pursuant to the
terms of this Indenture pending judicial determination as to the rights of such
person to receive such payment.

            Upon any payment or distribution of assets of the Company referred
to in this Article Eleven, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
Custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
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 Eleven.

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

            SECTION 11.13. No Fiduciary Duty to Holders of Senior Indebtedness.

            With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor
the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article Eleven
or otherwise.

                            [Signature Pages Follow]

                                      -38-
<PAGE>

                                   SIGNATURES

      IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.

Dated: October 6, 2004                        M.D.C. HOLDINGS, INC.

                                              By: /s/ Paris G. Reece III
                                                  ----------------------------
                                                  Name:  Paris G. Reece III
                                                  Title: Executive Vice
                                                          President and Chief
                                                          Financial Officer

                             Subordinated Indenture

<PAGE>

Dated:  October 6, 2004                      U.S. BANK NATIONAL ASSOCIATION,
                                                  as Trustee

                                             By: /s/ Ignazio Tamburello
                                                 -----------------------------
                                                 Name:  Ignazio Tamburello
                                                 Title: Assistant Vice President

                             Subordinated Indenture

<PAGE>

No.                                                         CUSIP No.:

                               [Title of Security]

M.D.C. HOLDINGS, INC., a Delaware corporation promises to pay to            or
registered assigns the principal sum of         [Dollars] on            .

                               [Title of Security]

            Interest Payment Dates:                            and

            Record Dates                             and

            Authenticated:                         Dated:

                                               M.D.C. HOLDINGS, INC.

                                               By: ____________________________
                                                   Name:
                                                   Title:

                                               By: ____________________________
                                                   Name:
                                                   Title:

U.S. Bank National Association,
as Trustee, certifies that this is one of the
Securities referred to in the within
mentioned Indenture.

By: _____________________________
    Authorized Signatory
    M.D.C. HOLDINGS, INC.
    [Title of Security]

                                       A-1
<PAGE>

1.    Interest.

            M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on [  ] and
[  ] of each year until the principal is paid or made available for payment.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid,
from [  ]; provided that, if there is no existing default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding interest payment date, interest
shall accrue from such interest payment date. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. [Provisions as to the right of
the Company to defer interest, if any, may be set forth here. ]

2.    Method of Payment.

            The Company will pay interest on the Securities (except defaulted
interest, if any, which will be paid on such special payment date to Holders of
record on such special record date as may be fixed by the Company) to the
persons who are registered Holders of Securities at the close of business on the
[Insert record dates]. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts.

3.    Paying Agent and Registrar.

            Initially, U.S. Bank National Association (the "Trustee") will act
as Paying Agent and Registrar. The Company may change or appoint any Paying
Agent, Registrar or co-Registrar without notice. The Company or any of its
Subsidiaries may act as Paying Agent, Registrar or co-Registrar.

4.    Indenture.

            The Company issued the Securities under an Indenture dated as of
October 6, 2004 (the "Indenture") among the Company and the Trustee. The terms
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 as in
effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.

            The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: M.D.C. Holdings,
Inc., 3600 South Yosemite, Suite 900, Denver, Colorado 80237, Attention:
Secretary.

                                       A-2
<PAGE>

5.    Optional Redemption.

            The Company may redeem the Securities at any time on or after      ,
in whole or in part, at the following redemption prices (expressed as a
percentage of their principal amount),set forth below, plus together with
interest accrued and unpaid thereon to the date fixed for redemption:

            If redeemed during the twelve-month period commencing on        and
ending on          in each of the following years:

                                                   REDEMPTION
              YEAR                                    PRICE
            [       ]                              [        ]%
            [       ]                              [        ]%
            [       ]                              [        ]%
            [       ] and thereafter                  100.000%

            Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part. On and after the redemption date, interest
ceases to accrue on Securities or portions of them called for redemption;
provided, that if the Company shall default in the payment of such Security at
the redemption price together with accrued interest, interest shall continue to
accrue at the rate borne by the Securities.

[Insert provisions relating to redemption at option of Holders, if any]

6.    Denominations, Transfer, Exchange.

            The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities by presentation of such Securities to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other denominations. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Security selected
for redemption, except the unredeemed part thereof if the Security is redeemed
in part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.

                                       A-3
<PAGE>

7.    Persons Deemed Owners.

            The registered Holder of this Security shall be treated as the owner
of it for all purposes.

8.    Unclaimed Money.

            If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its request. After that, Holders entitled to the money must look to
the Company for payment unless an abandoned property law designates another
person.

9.    Amendment, Supplement, Waiver.

            Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities of each Series
affected by the amendment and any past default or compliance with any provision
relating to any Series of the Securities may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the
outstanding Securities of such Series. Without the consent of any
Securityholder, the Company and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of certificated
Securities, to create a Series and establish its terms, or to make any other
change, provided such action does not adversely affect the rights of any
Securityholder.

10.   Successor Corporation.

            When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.

11.   Trustee Dealings With Company.

            U.S. Bank National Association, the Trustee under the Indenture, 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 Trustee.

12.   No Recourse Against Others.

            A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

                                       A-4
<PAGE>

13.   Discharge of Indenture.

            The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.

14.   Authentication.

            This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.

15.   Abbreviations.

            Customary abbreviations may be used in the name of a Securityholder
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).

16.   Subordination.

            To the extent set forth in Article 11 of the Indenture, the
Securities are subordinated to Senior Indebtedness, which generally is any
Indebtedness outstanding on the date of the Indenture or Indebtedness thereafter
created, incurred, assumed or guaranteed by the Company and all renewals,
extensions and refundings thereof except Indebtedness that expressly provides
that it is not senior to or superior in right of payment to the Securities.
Senior Indebtedness does not include Indebtedness of the Company to any of its
subsidiaries, trade payables of the Company and certain Indebtedness of others
guaranteed by the Company. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.

                                       A-5
<PAGE>

                                 ASSIGNMENT FORM

      If you, the Holder, want to assign this Security, fill in the form below:

      I or we assign and transfer this Security to:

_______________________________________________________________________________

_______________________________________________________________________________
              (Insert assignee's social security or tax ID number)

_______________________________________________________________________________

_______________________________________________________________________________

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

and irrevocably appoint:
_______________________________________________________________________________

agent to transfer this Security 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 other side of this Security)

Signature
Guarantee: ____________________________________________________________________

                                       A-6<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

===============================================================================

              M.D.C. HOLDINGS, INC. AND THE GUARANTORS PARTY HERETO

                   $500,000,000 AGGREGATE PRINCIPAL AMOUNT OF
                            MEDIUM TERM SENIOR NOTES
              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE
                                       AND
                         MEDIUM TERM SUBORDINATED NOTES
              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE

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

                             SUPPLEMENTAL INDENTURE

                           DATED AS OF OCTOBER 6, 2004

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

                         U.S. BANK NATIONAL ASSOCIATION,
                                     TRUSTEE

===============================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
<S>                                                                                      <C>
                                   ARTICLE ONE

                    Scope of Supplemental Indenture; General

                                   ARTICLE TWO

                               Certain Definitions

Section 2.01A.  Definitions Applicable to the Indentures...............................    2
Section 2.01B.  Definitions Applicable to the Senior Indenture.........................    4
Section 2.01C.  Definitions Applicable to the Subordinated Indenture...................    8

                                  ARTICLE THREE

                                   Redemption

Section 3.01.   Right of Redemption....................................................    9

                                  ARTICLE FOUR

                                    Covenants

Section 4.01.   Restrictions on Secured Debt...........................................   10
Section 4.02.   Limitations on Sale and Leaseback Transactions.........................   11
Section 4.03.   Additional Guarantees..................................................   11
Section 4.04.   SEC Reports............................................................   11

                                  ARTICLE FIVE

                              Successor Corporation

Section 5.01A.  Consolidation, Merger and Sale of Assets...............................   12
Section 5.01B.  Consolidation, Merger and Sale of Assets...............................   12

                                   ARTICLE SIX

                                   Guarantees

Section 6.01.   Unconditional Guarantee of the Senior Notes............................   13
Section 6.02.   Fraudulent Conveyance Limitation.......................................   14
Section 6.03.   Waiver ................................................................   14
Section 6.04.   Subordinated Indebtedness..............................................   15
Section 6.05.   Execution of Guarantee.................................................   16
Section 6.06.   Additional Guarantees and Release of Guarantees........................   16
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
                                  ARTICLE SEVEN

                                  Miscellaneous

Section 7.01.   Confirmation of the Indentures.........................................   17
Section 7.02.   Concerning the Trustee.................................................   17
Section 7.03.   Governing Law..........................................................   17
Section 7.04.   Separability...........................................................   17
Section 7.05.   Counterparts...........................................................   18
Section 7.06.   No Adverse Interpretation of Other Agreements..........................   18
Section 7.07.   No Recourse Against Others.............................................   18
Section 7.08.   Successors and Assigns.................................................   18
Section 7.09.   Duplicate Originals....................................................   18
Section 7.10.   Severability...........................................................   18
</TABLE>

                                      -ii-
<PAGE>

            SUPPLEMENTAL INDENTURE dated as of October 6, 2004 ("Supplemental
Indenture"), to the Senior Debt Securities Indenture dated as of December 3,
2002 (as amended, modified or supplemented from time to time in accordance
therewith, the "Senior Indenture"), by and among M.D.C. HOLDINGS, INC., a
Delaware corporation (the "Company"), the Guarantors (as defined herein) and
U.S. Bank National Association, as trustee (the "Trustee"), and to the Senior
Subordinated Debt Securities Indenture dated as of October 6, 2004 (as amended,
modified or supplemented from time to time in accordance therewith, the
"Subordinated Indenture" and together with the Senior Indenture, the
"Indentures"), by and between the Company and the Trustee.

            Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of Senior Notes (as defined
herein) and holders of Subordinated Notes (as defined herein):

            WHEREAS, the Company and the Trustee have executed the Senior
Indenture to provide for the issuance from time to time of senior debt
securities and the Subordinated Indenture to provide for the issuance from time
to time of subordinated debt securities (the "Securities") to be issued in one
or more series as the applicable Indenture provided;

            WHEREAS, the Company and the Guarantors desire and have requested
the Trustee to join them in the execution and delivery of this Supplemental
Indenture in order to provide for the issuance by the Company of one series of
Securities designated as its "Medium Term Senior Notes due Nine Months or More
from the Original Issue Date" (the "Senior Notes"), substantially in the form
attached hereto as Exhibits A-1 and A-2, in each case guaranteed by the
Guarantors, and establish and commence the operation of a program to sell such
Senior Notes (the "MTN Senior Notes Program"), on the terms set forth herein;

            WHEREAS, the Company desires and has requested the Trustee to join
it in the execution and delivery of this Supplemental Indenture in order to
provide for the issuance by the Company of one series of Securities designated
as its "Medium Term Subordinated Notes due Nine Months or More from the Original
Issue Date" (the "Subordinated Notes" and together with the Senior Notes, the
"Notes"), substantially in the form attached hereto as Exhibits B-1 and B-2, and
establish and commence the operation of a program to sell such Subordinated
Notes (the "MTN Subordinated Notes Program" and collectively, the "MTN
Program"), on the terms set forth herein;

            WHEREAS, Section 2.01 of the Indentures provides that a supplemental
indenture may be entered into for such purpose provided certain conditions are
met;

            WHEREAS, the conditions set forth in the Indentures for the
execution and delivery of this Supplemental Indenture have been complied with;

            WHEREAS, all things necessary to make this Supplemental Indenture a
valid agreement of the Company, the Guarantors and the Trustee in respect of the
Senior Notes, in accordance with its terms, and a valid amendment of, and
supplement to, the Senior Indenture have been done; and

            WHEREAS, all things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee in respect of the Subordinated
Notes, in accordance with its terms, and a valid amendment of and supplement to,
the Subordinated Indenture have been done;

<PAGE>

            NOW, THEREFORE:

            In consideration of the premises and the purchase and acceptance of
(x) the Senior Notes by the holders thereof, the Company and the Guarantors
mutually covenant and agree with the Trustee, for the equal and ratable benefit
of the Holders of the Senior Notes, that the Senior Indenture is supplemented
and amended, to the extent expressed herein, and (y) the Subordinated Notes by
the holders thereof, the Company covenants and agrees with the Trustee, for the
equal and ratable benefit of the Holders of the Subordinated Notes, that the
Subordinated Indenture is supplemented and amended, to the extent expressed
herein, as follows:

                                  ARTICLE ONE

                    SCOPE OF SUPPLEMENTAL INDENTURE; GENERAL

            The changes, modifications and supplements to each of the Indentures
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the Notes, which shall be limited to $500,000,000
in aggregate principal amount, and shall not apply to any other Securities that
may be issued under either of the Indentures unless a supplemental indenture
with respect to such other Securities specifically incorporates such changes,
modifications and supplements. Pursuant to this Supplemental Indenture, there is
hereby created and designated a series of Securities under the Senior Indenture
entitled "Medium Term Senior Notes due Nine Months or More from the Original
Issue Date" and a series of Securities under the Subordinated Indenture entitled
"Medium Term Subordinated Notes due Nine Months or More from the Original Issue
Date." The Senior Notes shall be in the form of Exhibits A-1 or A-2 hereto, as
applicable, and the Subordinated Notes shall be in the form of Exhibits B-1 or
B-2 hereto, as applicable. The Senior Notes shall be guaranteed by the
Guarantors as provided in such forms and the Senior Indenture. If required, the
Notes may bear an appropriate legend regarding original issue discount for
federal income tax purposes and any other legend required by applicable law or
the rules of any exchange on which the Notes may be listed.

                                  ARTICLE TWO

                               CERTAIN DEFINITIONS

            Section 2.01A. Definitions Applicable to the Indentures. The
following terms have the meanings set forth below in this Supplemental
Indenture. Capitalized terms used but not defined herein have the meanings
ascribed to such terms in the applicable Indenture. To the extent terms defined
herein differ from the applicable Indenture the terms defined herein will
govern.

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

            "Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of or in a Person's capital stock or
other equity interests, and options, rights or warrants to purchase such capital
stock or other equity interests, whether now outstanding or issued after the
Original Issue Date, including, without limitation, all Preferred Stock of such
Person if such Person is a corporation or membership interests if such Person is
a limited liability company and each general and limited partnership interest of
such Person if such Person is a partnership.

            "Capitalized Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.

                                      -2-
<PAGE>

            "cash" means U.S. Legal Tender.

            "Custodian" means any receiver, trustee, assignee, liquidator,
custodian, sequestrator or similar official under any Bankruptcy Law.

            "Distribution Agreement" means the certain distribution agreement
dated as of October 6, 2004 by and among the Company, the Guarantors and the
agents named therein.

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

            "Indebtedness" means (a) any liability of any Person (i) for
borrowed money, or (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind (other than a
trade payable or a current liability arising in the ordinary course of
business), or (iii) for the payment of money relating to a Capitalized Lease
Obligation or (iv) for all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; (b) any liability of others described in the preceding clause (a)
that such Person has guaranteed or that is otherwise its legal liability; (c)
all Indebtedness referred to in (but not excluded from) clauses (a) and (b)
above of other Persons and all dividends of other Persons, the payment of which
is secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Security Interest upon or
in property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (d) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types referred
to in clauses (a), (b) and (c) above.

            "Issue Date" means the date of original issuance of the Notes.

            "Legal Holiday" means a Saturday, a Sunday, a legal holiday or a day
on which banking institutions in Denver, Colorado and New York, New York are not
required to be open.

            "Notes" means the Senior Notes or the Subordinated Notes, as
applicable, created under Article One hereof.

            "Original Issue Date" shall mean the date of original issuance of
such Senior Notes or Subordinated Notes, as applicable.

            "Paying Agent" means an office or agency where Notes may be
presented for payment.

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

            "Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or with respect to the payment of
dividends.

            "Record Date" means a Record Date specified in the Notes whether or
not such Record Date is a Business Day.

            "Redeemable Capital Stock" means any Capital Stock of the Company or
any of its Subsidiaries that, either by its terms, by the terms of any security
into which it is convertible or exchangeable or otherwise, (a) is or upon the
happening of an event or passage of time would be required

                                      -3-
<PAGE>

to be redeemed on or prior to the final stated maturity of the securities or (b)
is redeemable at the option of the holder thereof at any time prior to such
final stated maturity or (c) is convertible into or exchangeable for debt
securities at any time on or prior to such final stated maturity.

            "Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and Paragraph 3 of the Notes.

            "Redemption Price," when used with respect to any Note to be
redeemed, means the price for such redemption pursuant to Paragraph 3 of the
Notes, which shall include, without duplication, in each case, accrued and
unpaid interest to the Redemption Date.

            "Registrar" means the office or agency where Notes may be presented
for registration of transfer or for exchange.

            "Significant Subsidiary" means any Subsidiary (a) whose revenues
exceed 10% of our total consolidated revenues, in each case for the most recent
fiscal year, or (b) whose net worth exceeds 10% of our total stockholders'
equity, in each case as of the end of the most recent fiscal year.

            "Subsidiary" means any Person of which at the time of determination
by the Company, directly and/or indirectly through one or more Subsidiaries, the
Company owns more than 50% of the shares of its Voting Stock.

            "Supplemental Indenture" has the meaning set forth in Article One
hereof.

            "TIA" means the Trust Indenture Act of 1939, as in effect from time
to time.

            "Trustee" means the party named as such in the Senior Indenture or
the Subordinated Indenture, as applicable, until a successor replaces it
pursuant to such Indenture and thereafter means the successor serving hereunder.

            "U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.

            "Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).

            Section 2.01B. Definitions Applicable to the Senior Indenture. The
following terms have the meanings set forth below in this Supplemental
Indenture. Capitalized terms used but not defined herein have the meanings
ascribed to such terms in the Senior Indenture. To the extent terms defined
herein differ from the Senior Indenture the terms defined herein will govern.

            "Attributable Debt" means, in respect of a Sale and Leaseback
Transaction, the present value (discounted at the weighted average effective
interest cost per annum of the outstanding debt securities of all series,
compounded semiannually) of the obligation of the lessee for rental payments
during the remaining term of the lease included in such transaction, including
any period for which such lease has been extended or may, at the option of the
lessor, be extended or, if earlier, until the earliest date on which the lessee
may terminate such lease upon payment of a penalty (in which case the obligation
of the lessee for rental payments shall include such penalty), after excluding
all amounts required to be paid

                                      -4-
<PAGE>

on account of maintenance and repairs, insurance, taxes, assessments, water and
utility rates and similar charges.

            "Consolidated Net Tangible Assets" means the total amount of assets
which would be included on a combined balance sheet of the Company and the
Guarantors under GAAP (less applicable reserves and other properly deductible
items) after deducting therefrom:

            (1) all short-term liabilities, except for (x) liabilities payable
      by their terms more than one year from the date of determination (or
      renewable or extendible at the option of the obligor for a period ending
      more than one year after such date) and (y) liabilities in respect of
      retiree benefits other than pensions for which the Restricted Subsidiaries
      are required to accrue pursuant to Statement of Financial Accounting
      Standards No. 106;

            (2) investments in subsidiaries that are not Restricted
      Subsidiaries; and

            (3) all goodwill, trade names, trademarks, patents, unamortized debt
      discount, unamortized expense incurred in the issuance of debt and other
      intangible assets.

            "Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of the Person determined in accordance with GAAP.

            "Event of Default" means any one of the following events:

            (a) default in the payment of interest on the Senior Notes as and
      when the same becomes due and payable and the continuance of any such
      failure for 30 days;

            (b) default in the payment of all or any part of the principal or
      premium, if any, on the Senior Notes when and as the same become due and
      payable at maturity, at redemption, by declaration of acceleration or
      otherwise;

            (c) default in the observance or performance of, or breach of, any
      covenant, agreement or warranty of the Company contained in the Senior
      Notes, the Senior Indenture or this Supplemental Indenture (unless
      specifically dealt with elsewhere), and continuance of such default or
      breach for a period of 60 days after there has been given, by registered
      or certified mail, to the Company by the Trustee, or to the Company and
      the Trustee by Holders of at least 25% in aggregate principal amount of
      the outstanding Senior Notes, a written notice specifying such default or
      breach, requiring it to be remedied and stating that such notice is a
      "Notice of Default" hereunder;

            (d) a decree, judgment, or order by a court of competent
      jurisdiction shall have been entered adjudging the Company or any of its
      Significant Subsidiaries as bankrupt or insolvent, or approving as
      properly filed a petition in an involuntary case or proceeding seeking
      reorganization of the Company or any of its Significant Subsidiaries under
      any bankruptcy or similar law, or a decree, judgment or order of a court
      of competent jurisdiction directing the appointment of a receiver,
      liquidator, trustee, or assignee in bankruptcy or insolvency of the
      Company, any of its Significant Subsidiaries, or of the assets or property
      of any such Person, or the winding up or liquidation of the affairs of any
      such Person, shall have been entered, and the continuance of any such
      decree, judgment or order unstayed and in effect for a period of 90
      consecutive days;

            (e) the Company or any of its Significant Subsidiaries shall
      institute proceedings to be adjudicated a voluntary bankrupt (including
      conversion of an involuntary proceeding into a

                                      -5-
<PAGE>

      voluntary proceeding), or shall consent to the filing of a bankruptcy
      proceeding against it, or shall file a petition or answer or consent to
      the filing of any such petition, or shall consent to the appointment of a
      Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
      insolvency of it or any of its assets or property, or shall make a general
      assignment for the benefit of creditors, or shall admit in writing its
      inability to pay its debts generally as they become due, or shall, within
      the meaning of any Bankruptcy Law, become insolvent, or fail generally to
      pay its debts as they become due;

            (f) (i) the acceleration of any Indebtedness (other than
      Non-Recourse Indebtedness) of the Company or any of its Significant
      Subsidiaries (in accordance with the terms of such Indebtedness and after
      giving effect to any applicable grace period set forth in the documents
      governing such Indebtedness) that has an outstanding principal amount of
      $25,000,000 or more individually or $40,000,000 or more in the aggregate
      to be immediately due and payable; provided that, in the event any such
      acceleration is withdrawn or otherwise rescinded (including satisfaction
      of such Indebtedness) within a period of ten Business Days after such
      acceleration by the holders of such Indebtedness, any Event of Default
      under this clause (f) will be deemed to be cured and any acceleration
      hereunder will be deemed withdrawn or rescinded; or (ii) the failure by
      the Company or any of its Significant Subsidiaries to make any principal,
      premium, interest or other required payment in respect of Indebtedness
      (other than Non-Recourse Indebtedness) of the Company or any of its
      Significant Subsidiaries with an outstanding aggregate principal amount of
      $25,000,000 or more individually or $40,000,000 or more in the aggregate
      (after giving effect to any applicable grace period set forth in the
      documents governing such Indebtedness);

            (g) one or more final nonappealable judgments (in the amount not
      covered by insurance or not reserved for) or the issuance of any warrant
      of attachment against any portion of the property or assets (except with
      respect to Non-Recourse Indebtedness) of the Company or any of its
      Restricted Subsidiaries, which are $25,000,000 or more individually or
      $40,000,000 or more in the aggregate, at any one time rendered against the
      Company or any of its Restricted Subsidiaries by a court of competent
      jurisdiction and not bonded, satisfied or discharged for a period (during
      which execution shall not be effectively stayed) of (i) 60 days after the
      judgment becomes final and such court shall not have ordered or approved,
      and the parties shall not have agreed upon, the payment of such judgment
      at a later date or dates or (ii) 60 days after all or any part of such
      judgment is payable pursuant to any court order or agreement between the
      parties; or

            (h) the Guarantee of any Guarantor shall fail to remain in full
      force and effect except in accordance with the Senior Indenture or any
      action shall be taken by any Guarantor to discontinue or to assert the
      invalidity or unenforceability of its Guarantee, or any Guarantor shall
      fail to comply with any of the terms or provisions of its Guarantee, or
      any Guarantor denies that it has any further liability under its Guarantee
      or gives notice to such effect.

            "Finance Subsidiary" means any Subsidiary of the Company
substantially all of whose operations consist of (a) the mortgage financing
business or (b) the insurance business.

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

            "Guarantee" has the meaning set forth in Section 6.01 hereof.

            "Guaranteed Indebtedness" has the meaning set forth in Section 6.06
hereof.

                                      -6-
<PAGE>

            "Guaranteed Obligations" has the meaning set forth in Section 6.01
hereof.

            "Guarantors" means Richmond American Homes of California, Inc.,
Richmond American Homes of Maryland, Inc., Richmond American Homes of Nevada,
Inc., Richmond American Homes of Virginia, Inc., Richmond American Homes of
Arizona, Inc., Richmond American Homes of Colorado, Inc., M.D.C. Land
Corporation, RAH of Florida, Inc., RAH of Texas, LP, RAH Texas Holdings, LLC,
Richmond American Construction, Inc., Richmond American Homes of Texas, Inc.,
Richmond American Homes of Utah, Inc., Richmond American Homes of West Virginia,
Inc., Richmond American Homes of Illinois, Inc., Richmond American Homes of
Delaware, Inc., Richmond American Homes of Pennsylvania, Inc., Richmond American
Homes of Florida, LP, Richmond American Homes of New Jersey, Inc., LLC, and any
other Subsidiary of the Company that executes and delivers a guarantee of the
Senior Notes pursuant to the provisions of the Senior Indenture.

            "Non-Recourse Indebtedness" means Indebtedness or other obligations
secured by a lien on property to the extent that the liability for the
Indebtedness or other obligations is limited to the security of the property
without liability on the part of the Company or any Restricted Subsidiary (other
than the Restricted Subsidiary which holds title to the property) for any
deficiency.

            "Preferential Payment" has the meaning set forth in Section 6.01.

            "Restricted Subsidiary" means any Guarantor and any successor to
such Guarantor.

            "Sale and Leaseback Transaction" means a sale or transfer made by
the Company or a Restricted Subsidiary (except a sale or transfer made to the
Company or a Restricted Subsidiary) of any property which is either (a) a
manufacturing facility, office building or warehouse whose book value equals or
exceeds 1% of Consolidated Net Tangible Assets as of the date of determination
or (b) another property (not including a model home) which exceeds 5% of
Consolidated Net Tangible Assets as of the date of determination, if such sale
or transfer is made with the agreement, commitment or intention of leasing such
property to the Company or a Restricted Subsidiary for more than a three-year
term.

            "Secured Debt" means any Indebtedness, except Indebtedness of the
Finance Subsidiaries, which is secured by (i) a Security Interest in any of the
property of the Company or any Restricted Subsidiary or (ii) a Security Interest
in shares of stock owned directly or indirectly by the Company or a Restricted
Subsidiary in a corporation or in equity interests owned by the Company or a
Restricted Subsidiary in a partnership or other entity not organized as a
corporation or in the Company's rights or the rights of a Restricted Subsidiary
in respect of Indebtedness of a corporation, partnership or other entity in
which the Company or a Restricted Subsidiary has an equity interest. The
securing in the foregoing manner of any such Indebtedness which immediately
prior thereto was not Secured Debt shall be deemed to be the creation of Secured
Debt at the time security is given.

            "Security Interests" means any mortgage, pledge, lien, encumbrance
or other security interest which secures the payment or performance of an
obligation.

            "Specified Indebtedness" means Indebtedness under (i) the Senior
Notes, (ii) the Senior Indenture and (iii) the Credit Agreement dated as of
April 8, 2004, among the Company and the banks named therein, as amended or
supplemented from time to time, and any refinancing, extension, renewal or
replacement of any of the foregoing.

            "Subordinated Indebtedness" means Indebtedness of the Company which
is subordinated in right of payment to the prior payment in full, including all
payment of principal, premium and all accrued interest (and post-petition
interest) on, and all other amounts owing in connection with the Notes.

                                      -7-
<PAGE>

            Section 2.01C. Definitions Applicable to the Subordinated Indenture.
The following terms have the meanings set forth below in this Supplemental
Indenture. Capitalized terms used but not defined herein have the meanings
ascribed to such terms in the Subordinated Indenture. To the extent terms
defined herein differ from the Subordinated Indenture the terms defined herein
will govern.

            "Event of Default" means any one of the following events:

            (a) default in the payment of interest on the Subordinated Notes as
      and when the same becomes due and payable and the continuance of any such
      failure for 30 days;

            (b) default in the payment of all or any part of the principal or
      premium, if any, on the Subordinated Notes when and as the same become due
      and payable at maturity, at redemption, by declaration of acceleration or
      otherwise;

            (c) default in the observance or performance of, or breach of, any
      covenant, agreement or warranty of the Company contained in the
      Subordinated Notes , the Subordinated Indenture or this Supplemental
      Indenture (unless specifically dealt with elsewhere), and continuance of
      such default or breach for a period of 60 days after there has been given,
      by registered or certified mail, to the Company by the Trustee, or to the
      Company and the Trustee by Holders of at least 25% in aggregate principal
      amount of the outstanding Subordinated Notes, a written notice specifying
      such default or breach, requiring it to be remedied and stating that such
      notice is a "Notice of Default" hereunder;

            (d) a decree, judgment, or order by a court of competent
      jurisdiction shall have been entered adjudging the Company or any of its
      Significant Subsidiaries as bankrupt or insolvent, or approving as
      properly filed a petition in an involuntary case or proceeding seeking
      reorganization of the Company or any of its Significant Subsidiaries under
      any bankruptcy or similar law, or a decree, judgment or order of a court
      of competent jurisdiction directing the appointment of a receiver,
      liquidator, trustee, or assignee in bankruptcy or insolvency of the
      Company, any of its Significant Subsidiaries, or of the assets or property
      of any such Person, or the winding up or liquidation of the affairs of any
      such Person, shall have been entered, and the continuance of any such
      decree, judgment or order unstayed and in effect for a period of 90
      consecutive days;

            (e) the Company or any of its Significant Subsidiaries shall
      institute proceedings to be adjudicated a voluntary bankrupt (including
      conversion of an involuntary proceeding into a voluntary proceeding), or
      shall consent to the filing of a bankruptcy proceeding against it, or
      shall file a petition or answer or consent to the filing of any such
      petition, or shall consent to the appointment of a Custodian, receiver,
      liquidator, trustee, or assignee in bankruptcy or insolvency of it or any
      of its assets or property, or shall make a general assignment for the
      benefit of creditors, or shall admit in writing its inability to pay its
      debts generally as they become due, or shall, within the meaning of any
      Bankruptcy Law, become insolvent, or fail generally to pay its debts as
      they become due;

            (f) (i) the acceleration of any Indebtedness (other than
      Non-Recourse Indebtedness) of the Company or any of its Significant
      Subsidiaries (in accordance with the terms of such Indebtedness and after
      giving effect to any applicable grace period set forth in the documents
      governing such Indebtedness) that has an outstanding principal amount of
      $25,000,000 or more individually or $40,000,000 or more in the aggregate
      to be immediately due and payable; provided that, in the event any such
      acceleration is withdrawn or otherwise rescinded (including satisfaction
      of such Indebtedness) within a period of ten Business Days after such
      acceleration by the holders of such Indebtedness, any Event of Default
      under this clause (f) will be deemed to be

                                      -8-
<PAGE>

      cured and any acceleration hereunder will be deemed withdrawn or
      rescinded; or (ii) the failure by the Company or any of its Significant
      Subsidiaries to make any principal, premium, interest or other required
      payment in respect of Indebtedness (other than Non-Recourse Indebtedness)
      of the Company or any of its Significant Subsidiaries with an outstanding
      aggregate principal amount of $25,000,000 or more individually or
      $40,000,000 or more in the aggregate (after giving effect to any
      applicable grace period set forth in the documents governing such
      Indebtedness); or

            (g) one or more final nonappealable judgments (in the amount not
      covered by insurance or not reserved for) or the issuance of any warrant
      of attachment against any portion of the property or assets (except with
      respect to Non-Recourse Indebtedness) of the Company or any of its
      Significant Subsidiaries, which are $25,000,000 or more individually or
      $40,000,000 or more in the aggregate, at any one time rendered against the
      Company or any of its Significant Subsidiaries by a court of competent
      jurisdiction and not bonded, satisfied or discharged for a period (during
      which execution shall not be effectively stayed) of (i) 60 days after the
      judgment becomes final and such court shall not have ordered or approved,
      and the parties shall not have agreed upon, the payment of such judgment
      at a later date or dates or (ii) 60 days after all or any part of such
      judgment is payable pursuant to any court order or agreement between the
      parties.

            "Non-Recourse Indebtedness" means Indebtedness or other obligations
secured by a lien on property to the extent that the liability for the
Indebtedness or other obligations is limited to the security of the property
without liability on the part of the Company for any deficiency.

                                 ARTICLE THREE

                                   REDEMPTION

                  Section 3.01. Right of Redemption.

            Redemption of Notes, as permitted by any provision of this Indenture
or the Notes, shall be made in accordance with such provision and Article Three
of the applicable Indenture.

            Unless one or more Redemption Dates are specified, the Notes will
not be redeemable prior to their Stated Maturity. If one or more Redemption
Dates are specified with respect to any Note, one or more Redemption Prices
(expressed as a percentage of the principal amount of the Note) and the
redemption period or periods during which the Redemption Prices shall apply
shall also be specified. Unless otherwise specified, any such Note will be
redeemable at our option at the specified Redemption Price applicable to the
redemption period during which the Notes are to be redeemed, together with
interest accrued to the Redemption Date. The Company may redeem the Notes that
are redeemable and remain outstanding either in whole or from time to time in
part, on at least 30 but not more than 60 days' prior notice to the Holders
thereof.

            If money sufficient to pay the Redemption Price of and accrued
interest on the Notes to be redeemed is deposited with the Trustee on or before
the Redemption Date, on and after the Redemption Date interest will cease to
accrue on the Notes (or such portions thereof) called for redemption and the
Notes will cease to be outstanding.

            On and after the Redemption Date, interest will cease to accrue on
the Notes or any portion of the Notes called for redemption (unless the Company
defaults in the payment of the Redemption Price and accrued interest). On or
before the Redemption Date, the Company will deposit with a paying agent (or the
Trustee) money sufficient to pay the redemption price of and accrued interest

                                      -9-
<PAGE>

on the Notes to be redeemed on that date. If less than all of the Notes are to
be redeemed, the Notes to be redeemed shall be selected by lot by DTC, in the
case of Notes represented by a global security.

                                  ARTICLE FOUR

                                    COVENANTS

            The following additional covenants will apply with respect to the
Senior Notes only:

            Section 4.01. Restrictions on Secured Debt.

            The Company will not, and will not cause or permit a Restricted
Subsidiary (other than any Finance Subsidiary) to, create, incur, assume or
guarantee any Secured Debt unless the Senior Notes will be secured equally and
ratably with (or prior to) such Secured Debt, with certain exceptions. This
restriction does not prohibit the creation, incurrence, assumption or guarantee
of Secured Debt which is secured by:

            (1) Security Interests in model homes, homes held for sale, homes
      that are under contract for sale, contracts for the sale of homes, land
      (improved or unimproved), manufacturing plants, warehouses or office
      buildings and fixtures and equipment located thereat or thereon;

            (2) Security Interests in property at the time of its acquisition by
      the Company or a Restricted Subsidiary, including Capitalized Lease
      Obligations, which Security Interests secure obligations assumed by the
      Company or a Restricted Subsidiary, or in the property of a corporation or
      other entity at the time it is merged into or consolidated with the
      Company or a Restricted Subsidiary (other than Secured Debt created in
      contemplation of the acquisition of such property or the consummation of
      such a merger or where the Security Interest attaches to or affects the
      property of the Company or a Restricted Subsidiary prior to such
      transaction);

            (3) Security Interests arising from conditional sales agreements or
      title retention agreements with respect to property acquired by the
      Company or a Restricted Subsidiary;

            (4) Security Interests incurred in connection with pollution
      control, industrial revenue, water, sewage or any similar item; and

            (5) Security Interests securing Indebtedness of a Restricted
      Subsidiary owing to the Company or a Restricted Subsidiary that is wholly
      owned (directly or indirectly) by the Company or Security Interests
      securing the Company's Indebtedness owing to a Guarantor.

            Such permitted Secured Debt also includes any amendment,
restatement, supplement, renewal, replacement, extension or refunding, in whole
or in part, of Secured Debt permitted at the time of the original incurrence
thereof.

            In addition, the Company and the Guarantors may create, incur,
assume or guarantee Secured Debt, without equally and ratably securing the
Senior Notes, if immediately thereafter the sum of (1) the aggregate principal
amount of all Secured Debt outstanding (excluding Secured Debt permitted under
clauses (1) through (5) above and any Secured Debt in relation to which the
Senior Notes have been equally and ratably secured) and (2) all Attributable
Debt in respect of Sale and Leaseback Transactions (excluding Attributable Debt
in respect of Sale and Leaseback Transactions as to which the provisions of
clauses (1) through (3) under Section 4.01 have been complied with) as of the
date of determination would not exceed 20% of Consolidated Net Tangible Assets.

                                      -10-
<PAGE>

            The provisions described above with respect to limitations on
Secured Debt are not applicable to Non-Recourse Indebtedness by virtue of the
definition of Secured Debt, and will not restrict the Company's or the
Guarantors' ability to create, incur, assume or guarantee any unsecured
Indebtedness, or the ability of any Subsidiary which is not a Restricted
Subsidiary to create, incur, assume or guarantee any secured or unsecured
Indebtedness.

                  Section 4.02. Limitations on Sale and Leaseback Transactions.

            The Company will not, and will not cause or permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless (1) the net
proceeds to the Company or such Restricted Subsidiary from such sale or transfer
equal or exceed the fair value (as determined by the Board of Directors,
chairman of the board, vice chairman, president or principal financial officer
of the Company) of the property or asset so leased, (2) the Company or such
Restricted Subsidiary would be entitled to incur Secured Debt pursuant to
Section 4.01, (3) the Company or any Restricted Subsidiary shall, and in any
case the Company and the Restricted Subsidiaries, covenant that they will,
within 180 days of the effective date of any Sale and Leaseback Transaction,
apply an amount equal to the fair value of the property so leased to the
retirement of Funded Indebtedness, (4) the Sale and Leaseback Transaction
relates to a sale which occurred within 180 days from the date of acquisition of
such property or asset by the Company or a Restricted Subsidiary or the date of
the completion of construction or commencement of full operations on such
property, whichever is later, or (5) the Sale and Leaseback Transaction was
consummated prior to the date of this Supplemental Indenture.

                  Section 4.03. Additional Guarantees.

            The Company shall not permit any Subsidiary that is not a Guarantor,
directly or indirectly, to guarantee any obligations of the Company under the
Specified Indebtedness unless such Subsidiary simultaneously executes and
delivers to the Trustee a supplemental indenture, in a form reasonably
satisfactory to the Trustee, pursuant to which such Subsidiary guarantees,
jointly and severally with all other Guarantors, on the same basis as the
Specified Indebtedness is guaranteed, the Company's obligations under the Senior
Indenture and the Senior Notes. The Company shall deliver to the Trustee an
opinion of counsel that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and, subject to customary exceptions,
constitutes a valid and legally binding and enforceable obligation of such
Subsidiary.

                  Section 4.04. SEC Reports.

            The Company shall deliver to the Trustee and each Holder of Senior
Notes, within 15 days after it files the same with the SEC, copies of all
reports and information (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe), if any, exclusive of exhibits,
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act or pursuant to the immediately following sentence. So
long as any Senior Notes remain outstanding, the Company shall file with the
Commission such reports as may be required pursuant to Section 13 of the
Exchange Act in respect of a security registered pursuant to Section 12 of the
Exchange Act. If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act (or otherwise required to file reports pursuant to the
immediately preceding sentence), the Company shall deliver to the Trustee and to
each Holder of Senior Notes, within 15 days after it would have been required to
file such information with the SEC were it required to do so, financial
statements, including any notes thereto (and, in the case of a fiscal year end,
an auditors' report by an independent certified public accounting firm of
established national reputation), and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," substantially equivalent to that
which it would have been required to include in such quarterly or annual
reports, information, documents or other reports if it had been subject to the

                                      -11-
<PAGE>

requirements of Section 13 or 15(d) of the Exchange Act. The Company shall also
comply with the other provisions of TIA Section 314(a).

            The Trustee has no duty to review the financial reports and other
information for the purpose of determining compliance with any provision of this
Indenture.

                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

            Section 5.01A. Consolidation, Merger and Sale of Assets. Article
Five of the Senior Indenture is replaced with the following in its entirety:

            Neither the Company nor the Guarantors will consolidate or merge
into or sell, assign, transfer or lease all or substantially all of their assets
to another person unless:

            (1) the person is a corporation organized under the laws of the
      United States of America or any state thereof;

            (2) the person assumes by supplemental indenture, in a form
      reasonably satisfactory to the Trustee, all of the obligations of the
      Company or such Guarantor, as the case may be, relating to the Senior
      Notes, the Guarantees and the Senior Indenture, as the case may be; and

            (3) immediately after the transaction no Event of Default exists;
      provided that in respect of the Senior Notes, this clause (3) will not
      restrict or be applicable to a merger, consolidation or liquidation of a
      Guarantor with or into the Company or another Subsidiary that is wholly
      owned, directly or indirectly, by the Company that is, or concurrently
      with the completion of such merger, consolidation or liquidation becomes,
      a Guarantor or a Restricted Subsidiary that is wholly owned, directly or
      indirectly, by the Company.

            Upon any such consolidation, merger, sale, assignment or transfer,
the successor corporation will be substituted for the Company or such Guarantor
(including any merger or consolidation described in the proviso at the end of
the immediately preceding sentence), as applicable, under the Senior Indenture.
The successor corporation may then exercise every power and right of the Company
or such Guarantor under the Senior Indenture, and the Company or such Guarantor,
as applicable, will be released from all of its respective liabilities and
obligations in respect of the Senior Notes and the Senior Indenture. If the
Company or any Guarantor leases all or substantially all of its assets, the
lessee corporation will be the successor to the Company or such Guarantor and
may exercise every power and right of the Company or such Guarantor, as the case
may be, under the Senior Indenture, but the Company or such Guarantor, as the
case may be, will not be released from its respective obligations to pay the
principal of and premium, if any, and interest, if any, on the Senior Notes.

            Section 5.01B. Consolidation, Merger and Sale of Assets. Article
Five of the Subordinated Indenture is replaced with the following in its
entirety:

            The Company will consolidate or merge into or sell, assign, transfer
or lease all or substantially all of their assets to another person unless:

                                      -12-
<PAGE>

            (1) the person is a corporation organized under the laws of the
      United States of America or any state thereof;

            (2) the person assumes by supplemental indenture, in a form
      reasonably satisfactory to the Trustee, all of the obligations of the
      Company relating to the Subordinated Notes and the Subordinated Indenture;
      and

            (3) immediately after the transaction no Event of Default exists.

            Upon any such consolidation, merger, sale, assignment or transfer,
the successor corporation will be substituted for the Company under the
Subordinated Indenture. The successor corporation may then exercise every power
and right of the Company under the Subordinated Indenture, and the Company will
be released from all of its respective liabilities and obligations in respect of
Subordinated Notes and the Subordinated Indenture. If the Company leases all or
substantially all of its assets, the lessee corporation will be the successor to
the Company and may exercise every power and right of the Company under the
Subordinated Indenture, but the Company will not be released from its respective
obligations to pay the principal of and premium, if any, and interest, if any,
on the Subordinated Notes.

                                  ARTICLE SIX

                                   GUARANTEES

                  Section 6.01. Unconditional Guarantee of the Senior Notes.

            Each Guarantor hereby fully and unconditionally, jointly and
severally, guarantees (each such guarantee to be referred to herein as the
"Guarantee") to the Holders of the Senior Notes and to the Trustee and its
successors and assigns that: (i) the principal of and interest on the Senior
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest of the Senior Notes and
all other obligations of the Company to the Holders of Senior Notes 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 Senior Notes or of any such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise
(collectively, the "Guaranteed Obligations"), subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in Section 6.02. Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Senior Notes
or the Senior Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of Senior 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.

            The obligations of each Guarantor hereunder are separate and
independent of the obligations of the Company and of any other Guarantor, and a
separate action or actions may be brought and prosecuted against a Guarantor
whether action is brought against the Company or any other Guarantor or whether
the Company or any other Guarantor are joined in any action or actions. The
obligations of a Guarantor hereunder shall survive and continue in full force
and effect until the earlier of (i) such time as such Guarantor may be released
from its obligations hereunder pursuant to the terms Section 6.06 hereof, or
(ii) payment in full of the Guaranteed Obligations is actually received by the

                                      -13-
<PAGE>

Holders of Senior Notes or the Trustee on behalf of the Holders of Senior Notes
and the period of time has expired during which any payment made by the Company
or such Guarantor may be determined to be a Preferential Payment (defined
below), notwithstanding any release or termination of the Company's or any other
Guarantor's liability by express or implied agreement or by operation of law and
notwithstanding that the Guaranteed Obligations or any part thereof are deemed
to have been paid or discharged by operation of law or by some act or agreement.
For purposes of this Guarantee, the Guaranteed Obligations shall be deemed to be
paid only to the extent that the Holders of Senior Notes, or the Trustee on
behalf of the Holders of Senior Notes, actually receive immediately available
funds.

            Each Guarantor agrees that to the extent the Company or any other
Guarantor makes any payment to the Holders of Senior Notes, or to the Trustee on
behalf of the Holders of Senior Notes, in connection with the Guaranteed
Obligations, and all or any part of such payment is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid by
the Holders of Senior Notes or the Trustee or paid over to a trustee, receiver
or any other entity, whether under any bankruptcy act or otherwise (any such
payment is hereinafter referred to as a "Preferential Payment"), then this
Guarantee shall continue to be effective or shall be reinstated, as the case may
be, and, to the extent of such payment or repayment by the Holders of Senior
Notes or the Trustee, the Guaranteed Obligations or part thereof intended to be
satisfied by such Preferential Payment shall be revived and continued in full
force and effect as if said Preferential Payment had not been made.

                  Section 6.02. Fraudulent Conveyance Limitation.

            Notwithstanding any contrary provision, the amount of the Guaranteed
Obligations guaranteed by a Guarantor under this Guarantee shall be, but not in
excess of, the maximum amount permitted by fraudulent conveyance, fraudulent
transfer or similar laws applicable to such Guarantor. Accordingly,
notwithstanding anything to the contrary contained in this Guarantee or any
other agreement or instrument executed in connection with the payment of the
Guaranteed Obligations, the amount of the Guaranteed Obligations guaranteed by
any Guarantor by this Guarantee shall be limited to an aggregate amount equal to
the largest amount that would not render such Guarantor's obligations hereunder
subject to avoidance under any Bankruptcy Law.

                  Section 6.03. Waiver.

            Each Guarantor waives and agrees not to assert: (a) any right to
require the Holders of Senior Notes or the Trustee to proceed against the
Company or any other Guarantor, to proceed against or exhaust any security for
the Guaranteed Obligations, to pursue any other remedy available to the Holders
of Senior Notes or the Trustee or to pursue any remedy in any particular order
or manner; (b) the benefit of any statute of limitations affecting such
Guarantor's liability hereunder or the enforcement hereof; (c) demand,
diligence, presentment for payment, protest and demand, and notice of extension,
dishonor, protest, demand, nonpayment and acceptance of this Guarantee; (d)
notice of the existence, creation or incurring of new or additional indebtedness
of the Company to the Holders of Senior Notes; and (e) any defense arising by
reason of any disability or other defense of the Company or by reason of the
cessation from any cause whatsoever (other than payment in full of all amounts
demanded to be paid by such Guarantor under this Guarantee) of the liability of
the Company for the Guaranteed Obligations. Each Guarantor hereby expressly
consents to any impairment of collateral, including, but not limited to, failure
to perfect a security interest and release collateral and any such impairment or
release shall not affect Guarantors' obligations hereunder. Until payment in
full of the Guaranteed Obligations, no Guarantor shall have a right of
subrogation and hereby waives any right to enforce any remedy which the Holders
of Senior Notes or the Trustee now have, or may hereafter have, against the
Company, and waives any benefit of, any right to participate in, any security
now or hereafter held on behalf of the Holders of Senior Notes.

                                      -14-
<PAGE>

                  Section 6.04. Subordinated Indebtedness.

            If from time to time the Company shall have liabilities or
obligations to the Guarantors, whether absolute or contingent, joint, several,
or joint and several, such liabilities and obligations and any and all
assignments as security, grants in trust, liens, mortgages, security interests,
other encumbrances, and other interests and rights securing such liabilities and
obligations shall at all times be fully subordinate to payment and performance
in full of the Guaranteed Obligations. Each Guarantor agrees that such
liabilities and obligations of the Company to such Guarantor shall not be
secured by any assignment as security, grant in trust, lien, mortgage, security
interest, other encumbrance or other interest or right in any property,
interests in property, or rights to property of the Company. Each Guarantor
agrees that (i) so long as no Event of Default has occurred and is continuing,
payments of principal and interest on the Subordinated Indebtedness may be made
by the Company and accepted by such Guarantor as such payments become due; and
(ii) after the occurrence and during the continuation of an Event of Default,
the Company shall not make and such Guarantor shall not accept any payments with
respect to the Subordinated Indebtedness. If, notwithstanding the foregoing,
subsequent to an Event of Default, any Guarantor receives any payment from the
Company, such payment shall be held in trust by such Guarantor for the benefit
of the Holders of Senior Notes, and shall be segregated from the other funds of
such Guarantor, and shall forthwith be paid by such Guarantor to the Holders of
Senior Notes or to the Trustee on behalf of the Holders of Senior Notes and
applied to payment of the Guaranteed Obligations whether or not then due.

            In the event of any distribution, division, or application, partial
or complete, voluntary or involuntary, by operation of law or otherwise, of all
or any part of the assets of the Company, or the proceeds thereof, to creditors
of the Company, by reason of the liquidation, dissolution, or other winding up
of the Company's business, or in the event of any receivership, insolvency or
bankruptcy proceedings by or against the Company, or assignment for the benefit
of creditors, or of any proceedings by or against the Company for any relief
under any bankruptcy or insolvency laws, or relating to the relief of debtors,
readjustment of indebtedness, reorganizations, arrangements, compositions or
extensions, or of any other event whereby it becomes necessary or desirable to
file or present claims against the Company for the purpose of receiving payment
thereof, or on account thereof, then and in any such event, any payment or
distribution of any kind or character, either in cash or other property, which
shall be made or shall be payable with respect to any Subordinated Indebtedness
shall be paid over to the Holders of Senior Notes or to the Trustee on behalf of
the Holders of Senior Notes for application to the payment of the Guaranteed
Obligations, whether due or not due, and no payments shall be made upon or in
respect of the Subordinated Indebtedness unless and until the Guaranteed
Obligations shall have been paid and satisfied in full. In any such event, all
claims of the Holders of Senior Notes and all claims of the Guarantors shall, at
the option of the Trustee, forthwith become due and payable without demand or
notice.

            In the event of any distribution, division, or application, partial
or complete, voluntary or involuntary, by operation of law or otherwise, of all
or any part of the assets of the Company, or the proceeds thereof, to creditors
of the Company, by reason of the liquidation, dissolution, or other winding up
of the Company's business, or in the event of any receivership, insolvency or
bankruptcy proceedings by or against the Company, or assignment for the benefit
of creditors, or of any proceedings by or against the Company for any relief
under any bankruptcy or insolvency laws, or relating to the relief of debtors,
readjustment of indebtedness, reorganizations, arrangements, compositions or
extensions, or of any other event whereby it becomes necessary or desirable to
file or present claims against the Company for the purpose of receiving payment
thereof, or on account thereof, each Guarantor irrevocably authorizes and
empowers the Trustee, or any person the Trustee may designate, to act as
attorney for such Guarantor with full power and authority in the name of such
Guarantor, or otherwise, to make and present such claims or proofs of claims
against the Company on account of the Subordinated Indebtedness as the Trustee,
or its appointee, may deem expedient and proper and, if necessary, to vote such
claims in any

                                      -15-
<PAGE>

proceedings and to receive and collect for the benefit of the Holders of Senior
Notes any and all dividends or other payments and disbursements made thereon in
whatever form they may be paid or issued, and to give acquittance therefor and
to apply same to the Guaranteed Obligations, and each Guarantor hereby agrees,
from time to time and upon request, to make, execute and deliver to the Trustee
such powers of attorney, assignments, endorsements, proofs of claim, pleadings,
verifications, affidavits, consents, agreements or other instruments as may be
requested by the Trustee in order to enable the Trustee and the Holders of
Senior Notes to enforce any and all claims upon, or with respect to, the
Subordinated Indebtedness, and to collect and receive any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect to the Subordinated Indebtedness.

            Except as otherwise permitted herein, should any payment or
distribution or security or proceeds thereof be received by a Guarantor upon or
with respect to the Subordinated Indebtedness prior to the satisfaction of the
Guaranteed Obligations, such Guarantor will forthwith deliver the same to the
Trustee on behalf of the Holders of Senior Notes in precisely the form as
received except for the endorsement or assignment of such Guarantor where
necessary for application on the Guaranteed Obligations, whether due or not due,
and until so delivered the same shall be held in trust by such Guarantor as
property of the Trustee on behalf of the Holders of Senior Notes. In the event
of the failure of such Guarantor to make any such endorsement or assignment, the
Trustee, or any of its officers or employees, on behalf of the Trustee, is
hereby irrevocably authorized to make the same.

            Each Guarantor agrees to maintain in its records notations
satisfactory to the Trustee of the rights and priorities of the Holders of
Senior Notes hereunder, and from time to time, upon request, to furnish the
Trustee for the benefit of the Holders of Senior Notes with sworn financial
statements. The Trustee may inspect the books of account and any records of each
Guarantor at any time during business hours. Each Guarantor agrees that any
promissory note now or hereafter evidencing the Subordinated Indebtedness shall
be nonnegotiable and shall be marked with a specific statement that the
indebtedness thereby evidenced is subject to the provisions of this Guarantee.

                  Section 6.05. Execution of Guarantee.

            Each Guarantor hereby agrees to execute a notation of Guarantee in
substantially the form attached to the form of Senior Note, and to deliver such
notation to the Trustee.

                  Section 6.06. Additional Guarantees and Release of Guarantees.

            (a) The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to guarantee any Specified Indebtedness ("Guaranteed
Indebtedness") unless such Restricted Subsidiary simultaneously executes and
delivers to the Trustee a supplemental indenture, in a form reasonably
satisfactory to the Trustee, pursuant to which such Restricted Subsidiary
guarantees, jointly and severally with all other Guarantors, on the same basis
as such Guaranteed Indebtedness is guaranteed, the Guaranteed Obligations. If
the Guaranteed Indebtedness (1) ranks pari passu in right of payment with the
Senior Notes, then the guarantee of such Guaranteed Indebtedness shall rank pari
passu with, or be subordinated in right of payment to, the Guarantee of such
Restricted Subsidiary or (2) is subordinated by its terms in right of payment to
the Senior Notes, then the guarantee of such Guaranteed Indebtedness shall be
subordinated to the Guarantee of such Restricted Subsidiary at least to the
extent that the Guaranteed Indebtedness is subordinated to the Senior Notes.

            (b) The Guarantee of any Guarantor will be automatically and
unconditionally released and discharged so long as:

                                      -16-
<PAGE>

            (i) no Default or Event of Default exists or would result from
      release of such Guarantee;

            (ii) the Guarantor being released has Consolidated Net Worth of less
      than 5% of the Company Consolidated Net Worth as of the end of the most
      recent fiscal quarter;

            (iii) the Guarantors released from their Guarantees in any year-end
      period comprise in the aggregate less than 10% (or 15% if and to the
      extent necessary to permit the Company to cure a Default) of the Company's
      Consolidated Net Worth as of the end of the most recent fiscal quarter;

            (iv) such release would not have a material adverse effect on the
      homebuilding business of the Company and its Subsidiaries; and

            (v) the Guarantor is released from its guarantee(s) under the
      Specified Indebtedness;

provided, in each such case, the Company has delivered to the Trustee an
Officers' Certificate and Opinion of Counsel, each stating that all conditions
precedent provided for in the Indenture relating to such transactions have been
complied with and that such release is authorized and permitted under the Senior
Indenture.

            (c) If there are no guarantors under any Specified Indebtedness,
Guarantors under this Supplemental Indenture will be released from their
Guarantees.

                                 ARTICLE SEVEN

                                 MISCELLANEOUS

                  Section 7.01. Confirmation of the Indentures.

            Each of the Indentures, as supplemented and amended by this
Supplemental Indenture, is in all respects ratified and confirmed, and each
Indenture, this Supplemental Indenture and all indentures supplemental thereto
shall be read, taken and construed as one and the same instrument.

                  Section 7.02. Concerning the Trustee.

            The rights and duties of the Trustee set forth in Article Seven of
the Indentures shall not be modified by reason of this Supplemental Indenture.

                  Section 7.03. Governing Law.

            This Supplemental Indenture, the Indentures, the Notes, and the
Guarantee shall be governed by the laws of the State of New York.

                  Section 7.04. Separability.

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

                                      -17-
<PAGE>

                  Section 7.05. Counterparts.

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

                  Section 7.06. No Adverse Interpretation of Other Agreements.

            This Supplemental Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Supplemental
Indenture.

                  Section 7.07. No Recourse Against Others.

            All liability described in Paragraph 18 of the Notes of any
director, officer, employee or stockholder, as such, of the Company or any
Guarantor is waived and released.

                  Section 7.08. Successors and Assigns.

            All covenants and agreements of the Company and the Guarantors in
this Supplemental Indenture and the Notes shall bind its successors and assigns.
All agreements of the Trustee in this Supplemental Indenture shall bind its
successors and assigns.

                  Section 7.09. Duplicate Originals.

            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.

                  Section 7.10. Severability.

            In case any one or more of the provisions contained in this
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Indenture or of the Notes.

                            [Signature Pages Follow]

                                      -18-
<PAGE>

                                   SIGNATURES

            IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.

                                   M.D.C. HOLDINGS, INC.

                                   By: /s/ Paris G. Reece III
                                       ----------------------------------------
                                       Name:  Paris G. Reece III
                                       Title: Executive Vice President and
                                               Chief Financial Officer

                             Supplemental Indenture

<PAGE>

                                   GUARANTORS:

                                   RICHMOND AMERICAN HOMES OF
                                        CALIFORNIA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        MARYLAND, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        NEVADA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        VIRGINIA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        ARIZONA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        COLORADO, INC.
                                   M.D.C. LAND CORPORATION
                                   RAH TEXAS HOLDINGS, LLC
                                   RAH OF FLORIDA, INC.
                                   RAH OF TEXAS, LP
                                   RICHMOND AMERICAN CONSTRUCTION,
                                      INC.
                                   RICHMOND AMERICAN HOMES OF
                                        TEXAS, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        UTAH, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        WEST VIRGINIA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        ILLINOIS, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        DELAWARE, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        PENNSYLVANIA, INC.
                                   RICHMOND AMERICAN HOMES OF
                                        FLORIDA, LP
                                   RICHMOND AMERICAN HOMES OF
                                        NEW JERSEY, INC.

                                   By: /s/ Paris G. Reece III
                                       ----------------------------------------
                                       Name:  Paris G. Reece III
                                       Title: Authorized Officer or
                                               representative of each
                                               Guarantor

                             Supplemental Indenture

<PAGE>

U.S.  BANK NATIONAL ASSOCIATION,
 as Trustee

By: /s/ Ignazio Tamburello
    ---------------------------------------
    Name:  Ignazio Tamburello
    Title: Authorized Signatory

                             Supplemental Indenture

<PAGE>

                                                                     EXHIBIT A-1

            THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE SENIOR
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
SENIOR INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE SENIOR INDENTURE.

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

                                     A-1-1
<PAGE>

                   Form of Medium Term Fixed Rate Senior Note

                                 [Face of Note]

                             M.D.C. HOLDINGS, INC.

CUSIP NO.:

REGISTERED NO.  FX         MEDIUM-TERM SENIOR NOTE         PRINCIPAL AMOUNT: $

                Due Nine Months or More from Original Issue Date

            The following summary of terms is subject to the information set
forth on the reverse hereof:

<TABLE>
<S>                                                                     <C>
ORIGINAL ISSUE DATE:                                                    OPTION TO REDEEM:               [ ] Yes   [ ] No

STATED MATURITY:                                                        REDEMPTION DATE(S):

SPECIFIED CURRENCY: U.S. dollars                                        REDEMPTION PRICE(S):

EXCHANGE RATE AGENT:                                                    OPTION TO ELECT REPAYMENT:      [ ] Yes   [ ] No

AUTHORIZED DENOMINATIONS (if other than $1,000 and integral             REPAYMENT DATE(S):
multiples thereof):

FORM: Global/Book-Entry Certificated                                    REPAYMENT PRICE(S):

PAYING AGENT (if other than the Trustee):                               OPTION TO RESET:                [ ] Yes   [ ] No

INITIAL INTEREST RATE:                                                  RESET DATE(S):

INTEREST PAYMENT DATES:                                                 RESET BASIS:

REGULAR RECORD DATES:                                                   OPTION TO EXTEND ORIGINAL STATED MATURITY:
                                                                        [ ] Yes                         [ ] No

SINKING FUND:   [ ] Yes   [ ] No                                        EXTENSION PERIOD:

ORIGINAL ISSUE DISCOUNT:                                                NUMBER OF EXTENSION PERIODS:

SECURITY (Discount Note): [ ] Yes (see below) [ ] No                    FINAL MATURITY DATE:

AMORTIZING SECURITY:      [ ] Yes          [ ]  No                      OPTION TO RENEW:                [ ] Yes   [ ] No

OTHER PROVISIONS:                                                       INITIAL MATURITY DATE:

ANNEX ATTACHED:       [ ] Yes   [ ] No                                  RENEWAL TERMS:

</TABLE>

If this Senior Note was issued with "original issue discount" for purposes of
Section 1273 of the Internal Revenue Code of 1986, as amended, the following
shall be completed:

ISSUE PRICE (expressed as a percentage of aggregate principal amount):

TOTAL AMOUNT OF OID:

                                     A-1-2
<PAGE>

SHORT ACCRUAL PERIOD OID:

YIELD TO MATURITY:

METHOD USED TO DETERMINE YIELD FOR SHORT ACCRUAL PERIOD: Approximate   Exact

            M.D.C. HOLDINGS, INC., a Delaware corporation, hereby promises to
pay to ______ or registered assigns, the principal amount specified above on the
Stated Maturity shown above, and to pay interest thereon from the Original Issue
Date shown above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be.

            Interest will be paid on the Interest Payment Date(s) specified
above, commencing with the first such Interest Payment Date next succeeding the
Original Issue Date shown above (except as provided below), at the rate per
annum specified above, until the principal hereof is paid or made available for
payment and on the Stated Maturity. The first payment of interest on any Senior
Note originally issued between a Regular Record Date and the next Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the Holder on such next succeeding Regular
Record Date. The interest so payable and punctually paid or duly provided for on
any Interest Payment Date will, as provided in the Senior Indenture, be paid to
the Person in whose name this Senior Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date specified above
next preceding such Interest Payment Date; provided, however, that interest
payable at the Stated Maturity or any Redemption Date or Repayment Date (each
being herein referred to as "Maturity") will be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Senior
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Senior Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date (which shall not be less than five Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail by or on
behalf of the Company to the Holder of this Senior Note (or one or more
Predecessor Notes) not less than 15 days prior to such Special Record Date, all
as more fully provided in said Senior Indenture.

            If this Senior Note is in global form as specified above, while this
Senior Note is represented by one or more global Senior Notes registered in the
name of the Depository or its nominee, the Company will cause payments of
principal of, premium, if any, and interest on such global Senior Notes to be
made to the Depository or its nominee, as the case may be, by wire transfer to
the extent, in the funds and in the manner required by agreements with, or
regulations or procedures prescribed from time to time by, the Depository or its
nominee, and otherwise in accordance with such agreements, regulations and
procedures. If this Senior Note is in global form as specified above, the
following legend is applicable except as specified on the reverse hereof: THIS
SENIOR NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY
OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR.

            If this Senior Note is in certificated form as specified above,
payments of interest and, if this Senior Note is an Amortizing Note as specified
above, principal on this Senior Note (other than interest, and if this Senior
Note is an Amortizing Note, principal payable at Stated Maturity) will be made
by mailing a check to the Holder at the last address of the Holder appearing in
the registry books of the Company on the applicable Regular Record Date.
Notwithstanding the foregoing, the Company will make payments of interest and,
in the case of Amortizing Notes, principal to each Holder of $10,000,000 or more
in aggregate principal amount of Senior Notes in certificated form by wire
transfer of

                                     A-1-3
<PAGE>

immediately available funds if the applicable Holder has delivered appropriate
wire transfer instructions in writing to the Trustee not less than 15 days prior
to the applicable Interest Payment Date.

            If this Senior Note is in certificated form as specified above,
payment of the principal of, and premium, if any, and interest on this Senior
Note at Maturity will be made in immediately available funds upon surrender of
this Senior Note accompanied by wire instructions at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York; provided that
this Senior Note is presented to the Trustee in time for the Trustee to make
such payment in such funds in accordance with its normal procedures.

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

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or its successor as Trustee, or
its agent, by manual signature of an authorized signatory, this Senior Note will
not be entitled to any benefit under the Senior Indenture or be valid or
obligatory for any purpose.

                                     A-1-4
<PAGE>

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

Dated:

                                   M.D.C. HOLDINGS, INC.

                                   By:
                                       ________________________________________
                                       Name:
                                       Title:

                                   By:
                                       ________________________________________
                                       Name:
                                       Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

U.S. Bank National Association, as Trustee, certifies
that this is one of the Senior Notes referred to in the within
mentioned Senior Indenture.

By:
   ________________________________________
   Name:
   Authorized Signatory

                                     A-1-5
<PAGE>

                            [Reverse of Senior Note]

                              M.D.C. HOLDINGS, INC.
                             MEDIUM-TERM SENIOR NOTE
              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE

            1.    General. This Senior Note is one of a duly authorized issue of
securities of the Company (herein called the "Senior Notes"), issued and to be
issued in one or more series under an Indenture, dated as of December 3, 2002,
as supplemented from time to time (herein called the "Senior Indenture"),
between the Company, the Guarantors and U.S. Bank National Association, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Senior Indenture), to which Senior Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Senior Notes and of the terms upon which the
Senior Notes are, and are to be, authenticated and delivered. This Senior Note
is one of the Senior Notes of the series designated on the face hereof. The
Senior Notes of this series may bear different dates, mature at different times,
bear interest at different rates, be subject to different redemption provisions,
if any, may be subject to different sinking funds, purchase or analogous funds,
if any, and may otherwise vary, all as provided in the Senior Indenture. The
Senior Notes of this series may be issued from time to time in amounts up to an
aggregate public offering price of $500,000,000; provided that the amount of
Senior Notes sold will reduce the amount of Subordinated Notes that may be sold.

            2.    Payments. Interest on this Senior Note will be payable on the
Interest Payment Date or Interest Payment Dates as specified on the face hereof
and, in either case, at Maturity.

            Unless otherwise specified on the face hereof, payments on this
Senior Note with respect to any Interest Payment Date or Maturity will include
interest accrued from and including the Original Issue Date, or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, to but excluding such Interest Payment Date or Maturity.
Unless otherwise specified on the face hereof, interest on this Senior Note will
be computed and paid on the basis of a 360-day year of twelve 30-day months.

            Unless otherwise specified on the face hereof, if this Senior Note
is an Amortizing Note, payments with respect to this Senior Note will be applied
first to interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Senior Note is an Amortizing Note, a table
setting forth repayment information in respect to this Senior Note will be
provided to the original purchaser hereof and will be available, upon request,
to subsequent Holders.

            All percentages resulting from any calculation with respect to this
Senior Note will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (with five one-millionths of a percentage point being
rounded upward) and all amounts used in or resulting from any such calculation
with respect to this Senior Note will be rounded to the nearest cent (with
one-half cent being rounded upwards).

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

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

                                     A-1-6
<PAGE>

            The Company is obligated to make payment of principal, premium, if
any, and interest, if any, in respect of this Senior Note in U.S. dollars.

            3.    Optional Redemption. Unless one or more Redemption Dates are
specified on the face hereof, this Senior Note shall not be redeemable at the
option of the Company prior to the Stated Maturity. If one or more Redemption
Dates (or ranges of Redemption Dates) are so specified, this Senior Note will be
subject to redemption on any such date (or during any such range) at the option
of the Company, upon notice by first-class mail, postage prepaid, mailed not
less than 30 days nor more than 60 days prior to the Redemption Date specified
in such notice, at the applicable Redemption Price specified on the face hereof
(expressed as a percentage of the principal amount of this Senior Note),
together with accrued interest to the Redemption Date, but payments due with
respect to this Senior Note prior to the Redemption Date will be payable to the
Holder of this Senior Note, or one or more Predecessor Notes, of record at the
close of business on the relevant Regular Record Date or Special Record Date,
all as provided in the Senior Indenture. The Company may elect to redeem less
than the entire principal amount hereof, provided that the principal amount, if
any, of this Senior Note that remains outstanding after such redemption is an
Authorized Denomination specified on the face hereof. In the event of redemption
of this Senior Note in part only, the Company will not be required to (i) issue,
register the transfer of or exchange any Senior Note during a period of 15 days
immediately preceding the day of the first mailing of the notice of redemption
or (ii) register the transfer or exchange of any Senior Note, or any portion
thereof, called for redemption, except the unredeemed portion of any Senior Note
being redeemed in part. Upon such partial redemption, this Senior Note will be
canceled and a new Senior Note or Senior Notes representing the unredeemed
portion hereof will be issued in the name of the Holder hereof.

            4.    Optional Repayment. Unless one or more Repayment Dates are
specified on the face hereof, this Senior Note shall not be repayable at the
option of the Holder prior to the Stated Maturity. If one or more Repayment
Dates (or ranges of Repayment Dates) are so specified, this Senior Note will be
subject to repayment on any such date (or during any such range) at the option
of the Holder at the applicable Repayment Price specified on the face hereof
(expressed as a percentage of the principal amount of this Senior Note),
together with accrued interest to the Repayment Date, but payments due with
respect to this Senior Note prior to the Repayment Date will be payable to the
Holder of this Senior Note, or one or more Predecessor Notes, of record at the
close of business on the relevant Regular Record Date or Special Record Date,
all as provided in the Senior Indenture. In order for this Senior Note to be
repaid prior to Stated Maturity, the Trustee must receive at least 30 days but
not more than 60 days prior to a Repayment Date: (a) appropriate wire transfer
instructions and (b) either (i) this Senior Note with the form attached hereto
entitled "Option to Elect Repayment" duly completed or (ii) a telegram, telex,
facsimile transmission or letter (first class, postage prepaid) from a member of
a national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States setting
forth the name of the Holder of this Senior Note, the principal amount of this
Senior Note, the portion of the principal amount of this Senior Note to be
repaid, the certificate number or a description of the tenor and terms of this
Senior Note, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Senior Note with the form attached hereto
entitled "Option to Elect Repayment" duly completed will be received by the
Trustee not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter. If the procedure described in clause
(b)(ii) of the preceding sentence is followed, this Senior Note with such form
duly completed must be received by the Trustee by such fifth Business Day.
Exercise of the repayment option by the Holder of this Senior Note will be
irrevocable, except that a Holder who has tendered this Senior Note for
repayment may revoke such tender for repayment by written notice to the Trustee
until the close of business on the tenth day prior to the Repayment Date. The
repayment option may be exercised by the Holder for less than the entire
principal amount hereof, provided that the principal amount, if any, of this
Senior Note that remains outstanding after such repayment is an Authorized
Denomination specified on the face hereof. No transfer or exchange of any Senior
Note, or portion thereof, as to which a repayment

                                     A-1-7
<PAGE>

option has been exercised will be permitted after such exercise. Upon such
partial repayment, this Senior Note will be canceled and a new Senior Note or
Senior Notes representing the unrepaid portion hereof will be issued in the name
of the Holder hereof.

            If this Senior Note is in global form as specified on the face
hereof, while this Senior Note is represented by one or more global Senior Notes
registered in the name of the Depository or its nominee, the option for
repayment may be exercised only by a participant that has an account with the
Depository, on behalf of the beneficial owner of this Senior Note, by delivering
a written notice substantially similar to the form attached hereto entitled
"Option to Elect Repayment" duly completed to the Trustee at its Corporate Trust
Office (or such other address of which the Company will from time to time notify
the Holders), at least 30 days but not more than 60 days prior to a Repayment
Date. A notice of election from a participant on behalf of the beneficial owner
of this Senior Note to exercise the option to have this Senior Note repaid must
be received by the Trustee prior to 5:00 P.M., New York City time, on the last
day for giving such notice. In order to ensure that a notice is received by the
Trustee on a particular day, the beneficial owner of this Senior Note must so
direct the applicable participant before such participant's deadline for
accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly, the
beneficial owner of this Senior Note should consult the participant through
which such beneficial owner owns its interest herein for the deadline for such
participant. All notices shall be executed by a duly authorized officer of such
participant (with signatures guaranteed) and will be irrevocable. In addition,
the beneficial owner of this Senior Note shall effect delivery at the time such
notice of election is given to the Depository by causing the applicable
participant to transfer such beneficial owner's interest in this Senior Note, on
the Depository's records, to the Trustee.

            5.    Optional Interest Reset. If so specified on the face hereof,
the Company may reset the interest rate specified on the face hereof on the
Reset Date or Dates specified on the face hereof. The Company may exercise such
option by notifying the Trustee of such exercise at least 45 days but not more
than 60 days prior to a Reset Date. If the Company so notifies the Trustee of
such exercise, not later than 40 days prior to such Reset Date, the Trustee will
mail (first class, postage prepaid) to the Holder of this Senior Note a notice
(the "Reset Notice") setting forth (i) the Company's election to reset the
interest rate, (ii) the new interest rate and (iii) the provisions, if any, for
redemption during the period from such Reset Date to the next Reset Date, or if
there is no next Reset Date, to the Stated Maturity of this Senior Note (each
such period a "Subsequent Interest Period"), including the date or dates on
which or the period or periods during which and the price or prices at which
such redemption may occur during such Subsequent Interest Period.

            Notwithstanding the foregoing, not later than 20 days prior to a
Reset Date, the Company may, at its option, revoke the interest rate provided
for in the Reset Notice and establish a higher interest rate for the Subsequent
Interest Period commencing on such Reset Date by mailing or causing the Trustee
to mail (first class, postage prepaid) notice of such higher interest rate to
the Holder of this Senior Note. Such notice will be irrevocable. All Senior
Notes with respect to which the interest rate is reset on a Reset Date to a
higher interest rate will bear such higher interest rate, whether or not
tendered for repayment as provided in the next paragraph.

            If the Company elects to reset the interest rate of this Senior
Note, the Holder of this Senior Note will have the option to elect repayment of
this Senior Note, in whole but not in part, on the Reset Date at a price equal
to the principal amount hereof plus accrued interest to such Reset Date. In
order for this Senior Note to be so repaid on a Reset Date, the Holder must
follow the procedures specified under Paragraph 4 for optional repayment, except
that the period for delivery of this Senior Note or notification to the Trustee
will be at least 25 days but not more than 35 days prior to such Reset Date. If
the Holder has tendered this Senior Note for repayment following receipt of a
Reset Notice, the Holder

                                     A-1-8
<PAGE>

may revoke such tender for repayment by written notice to the Trustee received
prior to the close of business, on the tenth day prior to such Reset Date.

            6.    Optional Extension of Maturity. If so specified on the face
hereof, the Company may extend the Stated Maturity of this Senior Note for one
or more periods, as specified on the face hereof (each, an "Extension Period"),
up to but not beyond the date (the "Final Maturity Date") specified on the face
hereof. The Company may exercise such option with respect to this Senior Note by
notifying the Trustee of such exercise at least 45 days but not more than 60
days prior to the Stated Maturity of this Senior Note in effect prior to the
exercise of such option. If the Company so notifies the Trustee of such
exercise, the Trustee will mail (first class, postage prepaid), not later than
40 days prior to the Stated Maturity then in effect, to the Holder of this
Senior Note a notice (the "Extension Notice") relating to such Extension Period
setting forth: (i) the Company's election to extend the Stated Maturity of this
Senior Note, (ii) the new Stated Maturity (which shall then be considered the
Stated Maturity for all purposes of this Senior Note), (iii) the interest rate
applicable to such Extension Period and (iv) the provisions, if any, for
redemption during such Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during such Extension Period. Upon the Trustee's mailing of
the Extension Notice, the Stated Maturity of this Senior Note will be extended
automatically and, except as modified by the Extension Notice and as described
in the next two paragraphs, this Senior Note will have the same terms as prior
to the mailing of such Extension Notice.

            Notwithstanding the foregoing, not later than 20 days prior to the
Stated Maturity of this Senior Note which was in effect prior to the mailing of
an Extension Notice, the Company may, at its option, revoke the interest rate
provided for in the Extension Notice and establish a higher interest rate for
the Extension Period by mailing or causing the Trustee to mail (first class,
postage prepaid) notice of such higher interest rate to the Holder of this
Senior Note. Such notice will be irrevocable. All Senior Notes with respect to
which the Stated Maturity is extended will bear such higher interest rate for
the Extension Period, whether or not tendered for repayment as provided in the
next paragraph.

            If the Company elects to extend the Stated Maturity of this Senior
Note, the Holder will have the option to elect repayment of this Senior Note, in
whole but not in part, on the Stated Maturity in effect prior to the mailing of
the Extension Notice at a price equal to the principal amount hereof, plus
accrued interest to such date. In order for this Senior Note to be so repaid on
the Stated Maturity in effect prior to the mailing of the Extension Notice, the
Holder of this Senior Note must follow the procedures specified under Paragraph
4 for optional repayment, except that the period for delivery of this Senior
Note or notification to the Trustee will be at least 25 days but not more than
35 days prior to such Stated Maturity. If the Holder has tendered this Senior
Note for repayment following receipt of an Extension Notice, the Holder may
revoke such tender for repayment by written notice to the Trustee received prior
to the close of business, on the tenth day prior to such Stated Maturity.

            7.    Optional Renewal. If so specified on the face hereof, the
Holder may renew the term of this Senior Note on an Interest Payment Date
specified on the face hereof occurring in or prior to the twelfth month
following the Original Issue Date (the "Initial Maturity Date"). On the Interest
Payment Date occurring in the sixth month (unless a different interval (the
"Special Election Interval") is specified on the face hereof) prior to the
Initial Maturity Date (the "Initial Renewal Date") and on the Interest Payment
Date occurring in each sixth month (or in the last month of a Special Election
Interval) after such Initial Renewal Date (each, together with the Initial
Renewal Date, a "Renewal Date"), the term of this Senior Note may be extended to
the Interest Payment Date occurring in the twelfth month (or in the last month
of a period equal to twice the Special Election Interval) after such Renewal
Date, if the Holder elects to extend the term of this Senior Note as provided
below. If the Holder does not elect to extend the term of any portion of the
principal amount of this Senior Note during the specified period

                                     A-1-9
<PAGE>

prior to any Renewal Date, such portion will become due and payable on the
Interest Payment Date occurring in the sixth month (or in the last month of a
Special Election Interval) after such Renewal Date (the "New Maturity Date").

            In order for the term of this Senior Note to be renewed prior to a
Renewal Date, the Trustee must receive at its Corporate Trust Office, at least
15 days but not more than 30 days prior to a Renewal Date (unless another period
is specified on the face hereof as the "Special Election Period"), notice to
such effect. Such election will be irrevocable and will be binding upon each
subsequent Holder of this Senior Note. The Holder may elect to renew the term of
this Senior Note with respect to less than the entire principal amount hereof
only if so specified on the face hereof and only in such principal amount, or
any integral multiple in excess thereof, as specified on the face hereof.
Notwithstanding the foregoing, the term of this Senior Note may not be extended
beyond the Stated Maturity specified on the face hereof.

            If the Holder does not elect to renew the term of this Senior Note,
this Senior Note must be presented to the Trustee (or any Paying Agent)
simultaneously with notice thereof (or, in the event such notice, together with
a guarantee of delivery, is transmitted on behalf of a Holder from a member of a
national securities exchange, the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States, within five
Business Days after the date of such notice). If this Senior Note is in
certificated form, as soon as practicable following receipt of this Senior Note,
the Trustee (or any Paying Agent) shall issue in exchange therefor in the name
of such Holder: (i) a Senior Note, in principal amount equal to the principal
amount of such exchanged Senior Note for which the election to renew the term
thereof was not exercised, with terms identical to those specified herein
(except for the Original Issue Date and the Initial Interest Rate and except
that such Senior Note shall have a fixed, nonrenewable Stated Maturity on the
New Maturity Date); and (ii) a replacement Senior Note, in a principal amount
equal to the principal amount, if any, of such exchanged Senior Note for which
the election to renew was made, with terms identical to the exchanged Senior
Note.

            8.    Sinking Fund. This Senior Note is not subject to a sinking
fund unless otherwise specified on the face hereof.

            9.    Original Issue Discount Notes. Notwithstanding anything herein
to the contrary, if this Senior Note is an Original Issue Discount Note as
specified on the face hereof, the amount payable in the event the principal
amount hereof is declared to be due and payable immediately by reason of an
Event of Default or in the event of redemption or repayment hereof prior to the
Stated Maturity hereof, in lieu of the principal amount due at the Stated
Maturity hereof, will be the Amortized Face Amount of this Senior Note as of the
date of declaration, redemption or repayment, as the case may be. The "Amortized
Face Amount" of this Senior Note will be the amount equal to the sum of (i) the
principal amount of this Senior Note multiplied by the Issue Price specified on
the face hereof and (ii) the portion of the difference between the dollar amount
determined pursuant to the preceding clause (i) and the principal amount hereof
that has accrued at the Yield to Maturity specified on the face hereof (computed
in accordance with generally accepted United States bond yield computation
principles) to such date of declaration, redemption or repayment, as the case
may be, but in no event will the Amortized Face Amount of this Senior Note
exceed its principal amount.

            For the purpose of determining whether Holders of the requisite
principal amount of Senior Notes of a series outstanding under the Senior
Indenture have made a demand or given a notice or waiver or taken any other
action, the outstanding principal amount of Original Issue Discount Notes will
be the Amortized Face Amount of such Senior Notes as of the date of such
determination as specified above.

                                     A-1-10
<PAGE>

            10.   Events of Default. If any Event of Default with respect to
Senior Notes of this series shall occur and be continuing, the principal of the
Senior Notes of this series may be declared due and payable in the manner and
with the effect provided in the Senior Indenture; provided, however, that
notwithstanding anything herein to the contrary, if this Senior Note is an
Original Issue Discount Note, the amount so declared to be due and payable will
be the Amortized Face Amount of this Senior Note as of the date of such
declaration as specified under Paragraph 9.

            11.   Governing Law. The Senior Indenture and the Senior Notes will
be governed by and construed in accordance with the laws of the State of New
York.

            12.   Denominations, Transfer, Exchange. The Senior Notes are in
registered form without coupons in denominations of $1,000 and integral
multiplies of $1,000. A Holder may transfer or exchange Senior Notes by
presentation of such Senior Notes to the Registrar or a co-Registrar with a
request to register the transfer or to exchange then for an equal principal
amount of Senior Notes of a different Authorized Denomination. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Senior Indenture. The Registrar need not transfer or exchange any Senior
Note selected for redemption, except the unredeemed part thereof if the Senior
Note is redeemed in part, or transfer or exchange of any Senior Note for a
period for 15 days before a selection of Senior Notes to be redeemed.

            13.   Persons Deemed Owners. The registered Holder of this Senior
Note shall be treated as the owner of it for all purposes.

            14.   Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled to
money must look to the Company for payment unless an abandoned property law
designates another person.

            15.   Amendment, Supplement, Waiver. Subject to certain exceptions,
the Senior Indenture or the Senior Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
outstanding Senior Notes and any past default or compliance with any provision
relating to the Senior Notes may be waived in a particular instance with the
consent of the Holders of a majority in principal amount of the outstanding
Senior Notes. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Senior Indenture or the Senior Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Senior Notes
in addition to or in place of certificated Senior Notes, to remove a Guarantor
which, in accordance with the terms of the Supplemental Indenture, ceases to be
liable in respect of its Guarantee, or to make any other change, provided such
action does not adversely affect the rights of any Holder. No reference herein
to the Senior Indenture and no provision of this Senior Note or of the Senior
Indenture will alter or impair the right of the Holder of this Senior Note,
which is absolute and unconditional, to receive payment of the principal of, and
premium, if any, and interest on this Senior Note at the times, places and
rates, and in the coin or currency, herein prescribed.

            16.   Successor Corporation. When a successor corporation assumes
all of the obligations of its predecessor under the Senior Notes and the Senior
Indenture, the predecessor corporation will be released from those obligations,
except that a lease of all or substantially all its assets does not release the
predecessor from its obligations to pay the principal of and premium, if any,
and interest, if any, on the Senior Notes.

            17.   Trustee Dealings With Company. U.S. Bank National Association,
the Trustee under the Senior Indenture, in its individual or any other capacity,
may make loans to, accept deposits

                                     A-1-11
<PAGE>

from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates.

            18.   No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Senior Notes or the Senior Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Senior Note waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Senior Notes.

            19.   Discharge of Senior Indenture. The Senior Indenture contains
certain provisions pertaining to defeasance, which provisions shall for all
purposes have the same effect as if set forth herein.

            20.   Authentication. This Senior Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Senior
Note.

            21.   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 entirety, JT TEN (= joint tenants with rights of survivorship and
not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).

                                     A-1-12
<PAGE>

                            OPTION TO ELECT REPAYMENT

      [To be completed only if this Senior Note is repayable at the option
          of the Holder and the Holder elects to exercise such rights]

            The undersigned owner of this Senior Note hereby irrevocably elects
to have the Company repay the principal amount of this Senior Note or portion
hereof below designated at the applicable Repayment Price indicated on the face
hereof plus accrued interest to the Repayment Date pursuant to Paragraph 4 of
this Senior Note.

            If less than the entire principal amount of this Senior Note,
specify the portion to be repaid:

            Specify the denomination(s) (which shall be an Authorized
Denomination) of the Senior Note or Senior Notes to be issued to the undersigned
for the portion of this Senior Note not being repaid (in the absence of any
specification, one such Senior Note will be issued for the portion not being
repaid):

Dated:

            Signature  _________________________________________________
                       Sign exactly as name appears on the front of this
                       Senior Note.

            Indicate address where check is to be sent, if repaid:

            _____________________________________
            _____________________________________

            SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

            _____________________________________
            _____________________________________

NOTICE:     THE SIGNATURE TO THIS OPTION TO ELECT REPAYMENT MUST CORRESPOND
            WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN
            EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
            WHATEVER.

                                     A-1-13
<PAGE>

                                 ASSIGNMENT FORM

            If you, the Holder, want to assign this Senior Note, fill in the
form below:

            I or we assign and transfer this Senior Note to:

________________________________________________________________________________

________________________________________________________________________________
              (Insert assignee's social security or tax ID number)

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

and irrevocably appoint:

________________________________________________________________________________

________________________________________________________________________________
agent to transfer this Senior 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 other side of this Senior Note)

                                     A-1-14
<PAGE>

Signature Guarantee:____________________________________________________________

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                     A-1-15
<PAGE>

             [FORM OF NOTATION ON SENIOR NOTE RELATING TO GUARANTEE]

                                    GUARANTEE

            The undersigned (the "Guarantors") have fully and unconditionally
guaranteed, jointly and severally (such guarantee by each Guarantor being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest on the Senior Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Senior Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders of Senior Notes or the Trustee all in accordance with the
terms set forth in Article Six of the Supplemental Indenture and (ii) in case of
any extension of time of payment or renewal of any Senior 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.

            No past, present or future stockholder, officer, director, employee
or incorporator, as such, of any of the Guarantors shall have any liability
under the Guarantee by reason of such person's status as stockholder, officer,
director, employee or incorporator. Each holder of a Senior Note by accepting a
Senior Note waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Guarantees.

            Each holder of a Senior Note by accepting a Senior Note agrees that
any Guarantor named below shall have no further liability with respect to its
Guarantee if such Guarantor otherwise ceases to be liable in respect of its
Guarantee in accordance with the terms of the Supplemental Indenture.

                                     A-1-16
<PAGE>

            The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Senior Notes upon which the Guarantee
is noted shall have been executed by the Trustee under the Supplemental
Indenture by the manual signature of one of its authorized officers.

                                      [GUARANTORS]

                                       By:______________________________________
                                          Name:
                                          Title:

                                     A-1-17
<PAGE>

                                                                     EXHIBIT A-2

            THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE SENIOR
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
SENIOR INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE SENIOR INDENTURE.

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

                                     A-2-1
<PAGE>

                  Form of Medium Term Floating Rate Senior Note

                              [Face of Senior Note]

                              M.D.C. HOLDINGS, INC.

CUSIP NO.
REGISTERED NO.FL             MEDIUM-TERM SENIOR NOTE        PRINCIPAL AMOUNT: $

              Due Nine Months or More from the Original Issue Date

            The following summary of terms is subject to the information set
forth on the reverse hereof:

<TABLE>
<S>                                                           <C>
ORIGINAL ISSUE DATE:                                          TYPE (if other than regular):     Floating Rate/Fixed Rate
                                                                                                Inverse Floating Rate

STATED MATURITY:                                              FIXED INTEREST RATE (If applicable):

SPECIFIED CURRENCY:        U.S. dollars                       FIXED INTEREST RATE COMMENCEMENT DATE:

AUTHORIZED DENOMINATIONS (if other than $1,000 and            OPTION TO REDEEM:              [ ] Yes   [ ] No
integral multiples thereof):

FORM:   Global/Book-Entry Certificated                        REDEMPTION DATE(S):

PAYING AGENT (if other than the Trustee):                     REDEMPTION PRICE(S):

INITIAL INTEREST RATE:                                        OPTION TO ELECT REPAYMENT:     [ ] Yes   [ ] No

     MAXIMUM INTEREST RATE:                                   REPAYMENT DATE(S):

     MINIMUM INTEREST RATE:                                   REPAYMENT PRICE(S):

INTEREST PAYMENT DATES:                                       OPTION TO EXTEND ORIGINAL STATED MATURITY:
                                                                            [ ] Yes   [ ] No

REGULAR RECORD DATES:                                         EXTENSION PERIOD:

SINKING FUND:        [ ] Yes   [ ] No                         NUMBER OF EXTENSION PERIODS:

ORIGINAL ISSUE DISCOUNT:                                      FINAL MATURITY DATE:

SECURITY (Discount Note):                                     OPTION TO RENEW:               [ ] Yes   [ ] No

[ ] Yes (see below)          [ ] No

AMORTIZING SECURITY:             [ ] Yes                      INITIAL MATURITY DATE:

                                 [ ] No

OTHER PROVISIONS:                                             RENEWAL TERMS:

ANNEX ATTACHED:             [ ] Yes   [ ] No                  OPTION TO RESET:               [ ] Yes   [ ] No

SPREAD:                                                       RESET DATE(S):

SPREAD MULTIPLIER:                                            RESET BASIS:
</TABLE>

                                     A-2-2
<PAGE>

<TABLE>
<S>                                                           <C>
CALCULATION AGENT (if other than the Trustee):                RESET PERIOD:

INTEREST RATE BASIS:                                          INTEREST RESET DATE(S):

CD Rate [ ]                  LIBOR [ ]

CMT Rate [ ]                 LIBOR Reuters [ ]

Commercial Paper Rate [ ]    LIBOR Moneyline Telerate [ ]

Eleventh District Cost of Funds Rate [ ] Treasury Rate [ ]

Federal Funds Rate:  [ ]     Other: [ ]

INDEX MATURITY:                                               INTEREST DETERMINATION DATE(S):
</TABLE>

            If this Senior Note was issued with "original issue discount" for
purposes of Section 1273 of the Internal Revenue Code of 1986, as amended, the
following shall be completed:

ISSUE PRICE (expressed as a percentage of aggregate principal amount):

TOTAL AMOUNT OF OID:

SHORT ACCRUAL PERIOD OID:

YIELD TO MATURITY:

METHOD USED TO DETERMINE YIELD FOR SHORT ACCRUAL PERIOD:   Approximate   Exact

            M.D.C. HOLDINGS, INC., a Delaware corporation, hereby promises to
pay to _______________ or registered assigns, the principal amount specified
above on the Stated Maturity shown above, and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be.

            Interest will be paid on the Interest Payment Date(s) specified
above, commencing with the first such Interest Payment Date next succeeding the
Original Issue Date shown above (except as provided below), at the rate per
annum specified above, until the principal hereof is paid or made available for
payment and on the Stated Maturity. The first payment of interest on any Senior
Note originally issued between a Regular Record Date and the next Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the Holder on such next succeeding Regular
Record Date. The interest so payable and punctually paid or duly provided for on
any Interest Payment Date will, as provided in the Senior Indenture, be paid to
the Person in whose name this Senior Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date specified above
next preceding such Interest Payment Date; provided, however, that interest
payable at the Stated Maturity or any Redemption Date or Repayment Date (each
being herein referred to as "Maturity") will be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Senior
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Senior Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date (which shall not be less than five Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail by or on
behalf of the Company to the Holder

                                     A-2-3
<PAGE>

of this Senior Note (or one or more Predecessor Notes) not less than 15 days
prior to such Special Record Date, all as more fully provided in said Senior
Indenture.

            If this Senior Note is in global form as specified above, while this
Senior Note is represented by one or more global Senior Notes registered in the
name of the Depository or its nominee, the Company will cause payments of
principal of, premium, if any, and interest on such global Senior Notes to be
made to the Depository or its nominee, as the case may be, by wire transfer to
the extent, in the funds and in the manner required by agreements with, or
regulations or procedures prescribed from time to time by, the Depository or its
nominee, and otherwise in accordance with such agreements, regulations and
procedures. If this Senior Note is in global form as specified above, the
following legend is applicable except as specified on the reverse hereof: THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY
OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR.

            If this Senior Note is in certificated form as specified above,
payments of interest and, if this Senior Note is an Amortizing Note as specified
above, principal on this Senior Note (other than interest, and if this Senior
Note is an Amortizing Note, principal payable at Stated Maturity) will be made
by mailing a check to the Holder at the last address of the Holder appearing in
the registry books of the Company on the applicable Regular Record Date.
Notwithstanding the foregoing, the Company will make payments of interest and,
in the case of Amortizing Notes, principal to each Holder of $10,000,000 or more
in aggregate principal amount of Senior Notes in certificated form by wire
transfer of immediately available funds if the applicable Holder has delivered
appropriate wire transfer instructions in writing to the Trustee not less than
15 days prior to the applicable Interest Payment Date.

            If this Senior Note is in certificated form as specified above,
payment of the principal of, and premium, if any, and interest on this Senior
Note at Maturity will be made in immediately available funds upon surrender of
this Senior Note accompanied by wire instructions at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York; provided that
this Senior Note is presented to the Trustee in time for the Trustee to make
such payment in such funds in accordance with its normal procedures.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF AND THE ATTACHED ANNEX, IF ANY, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or its successor as Trustee, or
its agent, by manual signature of an authorized signatory, this Senior Note will
not be entitled to any benefit under the Senior Indenture or be valid or
obligatory for any purpose.

                                     A-2-4
<PAGE>

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

Dated:                       M.D.C. HOLDINGS, INC.

                             By:_______________________________
                                Name:
                                Title:

                             By:_______________________________
                                Name:
                                Title:

                                     A-2-5
<PAGE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. Bank National Association, as Trustee, certifies that
this is one of the Senior Notes referred to in the within mentioned
Senior Indenture.

U.S. BANK NATIONAL ASSOCIATION,
  as Trustee

By:______________________________________
   Name:
   Authorized Signatory

                                     A-2-6
<PAGE>

                            [Reverse of Senior Note]

                              M.D.C. HOLDINGS, INC.

                             MEDIUM-TERM SENIOR NOTE
              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE

            1.    General. This Senior Note is one of a duly authorized issue of
securities of the Company (herein called the "Senior Notes"), issued and to be
issued in one or more series under an Indenture, dated as of December 3, 2002,
as supplemented from time to time (herein called the "Senior Indenture"),
between the Company, the Guarantors and U.S. Bank National Association, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Senior Indenture), to which Senior Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Senior Notes and of the terms upon which the
Senior Notes are, and are to be, authenticated and delivered. This Senior Note
is one of the Senior Notes of the series designated on the face hereof. The
Senior Notes of this series may bear different dates, mature at different times,
bear interest at different rates, be subject to different redemption provisions,
if any, may be subject to different sinking funds, purchase or analogous funds,
if any, and may otherwise vary, all as provided in the Senior Indenture. The
Senior Notes of this series may be issued from time to time in amounts up to an
aggregate public offering price of $500,000,000; provided that the amount of
Senior Notes sold will reduce the amount of Subordinated Notes that may be sold.

            2.    Interest Rate Calculations; Payments. The interest rate on
this Senior Note will be equal to the interest rate calculated by reference to
the Interest Rate Basis specified on the face hereof (i) plus or minus the
Spread, if any, (ii) multiplied by the Spread Multiplier, if any, or (iii) plus
or minus the Spread, if any, and multiplied by the Spread Multiplier, if any.
The "Spread" is the number of basis points (one basis point equals one
one-hundredth of a percentage point) specified on the face hereof as being
applicable to this Senior Note, and the "Spread Multiplier" is the percentage
specified on the face hereof as being applicable to this Senior Note. Specified
on the face hereof is the Interest Rate Basis and the Spread and/or Spread
Multiplier, if any, and the maximum and/or minimum interest rate, if any,
applicable to this Senior Note. Specified on the face hereof are particulars as
to the Calculation Agent (unless otherwise specified, U.S. Bank National
Association (in such capacity, the "Calculation Agent")), Index Maturity,
Original Issue Date, the interest rate in effect for the period from the
Original Issue Date to the first Interest Reset Date specified on the face
hereof (the "Initial Interest Rate"), Interest Determination Dates, Interest
Payment Dates, Regular Record Dates and Interest Reset Dates with respect to
this Senior Note.

            Except as provided below, the Interest Payment Dates for the payment
of interest and, if this Senior Note is an Amortizing Note, principal on this
Senior Note will be: (i) if this Senior Note resets daily, weekly or monthly,
the third Wednesday of each month or the third Wednesday of March, June,
September and December of each year, as specified on the face hereof; (ii) if
this Senior Note resets quarterly, the third Wednesday of March, June, September
and December of each year, as specified on the face hereof; (iii) if this Senior
Note resets semi-annually, the third Wednesday of each of the two months of each
year specified on the face hereof; and (iv) if this Senior Note resets annually,
the third Wednesday of the one month of each year specified on the face hereof;
and, in each case, at Maturity. If any Interest Payment Date, other than
Maturity, for this Senior Note is not a Business Day for this Senior Note, such
Interest Payment Date will be postponed to the next succeeding Business Day for
this Senior Note, except that if the Interest Rate Basis specified on the face
hereof is LIBOR, if such Business Day is in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business Day,

                                     A-2-7
<PAGE>

in each case with the same force and effect as if made on the Interest Payment
Date. If the Maturity for this Senior Note falls on a day that is not a Business
Day, then payment of principal, premium, if any, or interest need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the due date, and no additional interest will be
payable for the period from and after the due date as a result of such delayed
payment.

            The rate of interest on this Senior Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (such period being the
"Reset Period" for this Senior Note, and the first day of each Reset Period
being an "Interest Reset Date"), as specified on the face hereof. Unless
otherwise specified on the face hereof, the Interest Reset Date will be: (i) if
this Senior Note resets daily, each Business Day for this Senior Note; (ii) if
this Senior Note resets weekly (unless the Interest Rate Basis specified on the
face hereof is the Treasury Rate), the Wednesday of each week; (iii) if this
Senior Note resets weekly and the Interest Rate Basis specified on the face
hereof is the Treasury Rate, the Tuesday of each week (except as specified
below); (iv) if this Senior Note resets monthly (unless the Interest Rate Basis
specified on the face hereof is the Eleventh District Cost of Funds Rate), the
third Wednesday of each month; (v) if this Senior Note resets monthly and the
Interest Rate Basis specified on the face hereof is the Eleventh District Cost
of Funds Rate, the first calendar day of each month; (vi) if this Senior Note
resets quarterly, the third Wednesday of each March, June, September and
December; (vii) if this Senior Note resets semi-annually, the third Wednesday of
each of the two months of each year specified on the face hereof; and (viii) if
this Senior Note resets annually, the third Wednesday of the one month of each
year specified on the face hereof; provided, however, that the interest rate in
effect from the Original Issue Date to but excluding the first Interest Reset
Date will be the Initial Interest Rate specified on the face hereof. If the
Interest Reset Date is not a Business Day for this Senior Note, the Interest
Reset Date will be postponed to the next succeeding Business Day for this Senior
Note, except that if the Interest Rate Basis specified on the face hereof is
LIBOR, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date will be the immediately preceding London Business Day. Each
adjusted rate will be applicable on and after the Interest Reset Date to which
it relates to but excluding the next succeeding Interest Reset Date or until
Maturity.

            The interest rate for each Reset Period will be the rate determined
by the Calculation Agent on the Calculation Date (as defined below) pertaining
to the Interest Determination Date pertaining to the Interest Reset Date for
such Reset Period; provided, however, that if the Interest Rate Basis specified
on the face hereof is LIBOR or the Eleventh District Cost of Funds Rate, such
rate will be determined on the applicable Interest Determination Date. Unless
otherwise specified on the face hereof, the "Interest Determination Date"
pertaining to an Interest Reset Date will be: (i) if the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate (the "Commercial Paper
Interest Determination Date"), the Federal Funds Rate (the "Federal Funds
Interest Determination Date") or the Prime Rate (the "Prime Interest
Determination Date"), the Business Day immediately preceding such Interest Reset
Date; (ii) if the Interest Rate Basis specified on the face hereof is the CD
Rate (the "CD Interest Determination Date") or the CMT Rate (the "CMT Interest
Determination Date"), the second Business Day immediately preceding such
Interest Reset Date; (iii) if the Interest Rate Basis specified on the face
hereof is the Eleventh District Cost of Funds Rate (the "Eleventh District
Interest Determination Date"), the last Business Day of the month immediately
preceding such Interest Reset Date on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the FHLB Index (as defined
below under "Determination of Eleventh District Cost of Funds Rate"); (iv) if
the Interest Rate Basis specified on the face hereof is LIBOR (the "LIBOR
Interest Determination Date"), the second London Business Day immediately
preceding such Interest Reset Date; and (v) if the Interest Rate Basis specified
on the face hereof is the Treasury Rate (the "Treasury Interest Determination
Date"), the day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. Treasury bills are usually sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on

                                     A-2-8
<PAGE>

the preceding Friday. If an auction is so held on the preceding Friday, such
Friday will be the Treasury Interest Determination Date pertaining to the Reset
Period commencing in the next succeeding week. Unless otherwise specified on the
face hereof, the "Calculation Date" pertaining to any Interest Determination
Date will be the earlier of (i) the tenth calendar day after the Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day, and (ii) the Business Day preceding the applicable Interest
Payment Date or Maturity, as the case may be.

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

            "Index Maturity" means the period to maturity of the instrument or
obligation on which the interest rate basis or bases will be calculated, as
specified on the face hereof.

            "London Business Day" means any day on which dealings in deposits in
the Designated LIBOR Currency are transacted in the London interbank market.

            Unless otherwise specified on the face hereof, payments on this
Senior Note with respect to any Interest Payment Date or Maturity will include
interest accrued from and including the Original Issue Date, or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, to but excluding such Interest Payment Date or Maturity.
Accrued interest is calculated by multiplying the outstanding principal amount
of this Senior Note by an accrued interest factor. Unless otherwise specified on
the face hereof, this accrued interest factor is computed by adding the interest
factors calculated for each day from the Original Issue Date, or from the last
date to which interest has been paid or duly provided for, to but excluding the
date for which accrued interest is being calculated. Unless otherwise specified
on the face hereof, the interest factor for each such day is computed by
dividing the interest rate applicable to such day by 360, if the Interest Rate
Basis specified on the face hereof is the Commercial Paper Rate, the Federal
Funds Rate, the CD Rate, the Eleventh District Cost of Funds Rate, the Prime
Rate or LIBOR, or by the actual number of days in the year, if the Interest Rate
Basis specified on the face hereof is the CMT Rate or Treasury Rate.

            Unless otherwise specified on the face hereof, if this Senior Note
is an Amortizing Note, payments with respect to this Senior Note will be applied
first to interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Senior Note is an Amortizing Note, a table
setting forth repayment information in respect to this Senior Note will be
provided to the original purchaser hereof and will be available, upon request,
to subsequent Holders.

            The Calculation Agent will calculate the interest rate on this
Senior Note, as provided below. The Calculation Agent will, upon the request of
the Holder of this Senior Note, provide the interest rate then in effect and, if
different, the interest rate which will become effective as a result of a
determination made with respect to the most recent Interest Determination Date
with respect to this Senior Note. For purposes of calculating the rate of
interest payable on this Senior Note, the Company has entered into or will enter
into an agreement with the Calculation Agent. The Calculation Agent's
determination of any interest rate will be at its sole discretion and will, in
the absence of manifest error, be conclusive for all purposes and binding on the
Holder of this Senior Note.

            Notwithstanding the determination of the interest rate as provided
below, the interest rate on this Senior Note for any interest period will not be
greater than the maximum interest rate, if any, or less than the minimum
interest rate, if any, specified on the face hereof. The interest rate on this
Senior Note will in no event be higher than the maximum rate permitted by New
York law, as the same may be modified by United States law of general
application.

                                     A-2-9
<PAGE>

            Determination of CD Rate. If the Interest Rate Basis specified on
the face hereof is the CD Rate, the interest rate determined with respect to any
CD Interest Determination Date will be the CD Rate on such CD Interest
Determination Date plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "CD Rate" means, with
respect to any CD Interest Determination Date, the rate on such date for
negotiable certificates of deposit having the Index Maturity specified on the
face hereof as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors ("H.15(519)") under the caption "CDs
(Secondary Market)."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CD Interest Determination Date, then the
CD Rate with respect to such CD Interest Determination Date will be the rate on
such CD Interest Determination Date for negotiable certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve Bank of New York in its daily update of
H.15(519), available through the website of the Board of Governors at
www.federalreserve.gov/releases/h15/update, or any successor publication
("H.15(519) Update") under the caption "CDs (Secondary Market)."

            If such rate is not published in either H.15(519) or H.15 Daily
Update by 3:00 P.M., New York City time, on such Calculation Date, then the CD
Rate with respect to such CD Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money market
banks of the highest credit standing (in the market for negotiable certificates
of deposit) with a remaining maturity closest to the Index Maturity specified on
the face hereof in a denomination of $5,000,000; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate with respect to such CD Interest
Determination Date will be the CD Rate in effect on such CD Interest
Determination Date.

            Determination of CMT Rate. If the Interest Rate Basis specified on
the face hereof is the CMT Rate, the interest rate determined with respect to
any CMT Interest Determination Date will be the CMT Rate on such CMT Interest
Determination Date plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "CMT Rate" means,
with respect to any CMT Interest Determination Date, the rate displayed on the
Designated CMT Telerate Page (as defined below) under the caption ". . .
Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . .
Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7051, such CMT Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the average for the week or the month, as specified on
the face hereof, ended immediately preceding the week or month, as applicable,
in which the related CMT Interest Determination Date occurs.

            If such rate is no longer displayed on the relevant page or is not
displayed by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such CMT Interest Determination Date, then the CMT Rate with respect to such
CMT Interest Determination Date will be the treasury constant maturity rate for
the Designated CMT Maturity Index as published in the relevant H.15(519).

                                     A-2-10
<PAGE>

            If such rate is no longer published or is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such CMT
Interest Determination Date, then the CMT Rate with respect to such CMT Interest
Determination Date will be the treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Interest Determination Date
pertaining to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States Department
of the Treasury that the Calculation Agent determines to be comparable to the
rate formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519).

            If such information is not provided by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CMT Interest Determination
Date, then the CMT Rate with respect to such CMT Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 P.M., New York City time, on the CMT Interest
Determination Date reported, according to their written records, by three
leading U.S. government securities dealers (each, a "Reference Dealer") in The
City of New York identified by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for the most recently issued
direct non-callable fixed rate obligations of the United States ("Treasury
Securities") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year; provided, however, that if three or four, but
not five, of such Reference Dealers provide quotations as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotations will be eliminated.

            If the Calculation Agent cannot obtain three such Treasury Security
quotations, the CMT Rate with respect to such CMT Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity
based on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Interest Determination
Date reported, according to their written records, by three Reference Dealers in
The City of New York identified by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)) for Treasury
Securities with an original maturity of the number of years that is the next
highest to the Designated CMT Maturity Index and a remaining term to maturity
closest to the Designated CMT Maturity Index and in an amount that is
representative for a single transaction in that market at that time; provided,
however, that if three or four, but not five, of such Reference Dealers provide
quotations as described above, then the CMT Rate will be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of such
quotations will be eliminated. If two Treasury Securities with an original
maturity as described in the preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the Treasury
Security with the shorter remaining term to maturity will be used.

            If fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Interest Determination Date.

            "Designated CMT Telerate Page" means the display on the Telerate
Service, or any successor service, on the page specified on the face hereof for
the purpose of displaying Treasury Constant Maturities as published in H.15(519)
(or any other page as may replace such page on that service, or any successor
service, for the purpose of displaying Treasury Constant Maturities as published

                                     A-2-11
<PAGE>

in H.15(519)). If no such page is specified on the face hereof, the Designated
CMT Telerate Page will be 7052 for the most recent week.

            "Designated CMT Maturity Index" means the original period to
maturity of the Treasury Securities (either one, two, three, five, seven, ten,
twenty or thirty years) specified on the face hereof with respect to which the
CMT Rate will be calculated. If no such maturity is specified on the face
hereof, the Designated CMT Maturity Index will be two years.

            Determination of Commercial Paper Rate. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, the interest rate
determined with respect to any Commercial Paper Interest Determination Date will
be the Commercial Paper Rate on such Commercial Paper Interest Determination
Date plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "Commercial Paper
Rate" means, with respect to any Commercial Paper Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate on such date
for commercial paper having the Index Maturity specified on the face hereof as
published in H.15(519) under the caption "Commercial Paper-Nonfinancial."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified on the face hereof as published in H.15 Daily Update
under the caption "Commercial Paper-Nonfinancial."

            If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not published in either H.15(519) or H.15 Daily Update, then the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.,
New York City time, on such Commercial Paper Interest Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the Index Maturity specified
on the face hereof placed for an industrial issuer whose bond rating is "AA," or
the equivalent, from a nationally recognized statistical rating agency;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
with respect to such Commercial Paper Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Interest Determination
Date.

            "Money Market Yield" means be a yield (expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a percent)
calculated in accordance with the following formula:

            Money Market Yield =              D x 360        x 100
                                         --------------------
                                          360 - (D x M)

where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the period for which accrued interest is being calculated.

            Determination of Eleventh District Cost of Funds Rate. If the
Interest Rate Basis specified on the face hereof is the Eleventh District Cost
of Funds Rate, the interest rate determined with

                                     A-2-12
<PAGE>

respect to any Eleventh District Interest Determination Date will be the
Eleventh District Cost of Funds Rate on such Eleventh District Interest
Determination Date plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, specified on the face hereof.

            Unless otherwise specified on the face hereof, "Eleventh District
Cost of Funds Rate" means, with respect to any Eleventh District Interest
Determination Date, the rate equal to the monthly weighted average cost of funds
for the calendar month preceding such Eleventh District Interest Determination
Date as set forth under the caption "11th District" on display on Moneyline
Telerate (or any successor service) on Page 7058 (or any successor page as may
replace such page on such service) as of 11:00 A.M., San Francisco time, on such
Eleventh District Interest Determination Date.

            If such rate does not appear on Moneyline Telerate Page 7058 on such
Eleventh District Interest Determination Date, the Eleventh District Cost of
Funds Rate with respect to such Eleventh District Interest Determination Date
will be the monthly weighted average cost of funds paid by member institutions
of the Eleventh Federal Home Loan Bank District that was most recently announced
(the "FHLB Index") by the FHLB of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the FHLB
of San Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Interest Determination Date, then the Eleventh
District Cost of Funds Rate with respect to such Eleventh District Interest
Determination Date will be the Eleventh District Cost of Funds Rate then in
effect on such Eleventh District Interest Determination Date.

            Determination of Federal Funds Rate. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Rate, the interest rate
determined with respect to any Federal Funds Interest Determination Date will be
the Federal Funds Rate on such Federal Funds Interest Determination Date plus or
minus the Spread, if any, and/or multiplied by the Spread Multiplier, if any,
specified on the face hereof.

            Unless otherwise specified on the face hereof, "Federal Funds Rate"
means, with respect to any Federal Funds Interest Determination Date, the rate
on such date for Federal Funds as published in H.15(519) under the caption
"Federal Funds (effective)" and displayed on Moneyline Telerate (or any
successor service) on Page 120 (or any successor page as may replace such page
on such service) ("Moneyline Telerate Page 120").

            If such rate does not so appear on Moneyline Telerate Page 120 or is
not published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, then the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the rate on such Federal Funds Interest Determination Date as published in
H.15 Daily Update under the caption "Federal Funds (effective)."

            If such rate is not published by 3:00 P.M., New York City time, on
such Calculation Date, then the Federal Funds Rate with respect to such Federal
Funds Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date for the last transaction
in overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate with
respect to such Federal Funds Interest Determination Date will be the Federal
Funds Rate in effect on such Federal Funds Interest Determination Date.

                                     A-2-13
<PAGE>

            Determination of LIBOR. If the Interest Rate Basis specified on the
face hereof is LIBOR, the interest rate determined with respect to any LIBOR
Interest Determination Date will be LIBOR on such LIBOR Interest Determination
Date plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, specified on the face hereof.

            Unless otherwise specified on the face hereof, LIBOR means, with
respect to any LIBOR Interest Determination Date, the rate determined by the
Calculation Agent in accordance with the following provisions:

            (a)   With respect to any LIBOR Interest Determination Date, LIBOR
      will be either: (i) if "LIBOR Reuters" is specified on the face hereof,
      the arithmetic mean of the offered rates (unless the specified Designated
      LIBOR Page (as defined below) by its terms provides only for a single
      rate, in which case such single rate will be used) for deposits in the
      Designated LIBOR Currency (as defined below) having the Index Maturity
      specified on the face hereof, commencing on the second London Business Day
      immediately following such LIBOR Interest Determination Date, which appear
      on the Designated LIBOR Page specified on the face hereof as of 11:00
      A.M., London time, on such LIBOR Interest Determination Date, if at least
      two such offered rates appear (unless, as aforesaid, only a single rate is
      required) on such Designated LIBOR Page; or (ii) if "LIBOR Moneyline
      Telerate" is specified on the face hereof, the rate for deposits in the
      Designated LIBOR Currency having the Index Maturity specified on the face
      hereof, commencing on the second London Business Day immediately following
      such LIBOR Interest Determination Date, which appears on the Designated
      LIBOR Page specified on the face hereof as of 11:00 A.M., London time, on
      such LIBOR Interest Determination Date. Notwithstanding the foregoing, if
      fewer than two offered rates appear on the Designated LIBOR Page with
      respect to LIBOR Reuters (unless the specified Designated LIBOR Page by
      its terms provides only for a single rate, in which case such single rate
      will be used), or if no rate appears on the Designated LIBOR Page with
      respect to LIBOR Moneyline Telerate, whichever may be applicable, LIBOR
      with respect to such LIBOR Interest Determination Date will be determined
      as if the parties had specified the rate described in paragraph (b) below.

            (b)   With respect to any LIBOR Interest Determination Date on which
      fewer than two offered rates appear on the Designated LIBOR Page with
      respect to LIBOR Reuters (unless the Designated LIBOR Page by its terms
      provides only for a single rate, in which case such single rate will be
      used), or on which no rate appears on the Designated LIBOR Page with
      respect to LIBOR Moneyline Telerate, as the case may be, the Calculation
      Agent will request the principal London office of each of four major banks
      in the London interbank market selected by the Calculation Agent to
      provide the Calculation Agent with its offered rate quotation for deposits
      in the Designated LIBOR Currency for the period of the Index Maturity
      specified on the face hereof, commencing on the second London Business Day
      immediately following such LIBOR Interest Determination Date, to prime
      banks in the London interbank market as of 11:00 A.M., London time, on
      such LIBOR Interest Determination Date and in a principal amount that is
      representative for a single transaction in such Designated LIBOR Currency
      in such market at such time. If at least two such quotations are provided,
      LIBOR with respect to such LIBOR Interest Determination Date will be
      calculated by the Calculation Agent and will be the arithmetic mean of
      such quotations. If fewer than two quotations are provided, LIBOR with
      respect to such LIBOR Interest Determination Date will be the arithmetic
      mean of the rates quoted as of 11:00 A.M., in the applicable Principal
      Financial Center, on such LIBOR Interest Determination Date by three major
      banks in such Principal Financial Center selected by the Calculation Agent
      for loans in the Designated LIBOR Currency to leading European banks,
      commencing on the second London Business Day immediately following such
      LIBOR Interest Determination Date having the Index Maturity specified on
      the face hereof in a principal amount that is representative for a

                                     A-2-14
<PAGE>

      single transaction in such Designated LIBOR Currency in such market at
      such time; provided, however, that if the banks so selected by the
      Calculation Agent are not quoting as mentioned in this sentence, LIBOR
      with respect to such LIBOR Interest Determination Date will be LIBOR in
      effect on such LIBOR Interest Determination Date.

            "Designated LIBOR Currency" means U.S. dollars.

            "Designated LIBOR Page" means either: (i) if "LIBOR Reuters" is
specified on the face hereof, the display on the Reuters Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR Currency; or (ii) if
"LIBOR Moneyline Telerate" is specified on the face hereof, the display on the
Moneyline Telerate Service (or any successor service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency. If neither LIBOR Reuters nor LIBOR Moneyline Telerate is specified on
the face hereof, LIBOR for the Designated LIBOR Currency will be determined as
if LIBOR Moneyline Telerate (page 3750) had been chosen.

            Determination of Prime Rate. If the Interest Rate Basis specified on
the face hereof is the Prime Rate, the interest rate determined with respect to
any Prime Interest Determination Date will be the Prime Rate on such Prime
Interest Determination Date plus or minus the Spread, if any, and/or multiplied
by the Spread Multiplier, if any, specified on the face hereof.

            Unless otherwise specified on the face hereof, "Prime Rate" means,
with respect to any Prime Interest Determination Date, the rate on such date as
published in H.15(519) under the caption "Bank prime loan."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate with respect to such Prime Interest Determination Date will be
the rate on such date as published in H.15 Daily Update under the caption "Bank
prime loan."

            If such rate is not published either in H.15(519) or H.15(519) Daily
Update by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such Prime Interest Determination Date, then the Prime Rate with respect to such
Prime Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the Reuters Screen US PRIME 1 Page as such bank's prime rate
or base lending rate as in effect as of 11:00 A.M., New York City time, with
respect to such Prime Interest Determination Date. If fewer than four such rates
appear on the Reuters Screen US PRIME 1 Page with respect to such Prime Interest
Determination Date, the Prime Rate with respect to such Prime Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the prime rates (quoted on the basis of the actual number of
days in the year divided by 360) as of the close of business on such Prime
Interest Determination Date by at least two of the three major money center
banks in The City of New York selected by the Calculation Agent from which
quotations are requested. If fewer than two quotations are provided, the Prime
Rate with respect to such Prime Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the prime rates
quoted on such date in The City of New York by the appropriate number of
substitute banks or trust companies organized and doing business under the laws
of the United States, or any state thereof, having total equity capital of at
least U.S. $500,000,000 and being subject to supervision or examination by a
federal or state authority, selected by the Calculation Agent to provide such
rate or rates; provided, however, that if the Prime Rate is not published in
H.15(519) and the banks or trust companies selected as aforesaid are not quoting
as mentioned in this sentence, the Prime Rate with respect to such Prime
Interest Determination Date will be the Prime Rate in effect on such Prime
Interest Determination Date.

                                     A-2-15
<PAGE>

            "Reuters Screen US PRIME 1 Page" means the display designated as
page "US PRIME 1" on the Reuters Monitor Money Rates Service (or such other page
as may replace such page on such service for the purpose of displaying prime
rates or base lending rates of major U.S. banks).

            Determination of Treasury Rate. If the Interest Rate Basis specified
on the face hereof is the Treasury Rate, the interest rate determined with
respect to any Treasury Interest Determination Date will be the Treasury Rate on
such Treasury Interest Determination Date plus or minus the Spread, if any,
and/or multiplied by the Spread Multiplier, if any, specified on the face
hereof.

            Unless otherwise specified on the face hereof, "Treasury Rate"
means, with respect to any Treasury Interest Determination Date, the rate set at
the most recent auction of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified on the face hereof and published
under the caption "INVESTMENT RATE" on the display on Moneyline Telerate (or any
successor service) on page 56 (or any other page as may replace such page on
such service) ("Moneyline Telerate Page 56") or page 57 (or any other page as
may replace such page on such service) ("Moneyline Telerate Page 57") or, if not
so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the Bond Equivalent
Yield (as defined below) of the rate for Treasury Bills as published in H.15
Daily Update, or the other recognized electronic source used for the purpose of
displaying the rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High."

            If such rate is not so published in H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Treasury Interest Determination Date, then
the Treasury Rate with respect to such Treasury Interest Determination Date
shall be the Bond Equivalent Yield of the auction rate of the Treasury Bills as
announced by the United States Department of the Treasury.

            If the auction rate is not so announced by the United States
Department of the Treasury on the Calculation Date pertaining to such Treasury
Interest Determination Date, or if no auction of Treasury Bills is held, then
the Treasury Rate with respect to such Treasury Interest Determination Date
shall be the Bond Equivalent Yield of the rate on such Treasury Interest
Determination Date of Treasury Bills having the index maturity as published in
H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market" or, if not yet published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on the Treasury Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or the other recognized
electronic source used for the purpose of displaying the rate, under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market."

            If the rate is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date, the Treasury Rate on the Treasury Interest Determination Date
will be calculated by the Calculation Agent and will be the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Interest
Determination Date, of three leading primary U.S. government securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face hereof;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate with
respect to such Treasury Interest Determination Date will be the Treasury Rate
in effect on such Treasury Interest Determination Date.

            "Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

                                     A-2-16
<PAGE>

            Bond Equivalent Yield =      D x N         x 100
                                 --------------------
                                     360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
interest reset period.

            This Senior Note may be issued with the principal amount payable at
Maturity and/or with interest payable hereon on an Interest Payment Date to be
determined by reference to the price or prices of specified securities or
commodities, securities or commodities exchange indices, the relationship
between two or more specified currencies or other factors (each an "Indexed
Security"), as shall be indicated above under "Other Provisions." Specific
information pertaining to the method for determining the principal amount
payable at Maturity or the amount of interest to be paid on an Interest Payment
Date with reference to the specified index shall be included above under "Other
Provisions."

            The Calculation Agent will calculate the interest rate on this
Senior Note in accordance with the foregoing no later than the Calculation Date.

            All percentages resulting from any calculation with respect to this
Senior Note will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (with five one-millionths of a percentage point being
rounded upward) and all amounts used in or resulting from any such calculation
with respect to this Senior Note will be rounded to the nearest cent (with
one-half cent being rounded upwards).

            The Company is obligated to make payment of principal, premium, if
any, and interest, if any, in respect of this Senior Note in U.S. dollars.

            3.    Optional Redemption. Unless one or more Redemption Dates are
specified on the face hereof, this Senior Note shall not be redeemable at the
option of the Company prior to the Stated Maturity. If one or more Redemption
Dates (or ranges of Redemption Dates) are so specified, this Senior Note will be
subject to redemption on any such date (or during any such range) at the option
of the Company, upon notice by first-class mail, postage prepaid, mailed not
less than 30 days nor more than 60 days prior to the Redemption Date specified
in such notice, at the applicable Redemption Price specified on the face hereof
(expressed as a percentage of the principal amount of this Senior Note),
together with accrued interest to the Redemption Date, but payments due with
respect to this Senior Note prior to the Redemption Date will be payable to the
Holder of this Senior Note, or one or more Predecessor Notes, of record at the
close of business on the relevant Regular Record Date or Special Record Date,
all as provided in the Senior Indenture. The Company may elect to redeem less
than the entire principal amount hereof, provided that the principal amount, if
any, of this Senior Note that remains outstanding after such redemption is an
Authorized Denomination specified on the face hereof. In the event of redemption
of this Senior Note in part only, the Company will not be required to (i) issue,
register the transfer of or exchange any Senior Note during a period of 15 days
immediately preceding the day of the first mailing of the notice of redemption
or (ii) register the transfer or exchange of any Senior Note, or any portion
thereof, called for redemption, except the unredeemed portion of any Senior Note
being redeemed in part. Upon such partial redemption, this Senior Note will be
canceled and a new Senior Note or Senior Notes representing the unredeemed
portion hereof will be issued in the name of the Holder hereof.

            4.    Optional Repayment. Unless one or more Repayment Dates are
specified on the face hereof, this Senior Note shall not be repayable at the
option of the Holder prior to the Stated Maturity. If one or more Repayment
Dates (or ranges of Repayment Dates) are so specified, this Senior Note will be
subject to repayment on any such date (or during any such range) at the option
of the Holder

                                     A-2-17
<PAGE>

at the applicable Repayment Price specified on the face hereof (expressed as a
percentage of the principal amount of this Senior Note), together with accrued
interest to the Repayment Date, but payments due with respect to this Senior
Note prior to the Repayment Date will be payable to the Holder of this Senior
Note, or one or more Predecessor Notes, of record at the close of business on
the relevant Regular Record Date or Special Record Date, all as provided in the
Senior Indenture. In order for this Senior Note to be repaid prior to Stated
Maturity, the Trustee must receive at least 30 days but not more than 60 days
prior to a Repayment Date: (a) appropriate wire transfer instructions and (b)
either (i) this Senior Note with the form attached hereto entitled "Option to
Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission or letter (first class, postage prepaid) from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States setting forth
the name of the Holder of this Senior Note, the principal amount of this Senior
Note, the portion of the principal amount of this Senior Note to be repaid, the
certificate number or a description of the tenor and terms of this Senior Note,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that this Senior Note with the form attached hereto entitled "Option
to Elect Repayment" duly completed will be received by the Trustee not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (b)(ii) of the
preceding sentence is followed, this Senior Note with such form duly completed
must be received by the Trustee by such fifth Business Day. Exercise of the
repayment option by the Holder of this Senior Note will be irrevocable, except
that a Holder who has tendered this Senior Note for repayment may revoke such
tender for repayment by written notice to the Trustee until the close of
business on the tenth day prior to the Repayment Date. The repayment option may
be exercised by the Holder for less than the entire principal amount hereof,
provided that the principal amount, if any, of this Senior Note that remains
outstanding after such repayment is an Authorized Denomination specified on the
face hereof. No transfer or exchange of any Senior Note, or portion thereof, as
to which a repayment option has been exercised will be permitted after such
exercise. Upon such partial repayment, this Senior Note will be canceled and a
new Senior Note or Senior Notes representing the unrepaid portion hereof will be
issued in the name of the Holder hereof.

            If this Senior Note is in global form as specified on the face
hereof, while this Senior Note is represented by one or more global Senior Notes
registered in the name of the Depository or its nominee, the option for
repayment may be exercised only by a participant that has an account with the
Depository, on behalf of the beneficial owner of this Senior Note, by delivering
a written notice substantially similar to the form attached hereto entitled
"Option to Elect Repayment" duly completed to the Trustee at its Corporate Trust
Office (or such other address of which the Company will from time to time notify
the Holders), at least 30 days but not more than 60 days prior to a Repayment
Date. A notice of election from a participant on behalf of the beneficial owner
of this Senior Note to exercise the option to have this Senior Note repaid must
be received by the Trustee prior to 5:00 P.M., New York City time, on the last
day for giving such notice. In order to ensure that a notice is received by the
Trustee on a particular day, the beneficial owner of this Senior Note must so
direct the applicable participant before such participant's deadline for
accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly, the
beneficial owner of this Senior Note should consult the participant through
which such beneficial owner owns its interest herein for the deadline for such
participant. All notices shall be executed by a duly authorized officer of such
participant (with signatures guaranteed) and will be irrevocable. In addition,
the beneficial owner of this Senior Note shall effect delivery at the time such
notice of election is given to the Depository by causing the applicable
participant to transfer such beneficial owner's interest in this Senior Note, on
the Depository's records, to the Trustee.

            5.    Optional Interest Reset. If so specified on the face hereof,
the Company may reset the Spread and/or Spread Multiplier specified on the face
hereof on the Reset Date or Dates specified on the face hereof. The Company may
exercise such option by notifying the Trustee of such

                                     A-2-18
<PAGE>

exercise at least 45 days but not more than 60 days prior to a Reset Date. If
the Company so notifies the Trustee of such exercise, not later than 40 days
prior to such Reset Date, the Trustee will mail (first class, postage prepaid)
to the Holder of this Senior Note a notice (the "Reset Notice") setting forth
(i) the Company's election to reset the Spread and/or Spread Multiplier, (ii)
the new Spread and/or Spread Multiplier and (iii) the provisions, if any, for
redemption during the period from such Reset Date to the next Reset Date, or if
there is no next Reset Date, to the Stated Maturity of this Senior Note (each
such period a "Subsequent Interest Period"), including the date or dates on
which or the period or periods during which and the price or prices at which
such redemption may occur during such Subsequent Interest Period.

            Notwithstanding the foregoing, not later than 20 days prior to a
Reset Date, the Company may, at its option, revoke the Spread and/or Spread
Multiplier provided for in the Reset Notice and establish a higher Spread and/or
Spread Multiplier for the Subsequent Interest Period commencing on such Reset
Date by mailing or causing the Trustee to mail (first class, postage prepaid)
notice of such higher Spread and/or Spread Multiplier to the Holder of this
Senior Note. Such notice will be irrevocable. All Senior Notes with respect to
which the Spread and/or Spread Multiplier is reset on a Reset Date to a higher
Spread and/or Spread Multiplier will bear such higher Spread and/or Spread
Multiplier, whether or not tendered for repayment as provided in the next
paragraph.

            If the Company elects to reset the Spread and/or Spread Multiplier
of this Senior Note, the Holder of this Senior Note will have the option to
elect repayment of this Senior Note, in whole but not in part, on the Reset Date
at a price equal to the principal amount hereof plus accrued interest to such
Reset Date. In order for this Senior Note to be so repaid on a Reset Date, the
Holder must follow the procedures specified under Section 4 for optional
repayment, except that the period for delivery of this Senior Note or
notification to the Trustee will be at least 25 days but not more than 35 days
prior to such Reset Date. If the Holder has tendered this Senior Note for
repayment following receipt of a Reset Notice, the Holder may revoke such tender
for repayment by written notice to the Trustee received prior to the close of
business, on the tenth day prior to such Reset Date.

            6.    Optional Extension of Maturity. If so specified on the face
hereof, the Company may extend the Stated Maturity of this Senior Note for one
or more periods, as specified on the face hereof (each, an "Extension Period"),
up to but not beyond the date (the "Final Maturity Date") specified on the face
hereof. The Company may exercise such option with respect to this Senior Note by
notifying the Trustee of such exercise at least 45 days but not more than 60
days prior to the Stated Maturity of this Senior Note in effect prior to the
exercise of such option. If the Company so notifies the Trustee of such
exercise, the Trustee will mail (first class, postage prepaid), not later than
40 days prior to the Stated Maturity then in effect to the Holder of this Senior
Note a notice (the "Extension Notice") relating to such Extension Period setting
forth: (i) the Company's election to extend the Stated Maturity of this Senior
Note, (ii) the new Stated Maturity (which shall then be considered the Stated
Maturity for all purposes of this Senior Note), (iii) the Spread and/or Spread
Multiplier applicable to such Extension Period and (iv) the provisions, if any,
for redemption during such Extension Period, including the date or dates on
which or the period or periods during which and the price or prices at which
such redemption may occur during such Extension Period. Upon the Trustee's
mailing of the Extension Notice, the Stated Maturity of this Senior Note will be
extended automatically and, except as modified by the Extension Notice and as
described in the next two paragraphs, this Senior Note will have the same terms
as prior to the mailing of such Extension Notice.

            Notwithstanding the foregoing, not later than 20 days prior to the
Stated Maturity of this Senior Note which was in effect prior to the mailing of
an Extension Notice, the Company may, at its option, revoke the Spread and/or
Spread Multiplier provided for in the Extension Notice and establish a higher
Spread and/or Spread Multiplier for the Extension Period by mailing or causing
the Trustee to mail

                                     A-2-19
<PAGE>

(first class, postage prepaid) notice of such higher Spread and/or Spread
Multiplier to the Holder of this Senior Note. Such notice will be irrevocable.
All Senior Notes with respect to which the Stated Maturity is extended will bear
such higher Spread and/or Spread Multiplier for the Extension Period, whether or
not tendered for repayment as provided in the next paragraph.

            If the Company elects to extend the Stated Maturity of this Senior
Note, the Holder will have the option to elect repayment of this Senior Note, in
whole but not in part, on the Stated Maturity in effect prior to the mailing of
the Extension Notice at a price equal to the principal amount hereof, plus
accrued interest to such date. In order for this Senior Note to be so repaid on
the Stated Maturity in effect prior to the mailing of the Extension Notice, the
Holder of this Senior Note must follow the procedures specified under Section 4
for optional repayment, except that the period for delivery of this Senior Note
or notification to the Trustee will be at least 25 days but not more than 35
days prior to such Stated Maturity. If the Holder has tendered this Senior Note
for repayment following receipt of an Extension Notice, the Holder may revoke
such tender for repayment by written notice to the Trustee received prior to the
close of business, on the tenth day prior to such Stated Maturity.

            7.    Optional Renewal. If so specified on the face hereof, the
Holder may renew the term of this Senior Note on an Interest Payment Date
specified on the face hereof occurring in or prior to the twelfth month
following the Original Issue Date (the "Initial Maturity Date"). On the Interest
Payment Date occurring in the sixth month (unless a different interval (the
"Special Election Interval") is specified on the face hereof) prior to the
Initial Maturity Date (the "Initial Renewal Date") and on the Interest Payment
Date occurring in each sixth month (or in the last month of a Special Election
Interval) after such Initial Renewal Date (each, together with the Initial
Renewal Date, a "Renewal Date"), the term of this Senior Note may be extended to
the Interest Payment Date occurring in the twelfth month (or in the last month
of a period equal to twice the Special Election Interval) after such Renewal
Date, if the Holder elects to extend the term of this Senior Note as provided
below. If the Holder does not elect to extend the term of any portion of the
principal amount of this Senior Note during the specified period prior to any
Renewal Date, such portion will become due and payable on the Interest Payment
Date occurring in the sixth month (or in the last month of a Special Election
Interval) after such Renewal Date (the "New Maturity Date").

            In order for the term of this Senior Note to be renewed prior to a
Renewal Date, the Trustee must receive at its Corporate Trust Office, at least
15 days but not more than 30 days prior to a Renewal Date (unless another period
is specified on the face hereof as the "Special Election Period"), notice to
such effect. Such election will be irrevocable and will be binding upon each
subsequent Holder of this Senior Note. The Holder may elect to renew the term of
this Senior Note with respect to less than the entire principal amount hereof
only if so specified on the face hereof and only in such principal amount, or
any integral multiple in excess thereof, as specified on the face hereof.
Notwithstanding the foregoing, the term of this Senior Note may not be extended
beyond the Stated Maturity specified on the face hereof.

            If the Holder does not elect to renew the term of this Senior Note,
this Senior Note must be presented to the Trustee (or any Paying Agent)
simultaneously with notice thereof (or, in the event such notice, together with
a guarantee of delivery, is transmitted on behalf of a Holder from a member of a
national securities exchange, the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States, within five
Business Days after the date of such notice). If this Senior Note is in
certificated form, as soon as practicable following receipt of this Senior Note,
the Trustee (or any Paying Agent) shall issue in exchange therefor in the name
of such Holder: (i) a Senior Note, in principal amount equal to the principal
amount of such exchanged Senior Note for which the election to renew the term
thereof was not exercised, with terms identical to those specified herein
(except for the Original Issue Date and the Initial Interest Rate and except
that such Senior Note shall have a

                                     A-2-20
<PAGE>

fixed, nonrenewable Stated Maturity on the New Maturity Date); and (ii) a
replacement Senior Note, in a principal amount equal to the principal amount, if
any, of such exchanged Senior Note for which the election to renew was made,
with terms identical to the exchanged Senior Note.

            8.    Sinking Fund. This Senior Note is not subject to a sinking
fund unless otherwise specified on the face hereof.

            9.    Original Issue Discount Notes. Notwithstanding anything herein
to the contrary, if this Senior Note is an Original Issue Discount Note as
specified on the face hereof, the amount payable in the event the principal
amount hereof is declared to be due and payable immediately by reason of an
Event of Default or in the event of redemption or repayment hereof prior to the
Stated Maturity hereof, in lieu of the principal amount due at the Stated
Maturity hereof, will be the Amortized Face Amount of this Senior Note as of the
date of declaration, redemption or repayment, as the case may be. The "Amortized
Face Amount" of this Senior Note will be the amount equal to the sum of (i) the
principal amount of this Senior Note multiplied by the Issue Price specified on
the face hereof and (ii) the portion of the difference between the dollar amount
determined pursuant to the preceding clause (i) and the principal amount hereof
that has accrued at the Yield to Maturity specified on the face hereof (computed
in accordance with generally accepted United States bond yield computation
principles) to such date of declaration, redemption or repayment, as the case
may be, but in no event will the Amortized Face Amount of this Senior Note
exceed its principal amount.

            For the purpose of determining whether Holders of the requisite
principal amount of Senior Notes of a series outstanding under the Senior
Indenture have made a demand or given a notice or waiver or taken any other
action, the outstanding principal amount of Original Issue Discount Notes will
be the Amortized Face Amount of such Senior Notes as of the date of such
determination as specified above.

            10.   Events of Default. If any Event of Default with respect to
Senior Notes of this series shall occur and be continuing, the principal of the
Senior Notes of this series may be declared due and payable in the manner and
with the effect provided in the Senior Indenture; provided, however, that
notwithstanding anything herein to the contrary, if this Senior Note is an
Original Issue Discount Note, the amount so declared to be due and payable will
be the Amortized Face Amount of this Senior Note as of the date of such
declaration as specified under Section 9.

            11.   Governing Law. The Senior Indenture and the Senior Notes will
be governed by and construed in accordance with the laws of the State of New
York.

            12.   Denominations, Transfer, Exchange. The Senior Notes are in
registered form without coupons in denominations of $1,000 and integral
multiplies of $1,000. A Holder may transfer or exchange Senior Notes by
presentation of such Senior Notes to the Registrar or a co-Registrar with a
request to register the transfer or to exchange then for an equal principal
amount of Senior Notes of a different Authorized Denomination. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Senior Indenture. The Registrar need not transfer or exchange any Senior
Note selected for redemption, except the unredeemed part thereof if the Senior
Note is redeemed in part, or transfer or exchange of any Senior Note for a
period for 15 days before a selection of Senior Notes to be redeemed.

            13.   Persons Deemed Owners. The registered Holder of this Senior
Note shall be treated as the owner of it for all purposes.

                                     A-2-21
<PAGE>

            14.   Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled to
money must look to the Company for payment unless an abandoned property law
designates another person.

            15.   Amendment, Supplement, Waiver. Subject to certain exceptions,
the Senior Indenture or the Senior Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
outstanding Senior Notes and any past default or compliance with any provision
relating to the Senior Notes may be waived in a particular instance with the
consent of the Holders of a majority in principal amount of the outstanding
Senior Notes. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Senior Indenture or the Senior Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Senior Notes
in addition to or in place of certificated Senior Notes, to remove a Guarantor
which, in accordance with the terms of the Supplemental Indenture, ceases to be
liable in respect of its Guarantee, or to make any other change, provided such
action does not adversely affect the rights of any Holder. No reference herein
to the Senior Indenture and no provision of this Senior Note or of the Senior
Indenture will alter or impair the right of the Holder of this Senior Note,
which is absolute and unconditional, to receive payment of the principal of, and
premium, if any, and interest on this Senior Note at the times, places and
rates, and in the coin or currency, herein prescribed.

            16.   Successor Corporation. When a successor corporation assumes
all of the obligations of its predecessor under the Senior Notes and the Senior
Indenture, the predecessor corporation will be released from those obligations,
except that a lease of all or substantially all its assets does not release the
predecessor from its obligations to pay the principal of and premium, if any,
and interest, if any, on the Senior Notes.

            17.   Trustee Dealings With Company. U.S. Bank National Association,
the Trustee under the Senior Indenture, 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.

            18.   No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Senior Notes or the Senior Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Senior Note waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Senior Notes.

            19.   Discharge of Senior Indenture. The Senior Indenture contains
certain provisions pertaining to defeasance, which provisions shall for all
purposes have the same effect as if set forth herein.

            20.   Authentication. This Senior Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Senior
Note.

            21.   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 entirety), JT TEN (= joint tenants with rights of survivorship
and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

                                     A-2-22
<PAGE>

                            OPTION TO ELECT REPAYMENT

      [To be completed only if this Senior Note is repayable at the option
          of the Holder and the Holder elects to exercise such rights]

            The undersigned owner of this Senior Note hereby irrevocably elects
to have the Company repay the principal amount of this Senior Note or portion
hereof below designated at the applicable Repayment Price indicated on the face
hereof plus accrued interest to the Repayment Date pursuant to Section 4 of this
Senior Note.

            If less than the entire principal amount of this Senior Note,
specify the portion to be repaid:

            Specify the denomination(s) (which shall be an Authorized
Denomination) of the Senior Note or Senior Notes to be issued to the undersigned
for the portion of this Senior Note not being repaid (in the absence of any
specification, one such Senior Note will be issued for the portion not being
repaid):

Dated:            Signature_____________________________________________________
                  Sign exactly as name appears on the front of this Senior Note.

Indicate address where check is to be sent, if repaid:
______________________________________________________
______________________________________________________

SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER
______________________________________________________
______________________________________________________

NOTICE: THE SIGNATURE TO THIS OPTION TO ELECT REPAYMENT MUST CORRESPOND WITH THE
        NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY
        PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

                                     A-2-23
<PAGE>

                                 ASSIGNMENT FORM

            If you, the Holder, want to assign this Senior Note, fill in the
form below:

            I or we assign and transfer this Senior Note to:

________________________________________________________________________________

________________________________________________________________________________

              (Insert assignee's social security or tax ID number)

________________________________________________________________________________

________________________________________________________________________________

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

and irrevocably appoint:

________________________________________________________________________________
agent to transfer this Senior 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
                                       other side of this Senior Note)

                                     A-2-24
<PAGE>

Signature Guarantee:____________________________________________________________

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                     A-2-25
<PAGE>

              [FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]

                                    GUARANTEE

            The undersigned (the "Guarantors") have fully and unconditionally
guaranteed, jointly and severally (such guarantee by each Guarantor being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest on the Senior Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Senior Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders of Senior Notes or the Trustee all in accordance with the
terms set forth in Article Six of the Supplemental Indenture and (ii) in case of
any extension of time of payment or renewal of any Senior 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.

            No past, present or future stockholder, officer, director, employee
or incorporator, as such, of any of the Guarantors shall have any liability
under the Guarantee by reason of such person's status as stockholder, officer,
director, employee or incorporator. Each holder of a Senior Note by accepting a
Senior Note waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Guarantees.

            Each holder of a Senior Note by accepting a Senior Note agrees that
any Guarantor named below shall have no further liability with respect to its
Guarantee if such Guarantor otherwise ceases to be liable in respect of its
Guarantee in accordance with the terms of the Supplemental Indenture.

                                     A-2-26
<PAGE>

            The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Senior Notes upon which the Guarantee
is noted shall have been executed by the Trustee under the Supplemental
Indenture by the manual signature of one of its authorized officers.

                                         [GUARANTORS]

                                         By:____________________________________
                                            Name:
                                            Title:

                                     A-2-27
<PAGE>

                                                                     EXHIBIT B-1

            THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
SUBORDINATED INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE SUBORDINATED INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE SUBORDINATED INDENTURE.

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

                                     B-1-1
<PAGE>

                Form of Medium Term Fixed Rate Subordinated Note

                           [Face of Subordinated Note]

                              M.D.C. HOLDINGS, INC.

CUSIP NO.:

REGISTERED NO. FX MEDIUM-TERM SUBORDINATED NOTE PRINCIPAL AMOUNT: $

                Due Nine Months or More from Original Issue Date

            The following summary of terms is subject to the information set
forth on the reverse hereof:

<TABLE>
<S>                                                <C>
ORIGINAL ISSUE DATE:                               TYPE (if other than regular): Floating Rate/Fixed Rate
                                                                                 Inverse Floating Rate

STATED MATURITY:                                   FIXED INTEREST RATE (If applicable):

SPECIFIED CURRENCY: U.S. dollars                   FIXED INTEREST RATE COMMENCEMENT DATE:

AUTHORIZED DENOMINATIONS (if other than            OPTION TO REDEEM:         [ ] Yes  [ ] No
$1,000 and integral multiples thereof):

FORM: Global/Book-Entry Certificated               REDEMPTION DATE(S):

PAYING AGENT (if other than the Trustee):          REDEMPTION PRICE(S):

INITIAL INTEREST RATE:                             OPTION TO ELECT REPAYMENT:[ ] Yes  [ ] No

     MAXIMUM INTEREST RATE:                        REPAYMENT DATE(S):

     MINIMUM INTEREST RATE:                        REPAYMENT PRICE(S):

INTEREST PAYMENT DATES:                            OPTION TO EXTEND ORIGINAL STATED MATURITY:
                                                            [ ] Yes  [ ] No

REGULAR RECORD DATES:                              EXTENSION PERIOD:

SINKING FUND: [ ] Yes  [ ] No                      NUMBER OF EXTENSION PERIODS:

ORIGINAL ISSUE DISCOUNT:                           FINAL MATURITY DATE:

SECURITY (Discount Note):                          OPTION TO RENEW:          [ ] Yes  [ ] No

Yes (see below)  [ ] No

AMORTIZING SECURITY: [ ] Yes                       INITIAL MATURITY DATE:
                     [ ] No

OTHER PROVISIONS:                                  RENEWAL TERMS:
</TABLE>

If this Subordinated Note was issued with "original issue discount" for purposes
of Section 1273 of the Internal Revenue Code of 1986, as amended, the following
shall be completed: ISSUE PRICE (expressed as a percentage of aggregate
principal amount):

                                     B-1-2
<PAGE>

TOTAL AMOUNT OF OID:
SHORT ACCRUAL PERIOD OID:
YIELD TO MATURITY:
METHOD USED TO DETERMINE YIELD FOR SHORT ACCRUAL PERIOD:
                                                           Approximate     Exact

            M.D.C. HOLDINGS, INC., a Delaware corporation, hereby promises to
pay to or registered assigns, the principal amount specified above on the Stated
Maturity shown above, and to pay interest thereon from the Original Issue Date
shown above, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be.

            Interest will be paid on the Interest Payment Date(s) specified
above, commencing with the first such Interest Payment Date next succeeding the
Original Issue Date shown above (except as provided below), at the rate per
annum specified above, until the principal hereof is paid or made available for
payment and on the Stated Maturity. The first payment of interest on any
Subordinated Note originally issued between a Regular Record Date and the next
Interest Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date to the Holder on such next succeeding
Regular Record Date. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Subordinated
Indenture, be paid to the Person in whose name this Subordinated Note (or one or
more Predecessor Notes) is registered at the close of business on the Regular
Record Date specified above next preceding such Interest Payment Date; provided,
however, that interest payable at the Stated Maturity or any Redemption Date or
Repayment Date (each being herein referred to as "Maturity") will be payable to
the Person to whom principal shall be payable. Except as otherwise provided in
the Subordinated Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and shall be paid to the Person in whose name this Subordinated Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date (which shall not be less than five Business Days prior to
the date of payment of such defaulted interest) established by notice given by
mail by or on behalf of the Company to the Holder of this Subordinated Note (or
one or more Predecessor Notes) not less than 15 days prior to such Special
Record Date, all as more fully provided in said Subordinated Indenture.

            If this Subordinated Note is in global form as specified above,
while this Subordinated Note is represented by one or more global Subordinated
Notes registered in the name of the Depository or its nominee, the Company will
cause payments of principal of, premium, if any, and interest on such global
Subordinated Notes to be made to the Depository or its nominee, as the case may
be, by wire transfer to the extent, in the funds and in the manner required by
agreements with, or regulations or procedures prescribed from time to time by,
the Depository or its nominee, and otherwise in accordance with such agreements,
regulations and procedures. If this Subordinated Note is in global form as
specified above, the following legend is applicable except as specified on the
reverse hereof: THIS SUBORDINATED NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.

            If this Subordinated Note is in certificated form as specified
above, payments of interest and, if this Subordinated Note is an Amortizing Note
as specified above, principal on this Subordinated Note (other than interest,
and if this Subordinated Note is an Amortizing Note, principal payable at Stated
Maturity) will be made by mailing a check to the Holder at the last address of
the Holder appearing in the registry books of the Company on the applicable
Regular Record Date. Notwithstanding the foregoing,

                                     B-1-3
<PAGE>

the Company will make payments of interest and, in the case of Amortizing Notes,
principal to each Holder of $10,000,000 or more in aggregate principal amount of
Subordinated Notes in certificated form by wire transfer of immediately
available funds if the applicable Holder has delivered appropriate wire transfer
instructions in writing to the Trustee not less than 15 days prior to the
applicable Interest Payment Date.

            If this Subordinated Note is in certificated form as specified
above, payment of the principal of, and premium, if any, and interest on this
Subordinated Note at Maturity will be made in immediately available funds upon
surrender of this Subordinated Note accompanied by wire instructions at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York; provided that this Subordinated Note is presented to the Trustee in
time for the Trustee to make such payment in such funds in accordance with its
normal procedures.

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

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or its successor as Trustee, or
its agent, by manual signature of an authorized signatory, this Subordinated
Note will not be entitled to any benefit under the Subordinated Indenture or be
valid or obligatory for any purpose.

                                     B-1-4
<PAGE>

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

Dated:

                                         M.D.C. HOLDINGS, INC.

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         By: ___________________________________
                                             Name:
                                             Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION

U.S. Bank National Association, as Trustee, certifies
that this is one of the Subordinated Notes referred to in the within
mentioned Subordinated Indenture.

  By: ___________________________________
      Name:
      Authorized Signatory

                                     B-1-5
<PAGE>

                         [Reverse of Subordinated Note]

                             M.D.C. HOLDINGS, INC.
                         MEDIUM-TERM SUBORDINATED NOTE

              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE

            1. General. This Subordinated Note is one of a duly authorized issue
of securities of the Company (herein called the "Subordinated Notes"), issued
and to be issued in one or more series under an Indenture, dated as of October
6, 2004 as supplemented from time to time (herein called the "Subordinated
Indenture"), between the Company and U.S. Bank National Association, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Subordinated Indenture), to which Subordinated Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Subordinated Notes and of the terms upon
which the Subordinated Notes are, and are to be, authenticated and delivered.
This Subordinated Note is one of the Subordinated Notes of the series designated
on the face hereof. The Subordinated Notes of this series may bear different
dates, mature at different times, bear interest at different rates, be subject
to different redemption provisions, if any, may be subject to different sinking
funds, purchase or analogous funds, if any, and may otherwise vary, all as
provided in the Subordinated Indenture. The Subordinated Notes of this series
may be issued from time to time in amounts up to an aggregate public offering
price of $500,000,000; provided that the amount of Subordinated Notes sold will
reduce the amount of Senior Notes that may be sold.

            2. Payments. Interest on this Subordinated Note will be payable on
the Interest Payment Date or Interest Payment Dates as specified on the face
hereof and, in either case, at Maturity.

            Unless otherwise specified on the face hereof, payments on this
Subordinated Note with respect to any Interest Payment Date or Maturity will
include interest accrued from and including the Original Issue Date, or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, to but excluding such Interest Payment Date or Maturity.
Unless otherwise specified on the face hereof, interest on this Subordinated
Note will be computed and paid on the basis of a 360-day year of twelve 30-day
months.

            Unless otherwise specified on the face hereof, if this Subordinated
Note is an Amortizing Note, payments with respect to this Subordinated Note will
be applied first to interest due and payable hereon and then to the reduction of
the unpaid principal amount hereof. If this Subordinated Note is an Amortizing
Note, a table setting forth repayment information in respect to this
Subordinated Note will be provided to the original purchaser hereof and will be
available, upon request, to subsequent Holders.

            All percentages resulting from any calculation with respect to this
Subordinated Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with five one-millionths of a
percentage point being rounded upward) and all amounts used in or resulting from
any such calculation with respect to this Subordinated Note will be rounded to
the nearest cent (with one-half cent being rounded upwards.

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

            If any Interest Payment Date or the Maturity for this Subordinated
Note falls on a day that is not a Business Day, then payment of principal,
premium, if any, or interest need not be made on such date but may be made on
the next succeeding Business Day with the same force and effect as if

                                     B-1-6
<PAGE>

made on the due date, and no additional interest will be payable for the period
from and after the due date as a result of such delayed payment.

            The Company is obligated to make payment of principal, premium, if
any, and interest in respect of this Subordinated Note in U.S. dollars.

            3. Optional Redemption. Unless one or more Redemption Dates are
specified on the face hereof, this Subordinated Note shall not be redeemable at
the option of the Company prior to the Stated Maturity. If one or more
Redemption Dates (or ranges of Redemption Dates) are so specified, this
Subordinated Note will be subject to redemption on any such date (or during any
such range) at the option of the Company, upon notice by first-class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date specified in such notice, at the applicable Redemption Price
specified on the face hereof (expressed as a percentage of the principal amount
of this Subordinated Note), together with accrued interest to the Redemption
Date, but payments due with respect to this Subordinated Note prior to the
Redemption Date will be payable to the Holder of this Subordinated Note, or one
or more Predecessor Notes, of record at the close of business on the relevant
Regular Record Date or Special Record Date, all as provided in the Subordinated
Indenture. The Company may elect to redeem less than the entire principal amount
hereof, provided that the principal amount, if any, of this Subordinated Note
that remains outstanding after such redemption is an Authorized Denomination
specified on the face hereof. In the event of redemption of this Subordinated
Note in part only, the Company will not be required to (i) issue, register the
transfer of or exchange any Subordinated Note during a period of 15 days
immediately preceding the day of the first mailing of the notice of redemption
or (ii) register the transfer or exchange of any Subordinated Note, or any
portion thereof, called for redemption, except the unredeemed portion of any
Subordinated Note being redeemed in part. Upon such partial redemption, this
Subordinated Note will be canceled and a new Subordinated Note or Subordinated
Notes representing the unredeemed portion hereof will be issued in the name of
the Holder hereof.

            4. Optional Repayment. Unless one or more Repayment Dates are
specified on the face hereof, this Subordinated Note shall not be repayable at
the option of the Holder prior to the Stated Maturity. If one or more Repayment
Dates (or ranges of Repayment Dates) are so specified, this Subordinated Note
will be subject to repayment on any such date (or during any such range) at the
option of the Holder at the applicable Repayment Price specified on the face
hereof (expressed as a percentage of the principal amount of this Subordinated
Note), together with accrued interest to the Repayment Date, but payments due
with respect to this Subordinated Note prior to the Repayment Date will be
payable to the Holder of this Subordinated Note, or one or more Predecessor
Notes, of record at the close of business on the relevant Regular Record Date or
Special Record Date, all as provided in the Subordinated Indenture. In order for
this Subordinated Note to be repaid prior to Stated Maturity, the Trustee must
receive at least 30 days but not more than 60 days prior to a Repayment Date:
(a) appropriate wire transfer instructions and (b) either (i) this Subordinated
Note with the form attached hereto entitled "Option to Elect Repayment" duly
completed or (ii) a telegram, telex, facsimile transmission or letter (first
class, postage prepaid) from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of this
Subordinated Note, the principal amount of this Subordinated Note, the portion
of the principal amount of this Subordinated Note to be repaid, the certificate
number or a description of the tenor and terms of this Subordinated Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that this Subordinated Note with the form attached hereto entitled
"Option to Elect Repayment" duly completed will be received by the Trustee not
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (b)(ii) of the
preceding sentence is followed, this Subordinated Note with such form duly
completed must be received by the Trustee by such fifth Business Day. Exercise
of the repayment option by the Holder of this Subordinated Note will be
irrevocable, except that a Holder who has tendered this

                                     B-1-7
<PAGE>

Subordinated Note for repayment may revoke such tender for repayment by written
notice to the Trustee until the close of business on the tenth day prior to the
Repayment Date. The repayment option may be exercised by the Holder for less
than the entire principal amount hereof, provided that the principal amount, if
any, of this Subordinated Note that remains outstanding after such repayment is
an Authorized Denomination specified on the face hereof. No transfer or exchange
of any Subordinated Note, or portion thereof, as to which a repayment option has
been exercised will be permitted after such exercise. Upon such partial
repayment, this Subordinated Note will be canceled and a new Subordinated Note
or Subordinated Notes representing the unrepaid portion hereof will be issued in
the name of the Holder hereof.

            If this Subordinated Note is in global form as specified on the face
hereof, while this Subordinated Note is represented by one or more global
Subordinated Notes registered in the name of the Depository or its nominee, the
option for repayment may be exercised only by a participant that has an account
with the Depository, on behalf of the beneficial owner of this Subordinated
Note, by delivering a written notice substantially similar to the form attached
hereto entitled "Option to Elect Repayment" duly completed to the Trustee at its
Corporate Trust Office (or such other address of which the Company will from
time to time notify the Holders), at least 30 days but not more than 60 days
prior to a Repayment Date. A notice of election from a participant on behalf of
the beneficial owner of this Subordinated Note to exercise the option to have
this Subordinated Note repaid must be received by the Trustee prior to 5:00
P.M., New York City time, on the last day for giving such notice. In order to
ensure that a notice is received by the Trustee on a particular day, the
beneficial owner of this Subordinated Note must so direct the applicable
participant before such participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, the beneficial owner of this
Subordinated Note should consult the participant through which such beneficial
owner owns its interest herein for the deadline for such participant. All
notices shall be executed by a duly authorized officer of such participant (with
signatures guaranteed) and will be irrevocable. In addition, the beneficial
owner of this Subordinated Note shall effect delivery at the time such notice of
election is given to the Depository by causing the applicable participant to
transfer such beneficial owner's interest in this Subordinated Note, on the
Depository's records, to the Trustee.

            5. Optional Interest Reset. If so specified on the face hereof, the
Company may reset the interest rate specified on the face hereof on the Reset
Date or Dates specified on the face hereof. The Company may exercise such option
by notifying the Trustee of such exercise at least 45 days but not more than 60
days prior to a Reset Date. If the Company so notifies the Trustee of such
exercise, not later than 40 days prior to such Reset Date, the Trustee will mail
(first class, postage prepaid) to the Holder of this Subordinated Note a notice
(the "Reset Notice") setting forth (i) the Company's election to reset the
interest rate, (ii) the new interest rate and (iii) the provisions, if any, for
redemption during the period from such Reset Date to the next Reset Date, or if
there is no next Reset Date, to the Stated Maturity of this Subordinated Note
(each such period a "Subsequent Interest Period"), including the date or dates
on which or the period or periods during which and the price or prices at which
such redemption may occur during such Subsequent Interest Period.

            Notwithstanding the foregoing, not later than 20 days prior to a
Reset Date, the Company may, at its option, revoke the interest rate provided
for in the Reset Notice and establish a higher interest rate for the Subsequent
Interest Period commencing on such Reset Date by mailing or causing the Trustee
to mail (first class, postage prepaid) notice of such higher interest rate to
the Holder of this Subordinated Note. Such notice will be irrevocable. All
Subordinated Notes with respect to which the interest rate is reset on a Reset
Date to a higher interest rate will bear such higher interest rate, whether or
not tendered for repayment as provided in the next paragraph.

                                     B-1-8
<PAGE>

            If the Company elects to reset the interest rate of this
Subordinated Note, the Holder of this Subordinated Note will have the option to
elect repayment of this Subordinated Note, in whole but not in part, on the
Reset Date at a price equal to the principal amount hereof plus accrued interest
to such Reset Date. In order for this Subordinated Note to be so repaid on a
Reset Date, the Holder must follow the procedures specified under Paragraph 4
for optional repayment, except that the period for delivery of this Subordinated
Note or notification to the Trustee will be at least 25 days but not more than
35 days prior to such Reset Date. If the Holder has tendered this Subordinated
Note for repayment following receipt of a Reset Notice, the Holder may revoke
such tender for repayment by written notice to the Trustee received prior to the
close of business, on the tenth day prior to such Reset Date.

            6. Optional Extension of Maturity. If so specified on the face
hereof, the Company may extend the Stated Maturity of this Subordinated Note for
one or more periods, as specified on the face hereof (each, an "Extension
Period"), up to but not beyond the date (the "Final Maturity Date") specified on
the face hereof. The Company may exercise such option with respect to this
Subordinated Note by notifying the Trustee of such exercise at least 45 days but
not more than 60 days prior to the Stated Maturity of this Subordinated Note in
effect prior to the exercise of such option. If the Company so notifies the
Trustee of such exercise, the Trustee will mail (first class, postage prepaid),
not later than 40 days prior to the Stated Maturity then in effect, to the
Holder of this Subordinated Note a notice (the "Extension Notice") relating to
such Extension Period setting forth: (i) the Company's election to extend the
Stated Maturity of this Subordinated Note, (ii) the new Stated Maturity (which
shall then be considered the Stated Maturity for all purposes of this
Subordinated Note), (iii) the interest rate applicable to such Extension Period
and (iv) the provisions, if any, for redemption during such Extension Period,
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during such Extension
Period. Upon the Trustee's mailing of the Extension Notice, the Stated Maturity
of this Subordinated Note will be extended automatically and, except as modified
by the Extension Notice and as described in the next two paragraphs, this
Subordinated Note will have the same terms as prior to the mailing of such
Extension Notice.

            Notwithstanding the foregoing, not later than 20 days prior to the
Stated Maturity of this Subordinated Note which was in effect prior to the
mailing of an Extension Notice, the Company may, at its option, revoke the
interest rate provided for in the Extension Notice and establish a higher
interest rate for the Extension Period by mailing or causing the Trustee to mail
(first class, postage prepaid) notice of such higher interest rate to the Holder
of this Subordinated Note. Such notice will be irrevocable. All Subordinated
Notes with respect to which the Stated Maturity is extended will bear such
higher interest rate for the Extension Period, whether or not tendered for
repayment as provided in the next paragraph.

            If the Company elects to extend the Stated Maturity of this
Subordinated Note, the Holder will have the option to elect repayment of this
Subordinated Note, in whole but not in part, on the Stated Maturity in effect
prior to the mailing of the Extension Notice at a price equal to the principal
amount hereof, plus accrued interest to such date. In order for this
Subordinated Note to be so repaid on the Stated Maturity in effect prior to the
mailing of the Extension Notice, the Holder of this Subordinated Note must
follow the procedures specified under Paragraph 4 for optional repayment, except
that the period for delivery of this Subordinated Note or notification to the
Trustee will be at least 25 days but not more than 35 days prior to such Stated
Maturity. If the Holder has tendered this Subordinated Note for repayment
following receipt of an Extension Notice, the Holder may revoke such tender for
repayment by written notice to the Trustee received prior to the close of
business, on the tenth day prior to such Stated Maturity.

            7. Optional Renewal. If so specified on the face hereof, the Holder
may renew the term of this Subordinated Note on an Interest Payment Date
specified on the face hereof occurring in or prior to the twelfth month
following the Original Issue Date (the "Initial Maturity Date"). On the Interest

                                     B-1-9
<PAGE>

Payment Date occurring in the sixth month (unless a different interval (the
"Special Election Interval") is specified on the face hereof) prior to the
Initial Maturity Date (the "Initial Renewal Date") and on the Interest Payment
Date occurring in each sixth month (or in the last month of a Special Election
Interval) after such Initial Renewal Date (each, together with the Initial
Renewal Date, a "Renewal Date"), the term of this Subordinated Note may be
extended to the Interest Payment Date occurring in the twelfth month (or in the
last month of a period equal to twice the Special Election Interval) after such
Renewal Date, if the Holder elects to extend the term of this Subordinated Note
as provided below. If the Holder does not elect to extend the term of any
portion of the principal amount of this Subordinated Note during the specified
period prior to any Renewal Date, such portion will become due and payable on
the Interest Payment Date occurring in the sixth month (or in the last month of
a Special Election Interval) after such Renewal Date (the "New Maturity Date").

            In order for the term of this Subordinated Note to be renewed prior
to a Renewal Date, the Trustee must receive at its Corporate Trust Office, at
least 15 days but not more than 30 days prior to a Renewal Date (unless another
period is specified on the face hereof as the "Special Election Period"), notice
to such effect. Such election will be irrevocable and will be binding upon each
subsequent Holder of this Subordinated Note. The Holder may elect to renew the
term of this Subordinated Note with respect to less than the entire principal
amount hereof only if so specified on the face hereof and only in such principal
amount, or any integral multiple in excess thereof, as specified on the face
hereof. Notwithstanding the foregoing, the term of this Subordinated Note may
not be extended beyond the Stated Maturity specified on the face hereof.

            If the Holder does not elect to renew the term of this Subordinated
Note, this Subordinated Note must be presented to the Trustee (or any Paying
Agent) simultaneously with notice thereof (or, in the event such notice,
together with a guarantee of delivery, is transmitted on behalf of a Holder from
a member of a national securities exchange, the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States, within five Business Days after the date of such notice). If this
Subordinated Note is in certificated form, as soon as practicable following
receipt of this Subordinated Note, the Trustee (or any Paying Agent) shall issue
in exchange therefor in the name of such Holder: (i) a Subordinated Note, in
principal amount equal to the principal amount of such exchanged Subordinated
Note for which the election to renew the term thereof was not exercised, with
terms identical to those specified herein (except for the Original Issue Date
and the Initial Interest Rate and except that such Subordinated Note shall have
a fixed, nonrenewable Stated Maturity on the New Maturity Date); and (ii) a
replacement Subordinated Note, in a principal amount equal to the principal
amount, if any, of such exchanged Subordinated Note for which the election to
renew was made, with terms identical to the exchanged Subordinated Note.

            8. Sinking Fund. This Subordinated Note is not subject to a sinking
fund unless otherwise specified on the face hereof.

            9. Original Issue Discount Notes. Notwithstanding anything herein to
the contrary, if this Subordinated Note is an Original Issue Discount Note as
specified on the face hereof, the amount payable in the event the principal
amount hereof is declared to be due and payable immediately by reason of an
Event of Default or in the event of redemption or repayment hereof prior to the
Stated Maturity hereof, in lieu of the principal amount due at the Stated
Maturity hereof, will be the Amortized Face Amount of this Subordinated Note as
of the date of declaration, redemption or repayment, as the case may be. The
"Amortized Face Amount" of this Subordinated Note will be the amount equal to
the sum of (i) the principal amount of this Subordinated Note multiplied by the
Issue Price specified on the face hereof and (ii) the portion of the difference
between the dollar amount determined pursuant to the preceding clause (i) and
the principal amount hereof that has accrued at the Yield to Maturity specified
on the face hereof (computed in accordance with generally accepted United States
bond yield computation principles)

                                     B-1-10
<PAGE>

to such date of declaration, redemption or repayment, as the case may be, but in
no event will the Amortized Face Amount of this Subordinated Note exceed its
principal amount.

            For the purpose of determining whether Holders of the requisite
principal amount of Subordinated Notes of a series outstanding under the
Subordinated Indenture have made a demand or given a notice or waiver or taken
any other action, the outstanding principal amount of Original Issue Discount
Notes will be the Amortized Face Amount of such Subordinated Notes as of the
date of such determination as specified above.

            10. Events of Default. If any Event of Default with respect to
Subordinated Notes of this series shall occur and be continuing, the principal
of the Subordinated Notes of this series may be declared due and payable in the
manner and with the effect provided in the Subordinated Indenture; provided,
however, that notwithstanding anything herein to the contrary, if this
Subordinated Note is an Original Issue Discount Note, the amount so declared to
be due and payable will be the Amortized Face Amount of this Subordinated Note
as of the date of such declaration as specified under Paragraph 9.

            11. Governing Law. The Subordinated Indenture and the Subordinated
Notes will be governed by and construed in accordance with the laws of the State
of New York.

            12. Denominations, Transfer, Exchange. The Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiplies of $1,000. A Holder may transfer or exchange Subordinated Notes by
presentation of such Subordinated Notes to the Registrar or a co-Registrar with
a request to register the transfer or to exchange then for an equal principal
amount of Subordinated Notes of a different Authorized Denomination. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Subordinated Indenture. The Registrar need not transfer
or exchange any Subordinated Note selected for redemption, except the unredeemed
part thereof if the Subordinated Note is redeemed in part, or transfer or
exchange of any Subordinated Note for a period for 15 days before a selection of
Subordinated Notes to be redeemed.

            13. Persons Deemed Owners. The registered Holder of this
Subordinated Note shall be treated as the owner of it for all purposes.

            14. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled to
money must look to the Company for payment unless an abandoned property law
designates another person.

            15. Amendment, Supplement, Waiver. Subject to certain exceptions,
the Subordinated Indenture or the Subordinated Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the outstanding Subordinated Notes and any past default or compliance
with any provision relating to the Subordinated Notes may be waived in a
particular instance with the consent of the Holders of a majority in principal
amount of the outstanding Subordinated Notes. Without the consent of any Holder,
the Company and the Trustee may amend or supplement the Subordinated Indenture
or the Subordinated Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Subordinated Notes in addition to or in place of
certificated Subordinated Notes, or to make any other change, provided such
action does not adversely affect the rights of any Holder. No reference herein
to the Subordinated Indenture and no provision of this Subordinated Note or of
the Subordinated Indenture will alter or impair the right of the Holder of this
Subordinated Note, which is absolute and unconditional, to receive payment of
the principal of, and

                                     B-1-11
<PAGE>

premium, if any, and interest on this Subordinated Note at
the times, places and rates, and in the coin or currency, herein prescribed.

            16. Successor Corporation. When a successor corporation assumes all
of the obligations of its predecessor under the Subordinated Notes and the
Subordinated Indenture, the predecessor corporation will be released from those
obligations, except that a lease of all or substantially all its assets does not
release the predecessor from its obligations to pay the principal of and
premium, if any, and interest, if any, on the Subordinated Notes.

            17. Trustee Dealings With Company. U.S. Bank National Association,
the Trustee under the Subordinated Indenture, 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.

            18. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Subordinated Notes or the Subordinated
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Subordinated Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Subordinated Notes.

            19. Discharge of Subordinated Indenture. The Subordinated Indenture
contains certain provisions pertaining to defeasance, which provisions shall for
all purposes have the same effect as if set forth herein.

            20. Authentication. This Subordinated Note shall not be valid until
the Trustee signs the certificate of authentication on the other side of this
Subordinated Note.

            21. 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 entirety, JT TEN (= joint tenants with rights of survivorship and
not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).

            22. Subordination. To the extent set forth in Article 11 of the
Subordinated Indenture, the Subordinated Notes are subordinated to Senior
Indebtedness, which generally is any Indebtedness outstanding on the date of the
Subordinated Indenture or Indebtedness thereafter created, incurred, assumed or
guaranteed by the Company and all renewals, extensions and refundings thereof
except Indebtedness that expressly provides that it is not senior to or superior
in right of payment to the Subordinated Notes. Senior Indebtedness does not
include Indebtedness of the Company to any of its subsidiaries, trade payables
of the Company and certain Indebtedness of others guaranteed by the Company. To
the extent provided in the Subordinated Indenture, Senior Indebtedness must be
paid before the Subordinated Notes may be paid. The Company agrees, and each
Securityholder by accepting a Subordinated Note agrees, to the subordination and
authorizes the Trustee to give it effect.

            "Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Subordinated
Notes. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be

                                     B-1-12
<PAGE>

outstanding in the future, except that Senior Indebtedness shall include any
guarantees as may be listed in a supplemental indenture and any other present
and future guarantees that provide by their terms that they constitute Senior
Indebtedness.

                                     B-1-13
<PAGE>

                            OPTION TO ELECT REPAYMENT

            [To be completed only if this Subordinated Note is repayable at the
             option of the Holder and the Holder elects to exercise such rights]

            The undersigned owner of this Subordinated Note hereby irrevocably
elects to have the Company repay the principal amount of this Subordinated Note
or portion hereof below designated at the applicable Repayment Price indicated
on the face hereof plus accrued interest to the Repayment Date pursuant to
Paragraph 4 of this Subordinated Note.

            If less than the entire principal amount of this Subordinated Note,
specify the portion to be repaid:

            Specify the denomination(s) (which shall be an Authorized
Denomination) of the Subordinated Note or Subordinated Notes to be issued to the
undersigned for the portion of this Subordinated Note not being repaid (in the
absence of any specification, one such Subordinated Note will be issued for the
portion not being repaid):

Dated:

                     Signature _________________________________________________
                               Sign exactly as name appears on the front of this
                               Subordinated Note.

                     Indicate address where check is to be sent, if repaid:

                     ______________________________________

                     ______________________________________

                     SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

                     ______________________________________

                     ______________________________________

NOTICE:     THE SIGNATURE TO THIS OPTION TO ELECT REPAYMENT MUST CORRESPOND WITH
            THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY
            PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
            WHATEVER.

                                     B-1-14
<PAGE>

                                 ASSIGNMENT FORM

            If you, the Holder, want to assign this Subordinated Note, fill in
the form below:

            I or we assign and transfer this Subordinated Note to:

________________________________________________________________________________

________________________________________________________________________________
              (Insert assignee's social security or tax ID number)

________________________________________________________________________________

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

and irrevocably appoint:
________________________________________________________________________________
agent to transfer this Subordinated 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 other side of this Subordinated Note)

                                     B-1-15
<PAGE>

Signature Guarantee:____________________________________________________________

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                     B-1-16
<PAGE>

                                                                     EXHIBIT B-2

            THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
SUBORDINATED INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE SUBORDINATED INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE SUBORDINATED INDENTURE.

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

                                     B-2-1

<PAGE>

               Form of Medium Term Floating Rate Subordinated Note

                           [Face of Subordinated Note]

                              M.D.C. HOLDINGS, INC.

CUSIP NO.
REGISTERED NO. FL      MEDIUM-TERM SUBORDINATED NOTE PRINCIPAL AMOUNT: $

              Due Nine Months or More from the Original Issue Date

            The following summary of terms is subject to the information set
forth on the reverse hereof:

<TABLE>
<S>                                                   <C>                               <C>
ORIGINAL ISSUE DATE:                                  TYPE (if other than regular):     Floating Rate/Fixed Rate
                                                                                        Inverse Floating Rate

STATED MATURITY:                                      FIXED INTEREST RATE (If applicable):

SPECIFIED CURRENCY:        U.S. dollars               FIXED INTEREST RATE COMMENCEMENT DATE:

EXCHANGE RATE AGENT:                                  OPTION TO REDEEM:               [ ] Yes   [ ] No

AUTHORIZED DENOMINATIONS (if other than $1,000 and    REDEMPTION DATE(S):
integral multiples thereof):

FORM:               Global/Book-Entry                 REDEMPTION PRICE(S):
Certificated

PAYING AGENT (if other than the Trustee):             OPTION TO ELECT REPAYMENT:      [ ] Yes   [ ] No

INITIAL INTEREST RATE:                                REPAYMENT DATE(S):

      MAXIMUM INTEREST RATE:                          REPAYMENT PRICE(S):

      MINIMUM INTEREST RATE:                          EXTENSION PERIOD:

INTEREST PAYMENT DATES:                               NUMBER OF EXTENSION PERIODS:

REGULAR RECORD DATES:                                 FINAL MATURITY DATE:

SINKING FUND:       [ ] Yes  [ ] No                   OPTION TO RENEW:                [ ] Yes   [ ] No

ORIGINAL ISSUE DISCOUNT:                              INITIAL MATURITY DATE:

SECURITY (Discount Note):  [ ] Yes (see below) [ ]    RENEWAL TERMS:
                             No

AMORTIZING SECURITY:         [ ] Yes                  OPTION TO RESET:                [ ] Yes   [ ] No
                             [ ] No

OTHER PROVISIONS:                                     RESET DATE(S):

ANNEX ATTACHED:         [ ] Yes   [ ] No              RESET BASIS:

SPREAD:                                               RESET PERIOD:

SPREAD MULTIPLIER:                                    INTEREST RESET DATE(S):
</TABLE>

                                     B-2-2

<PAGE>

<TABLE>
<S>                                                         <C>
CALCULATION AGENT (if other than the Trustee):              INTEREST DETERMINATION DATE(S):

INTEREST RATE BASIS:                                         OPTION TO EXTEND ORIGINAL STATED MATURITY:

CD Rate [ ]                LIBOR [ ]                                        [ ] Yes     [ ] No

CMT Rate [ ]               LIBOR Reuters [ ]

Commercial Paper Rate [ ]  LIBOR Moneyline Telerate [ ]

Eleventh District Cost of Funds Rate [ ]  Treasury Rate [ ]

Federal Funds Rate: [ ]    Other: [ ]

INDEX MATURITY:
</TABLE>

            If this Subordinated Note was issued with "original issue discount"
for purposes of Section 1273 of the Internal Revenue Code of 1986, as amended,
the following shall be completed:

ISSUE PRICE (expressed as a percentage of aggregate principal amount):
TOTAL AMOUNT OF OID:
SHORT ACCRUAL PERIOD OID:
YIELD TO MATURITY:
METHOD USED TO DETERMINE YIELD FOR SHORT ACCRUAL PERIOD:

                                                           Approximate     Exact

            M.D.C. HOLDINGS, INC., a Delaware corporation, hereby promises to
pay to __________________ or registered assigns, the principal amount specified
above on the Stated Maturity shown above, and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be.

            Interest will be paid on the Interest Payment Date(s) specified
above, commencing with the first such Interest Payment Date next succeeding the
Original Issue Date shown above (except as provided below), at the rate per
annum specified above, until the principal hereof is paid or made available for
payment and on the Stated Maturity. The first payment of interest on any
Subordinated Note originally issued between a Regular Record Date and the next
Interest Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date to the Holder on such next succeeding
Regular Record Date. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Subordinated
Indenture, be paid to the Person in whose name this Subordinated Note (or one or
more Predecessor Notes) is registered at the close of business on the Regular
Record Date specified above next preceding such Interest Payment Date; provided,
however, that interest payable at the Stated Maturity or any Redemption Date or
Repayment Date (each being herein referred to as "Maturity") will be payable to
the Person to whom principal shall be payable. Except as otherwise provided in
the Subordinated Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and shall be paid to the Person in whose name this Subordinated Note
(or one or more Predecessor Notes) is registered at the close of business on a
Special Record Date (which shall not be less than five Business Days prior to
the date of payment of such defaulted interest) established by notice given by
mail by or on behalf of the Company to the Holder of this Subordinated Note (or
one or more Predecessor Notes) not less than 15 days prior to such Special
Record Date, all as more fully provided in said Subordinated Indenture.

                                     B-2-3

<PAGE>

            If this Subordinated Note is in global form as specified above,
while this Subordinated Note is represented by one or more global Subordinated
Notes registered in the name of the Depository or its nominee, the Company will
cause payments of principal of, premium, if any, and interest on such global
Subordinated Notes to be made to the Depository or its nominee, as the case may
be, by wire transfer to the extent, in the funds and in the manner required by
agreements with, or regulations or procedures prescribed from time to time by,
the Depository or its nominee, and otherwise in accordance with such agreements,
regulations and procedures. If this Subordinated Note is in global form as
specified above, the following legend is applicable except as specified on the
reverse hereof: THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.

            If this Subordinated Note is in certificated form as specified
above, payments of interest and, if this Subordinated Note is an Amortizing Note
as specified above, principal on this Subordinated Note (other than interest,
and if this Subordinated Note is an Amortizing Note, principal payable at Stated
Maturity) will be made by mailing a check to the Holder at the last address of
the Holder appearing in the registry books of the Company on the applicable
Regular Record Date. Notwithstanding the foregoing, the Company will make
payments of interest and, in the case of Amortizing Notes, principal to each
Holder of $10,000,000 or more in aggregate principal amount of Subordinated
Notes in certificated form by wire transfer of immediately available funds if
the applicable Holder has delivered appropriate wire transfer instructions in
writing to the Trustee not less than 15 days prior to the applicable Interest
Payment Date.

            If this Subordinated Note is in certificated form as specified
above, payment of the principal of, and premium, if any, and interest on this
Subordinated Note at Maturity will be made in immediately available funds upon
surrender of this Subordinated Note accompanied by wire instructions at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York; provided that this Subordinated Note is presented to the Trustee in
time for the Trustee to make such payment in such funds in accordance with its
normal procedures.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF AND THE ATTACHED ANNEX, IF ANY, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or its successor as Trustee, or
its agent, by manual signature of an authorized signatory, this Subordinated
Note will not be entitled to any benefit under the Subordinated Indenture or be
valid or obligatory for any purpose.

                                     B-2-4

<PAGE>

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

Dated:                                    M.D.C. HOLDINGS, INC.

                                          By:___________________________________
                                             Name:
                                             Title:

                                          By:___________________________________
                                             Name:
                                             Title:

                                     B-2-5

<PAGE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. Bank National Association, as Trustee, certifies that
this is one of the Subordinated Notes referred to in the within mentioned
Subordinated Indenture.

U.S. BANK NATIONAL ASSOCIATION,
as Trustee

By: ___________________________________
    Name:
    Authorized Signatory

                                     B-2-6

<PAGE>

                         [Reverse of Subordinated Note]

                              M.D.C. HOLDINGS, INC.

                          MEDIUM-TERM SUBORDINATED NOTE
              DUE NINE MONTHS OR MORE FROM THE ORIGINAL ISSUE DATE

            1. General. This Subordinated Note is one of a duly authorized issue
of securities of the Company (herein called the "Subordinated Notes"), issued
and to be issued in one or more series under an Indenture, dated as of October
6, 2004 as supplemented from time to time (herein called the "Subordinated
Indenture"), between the Company and U.S. Bank National Association, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Subordinated Indenture), to which Subordinated Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Subordinated Notes and of the terms upon
which the Subordinated Notes are, and are to be, authenticated and delivered.
This Subordinated Note is one of the Subordinated Notes of the series designated
on the face hereof. The Subordinated Notes of this series may bear different
dates, mature at different times, bear interest at different rates, be subject
to different redemption provisions, if any, may be subject to different sinking
funds, purchase or analogous funds, if any, and may otherwise vary, all as
provided in the Subordinated Indenture. The Subordinated Notes of this series
may be issued from time to time in amounts up to an aggregate public offering
price of $500,000,000; provided that the amount of Subordinated Notes sold will
reduce the amount of Senior Notes that may be sold.

            2. Interest Rate Calculations; Payments. The interest rate on this
Subordinated Note will be equal to the interest rate calculated by reference to
the Interest Rate Basis specified on the face hereof (i) plus or minus the
Spread, if any, (ii) multiplied by the Spread Multiplier, if any, or (iii) plus
or minus the Spread, if any, and multiplied by the Spread Multiplier, if any.
The "Spread" is the number of basis points (one basis point equals one
one-hundredth of a percentage point) specified on the face hereof as being
applicable to this Subordinated Note, and the "Spread Multiplier" is the
percentage specified on the face hereof as being applicable to this Subordinated
Note. Specified on the face hereof is the Interest Rate Basis and the Spread
and/or Spread Multiplier, if any, and the maximum and/or minimum interest rate,
if any, applicable to this Subordinated Note. Specified on the face hereof are
particulars as to the Calculation Agent (unless otherwise specified, U.S. Bank
National Association (in such capacity, the "Calculation Agent")), Index
Maturity, Original Issue Date, the interest rate in effect for the period from
the Original Issue Date to the first Interest Reset Date specified on the face
hereof (the "Initial Interest Rate"), Interest Determination Dates, Interest
Payment Dates, Regular Record Dates and Interest Reset Dates with respect to
this Subordinated Note.

            Except as provided below, the Interest Payment Dates for the payment
of interest and, if this Subordinated Note is an Amortizing Note, principal on
this Subordinated Note will be: (i) if this Subordinated Note resets daily,
weekly or monthly, the third Wednesday of each month or the third Wednesday of
March, June, September and December of each year, as specified on the face
hereof; (ii) if this Subordinated Note resets quarterly, the third Wednesday of
March, June, September and December of each year, as specified on the face
hereof; (iii) if this Subordinated Note resets semi-annually, the third
Wednesday of each of the two months of each year specified on the face hereof;
and (iv) if this Subordinated Note resets annually, the third Wednesday of the
one month of each year specified on the face hereof; and, in each case, at
Maturity. If any Interest Payment Date, other than Maturity, for this
Subordinated Note is not a Business Day for this Subordinated Note, such
Interest Payment Date will be postponed to the next succeeding Business Day for
this Subordinated Note, except that if the Interest Rate

                                     B-2-7

<PAGE>

Basis specified on the face hereof is LIBOR, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding Business Day, in each case with the same force and effect as if made
on the Interest Payment Date. If the Maturity for this Subordinated Note falls
on a day that is not a Business Day, then payment of principal, premium, if any,
or interest need not be made on such date but may be made on the next succeeding
Business Day with the same force and effect as if made on the due date, and no
additional interest will be payable for the period from and after the due date
as a result of such delayed payment.

            The rate of interest on this Subordinated Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (such period being the
"Reset Period" for this Subordinated Note, and the first day of each Reset
Period being an "Interest Reset Date"), as specified on the face hereof. Unless
otherwise specified on the face hereof, the Interest Reset Date will be: (i) if
this Subordinated Note resets daily, each Business Day for this Subordinated
Note; (ii) if this Subordinated Note resets weekly (unless the Interest Rate
Basis specified on the face hereof is the Treasury Rate), the Wednesday of each
week; (iii) if this Subordinated Note resets weekly and the Interest Rate Basis
specified on the face hereof is the Treasury Rate, the Tuesday of each week
(except as specified below); (iv) if this Subordinated Note resets monthly
(unless the Interest Rate Basis specified on the face hereof is the Eleventh
District Cost of Funds Rate), the third Wednesday of each month; (v) if this
Subordinated Note resets monthly and the Interest Rate Basis specified on the
face hereof is the Eleventh District Cost of Funds Rate, the first calendar day
of each month; (vi) if this Subordinated Note resets quarterly, the third
Wednesday of each March, June, September and December; (vii) if this
Subordinated Note resets semi-annually, the third Wednesday of each of the two
months of each year specified on the face hereof; and (viii) if this
Subordinated Note resets annually, the third Wednesday of the one month of each
year specified on the face hereof; provided, however, that the interest rate in
effect from the Original Issue Date to but excluding the first Interest Reset
Date will be the Initial Interest Rate specified on the face hereof. If the
Interest Reset Date is not a Business Day for this Subordinated Note, the
Interest Reset Date will be postponed to the next succeeding Business Day for
this Subordinated Note, except that if the Interest Rate Basis specified on the
face hereof is LIBOR, if such Business Day is in the next succeeding calendar
month, such Interest Reset Date will be the immediately preceding London
Business Day. Each adjusted rate will be applicable on and after the Interest
Reset Date to which it relates to but excluding the next succeeding Interest
Reset Date or until Maturity.

            The interest rate for each Reset Period will be the rate determined
by the Calculation Agent on the Calculation Date (as defined below) pertaining
to the Interest Determination Date pertaining to the Interest Reset Date for
such Reset Period; provided, however, that if the Interest Rate Basis specified
on the face hereof is LIBOR or the Eleventh District Cost of Funds Rate, such
rate will be determined on the applicable Interest Determination Date. Unless
otherwise specified on the face hereof, the "Interest Determination Date"
pertaining to an Interest Reset Date will be: (i) if the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate (the "Commercial Paper
Interest Determination Date"), the Federal Funds Rate (the "Federal Funds
Interest Determination Date") or the Prime Rate (the "Prime Interest
Determination Date"), the Business Day immediately preceding such Interest Reset
Date; (ii) if the Interest Rate Basis specified on the face hereof is the CD
Rate (the "CD Interest Determination Date") or the CMT Rate (the "CMT Interest
Determination Date"), the second Business Day immediately preceding such
Interest Reset Date; (iii) if the Interest Rate Basis specified on the face
hereof is the Eleventh District Cost of Funds Rate (the "Eleventh District
Interest Determination Date"), the last Business Day of the month immediately
preceding such Interest Reset Date on which the Federal Home Loan Bank of San
Francisco (the "FHLB of San Francisco") publishes the FHLB Index (as defined
below under "Determination of Eleventh District Cost of Funds Rate"); (iv) if
the Interest Rate Basis specified on the face hereof is LIBOR (the "LIBOR
Interest Determination Date"), the second London Business Day immediately
preceding such Interest Reset Date; and (v) if the Interest Rate Basis specified
on the face hereof is the Treasury Rate (the "Treasury Interest Determination
Date"), the day of

                                     B-2-8

<PAGE>

the week in which such Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
usually held on the following Tuesday, except that such auction may be held on
the preceding Friday. If an auction is so held on the preceding Friday, such
Friday will be the Treasury Interest Determination Date pertaining to the Reset
Period commencing in the next succeeding week. Unless otherwise specified on the
face hereof, the "Calculation Date" pertaining to any Interest Determination
Date will be the earlier of (i) the tenth calendar day after the Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day, and (ii) the Business Day preceding the applicable Interest
Payment Date or Maturity, as the case may be.

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

            "Index Maturity" means the period to maturity of the instrument or
obligation on which the interest rate basis or bases will be calculated, as
specified on the face hereof.

            "London Business Day" means any day on which dealings in deposits in
the Designated LIBOR Currency are transacted in the London interbank market.

            Unless otherwise specified on the face hereof, payments on this
Subordinated Note with respect to any Interest Payment Date or Maturity will
include interest accrued from and including the Original Issue Date, or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, to but excluding such Interest Payment Date or Maturity.
Accrued interest is calculated by multiplying the outstanding principal amount
of this Subordinated Note by an accrued interest factor. Unless otherwise
specified on the face hereof, this accrued interest factor is computed by adding
the interest factors calculated for each day from the Original Issue Date, or
from the last date to which interest has been paid or duly provided for, to but
excluding the date for which accrued interest is being calculated. Unless
otherwise specified on the face hereof, the interest factor for each such day is
computed by dividing the interest rate applicable to such day by 360, if the
Interest Rate Basis specified on the face hereof is the Commercial Paper Rate,
the Federal Funds Rate, the CD Rate, the Eleventh District Cost of Funds Rate,
the Prime Rate or LIBOR, or by the actual number of days in the year, if the
Interest Rate Basis specified on the face hereof is the CMT Rate or Treasury
Rate.

            Unless otherwise specified on the face hereof, if this Subordinated
Note is an Amortizing Subordinated Note, payments with respect to this
Subordinated Note will be applied first to interest due and payable hereon and
then to the reduction of the unpaid principal amount hereof. If this
Subordinated Note is an Amortizing Note, a table setting forth repayment
information in respect to this Subordinated Note will be provided to the
original purchaser hereof and will be available, upon request, to subsequent
Holders.

            The Calculation Agent will calculate the interest rate on this
Subordinated Note, as provided below. The Calculation Agent will, upon the
request of the Holder of this Subordinated Note, provide the interest rate then
in effect and, if different, the interest rate which will become effective as a
result of a determination made with respect to the most recent Interest
Determination Date with respect to this Subordinated Note. For purposes of
calculating the rate of interest payable on this Subordinated Note, the Company
has entered into or will enter into an agreement with the Calculation Agent. The
Calculation Agent's determination of any interest rate will be at its sole
discretion and will, in the absence of manifest error, be conclusive for all
purposes and binding on the Holder of this Subordinated Note.

            Notwithstanding the determination of the interest rate as provided
below, the interest rate on this Subordinated Note for any interest period will
not be greater than the maximum interest rate, if any, or less than the minimum
interest rate, if any, specified on the face hereof. The interest rate on this

                                     B-2-9

<PAGE>

Subordinated Note will in no event be higher than the maximum rate permitted by
New York law, as the same may be modified by United States law of general
application.

            Determination of CD Rate. If the Interest Rate Basis specified on
the face hereof is the CD Rate, the interest rate determined with respect to any
CD Interest Determination Date will be the CD Rate on such CD Interest
Determination Date plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "CD Rate" means, with
respect to any CD Interest Determination Date, the rate on such date for
negotiable certificates of deposit having the Index Maturity specified on the
face hereof as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors ("H.15(519)") under the caption "CDs
(Secondary Market)."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CD Interest Determination Date, then the
CD Rate with respect to such CD Interest Determination Date will be the rate on
such CD Interest Determination Date for negotiable certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve Bank of New York in its daily update of
H.15(519), available through the website of the Board of Governors at
www.federalreserve.gov/releases/h15/update, or any successor publication
("H.15(519) Update") under the caption "CDs (Secondary Market)."

            If such rate is not published in either H.15(519) or H.15 Daily
Update by 3:00 P.M., New York City time, on such Calculation Date, then the CD
Rate with respect to such CD Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money market
banks of the highest credit standing (in the market for negotiable certificates
of deposit) with a remaining maturity closest to the Index Maturity specified on
the face hereof in a denomination of $5,000,000; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate with respect to such CD Interest
Determination Date will be the CD Rate in effect on such CD Interest
Determination Date.

            Determination of CMT Rate. If the Interest Rate Basis specified on
the face hereof is the CMT Rate, the interest rate determined with respect to
any CMT Interest Determination Date will be the CMT Rate on such CMT Interest
Determination Date plus or minus the Spread, if any, and/or multiplied by the
Spread Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "CMT Rate" means,
with respect to any CMT Interest Determination Date, the rate displayed on the
Designated CMT Telerate Page (as defined below) under the caption ". . .
Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . .
Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7051, such CMT Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the average for the week or the month, as specified on
the face hereof, ended immediately preceding the week or month, as applicable,
in which the related CMT Interest Determination Date occurs.

            If such rate is no longer displayed on the relevant page or is not
displayed by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such CMT Interest Determination Date, then

                                     B-2-10

<PAGE>

the CMT Rate with respect to such CMT Interest Determination Date will be the
treasury constant maturity rate for the Designated CMT Maturity Index as
published in the relevant H.15(519).

            If such rate is no longer published or is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such CMT
Interest Determination Date, then the CMT Rate with respect to such CMT Interest
Determination Date will be the treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Interest Determination Date
pertaining to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States Department
of the Treasury that the Calculation Agent determines to be comparable to the
rate formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519).

            If such information is not provided by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CMT Interest Determination
Date, then the CMT Rate with respect to such CMT Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 P.M., New York City time, on the CMT Interest
Determination Date reported, according to their written records, by three
leading U.S. government securities dealers (each, a "Reference Dealer") in The
City of New York identified by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for the most recently issued
direct non-callable fixed rate obligations of the United States ("Treasury
Securities") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year; provided, however, that if three or four, but
not five, of such Reference Dealers provide quotations as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotations will be eliminated.

            If the Calculation Agent cannot obtain three such Treasury Security
quotations, the CMT Rate with respect to such CMT Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity
based on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Interest Determination
Date reported, according to their written records, by three Reference Dealers in
The City of New York identified by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)) for Treasury
Securities with an original maturity of the number of years that is the next
highest to the Designated CMT Maturity Index and a remaining term to maturity
closest to the Designated CMT Maturity Index and in an amount that is
representative for a single transaction in that market at that time; provided,
however, that if three or four, but not five, of such Reference Dealers provide
quotations as described above, then the CMT Rate will be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of such
quotations will be eliminated. If two Treasury Securities with an original
maturity as described in the preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the Treasury
Security with the shorter remaining term to maturity will be used.

            If fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Interest Determination Date.

            "Designated CMT Telerate Page" means the display on the Telerate
Service, or any successor service, on the page specified on the face hereof for
the purpose of displaying Treasury

                                     B-2-11

<PAGE>

Constant Maturities as published in H.15(519) (or any other page as may replace
such page on that service, or any successor service, for the purpose of
displaying Treasury Constant Maturities as published in H.15(519)). If no such
page is specified on the face hereof, the Designated CMT Telerate Page will be
7052 for the most recent week.

            "Designated CMT Maturity Index" means the original period to
maturity of the Treasury Securities (either one, two, three, five, seven, ten,
twenty or thirty years) specified on the face hereof with respect to which the
CMT Rate will be calculated. If no such maturity is specified on the face
hereof, the Designated CMT Maturity Index will be two years.

            Determination of Commercial Paper Rate. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, the interest rate
determined with respect to any Commercial Paper Interest Determination Date will
be the Commercial Paper Rate on such Commercial Paper Interest Determination
Date plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, as specified on the face hereof.

            Unless otherwise specified on the face hereof, "Commercial Paper
Rate" means, with respect to any Commercial Paper Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate on such date
for commercial paper having the Index Maturity specified on the face hereof as
published in H.15(519) under the caption "Commercial Paper-Nonfinancial."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified on the face hereof as published in H.15 Daily Update
under the caption "Commercial Paper-Nonfinancial."

            If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not published in either H.15(519) or H.15 Daily Update, then the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.,
New York City time, on such Commercial Paper Interest Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the Index Maturity specified
on the face hereof placed for an industrial issuer whose bond rating is "AA," or
the equivalent, from a nationally recognized statistical rating agency;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
with respect to such Commercial Paper Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Interest Determination
Date.

            "Money Market Yield" means be a yield (expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a percent)
calculated in accordance with the following formula:

            Money Market Yield =              D x 360       x 100
                                        --------------------
                                           360 - (D x M)

where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal, and "M" refers to the actual number
of days in the period for which accrued interest is being calculated.

                                     B-2-12

<PAGE>

            Determination of Eleventh District Cost of Funds Rate. If the
Interest Rate Basis specified on the face hereof is the Eleventh District Cost
of Funds Rate, the interest rate determined with respect to any Eleventh
District Interest Determination Date will be the Eleventh District Cost of Funds
Rate on such Eleventh District Interest Determination Date plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if any, specified on
the face hereof.

            Unless otherwise specified on the face hereof, "Eleventh District
Cost of Funds Rate" means, with respect to any Eleventh District Interest
Determination Date, the rate equal to the monthly weighted average cost of funds
for the calendar month preceding such Eleventh District Interest Determination
Date as set forth under the caption "11th District" on display on Moneyline
Telerate (or any successor service) on Page 7058 (or any successor page as may
replace such page on such service) as of 11:00 A.M., San Francisco time, on such
Eleventh District Interest Determination Date.

            If such rate does not appear on Moneyline Telerate Page 7058 on such
Eleventh District Interest Determination Date, the Eleventh District Cost of
Funds Rate with respect to such Eleventh District Interest Determination Date
will be the monthly weighted average cost of funds paid by member institutions
of the Eleventh Federal Home Loan Bank District that was most recently announced
(the "FHLB Index") by the FHLB of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the FHLB
of San Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Interest Determination Date, then the Eleventh
District Cost of Funds Rate with respect to such Eleventh District Interest
Determination Date will be the Eleventh District Cost of Funds Rate then in
effect on such Eleventh District Interest Determination Date.

            Determination of Federal Funds Rate. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Rate, the interest rate
determined with respect to any Federal Funds Interest Determination Date will be
the Federal Funds Rate on such Federal Funds Interest Determination Date plus or
minus the Spread, if any, and/or multiplied by the Spread Multiplier, if any,
specified on the face hereof.

            Unless otherwise specified on the face hereof, "Federal Funds Rate"
means, with respect to any Federal Funds Interest Determination Date, the rate
on such date for Federal Funds as published in H.15(519) under the caption
"Federal Funds (effective)" and displayed on Moneyline Telerate (or any
successor service) on Page 120 (or any successor page as may replace such page
on such service) ("Moneyline Telerate Page 120").

            If such rate does not so appear on Moneyline Telerate Page 120 or is
not published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, then the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the rate on such Federal Funds Interest Determination Date as published in
H.15 Daily Update under the caption "Federal Funds (effective)."

            If such rate is not published by 3:00 P.M., New York City time, on
such Calculation Date, then the Federal Funds Rate with respect to such Federal
Funds Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date for the last transaction
in overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate with
respect to such Federal Funds Interest Determination Date will be the Federal
Funds Rate in effect on such Federal Funds Interest Determination Date.

                                     B-2-13

<PAGE>

            Determination of LIBOR. If the Interest Rate Basis specified on the
face hereof is LIBOR, the interest rate determined with respect to any LIBOR
Interest Determination Date will be LIBOR on such LIBOR Interest Determination
Date plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any, specified on the face hereof.

            Unless otherwise specified on the face hereof, LIBOR means, with
respect to any LIBOR Interest Determination Date, the rate determined by the
Calculation Agent in accordance with the following provisions:

            (a) With respect to any LIBOR Interest Determination Date, LIBOR
      will be either: (i) if "LIBOR Reuters" is specified on the face hereof,
      the arithmetic mean of the offered rates (unless the specified Designated
      LIBOR Page (as defined below) by its terms provides only for a single
      rate, in which case such single rate will be used) for deposits in the
      Designated LIBOR Currency (as defined below) having the Index Maturity
      specified on the face hereof, commencing on the second London Business Day
      immediately following such LIBOR Interest Determination Date, which appear
      on the Designated LIBOR Page specified on the face hereof as of 11:00
      A.M., London time, on such LIBOR Interest Determination Date, if at least
      two such offered rates appear (unless, as aforesaid, only a single rate is
      required) on such Designated LIBOR Page; or (ii) if "LIBOR Moneyline
      Telerate" is specified on the face hereof, the rate for deposits in the
      Designated LIBOR Currency having the Index Maturity specified on the face
      hereof, commencing on the second London Business Day immediately following
      such LIBOR Interest Determination Date, which appears on the Designated
      LIBOR Page specified on the face hereof as of 11:00 A.M., London time, on
      such LIBOR Interest Determination Date. Notwithstanding the foregoing, if
      fewer than two offered rates appear on the Designated LIBOR Page with
      respect to LIBOR Reuters (unless the specified Designated LIBOR Page by
      its terms provides only for a single rate, in which case such single rate
      will be used), or if no rate appears on the Designated LIBOR Page with
      respect to LIBOR Moneyline Telerate, whichever may be applicable, LIBOR
      with respect to such LIBOR Interest Determination Date will be determined
      as if the parties had specified the rate described in paragraph (b) below.

            (b) With respect to any LIBOR Interest Determination Date on which
      fewer than two offered rates appear on the Designated LIBOR Page with
      respect to LIBOR Reuters (unless the Designated LIBOR Page by its terms
      provides only for a single rate, in which case such single rate will be
      used), or on which no rate appears on the Designated LIBOR Page with
      respect to LIBOR Moneyline Telerate, as the case may be, the Calculation
      Agent will request the principal London office of each of four major banks
      in the London interbank market selected by the Calculation Agent to
      provide the Calculation Agent with its offered rate quotation for deposits
      in the Designated LIBOR Currency for the period of the Index Maturity
      specified on the face hereof, commencing on the second London Business Day
      immediately following such LIBOR Interest Determination Date, to prime
      banks in the London interbank market as of 11:00 A.M., London time, on
      such LIBOR Interest Determination Date and in a principal amount that is
      representative for a single transaction in such Designated LIBOR Currency
      in such market at such time. If at least two such quotations are provided,
      LIBOR with respect to such LIBOR Interest Determination Date will be
      calculated by the Calculation Agent and will be the arithmetic mean of
      such quotations. If fewer than two quotations are provided, LIBOR with
      respect to such LIBOR Interest Determination Date will be the arithmetic
      mean of the rates quoted as of 11:00 A.M., in the applicable Principal
      Financial Center, on such LIBOR Interest Determination Date by three major
      banks in such Principal Financial Center selected by the Calculation Agent
      for loans in the Designated LIBOR Currency to leading European banks,
      commencing on the second London Business Day immediately following such
      LIBOR Interest Determination Date having the Index Maturity specified on
      the face hereof in a principal amount that is representative for a

                                     B-2-14

<PAGE>

      single transaction in such Designated LIBOR Currency in such market at
      such time; provided, however, that if the banks so selected by the
      Calculation Agent are not quoting as mentioned in this sentence, LIBOR
      with respect to such LIBOR Interest Determination Date will be LIBOR in
      effect on such LIBOR Interest Determination Date.

            "Designated LIBOR Currency" means U.S. dollars.

            "Designated LIBOR Page" means either: (i) if "LIBOR Reuters" is
specified on the face hereof, the display on the Reuters Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR Currency; or (ii) if
"LIBOR Moneyline Telerate" is specified on the face hereof, the display on the
Moneyline Telerate Service (or any successor service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency. If neither LIBOR Reuters nor LIBOR Moneyline Telerate is specified on
the face hereof, LIBOR for the Designated LIBOR Currency will be determined as
if LIBOR Moneyline Telerate (page 3750) had been chosen.

            Determination of Prime Rate. If the Interest Rate Basis specified on
the face hereof is the Prime Rate, the interest rate determined with respect to
any Prime Interest Determination Date will be the Prime Rate on such Prime
Interest Determination Date plus or minus the Spread, if any, and/or multiplied
by the Spread Multiplier, if any, specified on the face hereof.

            Unless otherwise specified on the face hereof, "Prime Rate" means,
with respect to any Prime Interest Determination Date, the rate on such date as
published in H.15(519) under the caption "Bank prime loan."

            If such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate with respect to such Prime Interest Determination Date will be
the rate on such date as published in H.15 Daily Update under the caption "Bank
prime loan."

            If such rate is not published either in H.15(519) or H.15(519) Daily
Update by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such Prime Interest Determination Date, then the Prime Rate with respect to such
Prime Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the Reuters Screen US PRIME 1 Page as such bank's prime rate
or base lending rate as in effect as of 11:00 A.M., New York City time, with
respect to such Prime Interest Determination Date. If fewer than four such rates
appear on the Reuters Screen US PRIME 1 Page with respect to such Prime Interest
Determination Date, the Prime Rate with respect to such Prime Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the prime rates (quoted on the basis of the actual number of
days in the year divided by 360) as of the close of business on such Prime
Interest Determination Date by at least two of the three major money center
banks in The City of New York selected by the Calculation Agent from which
quotations are requested. If fewer than two quotations are provided, the Prime
Rate with respect to such Prime Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the prime rates
quoted on such date in The City of New York by the appropriate number of
substitute banks or trust companies organized and doing business under the laws
of the United States, or any state thereof, having total equity capital of at
least U.S. $500,000,000 and being subject to supervision or examination by a
federal or state authority, selected by the Calculation Agent to provide such
rate or rates; provided, however, that if the Prime Rate is not published in
H.15(519) and the banks or trust companies selected as aforesaid are not quoting
as mentioned in this sentence, the Prime Rate with respect to such Prime
Interest Determination Date will be the Prime Rate in effect on such Prime
Interest Determination Date.

                                     B-2-15

<PAGE>

            "Reuters Screen US PRIME 1 Page" means the display designated as
page "US PRIME 1" on the Reuters Monitor Money Rates Service (or such other page
as may replace such page on such service for the purpose of displaying prime
rates or base lending rates of major U.S. banks).

            Determination of Treasury Rate. If the Interest Rate Basis specified
on the face hereof is the Treasury Rate, the interest rate determined with
respect to any Treasury Interest Determination Date will be the Treasury Rate on
such Treasury Interest Determination Date plus or minus the Spread, if any,
and/or multiplied by the Spread Multiplier, if any, specified on the face
hereof.

            Unless otherwise specified on the face hereof, "Treasury Rate"
means, with respect to any Treasury Interest Determination Date, the rate set at
the most recent auction of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified on the face hereof and published
under the caption "INVESTMENT RATE" on the display on Moneyline Telerate (or any
successor service) on page 56 (or any other page as may replace such page on
such service) ("Moneyline Telerate Page 56") or page 57 (or any other page as
may replace such page on such service) ("Moneyline Telerate Page 57") or, if not
so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the Bond Equivalent
Yield (as defined below) of the rate for Treasury Bills as published in H.15
Daily Update, or the other recognized electronic source used for the purpose of
displaying the rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High."

            If such rate is not so published in H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Treasury Interest Determination Date, then
the Treasury Rate with respect to such Treasury Interest Determination Date
shall be the Bond Equivalent Yield of the auction rate of the Treasury Bills as
announced by the United States Department of the Treasury.

            If the auction rate is not so announced by the United States
Department of the Treasury on the Calculation Date pertaining to such Treasury
Interest Determination Date, or if no auction of Treasury Bills is held, then
the Treasury Rate with respect to such Treasury Interest Determination Date
shall be the Bond Equivalent Yield of the rate on such Treasury Interest
Determination Date of Treasury Bills having the index maturity as published in
H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market" or, if not yet published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on the Treasury Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or the other recognized
electronic source used for the purpose of displaying the rate, under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market."

            If the rate is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date, the Treasury Rate on the Treasury Interest Determination Date
will be calculated by the Calculation Agent and will be the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Interest
Determination Date, of three leading primary U.S. government securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face hereof;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate with
respect to such Treasury Interest Determination Date will be the Treasury Rate
in effect on such Treasury Interest Determination Date.

            "Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:

                                     B-2-16

<PAGE>

                  Bond Equivalent Yield =      D x N         x 100
                                         --------------------
                                            360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the applicable
interest reset period.

            This Subordinated Note may be issued with the principal amount
payable at Maturity and/or with interest payable hereon on an Interest Payment
Date to be determined by reference to the price or prices of specified
securities or commodities, securities or commodities exchange indices, the
relationship between two or more specified currencies or other factors (each an
"Indexed Security"), as shall be indicated above under "Other Provisions."
Specific information pertaining to the method for determining the principal
amount payable at Maturity or the amount of interest to be paid on an Interest
Payment Date with reference to the specified index shall be included above under
"Other Provisions."

            The Calculation Agent will calculate the interest rate on this
Subordinated Note in accordance with the foregoing no later than the Calculation
Date.

            All percentages resulting from any calculation with respect to this
Subordinated Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with five one-millionths of a
percentage point being rounded upward) and all amounts used in or resulting from
any such calculation with respect to this Subordinated Note will be rounded to
the nearest cent (with one-half cent being rounded upwards).

            The Company is obligated to make payment of principal, premium, if
any, and interest, if any, in respect of this Subordinated Note in U.S. dollars.

            3. Optional Redemption. Unless one or more Redemption Dates are
specified on the face hereof, this Subordinated Note shall not be redeemable at
the option of the Company prior to the Stated Maturity. If one or more
Redemption Dates (or ranges of Redemption Dates) are so specified, this
Subordinated Note will be subject to redemption on any such date (or during any
such range) at the option of the Company, upon notice by first-class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date specified in such notice, at the applicable Redemption Price
specified on the face hereof (expressed as a percentage of the principal amount
of this Subordinated Note), together with accrued interest to the Redemption
Date, but payments due with respect to this Subordinated Note prior to the
Redemption Date will be payable to the Holder of this Subordinated Note, or one
or more Predecessor Notes, of record at the close of business on the relevant
Regular Record Date or Special Record Date, all as provided in the Subordinated
Indenture. The Company may elect to redeem less than the entire principal amount
hereof, provided that the principal amount, if any, of this Subordinated Note
that remains outstanding after such redemption is an Authorized Denomination
specified on the face hereof. In the event of redemption of this Subordinated
Note in part only, the Company will not be required to (i) issue, register the
transfer of or exchange any Subordinated Note during a period of 15 days
immediately preceding the day of the first mailing of the notice of redemption
or (ii) register the transfer or exchange of any Subordinated Note, or any
portion thereof, called for redemption, except the unredeemed portion of any
Subordinated Note being redeemed in part. Upon such partial redemption, this
Subordinated Note will be canceled and a new Subordinated Note or Subordinated
Notes representing the unredeemed portion hereof will be issued in the name of
the Holder hereof.

            4. Optional Repayment. Unless one or more Repayment Dates are
specified on the face hereof, this Subordinated Note shall not be repayable at
the option of the Holder prior to the Stated Maturity. If one or more Repayment
Dates (or ranges of Repayment Dates) are so specified, this

                                     B-2-17

<PAGE>

Subordinated Note will be subject to repayment on any such date (or during any
such range) at the option of the Holder at the applicable Repayment Price
specified on the face hereof (expressed as a percentage of the principal amount
of this Subordinated Note), together with accrued interest to the Repayment
Date, but payments due with respect to this Subordinated Note prior to the
Repayment Date will be payable to the Holder of this Subordinated Note, or one
or more Predecessor Notes, of record at the close of business on the relevant
Regular Record Date or Special Record Date, all as provided in the Subordinated
Indenture. In order for this Subordinated Note to be repaid prior to Stated
Maturity, the Trustee must receive at least 30 days but not more than 60 days
prior to a Repayment Date: (a) appropriate wire transfer instructions and (b)
either (i) this Subordinated Note with the form attached hereto entitled "Option
to Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission or letter (first class, postage prepaid) from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States setting forth
the name of the Holder of this Subordinated Note, the principal amount of this
Subordinated Note, the portion of the principal amount of this Subordinated Note
to be repaid, the certificate number or a description of the tenor and terms of
this Subordinated Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Subordinated Note with the form
attached hereto entitled "Option to Elect Repayment" duly completed will be
received by the Trustee not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter. If the procedure described in
clause (b)(ii) of the preceding sentence is followed, this Subordinated Note
with such form duly completed must be received by the Trustee by such fifth
Business Day. Exercise of the repayment option by the Holder of this
Subordinated Note will be irrevocable, except that a Holder who has tendered
this Subordinated Note for repayment may revoke such tender for repayment by
written notice to the Trustee until the close of business on the tenth day prior
to the Repayment Date. The repayment option may be exercised by the Holder for
less than the entire principal amount hereof, provided that the principal
amount, if any, of this Subordinated Note that remains outstanding after such
repayment is an Authorized Denomination specified on the face hereof. No
transfer or exchange of any Subordinated Note, or portion thereof, as to which a
repayment option has been exercised will be permitted after such exercise. Upon
such partial repayment, this Subordinated Note will be canceled and a new
Subordinated Note or Subordinated Notes representing the unrepaid portion hereof
will be issued in the name of the Holder hereof.

            If this Subordinated Note is in global form as specified on the face
hereof, while this Subordinated Note is represented by one or more global
Subordinated Notes registered in the name of the Depository or its nominee, the
option for repayment may be exercised only by a participant that has an account
with the Depository, on behalf of the beneficial owner of this Subordinated
Note, by delivering a written notice substantially similar to the form attached
hereto entitled "Option to Elect Repayment" duly completed to the Trustee at its
Corporate Trust Office (or such other address of which the Company will from
time to time notify the Holders), at least 30 days but not more than 60 days
prior to a Repayment Date. A notice of election from a participant on behalf of
the beneficial owner of this Subordinated Note to exercise the option to have
this Subordinated Note repaid must be received by the Trustee prior to 5:00
P.M., New York City time, on the last day for giving such notice. In order to
ensure that a notice is received by the Trustee on a particular day, the
beneficial owner of this Subordinated Note must so direct the applicable
participant before such participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, the beneficial owner of this
Subordinated Note should consult the participant through which such beneficial
owner owns its interest herein for the deadline for such participant. All
notices shall be executed by a duly authorized officer of such participant (with
signatures guaranteed) and will be irrevocable. In addition, the beneficial
owner of this Subordinated Note shall effect delivery at the time such notice of
election is given to the Depository by causing the applicable participant to
transfer such beneficial owner's interest in this Subordinated Note, on the
Depository's records, to the Trustee.

                                     B-2-18

<PAGE>

            5. Optional Interest Reset. If so specified on the face hereof, the
Company may reset the Spread and/or Spread Multiplier specified on the face
hereof on the Reset Date or Dates specified on the face hereof. The Company may
exercise such option by notifying the Trustee of such exercise at least 45 days
but not more than 60 days prior to a Reset Date. If the Company so notifies the
Trustee of such exercise, not later than 40 days prior to such Reset Date, the
Trustee will mail (first class, postage prepaid) to the Holder of this
Subordinated Note a notice (the "Reset Notice") setting forth (i) the Company's
election to reset the Spread and/or Spread Multiplier, (ii) the new Spread
and/or Spread Multiplier and (iii) the provisions, if any, for redemption during
the period from such Reset Date to the next Reset Date, or if there is no next
Reset Date, to the Stated Maturity of this Subordinated Note (each such period a
"Subsequent Interest Period"), including the date or dates on which or the
period or periods during which and the price or prices at which such redemption
may occur during such Subsequent Interest Period.

            Notwithstanding the foregoing, not later than 20 days prior to a
Reset Date, the Company may, at its option, revoke the Spread and/or Spread
Multiplier provided for in the Reset Notice and establish a higher Spread and/or
Spread Multiplier for the Subsequent Interest Period commencing on such Reset
Date by mailing or causing the Trustee to mail (first class, postage prepaid)
notice of such higher Spread and/or Spread Multiplier to the Holder of this
Subordinated Note. Such notice will be irrevocable. All Subordinated Notes with
respect to which the Spread and/or Spread Multiplier is reset on a Reset Date to
a higher Spread and/or Spread Multiplier will bear such higher Spread and/or
Spread Multiplier, whether or not tendered for repayment as provided in the next
paragraph.

            If the Company elects to reset the Spread and/or Spread Multiplier
of this Subordinated Note, the Holder of this Subordinated Note will have the
option to elect repayment of this Subordinated Note, in whole but not in part,
on the Reset Date at a price equal to the principal amount hereof plus accrued
interest to such Reset Date. In order for this Subordinated Note to be so repaid
on a Reset Date, the Holder must follow the procedures specified under Section 4
for optional repayment, except that the period for delivery of this Subordinated
Note or notification to the Trustee will be at least 25 days but not more than
35 days prior to such Reset Date. If the Holder has tendered this Subordinated
Note for repayment following receipt of a Reset Notice, the Holder may revoke
such tender for repayment by written notice to the Trustee received prior to the
close of business, on the tenth day prior to such Reset Date.

            6. Optional Extension of Maturity. If so specified on the face
hereof, the Company may extend the Stated Maturity of this Subordinated Note for
one or more periods, as specified on the face hereof (each, an "Extension
Period"), up to but not beyond the date (the "Final Maturity Date") specified on
the face hereof. The Company may exercise such option with respect to this
Subordinated Note by notifying the Trustee of such exercise at least 45 days but
not more than 60 days prior to the Stated Maturity of this Subordinated Note in
effect prior to the exercise of such option. If the Company so notifies the
Trustee of such exercise, the Trustee will mail (first class, postage prepaid),
not later than 40 days prior to the Stated Maturity then in effect to the Holder
of this Subordinated Note a notice (the "Extension Notice") relating to such
Extension Period setting forth: (i) the Company's election to extend the Stated
Maturity of this Subordinated Note, (ii) the new Stated Maturity (which shall
then be considered the Stated Maturity for all purposes of this Subordinated
Note), (iii) the Spread and/or Spread Multiplier applicable to such Extension
Period and (iv) the provisions, if any, for redemption during such Extension
Period, including the date or dates on which or the period or periods during
which and the price or prices at which such redemption may occur during such
Extension Period. Upon the Trustee's mailing of the Extension Notice, the Stated
Maturity of this Subordinated Note will be extended automatically and, except as
modified by the Extension Notice and as described in the next two paragraphs,
this Subordinated Note will have the same terms as prior to the mailing of such
Extension Notice.

                                     B-2-19

<PAGE>

            Notwithstanding the foregoing, not later than 20 days prior to the
Stated Maturity of this Subordinated Note which was in effect prior to the
mailing of an Extension Notice, the Company may, at its option, revoke the
Spread and/or Spread Multiplier provided for in the Extension Notice and
establish a higher Spread and/or Spread Multiplier for the Extension Period by
mailing or causing the Trustee to mail (first class, postage prepaid) notice of
such higher Spread and/or Spread Multiplier to the Holder of this Subordinated
Note. Such notice will be irrevocable. All Subordinated Notes with respect to
which the Stated Maturity is extended will bear such higher Spread and/or Spread
Multiplier for the Extension Period, whether or not tendered for repayment as
provided in the next paragraph.

            If the Company elects to extend the Stated Maturity of this
Subordinated Note, the Holder will have the option to elect repayment of this
Subordinated Note, in whole but not in part, on the Stated Maturity in effect
prior to the mailing of the Extension Notice at a price equal to the principal
amount hereof, plus accrued interest to such date. In order for this
Subordinated Note to be so repaid on the Stated Maturity in effect prior to the
mailing of the Extension Notice, the Holder of this Subordinated Note must
follow the procedures specified under Section 4 for optional repayment, except
that the period for delivery of this Subordinated Note or notification to the
Trustee will be at least 25 days but not more than 35 days prior to such Stated
Maturity. If the Holder has tendered this Subordinated Note for repayment
following receipt of an Extension Notice, the Holder may revoke such tender for
repayment by written notice to the Trustee received prior to the close of
business, on the tenth day prior to such Stated Maturity.

            7. Optional Renewal. If so specified on the face hereof, the Holder
may renew the term of this Subordinated Note on an Interest Payment Date
specified on the face hereof occurring in or prior to the twelfth month
following the Original Issue Date (the "Initial Maturity Date"). On the Interest
Payment Date occurring in the sixth month (unless a different interval (the
"Special Election Interval") is specified on the face hereof) prior to the
Initial Maturity Date (the "Initial Renewal Date") and on the Interest Payment
Date occurring in each sixth month (or in the last month of a Special Election
Interval) after such Initial Renewal Date (each, together with the Initial
Renewal Date, a "Renewal Date"), the term of this Subordinated Note may be
extended to the Interest Payment Date occurring in the twelfth month (or in the
last month of a period equal to twice the Special Election Interval) after such
Renewal Date, if the Holder elects to extend the term of this Subordinated Note
as provided below. If the Holder does not elect to extend the term of any
portion of the principal amount of this Subordinated Note during the specified
period prior to any Renewal Date, such portion will become due and payable on
the Interest Payment Date occurring in the sixth month (or in the last month of
a Special Election Interval) after such Renewal Date (the "New Maturity Date").

            In order for the term of this Subordinated Note to be renewed prior
to a Renewal Date, the Trustee must receive at its Corporate Trust Office, at
least 15 days but not more than 30 days prior to a Renewal Date (unless another
period is specified on the face hereof as the "Special Election Period"), notice
to such effect. Such election will be irrevocable and will be binding upon each
subsequent Holder of this Subordinated Note. The Holder may elect to renew the
term of this Subordinated Note with respect to less than the entire principal
amount hereof only if so specified on the face hereof and only in such principal
amount, or any integral multiple in excess thereof, as specified on the face
hereof. Notwithstanding the foregoing, the term of this Subordinated Note may
not be extended beyond the Stated Maturity specified on the face hereof.

            If the Holder does not elect to renew the term of this Subordinated
Note, this Subordinated Note must be presented to the Trustee (or any Paying
Agent) simultaneously with notice thereof (or, in the event such notice,
together with a guarantee of delivery, is transmitted on behalf of a Holder from
a member of a national securities exchange, the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States, within five Business Days after the date

                                     B-2-20

<PAGE>

of such notice). If this Subordinated Note is in certificated form, as soon as
practicable following receipt of this Subordinated Note, the Trustee (or any
Paying Agent) shall issue in exchange therefor in the name of such Holder: (i) a
Subordinated Note, in principal amount equal to the principal amount of such
exchanged Subordinated Note for which the election to renew the term thereof was
not exercised, with terms identical to those specified herein (except for the
Original Issue Date and the Initial Interest Rate and except that such
Subordinated Note shall have a fixed, nonrenewable Stated Maturity on the New
Maturity Date); and (ii) a replacement Subordinated Note, in a principal amount
equal to the principal amount, if any, of such exchanged Subordinated Note for
which the election to renew was made, with terms identical to the exchanged
Subordinated Note.

            8. Sinking Fund. This Subordinated Note is not subject to a sinking
fund unless otherwise specified on the face hereof.

            9. Original Issue Discount Notes. Notwithstanding anything herein to
the contrary, if this Subordinated Note is an Original Issue Discount Note as
specified on the face hereof, the amount payable in the event the principal
amount hereof is declared to be due and payable immediately by reason of an
Event of Default or in the event of redemption or repayment hereof prior to the
Stated Maturity hereof, in lieu of the principal amount due at the Stated
Maturity hereof, will be the Amortized Face Amount of this Subordinated Note as
of the date of declaration, redemption or repayment, as the case may be. The
"Amortized Face Amount" of this Subordinated Note will be the amount equal to
the sum of (i) the principal amount of this Subordinated Note multiplied by the
Issue Price specified on the face hereof and (ii) the portion of the difference
between the dollar amount determined pursuant to the preceding clause (i) and
the principal amount hereof that has accrued at the Yield to Maturity specified
on the face hereof (computed in accordance with generally accepted United States
bond yield computation principles) to such date of declaration, redemption or
repayment, as the case may be, but in no event will the Amortized Face Amount of
this Subordinated Note exceed its principal amount.

            For the purpose of determining whether Holders of the requisite
principal amount of Subordinated Notes of a series outstanding under the
Subordinated Indenture have made a demand or given a notice or waiver or taken
any other action, the outstanding principal amount of Original Issue Discount
Notes will be the Amortized Face Amount of such Subordinated Notes as of the
date of such determination as specified above.

            10. Events of Default. If any Event of Default with respect to
Subordinated Notes of this series shall occur and be continuing, the principal
of the Subordinated Notes of this series may be declared due and payable in the
manner and with the effect provided in the Subordinated Indenture; provided,
however, that notwithstanding anything herein to the contrary, if this
Subordinated Note is an Original Issue Discount Note, the amount so declared to
be due and payable will be the Amortized Face Amount of this Subordinated Note
as of the date of such declaration as specified under Section 9.

            11. Governing Law. The Subordinated Indenture and the Subordinated
Notes will be governed by and construed in accordance with the laws of the State
of New York.

            12. Denominations, Transfer, Exchange. The Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiplies of $1,000. A Holder may transfer or exchange Subordinated Notes by
presentation of such Subordinated Notes to the Registrar or a co-Registrar with
a request to register the transfer or to exchange then for an equal principal
amount of Subordinated Notes of a different Authorized Denomination. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Subordinated Indenture. The Registrar need not transfer
or exchange any Subordinated Note selected for redemption, except the unredeemed
part thereof if the Subordinated

                                     B-2-21

<PAGE>

Note is redeemed in part, or transfer or exchange of any Subordinated Note for a
period for 15 days before a selection of Subordinated Notes to be redeemed.

            13. Persons Deemed Owners. The registered Holder of this
Subordinated Note shall be treated as the owner of it for all purposes.

            14. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled to
money must look to the Company for payment unless an abandoned property law
designates another person.

            15. Amendment, Supplement, Waiver. Subject to certain exceptions,
the Subordinated Indenture or the Subordinated Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the outstanding Subordinated Notes and any past default or compliance
with any provision relating to the Subordinated Notes may be waived in a
particular instance with the consent of the Holders of a majority in principal
amount of the outstanding Subordinated Notes. Without the consent of any Holder,
the Company and the Trustee may amend or supplement the Subordinated Indenture
or the Subordinated Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Subordinated Notes in addition to or in place of
certificated Subordinated Notes, or to make any other change, provided such
action does not adversely affect the rights of any Holder. No reference herein
to the Subordinated Indenture and no provision of this Subordinated Note or of
the Subordinated Indenture will alter or impair the right of the Holder of this
Subordinated Note, which is absolute and unconditional, to receive payment of
the principal of, and premium, if any, and interest on this Subordinated Note at
the times, places and rates, and in the coin or currency, herein prescribed.

            16. Successor Corporation. When a successor corporation assumes all
of the obligations of its predecessor under the Subordinated Notes and the
Subordinated Indenture, the predecessor corporation will be released from those
obligations, except that a lease of all or substantially all its assets does not
release the predecessor from its obligations to pay the principal of and
premium, if any, and interest, if any, on the Subordinated Notes.

            17. Trustee Dealings With Company. U.S. Bank National Association,
the Trustee under the Subordinated Indenture, 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.

            18. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Subordinated Notes or the Subordinated
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Subordinated Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Subordinated Notes.

            19. Discharge of Subordinated Indenture. The Subordinated Indenture
contains certain provisions pertaining to defeasance, which provisions shall for
all purposes have the same effect as if set forth herein.

            20. Authentication. This Subordinated Note shall not be valid until
the Trustee signs the certificate of authentication on the other side of this
Subordinated Note.

                                     B-2-22

<PAGE>

            21. 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 entirety), JT TEN (= joint tenants with rights of survivorship
and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

            22. Subordination. To the extent set forth in Article 11 of the
Subordinated Indenture, the Subordinated Notes are subordinated to Senior
Indebtedness, which generally is any Indebtedness outstanding on the date of the
Subordinated Indenture or Indebtedness thereafter created, incurred, assumed or
guaranteed by the Company and all renewals, extensions and refundings thereof
except Indebtedness that expressly provides that it is not senior to or superior
in right of payment to the Subordinated Notes. Senior Indebtedness does not
include Indebtedness of the Company to any of its subsidiaries, trade payables
of the Company and certain Indebtedness of others guaranteed by the Company. To
the extent provided in the Subordinated Indenture, Senior Indebtedness must be
paid before the Subordinated Notes may be paid. The Company agrees, and each
Securityholder by accepting a Subordinated Note agrees, to the subordination and
authorizes the Trustee to give it effect.

            "Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Subordinated
Notes. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be outstanding in the future, except that Senior
Indebtedness shall include any guarantees as may be listed in a supplemental
indenture and any other present and future guarantees that provide by their
terms that they constitute Senior Indebtedness.

                                     B-2-23

<PAGE>

                            OPTION TO ELECT REPAYMENT

   [To be completed only if this Subordinated Note is repayable at the option
          of the Holder and the Holder elects to exercise such rights]

            The undersigned owner of this Subordinated Note hereby irrevocably
elects to have the Company repay the principal amount of this Subordinated Note
or portion hereof below designated at the applicable Repayment Price indicated
on the face hereof plus accrued interest to the Repayment Date pursuant to
Section 4 of this Subordinated Note.

            If less than the entire principal amount of this Subordinated Note,
specify the portion to be repaid:

            Specify the denomination(s) (which shall be an Authorized
Denomination) of the Subordinated Note or Subordinated Notes to be issued to the
undersigned for the portion of this Subordinated Note not being repaid (in the
absence of any specification, one such Subordinated Note will be issued for the
portion not being repaid):

Dated:              Signature  _________________________________________________
                               Sign exactly as name appears on the front of this
Subordinated Note.

Indicate address where check is to be sent, if repaid:

____________________________________
____________________________________

SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

____________________________________
____________________________________

NOTICE: THE SIGNATURE TO THIS OPTION TO ELECT REPAYMENT MUST CORRESPOND WITH THE
        NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY
        PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

                                     B-2-24

<PAGE>

                                 ASSIGNMENT FORM

            If you, the Holder, want to assign this Subordinated Note, fill in
the form below:

            I or we assign and transfer this Subordinated Note to:

________________________________________________________________________________

________________________________________________________________________________
              (Insert assignee's social security or tax ID number)

________________________________________________________________________________

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

and irrevocably appoint:
________________________________________________________________________________
agent to transfer this Subordinated 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 other side of
                                                  this Subordinated Note)

                                     B-2-25

<PAGE>

Signature Guarantee:____________________________________________________________

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                     B-2-26

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