Document:

<PAGE>

                                                                   EXHIBIT 10.12

                                    RELEASE

     FOR VALUE RECEIVED, the undersigned, CENTURY BUSINESS CREDIT CORPORATION
together with its successors, assigns, executors and administrators
(collectively, the "Releasors") hereby release, acquit and forever discharge
GIANT GROUP, LTD., as well as its successors, assigns, directors, officers,
agents, servants and employees, past and present, and each of them
(collectively, "Releasee"), from any and all claims, demands, liens, agreements,
contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, which
against the Releasee, Releasor, ever had, now has or hereafter can, shall or may
have, for, upon, or by reason of or in respect of any matter, cause or thing
whatsoever relating to the transactions contemplated by the (a) Factoring
Agreement dated as of August 10, 1999 between Releasee and Periscope (as
amended, restated, supplemented and modified from time to time) and (b) the
Limited Guaranty dated August 9, 1999 made by Giant in favor of Releasee (as
amended, restated, supplemented and modified from time to time), from the
beginning of the world to the day of the date of this Release.

     Nothing contained in this Release shall be deemed a release by Releasor in
any manner whatsoever of any obligations of Releasee to Releasor under the
Amended and Restated Cash Pledge and Security Agreement dated as of April 28,
2000 between Releasee and Releasor (as amended, restated, supplemented and
modified from time to time) and/or the cash collateral pledged by Releasee to
Releasor thereunder, which such agreement remains in full force and effect in
accordance with its terms.

     This Release is not intended to be and shall not be deemed, construed or
treated in any respect as an admission of liability by any person or entity for
any purpose.

     This Release may not be changed orally.

     IN WITNESS WHEREOF, the Releasors have executed this Release on the 31st
day of October, 2000.

                                    CENTURY BUSINESS CREDIT CORPORATION

                                    By: /s/ CHRISTOPHER GOLL
                                       ----------------------------
                                    Title: Senior Vice President
                                          -------------------------
<PAGE>

STATE OF NEW YORK   )
                    : ss.:
COUNTY OF NEW YORK  )

     On this 31 day of October, 2000 before me personally came Christopher Goll,
to me known, who, by me duly sworn, did depose and say that he is the Senior
Vice President of CENTURY BUSINESS CREDIT CORPORATION, the corporation described
in, and which executed the foregoing Release, and duly acknowledged to me that
he executed the same by order of the board of said corporation.

                                                 /s/ LOUKIA HARRIS
                                             --------------------------
                                                    Notary Public<PAGE>

                                                                   EXHIBIT 10.13

                                    RELEASE

     FOR VALUE RECEIVED, each of the undersigned, PERISCOPE SPORTSWEAR, INC.,
("Periscope"), GIANT GROUP, LTD. ("Giant") together with their respective
successors, assigns, executors and administrators (collectively, the
"Releasors") hereby release, acquit and forever discharge CENTURY BUSINESS
CREDIT CORPORATION, as well as its successors, assigns, directors, officers,
agents, servants and employees, past and present, and each of them
(collectively, "Releasee"), from any and all claims, demands, liens, agreements,
contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, which
against the Releasee, any Releasor, ever had, now has or hereafter can, shall or
may have, for, upon, or by reason of or in respect of any matter, cause or thing
whatsoever relating to the transactions contemplated by the Factoring Agreement
dated as of August 10, 1999 between Releasee and Periscope (as amended,
restated, supplemented and modified from time to time) and (b) the Limited
Guaranty dated August 9, 1999 made by Giant in favor of Releasee (as amended,
restated, supplemented and modified from time to time), from the beginning of
the world to the day of the date of this Release.

     This Release is not intended to be and shall not be deemed, construed or
treated in any respect as an admission of liability by any person or entity for
any purpose.

     This Release may not be changed orally.

     IN WITNESS WHEREOF, the Releasors have executed this Release on the 31st
day of October, 2000.

                                    PERISCOPE SPORTSWEAR, INC.

                                    By: /s/ RAY KUSLANSKY
                                       ------------------------------
                                    Title: Vice President
                                          ---------------------------

                                    GIANT GROUP, LTD.

                                    By: /s/ DAVID GOTTERER
                                       ------------------------------
                                    Title: Vice Chairman
                                          ---------------------------
<PAGE>

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF NEW YORK  )

          On this 31 day of October, 2000, before me personally came Ray
Kuslansky to me known, who, being by me duly sworn, did depose and say that he
is the Vice President of PERISCOPE SPORTSWEAR, INC., the entity described in and
which executed the foregoing instrument and that he is authorized to execute
said instrument on behalf thereof.

                                               /s/ LOUKIA HARRIS
                                         ------------------------------
                                                  NOTARY PUBLIC

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF NEW YORK  )

     On this 31 day of October, 2000, before me personally came David Gotterer,
to me known, who, being by me duly sworn, did depose and say that he is the Vice
Chairman of GIANT GROUP, LTD., the corporation described in and which executed
the foregoing instrument and that he is authorized to execute said instrument on
behalf of said corporation.

                                             /s/ LOUKIA HARRIS
                                         --------------------------
                                                Notary Public<PAGE>   1

                         INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Shareholders of
Fresenius Medical Care Aktiengesellschaft,
Hof an der Saale, Germany:

     We consent to the incorporation by reference in the registration statement
on Form S-8 of Fresenius Medical Care Aktiengesellschaft relating to the
Fresenius Medical Care AG 1998 Stock Incentive Plan (the "Form S-8") of our
report dated March 23, 2001, except as to paragraphs 16 and 17 of Note 18, as to
which the date is April 5, 2001, relating to the consolidated balance sheets of
Fresenius Medical Care Aktiengesellschaft and its subsidiaries as of December
31, 2000 and 1999, and related consolidated statements of earnings, cash flows
and shareholders' equity for each of the years in the three-year period ended
December 31, 2000, and related financial statement schedules, which report
appears in the Annual Report on Form 20-F of Fresenius Medical Care
Aktiengesellschaft for the fiscal year ended December 31, 2000, filed on April
5, 2001 with the United States Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended.

Frankfurt am Main, Germany

April 5, 2001

/s/ KPMG
Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprufungsgesellschaft<PAGE>   1
                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY

                               LENNAR CORPORATION,

                                     Issuer

                                       TO

                          BANK ONE TRUST COMPANY, N.A.,
                                 as successor to
                       The First National Bank Of Chicago,

                                     Trustee

                          FIFTH SUPPLEMENTAL INDENTURE

                            DATED AS OF APRIL 4, 2001

                                  TO INDENTURE

                          DATED AS OF DECEMBER 31, 1997

                                   Relating To

           Zero Coupon Convertible Senior Subordinated Notes Due 2021
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                   <C>                                                               <C>
ARTICLE ONE           DEFINITIONS.........................................................2

ARTICLE TWO           ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2021.........12

ARTICLE THREE         GLOBAL SECURITIES..................................................36

ARTICLE FOUR          ADDITIONAL COVENANTS...............................................38

ARTICLE FIVE          REMEDIES...........................................................42

ARTICLE SIX           DISCHARGE OF SUPPLEMENTAL INDENTURE................................43

ARTICLE SEVEN         SUPPLEMENTAL INDENTURES............................................45

ARTICLE EIGHT         SUBORDINATION OF THE NOTES.........................................46

ARTICLE NINE          MISCELLANEOUS......................................................49
</TABLE>

                                        i
<PAGE>   3
                  FIFTH SUPPLEMENTAL INDENTURE, dated as of April 4, 2001 (the
"Supplemental Indenture"), to Indenture, dated as of December 31, 1997, between
Lennar Corporation (the "Company"), a Delaware corporation having its principal
office at 700 N.W. 107th Avenue, Miami, Florida 33172, and Bank One Trust
Company, N.A. (the "Trustee"), a national banking association, organized under
the laws of the United States of America which has its corporate trust office at
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126.

                             RECITALS OF THE COMPANY

                  WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture, dated as of December 31, 1997 (the "Indenture"),
providing for the issuance from time to time of its debentures, notes and other
evidences of unsecured indebtedness, to be issued in one or more series as
therein provided ("Securities");

                  WHEREAS, on September 13, 1999, Bank One Trust Company, N.A.
succeeded to The First National Bank Of Chicago as Trustee under the Indenture;

                  WHEREAS, Section 2.02 of the Indenture provides that the
Company and the Trustee, at any time and from time to time, may enter into an
indenture which supplements the Indenture to establish the terms of Securities
of any series;

                  WHEREAS, the Company has duly authorized the creation of an
issue of Securities to be known as the Zero Coupon Convertible Senior
Subordinated Notes Due 2021 (the "Notes") and to provide therefor the Company
has duly authorized the execution and delivery of this Supplemental Indenture;
and

                  WHEREAS, all things necessary to make the Notes, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Supplemental
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.

                  NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Notes by the Holders thereof, each party agrees for the benefit of each
other party and for the equal and ratable benefit of the Holders of the Notes,
as follows:

                                   ARTICLE ONE

                                   DEFINITIONS

                  SECTION 1.01 Capitalized terms used but not defined in this
Supplemental Indenture shall have the meanings ascribed to them in the
Indenture.

                                       2
<PAGE>   4
                  SECTION 1.02 References in this Supplemental Indenture to
section numbers shall be deemed to be references to section numbers of this
Supplemental Indenture unless otherwise specified.

                  SECTION 1.03 In the case of capitalized terms defined in this
Supplemental Indenture that are also defined in the Indenture, the meanings
ascribed to such terms in this Supplemental Indenture shall apply with respect
to the Notes.

                  SECTION 1.04 For purposes of this Supplemental Indenture, the
following terms have the meanings ascribed to them as follows:

                  "Accreted Conversion Price" means the price determined by
dividing (x) the sum of the Issue Price plus Original Issue Discount accrued to
the reference date, by (y) the Conversion Rate.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                  "Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value (discounted
at the actual rate of interest of such transaction) of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended or may, at the option of the lessor, be extended). The
term "net rental payments" under any lease for any period means the sum of the
rental and other payments required to be paid in such period by the lessee
thereunder, not including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts required to
be paid by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges. In the case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated without payment
of such penalty.

                  "Beneficial Owner" shall be determined in accordance with Rule
13d-3 promulgated by the SEC under the Securities Exchange Act of 1934.

                  "Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of the Board
of Directors.

                  "Bid Agent" means a bid solicitation agent appointed by the
Company to act in such capacity pursuant to paragraph 5 of the Notes.

                                       3
<PAGE>   5
                  "Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.

                  "Cash" has the meaning provided in Section 2.04.

                  "Cash Conversion Price" means, in respect of each of a Note
per $1,000 of Principal Amount at Final Maturity the product of (i) the average
of the Sale Price of the Common Stock for each Trading Day in the five Trading
Day period immediately following (a) the date on which the Company delivers
timely notice of its election to deliver cash instead of issuing shares of
Common Stock in accordance with Section 2.06(2) if the Company has not given
notice of redemption of the Notes or (b) the Conversion Date if the Company has
given notice of redemption of the Notes, in either case multiplied by (ii) the
Conversion Rate on such date and appropriately adjusted to take into account the
occurrence, during such five Trading Day period, of any event requiring
adjustment of the Conversion Rate under this Supplemental Indenture.

                  "Closing Date" means the date of this Supplemental Indenture.

                  "Closing Price" with respect to any securities on any day
means the closing sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on such Exchange, on the principal
national security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.

                  "Common Stock" means the Company's Common Stock, par value
$.10 per share.

                  "Company Fundamental Change Purchase Notice" has the meaning
provided in Section 2.03.

                  "Company Notice" has the meaning provided in Section 2.04.

                  "Company Notice Date" has the meaning provided in Section
2.04.

                  "Consolidated Net Tangible Assets" means, as of any date of
determination, the total amount of assets of the Company and its Subsidiaries
(less applicable reserves and other properly deductible items) after deducting
(1) all current liabilities (excluding the amount of those which are by their
terms extendable or renewable at the option of the obligor to a date more than
12 months after the date as of which the amount is being determined and
excluding all

                                       4
<PAGE>   6
intercompany items between the Company and any of its wholly-owned Subsidiaries
or between wholly-owned Subsidiaries of the Company) and (2) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangible assets, all as determined on a consolidated basis in accordance with
GAAP.

                  "Consolidated Shareholders' Equity" means consolidated
shareholders' equity of the Company and its Subsidiaries as determined in
accordance with GAAP and reflected on the Company's most recent balance sheet.

                  "Controlled" means ownership or control of more than 50% of
the voting power of such entity.

                  "Conversion Agent" means the office or agency designated by
the Company where Notes may be presented for conversion.

                  "Conversion Date" has the meaning provided in Section 2.06.

                  "Conversion Rate" has the meaning provided in Section 2.06.

                  "Credit Agreement" means the Credit Agreement dated May 3,
2000, by and among the Company, the lenders party thereto and Bank One, N.A., as
administrative agent, as amended from time to time.

                  "Defaulted Interest" has the meaning specified in Section
2.11.

                  "Depositary" has the meaning provided in Article Three.

                  "Designated Senior Indebtedness" means any Indebtedness
incurred under the Credit Agreement and any other Senior Indebtedness which, at
the time of determination, has an aggregate principal amount outstanding of, or
commitments to lend up to, at least $50,000,000, and is specifically designated
by the Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for the purposes of this
Supplemental Indenture.

                  "Distributed Securities" has the meaning provided in Section
2.07.

                  "Event of Default" has the meaning provided in Section 5.01.

                  "Expiration Time" has the meaning provided in Section 2.07.

                  "Fair Market Value" means the amount which a willing buyer
would pay a willing seller in an arm's length transaction.

                  "Final Maturity" or "Final Maturity Date" shall be April 4,
2021.

                  "Fundamental Change" shall be deemed to have occurred at such
time after the original issuance of the Notes as:

                                       5
<PAGE>   7
                  (a) any Person (including any syndicate or group deemed to be
a "person" under Section 13(d)(3) of the Securities Exchange Act of 1934), other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or Permitted Holders, is or becomes the
beneficial owner, directly or indirectly, through a purchase or other
acquisition transaction or series of transactions (other than a merger or
consolidation involving the Company), of shares of capital stock of the Company
entitling such Person to exercise in excess of 50% of the total voting power of
all shares of capital stock of the Company entitled to vote generally in the
election of directors;

                  (b) there occurs any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company, or any sale or transfer of the assets of the Company as, or
substantially as, an entirety, to another Person (other than (i) any such
transaction pursuant to which the holders of the Voting Stock immediately prior
to such transaction have, directly or indirectly, shares of capital stock of the
continuing or surviving corporation immediately after such transaction which
entitle such holders to exercise in excess of 50% of the total voting power of
all shares of capital stock of the continuing or surviving corporation entitled
to vote generally in the election of directors and (ii) any merger (A) which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Voting Stock or (B) which is effected solely to change the
jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Voting Stock solely into shares
of stock carrying substantially the same relative rights as the Voting Stock);
or

                  (c) a change in the Board of Directors in which the
individuals who constituted the Board of Directors at the beginning of the
two-year period immediately preceding such change (together with any other
director whose election to the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of at least a
majority of the directors then in office either who were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office;

provided, however, that a Fundamental Change shall not be deemed to have
occurred if either (I) the Closing Price per share of the Common Stock for any
ten (10) Trading Days (each, a "Pricing Trading Date") within the period of 20
consecutive Trading Days ending immediately before the Fundamental Change shall
equal or exceed 105% of the Accreted Conversion Price, provided that at least
five Pricing Trading Dates occur within the 10 consecutive Trading Days ending
immediately before the Fundamental Change or (II) (x) at least 90% of the
consideration (excluding cash payments for fractional shares) in the transaction
or transactions constituting the Fundamental Change consists of shares of common
stock with full voting rights traded on a national securities exchange or quoted
on the NASDAQ National Market (or which shall be so traded or quoted when issued
or exchanged in connection with such Fundamental Change) (such securities being
referred to as "Publicly Traded Securities") and as a result of such transaction
or transactions such Notes become convertible solely into such Publicly Traded
Securities and (y) the consideration in the transaction or transactions
constituting the Fundamental Change consists of cash, Publicly Traded Securities
or a combination of cash and Publicly Traded Securities with an aggregate fair
market value (which, in the case of Publicly Traded Securities, shall be equal
to the average Closing Price of such Publicly Traded Securities during the five
(5) consecutive

                                       6
<PAGE>   8
Trading Days commencing with the Trading Day following consummation of the
transaction or transactions constituting the Fundamental Change) of at least
105% of the Accreted Conversion Price.

                  "Fundamental Change Purchase Date" has the meaning provided in
Section 2.03.

                  "Fundamental Change Purchase Notice" has the meaning provided
in Section 2.03.

                  "Fundamental Change Purchase Price" has the meaning provided
in Section 2.03.

                  "Funded Debt" of any Person means all Indebtedness for
borrowed money created, incurred, assumed or guaranteed in any manner by such
person, and all Indebtedness, contingent or otherwise, incurred or assumed by
such person in connection with the acquisition of any business, property or
asset, which in each case matures more than one year after, or which by its
terms is renewable or extendible or payable out of the proceeds of similar
Indebtedness incurred pursuant to the terms of any revolving credit agreement or
any similar agreement at the option of such person for a period ending more than
one year after the date as of which Funded Debt is being determined; provided,
however, that Funded Debt shall not include (i) any Indebtedness for the
payment, redemption or satisfaction of which money (or evidences of
indebtedness, if permitted under the instrument creating or evidencing such
indebtedness) in the necessary amount shall have been irrevocably deposited in
trust with a trustee or proper depository either on or before the maturity or
redemption date thereof or (ii) any Indebtedness of such person to any of its
subsidiaries or of any subsidiary to such person or any other subsidiary or
(iii) any Indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to assets of such projects.

                  "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, including those
principles set forth in (i) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants, (ii)
statements and pronouncements of the Financial Accounting Standards Board, (iii)
such other statements by such other entity as approved by a significant segment
of the accounting profession and (iv) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended, including opinions and
pronouncements in staff accounting bulletins and similar written statements from
the accounting staff of the SEC. All ratios and computations based on GAAP
contained in this Supplemental Indenture shall be computed in conformity with
GAAP.

                  "Global Securities" means with respect to the Notes issued
hereunder, a Note which is executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Supplemental Indenture and any
supplemental indentures hereto, if any, or certified resolution of the Board of
Directors and pursuant to a written request by the Company, which shall be
registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
Principal Amount at Final Maturity of, all of the outstanding

                                       7
<PAGE>   9
Notes or any portion thereof, in either case having the same terms, including,
without limitation, the same original Issue Date and Final Maturity Date.

                  "Indebtedness" means, with respect to the Company or any
Subsidiary, and without duplication, (a) the principal of and premium, if any,
and interest on, and fees, costs, enforcement expenses, collateral protection
expenses and other reimbursement or indemnity obligations in respect to all
indebtedness or obligations of the Company or any Subsidiary to any Person,
including but not limited to banks and other lending institutions, for money
borrowed that is evidenced by a note, bond, debenture, loan agreement, or
similar instrument or agreement (including purchase money obligations with
original maturities in excess of one year and noncontingent reimbursement
obligations in respect of amounts paid under letters of credit); (b) all
reimbursement obligations and other liabilities (contingent or otherwise) of the
Company or any Subsidiary with respect to letters of credit, bank guarantees or
bankers', acceptances, (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of the Company or any Subsidiary required, in
conformity with generally accepted accounting principles, to be accounted for as
capital lease obligations on the balance sheet of the Company, (d) all
obligations of the Company or any Subsidiary (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement, (e) all direct or indirect guaranties or
similar agreements by the Company or any Subsidiary in respect of, and
obligations or liabilities (contingent or otherwise) of the Company or such
Subsidiary to purchase or otherwise acquire, or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations, excluding any operating leases the Company or any Subsidiary
is currently (or may become) a party to, described in clauses (a) through (d)
secured by any Lien existing on property which is owned or held by the Company
or Subsidiary, regardless of whether the indebtedness or other obligation
secured thereby shall have been assumed by the Company or such Subsidiary and
(g) any and all deferrals, renewals, extensions and refinancing of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (f).

                  "Indenture" has the meaning provided in the Recitals.

                  "Interest Payment Date" has the meaning specified in Section
2.09.

                  "Issue Date" of any Note means the date on which the Note was
originally issued or deemed issued as set forth on the face of the Note.

                  "Issue Price" of any Note means, in connection with the
original issuance of such Note, the initial issue price at which the Note is
issued as set forth on the face of the Note.

                  "Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).

                  "Market Price" means the average of the Sale Prices of the
Common Stock for the 20 Trading Day period ending on the third Business Day (if
the third Business Day prior to the

                                       8
<PAGE>   10
applicable Purchase Date is a Trading Day, or if not, then on the last Trading
Day prior to such third Business Day) prior to the applicable Purchase Date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such Trading Days during such 20 Trading Day period
and ending on such Purchase Date, of any event requiring adjustment of the
Conversion Rate under this Supplemental Indenture.

                  "Option Exercise Date" has the meaning specified in Section
2.09.

                  "Original Issue Discount" of any Note means the difference
between the Issue Price and the Principal Amount at Final Maturity of the Note
as set forth on the face of the Note.

                  "Notes" has the meaning provided in the Recitals.

                  "pay the Notes" has the meaning provided in Section 8.03.

                  "Paying Agent" means the office or agency designated by the
Company where Notes may be presented for payment.

                  "Payment Blockage Notice" has the meaning provided in Section
8.03.

                  "Permitted Holders" means any current holder of the Company's
Class B Common Stock and any permitted transferee of the Company's Class B
Common Stock under the terms of the Company's Certificate of Incorporation as it
exists on April 4, 2001.

                  "Permitted Liens" has the meaning provided in Section 4.01.

                  "Permitted Sale and Leaseback Transactions" has the meaning
provided in Section 4.02.

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

                  "Pricing Trading Date" has the meaning provided in the
definition of Fundamental Change in Section 1.04.

                  "Principal", "Principal Amount" or "principal" of a debt
security, including the Notes, means the principal of the security, including
any accrued Original Issue Discount on the security.

                  "Principal Property" means, any property owned or leased by
the Company or a Significant Subsidiary, the net book value of which exceeds one
percent of the Consolidated Net Tangible Assets of the Company and its
Subsidiaries.

                  "Publicly Traded Securities" has the meaning provided in the
definition of Fundamental Change in Section 1.04.

                  "Purchase Date" has the meaning provided in Section 2.04.

                                       9
<PAGE>   11
                  "Purchase Notice" has the meaning provided in Section 2.04.

                  "Purchase Price" has the meaning provided in Section 2.04.

                  "Purchased Shares" has the meaning provided in Section 2.07.

                  "Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).

                  "Redemption Date" when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Supplemental Indenture.

                  "Redemption Price" when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Supplemental Indenture.

                  "Regular Record Date" has the meaning specified in Section
2.09.

                  "Restated Principal Amount" has the meaning specified in
Section 2.09.

                  "Sale and Leaseback Transaction" has the meaning set forth in
Section 4.02.

                  "Sale Price" of the Common Stock on any date means the closing
sale price per share (or, if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the
average bid and average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System.

                  "SEC" means the Securities and Exchange Commission.

                  "Senior Indebtedness" means the principal of, interest on and
other amounts due on Indebtedness of the Company, whether outstanding on the
date of this Supplemental Indenture or thereafter created, incurred, assumed or
guaranteed by the Company; unless, in the instrument creating or evidencing or
pursuant to which Indebtedness is outstanding, it is expressly provided that
such Indebtedness is not senior in right of payment to the Notes. Senior
Indebtedness includes, with respect to the obligations described above, interest
accruing pursuant to the terms of such Senior Indebtedness on or after the
filing of a petition in bankruptcy or for reorganization relating to the
Company, whether or not post-filing interest is allowed in such proceeding, at
the rate specified in the instrument governing the relevant obligation.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include: (a) Indebtedness of or amounts owed by the Company or any
Subsidiary for compensation to employees, or for goods, services or materials
purchased in the ordinary course of business; (b)

                                       10
<PAGE>   12
Indebtedness of the Company to a Subsidiary of the Company; or (c) any liability
for federal, state, local or other taxes owed or owing by the Company.

                  "Significant Subsidiary" means a Subsidiary that is a
"Significant Subsidiary" as such term is defined in Regulation S-X promulgated
by the SEC, as in effect on the Closing Date.

                  "Special Record Date" has the meaning specified in Section
2.11.

                  "Stated Maturity", when used with respect to any Note or any
installment of semiannual or contingent interest thereon, means the date
specified in such Note as the fixed date on which an amount equal to the
Principal Amount at Final Maturity of such Note or such installment of
semiannual or contingent interest is due and payable.

                  "Subsidiary" means (i) a corporation or other entity of which
a majority in voting power of the stock or other interests is owned by the
Company, by a Subsidiary of the Company or by the Company and one or more
Subsidiaries of the Company or (ii) a partnership, the sole general partner of
which is the Company or any Subsidiary.

                  "Supplemental Indenture" has the meaning provided in the
Preamble.

                  "Tax Event" means that the Company shall have received an
opinion from independent tax counsel experienced in such matters to the effect
that, on or after March 30, 2001, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken, on or after
March 30, 2001, there is more than an insubstantial risk that interest
(including Original Issue Discount and contingent interest, if any) payable on
the Notes either (i) would not be deductible on a current accrual basis or (ii)
would not be deductible under any other method, in either case in whole or in
part, by the Company (by reason of deferral, disallowance, or otherwise) for
United States Federal income tax purposes.

                  "Tax Event Date" has the meaning specified in Section 2.09.

                  "Trading Day" means (x) if the applicable security is listed
or admitted for trading on the New York Stock Exchange, the NASDAQ National
Market or another national security exchange, a day on which the New York Stock
Exchange, the NASDAQ National Market or another national security exchange is
open for business or (y) if the applicable security is quoted on the NASDAQ
National Market, a day on which trades may be made thereon or (z) if the
applicable security is not so listed, admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.

                  "Twenty-Day Average Price" means the average of the Sale
Prices of the Common Stock for each Trading Day in the 20 Trading Day period
ending on the last Trading

                                       11
<PAGE>   13
Day prior to the applicable Conversion Date, appropriately adjusted to take into
account the occurrence, during such 20 Trading Day period, of any event
requiring adjustment of the Conversion Rate under this Supplemental Indenture.

                  "Trustee" means the person named as such in this Supplemental
Indenture and, subject to the provisions of Article Seven of the Indenture, any
successor to that person.

                  "Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.

                  "Voting Stock" means the Common Stock, the Company's Class B
Common Stock and any other stock of the Company which votes together with the
Common Stock in the election of directors (without regard to whether there has
been an arrearage in the payment of dividends on preferred stock).

                  "Wholly Owned Significant Subsidiary" means a Significant
Subsidiary, 100% of the outstanding capital stock of which (other than capital
stock constituting directors' qualifying shares or interests held by directors
or shares or interests required to be held by foreign nationals, in each case to
the extent mandated by applicable law) is directly or indirectly owned by the
Company or by one or more Wholly Owned Significant Subsidiaries.

                                  ARTICLE TWO

           ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2021

                  SECTION 2.01. Creation of Series. In accordance with Section
2.02 of the Indenture, there is hereby created a series of Securities under the
Indenture entitled "Zero Coupon Convertible Senior Subordinated Notes Due 2021".

                  (1) The form of the Notes, including the form of the
certificate of authentication, is attached hereto as Exhibit A.

                  (2) Subject to Section 2.02 of the Indenture and applicable
law, the aggregate Principal Amount at Final Maturity of the Notes which may be
authenticated and delivered under this Supplemental Indenture is limited to
$632,807,000.

                  (3) The aggregate Principal Amount at Final Maturity of the
Notes shall be payable on the Final Maturity Date unless earlier repaid or
converted in accordance with this Supplemental Indenture.

                  (4) The Notes shall be issued at an Issue Price of $363.46 per
$1,000 Principal Amount at Final Maturity. Except as provided for in Sections
2.09 and 2.11 and paragraph 1 of the Notes, there shall be no periodic payments
of interest on the Notes. The calculation of the accrual of Original Issue
Discount in the period during which each Note remains outstanding shall be on a
semiannual bond equivalent basis using a 360-day year composed of twelve 30-day
months, and such accrual shall commence on the Issue Date of the Notes. In the
event of the maturity, conversion, purchase by the Company at the option of a
Holder or redemption of a

                                       12
<PAGE>   14
Note, Original Issue Discount, if any, shall cease to accrue on such Note, under
the terms and subject to the conditions of this Supplemental Indenture.

                  (5) All amounts payable in connection with the Notes shall be
denominated and payable in the lawful currency of the United States.

                  (6) The Notes shall be payable and may be presented for
conversion, registration of transfer and exchange, without service charge, at
the office of the Company maintained for such purpose in New York, New York,
which shall initially be the office or agency of the Trustee.

                  SECTION 2.02. Optional Redemption by the Company.

                  (1) Right to Redeem; Notice to Trustee. The Company, at its
option, may redeem the Notes in accordance with the provisions of paragraphs 6
and 8 of the Notes. If the Company elects to redeem Notes pursuant to paragraph
6 of the Notes, it shall notify the Trustee in writing of the Redemption Date,
the Principal Amount at Final Maturity of Notes to be redeemed, the Redemption
Price and the amount of contingent interest, if any, payable on the Redemption
Date. The Company shall give the notice to the Trustee provided for in this
Section 2.02(1) at least 30 days but not more than 60 days before the Redemption
Date.

                  (2) Selection of Notes to be Redeemed. If any Note selected
for partial redemption is thereafter surrendered for conversion in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be),
solely for purposes of determining the aggregate Principal Amount at Final
Maturity of Notes to be redeemed by the Company, to be the portion selected for
redemption. Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 2.02(2) shall affect the right of any Holder
to convert any Note pursuant to Sections 2.06, 2.07 and 2.08 before the
termination of the conversion right with respect thereto.

                  (3) Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first-class mail to the Trustee and to each Holder of
Notes to be redeemed at such Holder's address as it appears on the Note
register.

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

                  (a) the Redemption Date;

                  (b) the Redemption Price and, to the extent known at the time
of such notice, the amount of contingent interest, if any, payable on the
Redemption Date;

                  (c) the then current Conversion Rate;

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

                                       13
<PAGE>   15
                  (e) that Notes called for redemption must be presented and
surrendered to the Paying Agent to collect the Redemption Price and contingent
interest, if any;

                  (f) that the Notes called for redemption may be converted at
any time before the close of business on the Redemption Date;

                  (g) that Holders who wish to convert Notes must comply with
the procedures in paragraph 10 of the Notes;

                  (h) that, unless the Company defaults in making payment of
such Redemption Price and contingent interest, if any, Original Issue Discount
and interest (including contingent interest), if any, on the Notes called for
redemption will cease to accrue on and after the Redemption Date and the only
remaining right of the Holder will be to receive payment of the Redemption Price
upon presentation and surrender to the Paying Agent of the Notes;

                  (i) if fewer than all the outstanding Notes are to be
redeemed, the certificate number and Principal Amounts at Final Maturity of the
particular Notes to be redeemed;

                  (j) that Original Issue Discount on Notes called for
redemption shall cease to accrue on and after the Redemption Date; and

                  (k) the CUSIP number or numbers for the Notes called for
redemption.

                  At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.

                  (4) Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price (together with accrued and unpaid contingent
interest, if any) stated in the notice, except for Notes that are converted in
accordance with the provisions of Sections 2.06, 2.07 and 2.08. Upon
presentation and surrender to the Paying Agent, Notes called for redemption
shall be paid at the Redemption Price (together with accrued contingent
interest, if any).

                  (5) Sinking Fund. There shall be no sinking fund provided for
the Notes.

                  (6) Deposit of Redemption Price. On or before 11:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or an Affiliate of the
Company is acting as the Paying Agent, shall segregate and hold in trust) an
amount of money sufficient to pay the aggregate Redemption Price of, and any
accrued and unpaid contingent interest with respect to, all the Notes to be
redeemed on that date other than the Notes or portions thereof called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. The Trustee and the Paying
Agent shall, as promptly as practicable, return to the Company any money not
required for that purpose because of conversion of the Notes in accordance with
the

                                       14
<PAGE>   16
provisions of Sections 2.06, 2.07 and 2.08. If such money is then held by the
Company or a Subsidiary in trust and is not required for such purpose, it shall
be discharged from such trust.

                  SECTION 2.03. Repurchase at Option of the Holder Upon a
Fundamental Change.

                  (1) If a Fundamental Change shall occur at any time prior to
April 4, 2006, each Holder of Notes shall have the right, at such Holder's
option, to require the Company to purchase such Holder's Notes on the date (the
"Fundamental Change Purchase Date") (or if such date is not a Business Day, the
next succeeding Business Day) that is 95 days after the date of the Fundamental
Change. The Notes shall be repurchased in integral multiples of $1,000 of
Principal Amount at Final Maturity. The Company shall purchase such Notes for
Cash at a price (the "Fundamental Change Purchase Price") equal to the Issue
Price plus accrued Original Issue Discount to the Fundamental Change Purchase
Date or for shares of Common Stock as set forth in Section 2.04. No Notes may be
repurchased at the option of the Holders due to a Fundamental Change if there
has occurred and is continuing an Event of Default (other than a default in the
payment of the Fundamental Change Purchase Price with respect to such Notes).

                  (2) The Company, or at its request (which must be received by
the Trustee at least three Business Days (or such lesser period as agreed to by
the Trustee) prior to the date the Trustee is requested to give such notice as
described below) the Trustee in the name of and at the expense of the Company,
shall mail to all Holders of record of the Notes a notice (a "Company
Fundamental Change Notice") of the occurrence of a Fundamental Change and of the
repurchase right arising as a result thereof, including the information required
by Section 2.04(6) hereof, on or before the 30th day after the occurrence of
such Fundamental Change. The Company shall promptly furnish to the Trustee a
copy of such notice.

                  (3) For a Note to be so repurchased at the option of the
Holder, the Paying Agent must receive such Note with the form entitled
"Fundamental Change Purchase Notice" on the reverse thereof duly completed,
together with such Note duly endorsed for transfer, on or before the 60th day
after the Company Fundamental Change Notice is delivered. All questions as to
the validity, eligibility (including time of receipt) and acceptance of any Note
for redemption shall be determined by the Company, whose determination shall be
final and binding.

                  SECTION 2.04. Purchase of Notes at the Option of the Holder;
Payment of Purchase Price or Fundamental Change Purchase Price in Stock.

                  (1) Purchase of Notes at the Option of the Holder. On each of
April 4, 2006, April 4, 2011 and April 4, 2016 (each, a "Purchase Date"), at the
purchase price specified in paragraph 7 of the Notes (each, a "Purchase Price"),
a Holder of Notes shall have the option to require the Company to purchase any
outstanding Notes, upon:

                           (a) delivery to the Paying Agent by the Holder of a
written notice of purchase (a "Purchase Notice") at any time from the opening of
business on the date that is 30 Business Days prior to a Purchase Date until the
close of business on such Purchase Date, stating:

                                       15
<PAGE>   17
                  (i) the certificate numbers of the Notes which the Holder
         shall deliver to be purchased;

                  (ii) the portion of the Principal Amount at Final Maturity of
         the Notes which the Holder shall deliver to be purchased, which portion
         must be $1,000 in Principal Amount at Final Maturity or a multiple
         thereof;

                  (iii) that such Notes shall be purchased as of the Purchase
         Date pursuant to the terms and conditions specified in paragraph 7 of
         the Notes and in this Supplemental Indenture; and

                  (iv) if the Company elects, pursuant to a Company Notice, to
         pay the Purchase Price to be paid as of such Purchase Date, in whole or
         in part, in Common Stock but such portion of the Purchase Price shall
         ultimately be payable to such Holder in Cash because any of the
         conditions to the payment of the Purchase Price in Common Stock are not
         satisfied prior to or on the Purchase Date, as set forth in Section
         2.04(4), whether such Holder elects (x) to withdraw such Purchase
         Notice as to some or all of the Notes to which such Purchase Notice
         relates (stating the Principal Amount at Final Maturity and certificate
         numbers of the Notes as to which such withdrawal shall relate), or (y)
         to receive Cash in respect of the entire Purchase Price for all Notes
         (or portions thereof) to which such Purchase Notice relates; and

                           (b) delivery or book-entry transfer of such Note to
the Paying Agent prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such delivery or
transfer being a condition to receipt by the Holder of the Purchase Price
therefor; provided, however, that such Purchase Price shall be so paid pursuant
to this Section 2.04 only if the Note so delivered or transferred to the Paying
Agent shall conform in all respects to the description thereof in the related
Purchase Notice.

                  (2) Procedures. If a Holder, in such Holder's Purchase Notice
or Fundamental Change Purchase Notice (and in any written notice of withdrawal
of a portion of a Holder's Notes previously submitted for purchase pursuant to a
Purchase Notice or Fundamental Change Purchase Notice, the portion that remains
subject to the Purchase Notice or Fundamental Change Purchase Notice), fails to
indicate such Holder's choice with respect to the election regarding a
conditional withdrawal pursuant to the terms of clause (iv) of Section
2.04(l)(a) or the penultimate paragraph of the Fundamental Change Purchase
Notice such Holder shall be deemed to have elected to receive Cash in respect of
all Notes subject to such Purchase Notice or Fundamental Change Purchase Notice
in the circumstances set forth in such clause (iv) and penultimate paragraph.

                  The Company shall purchase from the Holder thereof, pursuant
to this Section 2.04, a portion of a Note if the Principal Amount at Final
Maturity of such portion is $1,000 or a multiple of $1,000 if so requested by
the Holder. Provisions of this Supplemental Indenture that apply to the purchase
of all of a Note also apply to the purchase of such portion of such Note.

                  Any purchase by the Company contemplated pursuant to the
provisions of Section 2.03 or this Section 2.04 shall be consummated by the
delivery of the consideration to be

                                       16
<PAGE>   18
received by the Holder (together with accrued and unpaid contingent interest, if
any) promptly following the later of the Purchase Date and the time of delivery
or book-entry transfer of the Note.

                  Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice or Fundamental Change
Purchase Notice contemplated by Section 2.03 or this Section 2.04(1) shall have
the right at any time prior to the close of business on the Purchase Date or
Fundamental Change Purchase Date to withdraw such Purchase Notice or Fundamental
Change Purchase Notice (in whole or in part) by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 2.05(1).

                  The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or Fundamental Change Purchase Notice or
written notice of withdrawal thereof.

                  (3) Company's Right to Elect Manner of Payment of Purchase
Price. The Company may elect with respect to any Purchase Date or Fundamental
Change Purchase Date to pay the Purchase Price or Fundamental Change Purchase
Price in respect of the Notes to be purchased pursuant to Section 2.03 or
Section 2.04(1) as of such Purchase Date or Fundamental Change Purchase Date, in
U.S. legal tender ("Cash") or Common Stock, or in any combination of Cash and
Common Stock, subject to the conditions set forth in Sections 2.04(4) and (5).
The Company shall designate, in the Company Notice delivered pursuant to Section
2.04(6), whether the Company shall purchase the Notes for Cash or Common Stock,
or, if a combination thereof, the percentages of the Purchase Price or
Fundamental Change Purchase Price of Notes in respect of which it shall pay in
Cash and/or Common Stock; provided that the Company shall pay Cash for
fractional interests in Common Stock. For purposes of determining the existence
of potential fractional interests, all Notes subject to purchase by the Company
held by a Holder shall be considered together (no matter how many separate
certificates are to be presented). Each Holder whose Notes are purchased
pursuant to this Section 2.04 shall receive the same percentage of Cash and/or
Common Stock in payment of the Purchase Price or Fundamental Change Purchase
Price for such Notes, except (a) as provided in Section 2.04(5) with regard to
the payment of Cash in lieu of fractional interests in Common Stock and (b) in
the event that the Company is unable to purchase the Notes of a Holder or
Holders for Common Stock because any necessary qualifications or registrations
of the Common Stock under applicable federal or state securities laws cannot be
obtained, the Company may purchase the Notes of such Holder or Holders for Cash.
Once the Company has given its Company Notice to Holders, the Company may not
change its election with respect to the consideration (or components or
percentages of components thereof) to be paid except pursuant to this Section
2.04(3) or Section 2.04(5).

                  At least five Business Days before the Company Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:

                           (a) the manner of payment selected by the Company;

                           (b) the information required by Section 2.04(6);

                                       17
<PAGE>   19
                           (c) if the Company elects to pay the Purchase Price
or fundamental Change Purchase Price, or a specified percentage thereof, in
Common Stock, that the conditions to such manner of payment set forth in Section
2.04(5) have been or shall be complied with; and

                           (d) whether the Company desires the Trustee to give
the Company Notice required by Section 2.04(6).

                  (4) Purchase with Cash. At the option of the Company, the
Purchase Price or Fundamental Change Purchase Price of Notes in respect of which
a Purchase Notice or fundamental Change Purchase Notice pursuant to Section 2.03
or Section 2.04(l) has been given, or a specified percentage thereof, may be
paid by the Company with Cash equal to the aggregate Purchase Price or
Fundamental Change repurchase Price, or such specified percentage thereof, as
the case may be, of such Notes.

                  (5) Payment by Issuance of Common Stock. At the option of the
Company, the Purchase Price of Notes in respect of which a Purchase Notice
pursuant to Section 2.04(l) or Fundamental Change Purchase Notice has been
given, or a specified percentage thereof, may be paid by the Company by the
issuance of a number of shares of Common Stock equal to the quotient obtained by
dividing (a) the amount of Cash to which the Holders would have been entitled
had the Company elected to pay all or such specified percentage, as the case may
be, of the Purchase Price or Fundamental Change Purchase Price of such Notes in
Cash by (b) 0.95 times the Market Price of a share of Common Stock, subject to
the next succeeding paragraph.

                  The Company shall not issue a fractional share of Common Stock
in payment of the Purchase Price or Fundamental Change Purchase Price. Instead
the Company shall pay Cash for the current market value of the fractional share.
The current market value of a fraction of a share shall be determined by
multiplying the Market Price by such fraction and rounding the product to the
nearest whole cent. It is understood that if a Holder elects to have more than
one Note purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Notes to be purchased.

                  The Company's right to exercise its election to purchase the
Notes pursuant to Section 2.03 or Section 2.04 through the issuance of shares of
Common Stock shall be conditioned upon:

                           (a) the Company having given timely written notice in
accordance with Section 2.04(6) of its election to purchase all or a specified
percentage of the Notes with Common Stock as provided herein;

                           (b) (i) (A) the registration of the shares of Common
Stock to be issued in respect of the payment of the specified percentage of the
Purchase Price or Fundamental Change Purchase Price under the Securities Act of
1933 or (B) the issuance of the shares of Common Stock in an action which is
exempt from the registration requirements of the Securities Act of 1933 and
which will not result in such shares of Common Stock being deemed "restricted
securities" under the Securities Act of 1933 or otherwise and (ii) the
registration of the shares of Common Stock under the Securities Exchange Act of
1934;

                                       18
<PAGE>   20
                           (c) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption from such
qualification and registration; and

                           (d) the receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel each stating that (i) the terms of the
issuance of the Common Stock are in conformity with this Supplemental Indenture
and (ii) the shares of Common Stock to be issued by the Company in payment of
the specified percentage of the Purchase Price or Fundamental Change Purchase
Price in respect of Notes have been duly authorized and, when issued and
delivered pursuant to the terms of this Supplemental Indenture in payment of the
specified percentage of the Purchase Price or Fundamental Change Purchase Price
in respect of Notes, shall be validly issued, fully paid and nonassessable, and,
to the best of such counsel's knowledge, free from preemptive rights, and in the
case of such Officers' Certificate, stating that conditions (a), (b) and (c)
above have been satisfied and, in the case of such Opinion of Counsel, stating
that conditions (b) and (c) above have been satisfied.

                  Such Officers' Certificate shall also set forth the number of
shares of Common Stock to be issued for each $1,000 Principal Amount at Final
Maturity of Notes and the Sale Price of a share of Common Stock on each Trading
Day during the period during which the Market Price is calculated and ending on
the Purchase Date or Fundamental Change Purchase Date. The Company may elect to
pay the Purchase Price or Fundamental Change Purchase Price (or any portion
thereof) in Common Stock only if the information necessary to calculate the
Market Price is reported in a daily newspaper of national circulation. If any of
the conditions set forth in this Section 2.04(5) are not satisfied with respect
to a Holder or Holders prior to or on the Purchase Date or Fundamental Change
Repurchase Date and the Company elected to purchase the Notes to be purchased as
of such Purchase Date or Fundamental Change Repurchase Date pursuant to Section
2.03 or this Section 2.04 through the issuance of shares of Common Stock, the
Company shall pay the entire Purchase Price or Fundamental Change Purchase Price
in respect of such Notes of such Holder or Holders in Cash.

                  Upon determination of the actual number of shares of Common
Stock which the Holder of each $1,000 Principal Amount at Final Maturity of the
Notes shall receive, the Company shall publish such determination in a daily
newspaper of national circulation and on the Company's then existing website.

                  (6) Notice of Election. The Company's notices of election to
purchase with Cash or Common Stock, or any combination thereof (each a "Company
Notice"), shall be sent to the Holders (and to beneficial owners as required by
applicable law) at their addresses shown in the Note register maintained by the
Registrar, and delivered to the Trustee, not less than 30 Business Days prior to
the Purchase Date (the "Company Notice Date") or on or before the 30th day after
the occurrence of the Fundamental Change, as the case may be. Such Company
Notices shall state the manner of payment elected and shall contain the
following information:

                  In the event the Company has elected to pay a Purchase Price
or Fundamental Change Purchase Price (or a specified percentage thereof) with
Common Stock, the Company Notice shall:

                                       19
<PAGE>   21
                           (a) state that each Holder shall receive Common Stock
in respect of the specified percentage of the Purchase Price or Fundamental
Change Purchase Price of the Notes held by such Holder (except any Cash amount
to be paid in lieu of fractional share);

                           (b) state that the total number of shares of Common
Stock to be issued to Holders will be equal to the quotient obtained by dividing
(i) the amount of cash to which the Holders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price or Fundamental Change Purchase Price of such Notes in cash by
(ii) 0.95 times the Market Price of a share of Common Stock;

                           (c) set forth the method of calculating the Market
Price of the Common Stock; and

                           (d) state that because the Market Price of Common
Stock will be determined prior to the Purchase Date or Fundamental Change
Purchase Date, Holders will bear the market risk with respect to the value of
the Common Stock to be received from the date such Market Price is determined to
the Purchase Date.

                  In any case, each Company Notice shall include a form of
Purchase Notice or Fundamental Change Repurchase Notice to be completed by a
Holder and shall state:

                           (a) the Purchase Price, Conversion Rate and, to the
extent known at the time of such notice, the amount of contingent interest, if
any, that will be payable with respect to the Notes on the Purchase Date;

                           (b) the name and address of the Paying Agent and the
Conversion Agent;

                           (c) that Notes as to which a Purchase Notice or
Fundamental Change Purchase Notice has been given may be converted only if the
applicable Purchase Notice has been withdrawn in accordance with the terms of
this Supplemental Indenture;

                           (d) that Notes must be surrendered to the Paying
Agent to collect payment of the Purchase Price or Fundamental Change Purchase
Price and contingent interest, if any;

                           (e) that the Purchase Price or Fundamental Change
Purchase Price for any Note as to which a Purchase Notice has been given and not
withdrawn, together with any accrued contingent interest payable with respect
thereto, shall be paid promptly following the later of the Purchase Date or
Fundamental Change Purchase Date and the time of surrender of such Note as
described in (d);

                           (f) the procedures the Holder must follow under
Section 2.03 and Section 2.04;

                           (g) briefly, the conversion rights of the Notes;

                                       20
<PAGE>   22
                           (h) that, unless the Company defaults in making
payment of such Purchase Price or Fundamental Change Purchase Price and
contingent interest, if any, Original Issue Discount and interest (including
contingent interest), if any, on Notes covered by any Purchase Notice or
Fundamental Change Purchase Notice (or interest, if the Notes have been
converted into semiannual cash pay notes pursuant to Section 2.09 of this
Supplemental Indenture), if any, will cease to accrue on and after the Purchase
Date; and

                           (i) the CUSIP or ISIN number of the Notes.

                           (j) the procedures for withdrawing a Purchase Notice
or Fundamental Change Purchase Notice (including, without limitation, for a
conditional withdrawal pursuant to the terms of Section 2.04(l)(a)(iv) or the
penultimate paragraph of the Fundamental Change Purchase Notice).

                  At the Company's request and at the Company's expense, the
Trustee shall give the Company Notice in the Company's name; provided, however,
that, in all cases, the text of the Company Notice shall be prepared by the
Company.

                  (7) Covenants of the Company. All shares of Common Stock
delivered upon conversion or purchase of the Notes shall be newly issued shares
or treasury shares, shall be fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.

                  The Company shall cause to have listed or quoted all such
shares of Common Stock on each United States national securities exchange or
over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.

                  (8) Procedure Upon Purchase. On or before 11:00 a.m. (New York
City time) on the Purchase Date or Fundamental Change Purchase Date, the Company
shall deposit with the Paying Agent Cash (in respect of a Cash purchase under
Section 2.04(4) or for fractional interests or contingent interests, as
applicable), or shares of Common Stock, or a combination thereof, as applicable,
sufficient to pay the aggregate Purchase Price or Fundamental Change Purchase
Price of, and any accrued and unpaid interest with respect to, the Notes to be
purchased pursuant to this Section 2.04. Payment of the Purchase Price or
Fundamental Change Purchase Price for such Note shall be made as soon as
practicable following the later of the Purchase Date or Fundamental Change
Purchase Date or the time of book-entry transfer or delivery of such Note. If
the Company is delivering Common Stock, the Company shall deliver to each Holder
entitled to receive Common Stock, through the Paying Agent, a certificate for
the number of full shares of Common Stock, as applicable, issuable in payment of
such Purchase Price or Fundamental Change Purchase Price and Cash in lieu of any
fractional interests. The Person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record following the Purchase Date
or Fundamental Change Purchase Date. Subject to Section 2.04(5), no payment or
adjustment shall be made for dividends on the Common Stock the record date for
which occurred on or prior to the Purchase Date or Fundamental Change Purchase
Date. If the Paying Agent holds, in accordance with the terms of the Indenture,
money or securities sufficient to pay the Purchase Price or Fundamental Change
Purchase Price of such Note on the Business Day following the Purchase Date or
Fundamental Change Purchase Date, then, on and after such

                                       21
<PAGE>   23
date, such Note shall cease to be outstanding and Original Issue Discount on
such Note shall cease to accrue, whether or not book-entry transfer of such Note
is made or such Note is delivered to the Paying Agent, and all other rights of
the Holder shall terminate (other than the right to receive the Purchase Price
or Fundamental Change Purchase Price upon delivery or transfer of the Note).

                  (9) Taxes. If a Holder of a Note is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which shall be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

                  SECTION 2.05. Further Conditions for Purchase at the Option of
Holders Upon a Fundamental Change and Purchase of Notes at the Option of the
Holder.

                  (1) Effect of Purchase Notice or Fundamental Change Purchase
Notice. Upon receipt by the Company of the Purchase Notice or Fundamental Change
Purchase Notice specified in Section 2.04(l) or Section 2.03(3), as applicable,
the Holder of the Note in respect of which such Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Fundamental Change Purchase Notice is withdrawn as specified
in the following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Purchase Price, as the case may be, and any
accrued and unpaid contingent interest, if any, with respect to such Note. Such
Purchase Price or Fundamental Change Purchase Price and contingent interest, if
any, shall be paid to such Holder promptly following the later of (x) the
Purchase Date or the Fundamental Change Purchase Date, as the case may be, with
respect to such Note (provided the conditions in Section 2.04(l) or Section
2.03(3), as applicable, have been satisfied) and (y) the time of delivery or
book-entry transfer of such Note to the Paying Agent by the Holder thereof in
the manner required by Section 2.04(l) or Section 2.03(3), as applicable. Notes
in respect of which a Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, has been given by the Holder thereof may not be converted for
shares of Common Stock on or after the date of the delivery of such Purchase
Notice (or Fundamental Change Purchase Notice, as the case may be), unless such
Purchase Notice (or Fundamental Change Purchase Notice, as the case may be) has
first been validly withdrawn as specified in the following two paragraphs.

                  A Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent at any time prior to the close of
business on the Purchase Date or the Fundamental Change Purchase Date, as the
case may be, to which it relates specifying;

                           (a) the certificate number of the Note in respect of
which such notice of withdrawal is being submitted;

                                       22
<PAGE>   24
                           (b) the Principal Amount at Final Maturity of the
Note with respect to which such notice of withdrawal is being submitted; and

                           (c) the Principal Amount at Final Maturity, if any,
of such Note which remains subject to the original Purchase Notice or Company
Fundamental Change Notice, as the case may be, and which has been or shall be
delivered for purchase by the Company.

                  A written notice of withdrawal of a Purchase Notice or
Fundamental Change Purchase Notice may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
2.04(1)(a)(iv) or a Fundamental Change Purchase Notice pursuant to the
penultimate paragraph thereof or (ii) a conditional withdrawal containing the
information set forth in the preceding paragraph and contained in a written
notice of withdrawal delivered to the Paying Agent as set forth in the preceding
paragraph.

                  There shall be no purchase of any Notes pursuant to Section
2.03 or Section 2.04 (other than through the issuance of Common Stock in payment
of the Purchase Price or Fundamental Purchase Price, including Cash in lieu of
any fractional shares) or redemption pursuant to Section 2.03 if there has
occurred prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Purchase Notice (or Fundamental Change Purchase
Notice, as the case may be) and is continuing an Event of Default (other than a
default in the payment of the Purchase Price or Fundamental Change Purchase
Price, as the case may be, and any accrued and unpaid contingent interest with
respect to such Notes). The Paying Agent will promptly return to the respective
Holders thereof any Notes (x) with respect to which a Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, has been withdrawn in
compliance with this Supplemental Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Fundamental Change Purchase Price, as the case may be, and any
accrued and unpaid contingent interest with respect to such Notes) in which
case, upon such return, the Purchase Notice or Fundamental Change Purchase
Notice with respect thereto shall be deemed to have been withdrawn.

                  (2) Deposit of Purchase Price or Fundamental Change Purchase
Price. On or before 11:00 a.m. (New York City time) on a Purchase Date or a
Fundamental Change Purchase Date, as the case may be, the Company shall deposit
with the Trustee or with the Paying Agent (or, if the Company or an Affiliate of
the Company is acting as the Paying Agent, shall segregate and hold in trust) an
amount of money and/or Common Stock, if permitted hereunder, sufficient to pay
the aggregate Purchase Price or Fundamental Change Purchase Price, as the case
may be, of, and any accrued and unpaid contingent interests, with respect to,
all the Notes or portions thereof which are to be purchased as of such Purchase
Date or Fundamental Change Redemption Date, as the case may be.

                  (3) Notes Purchased in Part. Any Note that is to be purchased
only in part shall be surrendered at the office of the Paying Agent (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Note, without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder in aggregate
Principal Amount at Final Maturity

                                       23
<PAGE>   25
equal to, and in exchange for, the portion of the Principal Amount at Final
Maturity of the Note so surrendered which is not purchased or redeemed.

                  (4) Covenant to Comply with Securities Laws Upon Purchase of
Notes. In connection with any offer to purchase Notes under Sections 2.03 or
2.04 hereof, the Company shall (a) comply with Rule 13e-4 (which term, as used
herein, includes any successor provision thereto) under the Securities Exchange
Act of 1934, if applicable; (b) file the related Schedule TO (or any successor
schedule, form or report) under the Securities Exchange Act of 1934, if
applicable; and (c) otherwise comply with all federal and state securities laws
so as to permit the rights and obligations under Sections 2.03 and 2.04 to be
exercised in the time and in the manner specified in Sections 2.03 and 2.04.

                  (5) Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 15 of the Notes, together with interest that
the Trustee has agreed to pay, if any, or dividends, if any, paid thereon while
such shares are held by the Trustee or the Paying Agent, held by them for the
payment of a Purchase Price or Fundamental Change Purchase Price, as the case
may be or contingent interest, if any; provided, however, that to the extent
that the aggregate amount of cash or shares of Common Stock deposited by the
Company pursuant to Section 2.05(2) exceeds the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of, and any accrued and
unpaid contingent interest with respect to the Notes or portions thereof which
the Company is obligated to purchase as of the Purchase Date or Fundamental
Change Purchase Date, as the case may be, then promptly after the Business Day
following the Purchase Date or Fundamental Change Purchase Date, as the case may
be, the Trustee and the Paying Agent shall return any such excess to the Company
together with interest that the Trustee has agreed to pay, if any, or dividends,
if any, paid thereon while such shares are held by the Trustee or the Paying
Agent.

                  SECTION 2.06. Conversion of Notes.

                  (1) Right to Convert. A Holder of a Note may convert such Note
for Common Stock at any time during which the conditions stated in paragraph 10
of the Notes are met; provided, however, that if the Notes are properly
presented for conversion before April 4, 2006 pursuant to the requirements of
this Section 2.06, the Company, at its option, instead of delivering shares of
Common Stock, may pay the Holder the Cash Conversion Price. The number of shares
of Common Stock issuable upon conversion of a Note per $1,000 of Principal
Amount at Final Maturity (the "Conversion Rate") shall be that set forth in
paragraph 10 in the Notes, subject to adjustment as herein set forth.

                  A Holder may convert a portion of the Principal Amount at
Final Maturity of a Note if the portion is $1,000 or a multiple of $1,000.
Provisions of this Supplemental Indenture that apply to conversion of all of a
Note also apply to conversion of a portion of a Note.

                  (2) Conversion Procedures. To convert a Note a Holder must
satisfy the requirements in paragraph 10 of the Notes. The date on which the
Holder of Notes satisfies all those requirements is the conversion date (the
"Conversion Date"). Unless the Conversion Date is prior to April 4, 2006 and the
Company elects to pay the Cash Conversion Price instead of

                                       24
<PAGE>   26
issuing shares of Common Stock, as soon as practicable, but in no event later
than the fifth Business Day following the Conversion Date the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion and Cash in
lieu of any fractional share determined pursuant to Section 2.06(3). The Person
in whose name the certificate is registered shall be treated as a stockholder of
record on and after the Conversion Date; provided, however, that no surrender of
a Note on any date when the stock transfer books of the Company shall be closed
shall be effective to constitute the Person or Persons entitled to receive the
shares of Common Stock upon such conversion as the record holder or holders of
such shares of Common Stock on such date, but such surrender shall be effective
to constitute the Person or Persons entitled to receive such shares of Common
Stock as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date that such
Note shall have been surrendered for conversion, as if the stock transfer books
of the Company had not been closed. Upon conversion of a Note, such Person shall
no longer be a Holder of such Note.

                  If the Company elects to pay Cash instead of issuing shares
with regard to a Note presented for conversion before April 4, 2006, the Company
shall notify the Holder and the Trustee of such election no later than the
second Business Day after the Conversion Date. If the Holder does not withdraw
such election to convert, the Company shall pay the Cash Conversion Price not
later than the tenth Business Day after the Conversion Date.

                  No payment or adjustment shall be made for dividends on or
other distributions with respect to any Voting Stock except as provided in
Section 2.07. On conversion of a Note, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option pursuant to
Section 2.08) attributable to the period from the Issue Date of the Note to the
Conversion Date and (except as provided below) accrued contingent interest with
respect to the converted Note shall not be canceled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through
delivery of the (a) Common Stock (together with the Cash payment, if any, in
lieu of fractional shares) in exchange for the Note being converted pursuant to
the provisions hereof, and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for Original Issue
Discount (or interest, if the Company has exercised its option provided for in
Section 2.09) accrued through the Conversion Date and accrued contingent
interest, and the balance, if any, of such fair market value of such Common
Stock (and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Note being converted pursuant to the provisions hereof; or
(b) the Company's payment of the Cash Conversion Price, if the Conversion Date
is prior to April 4, 2006 and the Company elects to pay the Cash Conversion
Price instead of issuing shares of Common Stock.

                  If a Holder converts more than one Note at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the total Principal Amount at Final Maturity of the Notes converted.

                  Upon surrender of a Note that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Note in an authorized

                                       25
<PAGE>   27
denomination equal in Principal Amount at Final Maturity to the unconverted
portion of the Note surrendered.

                  If the last day on which a Note may be converted is a legal
holiday in a place where a Conversion Agent is located, the Note may be
surrendered to that Conversion Agent on the next succeeding day that it is not a
legal holiday.

                  (3) Cash Payments in Lieu of Fractional Shares. The Company
shall not issue a fractional share of Common Stock upon conversion of a Note.
Instead the Company shall deliver Cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined to the nearest 1/10,000th of a share by multiplying the Market Price
of a full share of Common Stock by the fractional amount and rounding the
product to the nearest whole cent.

                  (4) Taxes on Conversion. If a Holder converts a Note, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.

                  (5) Company to Provide Stock. The Company shall, prior to
issuance of any Notes hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Notes.

                  All shares of Common Stock delivered upon conversion of the
Notes shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.

                  The Company shall endeavor promptly to comply with all federal
and state securities laws regulating the order and delivery of shares of Common
Stock upon the conversion of Notes, if any, and shall cause to have listed or
quoted all such shares of Common Stock on each United States national securities
exchange or over-the-counter or other domestic market on which the Common Stock
is then listed or quoted.

                  SECTION 2.07. Adjustments to Conversion Rate. The Conversion
Rate shall be adjusted from time to time by the Company as follows:

                  (1) In case the Company shall (a) pay a dividend, or make a
distribution, in shares of its Voting Stock, on its Voting Stock; (b) subdivide
its outstanding Voting Stock into a greater number of shares; or (c) combine its
outstanding Voting Stock into a smaller number of shares, the Conversion Rate in
effect immediately prior thereto shall be adjusted so that the holder of any
Note thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock of the Company which such holder would have
owned or have been entitled

                                       26
<PAGE>   28
to receive after the happening of any of the events described above had such
Note been converted immediately prior to the happening of such event. If any
dividend or distribution of the type described in clause (a) above is not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend or distribution had not been
declared. An adjustment made pursuant to this Section 2.07 shall become
effective immediately after the Record Date in the case of a dividend and shall
become effective immediately after the effective date in the case of subdivision
or combination.

                  (2) In case the Company shall issue rights or warrants to all
holders of any class or series of its Voting Stock entitling them (for a period
expiring within 60 days after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe for or purchase Voting
Stock at a price per share less than the Market Price per share of Common Stock
at the Record Date for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of the
issuance of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Voting Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Voting Stock
offered for subscription or purchase, and of which the denominator shall be the
number of shares of Voting Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at such Market Price.
Such adjustment shall be made successively whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of business
on the day following the Record Date for the determination of the stockholders
entitled to receive such rights or warrants. To the extent that shares of Voting
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Voting Stock
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such Record Date for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Voting Stock at less than such Market Price, and in determining the aggregate
offering price of such shares of Voting Stock, there shall be taken into account
any consideration received by the Company for such rights or warrants, the value
of such consideration, if other than cash, to be determined by the Board of
Directors.

                  (3) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Voting Stock (excluding any distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary) any shares of any class of capital stock of
the Company (other than Voting Stock) or evidences of its indebtedness or assets
(other than Cash) or rights or warrants to subscribe for or purchase any of its
Notes (excluding those referred to in Section 2.07(2) hereof) (any of the
foregoing hereinafter in this Section 2.07(3) called the "Distributed
Securities"), then, the Conversion Rate shall be adjusted so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of such distribution by a fraction of which
the numerator shall be the Market Price per share of the Common Stock on the
Record Date mentioned below, and the

                                       27
<PAGE>   29
denominator shall be the Market Price per share of the Common Stock on such
Record Date less the fair market value on such Record Date (as determined by the
Board of Directors, whose determination shall be conclusive, and described in a
certificate filed with the Trustee) of the Distributed Securities so distributed
applicable to one share of Voting Stock. Such adjustment shall become effective
immediately after the Record Date for the determination of stockholders entitled
to receive such distribution. Notwithstanding the foregoing, in the event the
then fair market value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Voting Stock is equal to or
greater than the Market Price of the Common Stock on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each Holder
shall have the right to receive upon conversion the amount of Distributed
Securities such Holder would have received had such Holder converted each Note
on such Record Date. In the event that such distribution is not so paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate which would
then be in effect if such distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for purposes of
this Section 2.07(3) by reference to the actual or when issued trading market
for any Notes, it must in doing so consider the prices in such market over the
same period used in computing the Market Price of the Common Stock.

                  Notwithstanding the foregoing provisions of this Section
2.07(3), no adjustment shall be made thereunder for any distribution of
Distributed Securities if the Company makes proper provision so that each Holder
of a Note who converts such Note (or any portion thereof) after the Record Date
for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such Record Date, converted
such Note for Common Stock; provided that, with respect to any Distributed
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Distributed
Securities receivable upon conversion of such Note would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such Note.

                  Upon conversion of the Notes the Holders shall receive, in
addition to the Common Stock issuable upon such conversion, the rights issued
under the Company's existing stockholder rights plan and any future stockholder
rights plan the Company implements (notwithstanding the occurrence of an event
causing such rights to separate from the Common Stock at or prior to the time of
conversion).

                  (4) In case the Company shall, by dividend or otherwise,
distribute to all holders of any class of its Voting Stock cash (excluding any
cash that is distributed upon a merger or consolidation to which Section 2.08(6)
applies or as part of a distribution referred to in Section 2.07(3)) in an
aggregate amount that, combined together with (a) the aggregate amount of any
other such distributions to all holders of any class of its Voting Stock made
exclusively in cash within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this Section
2.07(4) has been made, and (b) the aggregate of any cash plus the fair market
value of consideration payable in respect of any tender offer by the Company for
all or any portion of any class of its Voting Stock concluded within the 12
months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to

                                       28
<PAGE>   30
Section 2.07(5) has been made, exceeds 10% of the product of the Market Price
(determined as provided herein) on the Record Date with respect to such
distribution times the number of shares of Voting Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, the Conversion Rate shall be increased so that the same shall equal
the Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the record date by a fraction of which the numerator shall
be such Market Price of the Common Stock and the denominator shall be the Market
Price of the Common Stock on the record date less the amount of cash so
distributed (and not excluded as provided above) applicable to one share of
Voting Stock, such increase to be effective immediately prior to the opening of
business on the day following the record date and the number of shares of Voting
Stock outstanding on the Record Date; provided, however, that no adjustment will
be made in respect of any such dividends and distributions that result in the
payment of any contingent interest to the Holders; provided, further, that, if
the portion of the cash so distributed applicable to one share of Voting Stock
is (a) equal to or greater than the Market Price of the Common Stock on the
Record Date or (b) the Market Price of the Common Stock on the Record Date is
greater than the fair market value of the evidences of indebtedness, assets,
rights and warrants distributed pursuant to Section 2.07(3) by less than $1.00,
then, in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder shall have the right to receive upon conversion, in addition to
the shares of Common Stock, the kind and amount of assets, debt securities, or
rights warrants or options the Holder would have received had such Holder
converted such Note immediately prior to such Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. If any adjustment is required to be made as
set forth in this Section 2.07(4) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set forth
in this Section 2.07(4) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.

     (5) In case a tender offer made by the Company or any of its subsidiaries
for all or any portion of any class of its Voting Stock expires and such tender
offer (as amended upon the expiration thereof) requires the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares) of an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that, combined together with (a) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of any class of its Voting Stock expiring within the 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to this Section 2.07(5) has been made, and (b) the aggregate amount of
any distributions to all holders of the Voting Stock made exclusively in cash
within 12 months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to Section 2.07(4) has been made, exceeds 10% of
the product of the Market Price (determined as provided herein) as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended) times the

                                       29
<PAGE>   31

number of shares of Voting Stock outstanding (including any tendered shares) at
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the Conversion
Rate determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction of which the numerator shall be the number
of shares of Voting Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time multiplied by the Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
an maximum specified in the terms of the tender or exchanged offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of Voting Stock
outstanding (less any Purchased Shares) on the Expiration Time and the Market
Price of the Common Stock on the Trading Day next succeeding the Expiration Time
such reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such tender offer had not
been made.

     (6) For purposes of this Section 2.07, the number of shares of Voting Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Voting Stock. The Company shall not pay
any dividend or make any distribution on shares of Voting Stock held in the
treasury of the Company.

     SECTION 2.08. Miscellaneous Provisions Relating to Conversion.

     (1) When Adjustment May be Deferred. No adjustment in the Conversion Rate
need be made unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Rate then in effect provided that any adjustment that
would otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. Except as stated in Section 2.07, the
Conversion Rate will not be adjusted for the issuance of Voting Stock or any
securities convertible into or exchangeable for Voting Stock or carrying the
right to purchase any of the foregoing. Any adjustments that are made shall be
carried forward and taken into account any subsequent adjustment. All
calculations under Sections 2.06, 2.07 and 2.08 shall be made to the nearest
cent or to the nearest 1/10,000th of a share, as the case may be.

     (2) When No Adjustment Required. No adjustment need be made for rights to
purchase Voting Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value or no par
value of the Voting Stock. To the extent the Notes become convertible into cash,
assets, property or Notes (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
Notes. Interest shall not accrue on the cash.

                                       30
<PAGE>   32

     (3) Notice of Adjustment. Whenever the Conversion Rate is adjusted, the
Company shall promptly mail to Holders a notice of the adjustment. The Company
shall file with the Trustee and the Conversion Agent such notice. The
certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither than Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.

     (4) Voluntary Increase. The Company may make such increases in the
Conversion Rate, in addition to those required by Section 2.07, as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Voting Stock or rights to purchase Voting Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. To the extent permitted by applicable
law, the Company may from time to time increase the Conversion Rate by any
amount for any period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. Whenever the Conversion Rate is so
increased, the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice of such increase. Neither the Trustee nor any
Conversion Agent shall be under any duty or responsibility with respect to any
such certificate except to exhibit the same to any holder desiring inspection
thereof. The Company shall mail the notice at least 15 days before the date the
increased Conversion Rate takes affect. The notice shall state the increased
Conversion Rate and the period it shall be in effect.

     (5) Notice to Holders Prior to Certain Actions. In case:

         (a) the Company shall declare a dividend (or any other distribution) on
its Voting Stock that would require an adjustment in the Conversion Rate
pursuant to Section 2.07;

         (b) the Company shall authorize the granting to all or substantially
all the Holders of its Voting Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants;

         (c) of any reclassification or reorganization of the Voting Stock of
the Company (other than a subdivision or combination of its outstanding Voting
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or

         (d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,

the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Notes at his address appearing on the Note register, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or,
if a

                                       31
<PAGE>   33

record is not to be taken, the date as of which the holders of Voting Stock of
record to be entitled to such dividend, distribution, or rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that holders
of Voting Stock of record shall be entitled to exchange their Voting Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

     (6) Effect of Reclassification, Consolidation, Merger or Sale. If any of
the following events occur, namely (a) any reclassification or change of
outstanding shares of Voting Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination); (b) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Voting
Stock shall be entitled to receive stock, Notes or other property or assets
(including cash) with respect to or in exchange for such Voting Stock; or (c)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Voting Stock shall be entitled to receive stock, Notes or other
property or assets (including cash) with respect to or in exchange for such
Voting Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Note shall be convertible into the kind and amount of shares
of stock and other Notes or property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Voting Stock issuable upon
conversion of such Notes immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 2.08(6).

     The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Notes, at his address appearing on the
Note register, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.

     The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.

     If this Section 2.08(6) applies to any event or occurrence, Section 2.07
shall not apply.

     (7) Responsibility of Trustee. The Trustee and any other Conversion Agent
shall not at any time be under any duty or responsibility to any Holder of Notes
to either calculate the Conversion Rate or determine whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same and shall be protected in relying
upon an Officer's Certificate with respect to the same. The Trustee and any
other Conversion Agent shall not be

                                       32
<PAGE>   34

accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note and the Trustee and any
other Conversion Agent make no representations with respect thereto. Subject to
the provisions of Article Seven of the Indenture, neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Section. Without limiting the generality of the
foregoing, neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 2.08(6) relating either
to the kind or amount of shares of stock or securities or property (including
cash) receivable by Holders upon the conversion of their Notes after any event
referred to in such Section 2.08(6) or to any adjustment to be made with respect
thereto, but, subject to the provisions of Article Seven of the Indenture, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officer's Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.

     (8) Simultaneous Adjustments. In the event that Sections 2.06, 2.07 or 2.08
require adjustments to the Conversion Rate under more than one of Sections
2.07(l), (2), (3) or (4), and the Record Dates for the distributions giving rise
to such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of Section 2.07(3), second, the
provisions of Section 2.07(4), third, the provisions of Section 2.07(l), and
fourth, the provisions of Section 2.07(2).

     (9) Successive Adjustments. After an adjustment to the Conversion Rate
under Sections 2.06, 2.07 or 2.08, any subsequent event requiring an adjustment
under Sections 2.06, 2.07 or 2.08 shall cause an adjustment to the Conversion
Rate as so adjusted.

     (10) General Considerations. Whenever successive adjustments to the
Conversion Rate are called for pursuant to Sections 2.06, 2.07 or 2.08, such
adjustments shall be made to the Market Price as may be necessary or appropriate
to effectuate the intent of Sections 2.06, 2.07 or 2.08 and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.

     SECTION 2.09. Optional Conversion to Semiannual Cash Pay Note Upon Tax
Event. From and after (i) the date (the "Tax Event Date") of the occurrence of a
Tax Event and (ii) the date the Company exercises its option set forth in this
Section 2.09, whichever is later (the "Option Exercise Date"), at the option of
the Company, cash interest in lieu of future Original Issue Discount shall
accrue at the rate of 5.125% per annum on a restated principal amount per $1,000
original Principal Amount at Final Maturity (the "Restated Principal Amount")
equal to the Issue Price plus Original Issue Discount accrued to the Option
Exercise Date and shall be payable semiannually on April 4 and October 4 of each
year (each an "Interest Payment Date") to holders of record at the close of
business on March 21 and September 19 (each a "Regular Record Date") immediately
preceding such Interest Payment Date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months and will accrue

                                       33
<PAGE>   35

from the most recent date on which interest has been paid or, if no interest has
been paid, from the Option Exercise Date. Within 15 days of the occurrence of a
Tax Event, the Company shall deliver a written notice of such Tax Event by
facsimile and first-class mail to the Trustee and within 15 days of their
exercise of such option the Company shall deliver a written notice of the Option
Exercise Date by facsimile and first-class mail to the Trustee and by first
class mail to the Holders of the Notes. From and after the Option Exercise Date,
(i) the Company shall be obligated to pay at Maturity or upon a Redemption Date,
Purchase Date or Fundamental Change Purchase Date, in lieu of the Principal
Amount at Final Maturity of a Note, the Restated Principal Amount thereof plus
accrued and unpaid interest, (ii) "Issue Price and accrued Original Issue
Discount," "Issue Price plus Original Issue Discount" or similar words, as used
herein, means Restated Principal Amount plus accrued and unpaid interest with
respect to any Note, and (iii) contingent interest shall cease to accrue on the
Notes. Notes authenticated and delivered after the Option Exercise Date may, and
shall if required by the Trustee, bear a notation in a form approved by the
Trustee as to the conversion of the Notes to semiannual cash pay notes.

     SECTION 2.10. Calculation of Original Issue Discount for U.S. Federal
Income Tax Purposes. The Company agrees, and each Holder and any beneficial
holder of a Note by its purchase thereof shall be deemed to agree, to treat (in
the absence of an administrative determination or judicial ruling to the
contrary), for United States federal income tax purposes, the Notes as debt
instruments that are subject to Section 1.1275-4(b) of the Treasury Regulations.
For United States federal income tax purposes, the Company shall accrue interest
with respect to outstanding Notes as original issue discount according to the
"noncontingent bond method," set forth in section 1.1275-4(b) of the Treasury
Regulations, based on a comparable yield of 10.04% compounded semiannually and
the projected payment schedule attached hereto as Exhibit B. The Company shall
file with the Trustee promptly at the end of each calendar year: (1) a written
notice specifying the amount of original issue discount for United States
federal income tax purposes (including daily rates and accrual periods) accrued
on outstanding Notes as of the end of such year and (2) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time, including
the amount of any adjustment made under the noncontingent bond method to account
for the amount of any difference between the amount of an actual payment and the
amount of a projected payment.

     The Company acknowledges and agrees, and each Holder and any beneficial
holder of a Note by its purchase thereof shall be deemed to acknowledge and
agree, that (i) the comparable yield means the annual yield the Company would
pay, as of the Issue Date, on a fixed-rate cash pay nonconvertible debt security
with no contingent payments, but with terms and conditions otherwise comparable
to those of the Notes; (ii) the schedule of projected payments attached hereto
as Exhibit B is determined on the basis of the comparable yield and an
assumption of linear growth of the stock price and a constant dividend yield;
(iii) the comparable yield and the schedule of projected payments are not
determined for any purpose other than for the determination of interest accruals
and adjustments thereof in respect of the Notes for United States federal income
tax purposes; and (iv) the comparable yield and the schedule of projected
payments do not constitute a projection or representation regarding the future
stock price or the amounts payable on the Notes.

                                       34
<PAGE>   36

     SECTION 2.11. Payment of Interest.

     (1) Paying Agent To Hold Money in Trust. Prior to 11:00 a.m. (New York City
time) on any applicable payment date, the Company shall deposit with the Paying
Agent (or if an Issuer or a Subsidiary of any Issuer is acting as Paying Agent,
segregate and hold in trust for the benefit of the Persons entitled thereto) a
sum sufficient to pay semiannual or contingent interest when due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Notes 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 held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.

     (2) Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders.

     (3) Payment of Interest; Interest Rights Preserved. (a) Semiannual or
contingent interest on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the close of business on the Regular Record Date
or accrual date, as the case may be, for such interest at the office or agency
of the Company maintained for such purpose. Each installment of semiannual or
contingent interest on any Note shall be paid in same-day funds by transfer to
an account maintained by the payee located inside the United States. In the case
of a Global Note, semiannual or contingent interest payable on any applicable
payment date will be paid to the Depositary, with respect to that portion of
such Global Note held for its account by Cede & Co. for the purpose of
permitting such party to credit the interest received by it in respect of such
Global Note to the accounts of the beneficial owners thereof.

     (b) Except as otherwise specified with respect to the Notes, any semiannual
or contingent interest on any Note that is payable, but is not punctually paid
or duly provided for, within 30 days following any applicable payment date
(herein called "Defaulted Interest", which term shall include any accrued and
unpaid interest that has accrued on such defaulted amount in accordance with
paragraph 1 of the Notes), shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date or accrual date, as the case
may be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in clause (i) or
(ii) below.

          (i) The Company may elect to make payment of any Defaulted Interest to
     the Persons in whose names the Notes are registered at the close of
     business on a date for the payment of such Defaulted Interest (the "Special
     Record Date"), which shall be fixed in

                                       35
<PAGE>   37

     the following manner: The Company shall notify the Trustee in writing of
     the amount of Defaulted Interest proposed to be paid on each Note and the
     date of the proposed payment (which shall not be less than 20 days after
     such notice is received by the Trustee), and at the same time the Company
     shall deposit with the Trustee an amount of money equal to the aggregate
     amount proposed to be paid in respect of such Defaulted Interest or shall
     make arrangements satisfactory to the Trustee for such deposit on or prior
     to the date of the proposed payment, such money when deposited to be held
     in trust for the benefit of the Persons entitled to such Defaulted Interest
     as in this clause provided. Thereupon the Trustee shall fix a Special
     Record Date for the payment of such Defaulted Interest which shall be not
     more than 15 days and not less than 10 days prior to the date of the
     proposed payment and not less than 10 days after the receipt by the Trustee
     of the notice of the proposed payment. The Trustee shall promptly notify
     the Company of such Special Record Date and, in the name and at the expense
     of the Company, shall cause notice of the proposed payment of such
     Defaulted Interest and the Special Record Date therefor to be mailed,
     first-class postage prepaid, to each Holder of Notes at his address as it
     appears on the list of Holders maintained pursuant to this Supplemental
     Indenture not less than 10 days prior to such Special Record Date. Notice
     of the proposed payment of such Defaulted Interest and the Special Record
     Date therefor having been mailed as aforesaid, such Defaulted Interest
     shall be paid to the Persons in whose names the Notes are registered at the
     close of business on such Special Record Date and shall no longer be
     payable pursuant to the following clause (ii).

          (ii) Alternatively, the Company may make payment of any Defaulted
     Interest on the Notes in any other lawful manner not inconsistent with the
     requirements of any Notes exchange on which such Notes may be listed, and
     upon such notice as may be required by such exchange, if, after notice
     given by the Company to the Trustee of the proposed payment pursuant to
     this clause, such manner of payment shall be deemed practicable by the
     Trustee.

     Subject to the foregoing provisions of this Section 2.11 and Section 3.02,
each Note delivered under this Supplemental Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to semiannual or contingent interest accrued and unpaid to, and to
accrue, which were carried by such other Note.

                                 ARTICLE THREE

                                GLOBAL SECURITIES

     SECTION 3.01. If the Board of Directors shall establish that the Notes are
to be issued in whole or in part in the form of one or more Global Securities,
then the Company shall execute and the Trustee or its agent shall authenticate
and deliver such Global Security or Securities which (1) shall represent, and
shall be denominated in an amount equal to the aggregate Principal Amount at
Final Maturity of, the outstanding Notes to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
writing to the Trustee, (2) shall be registered in the name of The Depository
Trust Company, New York, New York (the "Depositary") or its nominee, (3) shall
be delivered by the Trustee or

                                       36
<PAGE>   38

its agent to the Depositary or pursuant to the Depositary's instruction and (4)
shall bear a legend substantially to the following effect:

            UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
            INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
            TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
            DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
            ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
            NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
            DEPOSITARY.

Interests in the Global Securities shall be issued only in denominations of
$1,000 or integral multiples thereof.

     SECTION 3.02. Notwithstanding any other provisions herein but subject to
the provisions of Section 3.03 below, unless the terms of a Global Security
expressly permit such Global Security to be exchanged in whole or in part for
individual Notes, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.08 of the Indenture, only to a nominee
of the Depositary for such Global Security, or to the Depositary, or a successor
Depositary for such Global Security selected or approved by the Company, or to a
nominee of such successor Depositary.

     SECTION 3.03. (1) If at any time the Depositary for a Global Security
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the Notes ceases
to be a clearing agency registered under the Securities Exchange Act of 1934 or
other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to such Global Security. If a successor Depositary for
such Global Security is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
shall execute, and the Trustee or its agent, upon receipt of a written request
by the Company for the authentication and delivery of individual Notes in
exchange for such Global Security, shall authenticate and deliver, individual
Notes in an aggregate Principal Amount at Final Maturity equal to the Principal
Amount at Final Maturity of the Global Security in exchange for such Global
Security.

     (2) The Company may at any time and in its sole discretion determine that
the Notes or portion thereof issued or issuable in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company shall execute, and the Trustee, upon
receipt of a written request by the Company for the authentication and delivery
of individual Notes in exchange in whole or in part for such Global Security,
shall authenticate and deliver individual Notes in definitive form in an
aggregate Principal Amount at Final Maturity equal to the Principal Amount at
Final Maturity of such Global Security or Securities representing such series or
portion thereof in exchange for such Global Security or Securities.

                                       37
<PAGE>   39

     (3) If specified by the Company with respect to Notes issued or issuable in
the form of a Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for individual
Notes in definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon the Company shall execute, and the Trustee or its agent
shall authenticate and deliver, without service-charge, (a) to each Person
specified by such Depositary a new Note or Notes of any authorized denomination
as requested by such Person in aggregate Principal Amount at Final Maturity
equal to and in exchange for such Person's beneficial interest in the Global
Security; and (b) to such Depositary a new Global Security in an authorized
denomination equal to the difference, if any, between the Principal Amount at
Final Maturity of the surrendered Global Security and the aggregate Principal
Amount at Final Maturity of Notes delivered to the Holders thereof.

     (4) In any exchange provided for in any of the preceding three paragraphs,
the Company shall execute and the Trustee or its agent shall authenticate and
deliver individual Notes in definitive registered form in authorized
denominations. Upon the exchange of the entire Principal Amount at Final
Maturity of a Global Security for individual Notes, such Global Security shall
be canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Notes issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver such Notes to the Persons
in whose names such Notes are so registered.

                                  ARTICLE FOUR

                              ADDITIONAL COVENANTS

     SECTION 4.01. Limitation on Liens. Except as provided in Section 4.03, the
Company shall not, and shall not permit any Significant Subsidiary to, create or
suffer to exist any Lien to secure any Indebtedness of the Company or
Significant Subsidiary on any Principal Property of the Company or Significant
Subsidiary, without making, or causing such Significant Subsidiary to make,
effective provision to secure all of the Notes offered hereunder and then
outstanding by such Lien, equally and ratably with any and all other such
Indebtedness thereby secured, so long as such other Indebtedness is so secured,
except that the foregoing restrictions shall not apply to:

     (a) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or Significant Subsidiary or at the
time of sale, lease or other disposition of the properties of such Person (or a
division thereof) as an entirety or substantially as an entirety to the Company
or Significant Subsidiary;

     (b) Liens on property of a Person existing at the time such Person becomes
a Significant Subsidiary or existing on property prior to the acquisition
thereof by the Company or Significant Subsidiary;

     (c) Liens securing Indebtedness between a Significant Subsidiary and the
Company or between Significant Subsidiaries or Company;

                                       38
<PAGE>   40

     (d) Liens on any property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of the underlying
property, whether directly or indirectly, by way of share disposition or
otherwise, provided that the Company or the Significant Subsidiary must dispose
of such property within 180 days after the creation of such Liens and that any
Indebtedness secured by such Liens shall be without recourse to the Company or
Significant Subsidiary;

     (e) Liens in favor of the United States of America or any state thereof, or
any department, agency or instrumentality or political subdivision of the United
States of America or any state thereof, or in favor of any country, or any
political subdivision thereof, to secure partial, progress, advance or other
payments, or performance of any other similar obligations, including, without
limitation, Liens to secure pollution control bonds or industrial revenue or
other similar types of bonds;

     (f) Liens imposed by law, such as carriers', warehousemen's and mechanics'
Liens and other similar Liens arising in the ordinary course of business which
secure obligations not more than 60 days past due or which are being contested
in good faith and by appropriate proceedings;

     (g) Liens incurred in the ordinary course of business to secure performance
of obligations with respect to statutory or regulatory requirements, performance
or return-of-money bonds, surety bonds or other obligations of a like nature, in
each case which are not incurred in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
property and which do not in the aggregate impair in any material respect the
use of property in the operation of the business of the Company and their
respective Subsidiaries taken as a whole;

     (h) Liens incurred to secure appeal bonds and judgment and attachment
Liens, in each case in connection with litigation or legal proceedings which are
being contested in good faith by appropriate proceedings so long as reserves
have been established to the extent required by GAAP;

     (i) pledges or deposits under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which the Company or the Significant Subsidiary is a party, or deposits to
secure public or statutory obligations of the Company or the Significant
Subsidiary or deposits for the payment of rent, in each case incurred in the
ordinary course of business;

     (j) utility easements, building restrictions and such other encumbrances or
charges against real property as are of a nature generally existing with respect
to properties of a similar character;

     (k) Liens granted to any bank or other institution on the payments to be
made to such institution by the Company or any Subsidiary thereof, pursuant to
any interest rate swap or similar agreement or foreign currency hedge, exchange
or similar agreement designed to provide protection against fluctuations in
interest rates and currency exchange rates, respectively,

                                       39
<PAGE>   41

provided that such agreements are entered into in, or are incidental to, the
ordinary course of business;

     (l) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of setoff or similar rights and remedies;

     (m) Liens arising from Uniform Commercial Code financing statements
regarding leases;

     (n) the giving, simultaneously with or within 180 days after the latest of
the Closing Date, or the acquisition, construction, improvement, development or
expansion of such property, of a purchase money Lien on property acquired,
constructed, improved, developed or expanded after the Closing Date, or the
acquisition, construction, improvement, development or expansion after the
Closing Date, of property subject to any Lien which is limited to such property;

     (o) the giving of a Lien on real property which is the sole security for
Indebtedness incurred within two years after the latest of the Closing Date, or
the acquisition, construction, improvement, development or expansion of such
property, provided that the holder of such Indebtedness is entitled to enforce
its payment only by resorting to such security;

     (p) Liens arising by the terms of letters of credit entered into in the
ordinary course of business to secure reimbursement obligations thereunder;

     (q) Liens existing on the Closing Date;

     (r) Liens for taxes, assessments and other governmental charges or levies
not yet due or as to which the period of grace, if any related thereto has not
expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;
and

     (s) Liens securing refinancing, extension or refunding of any Indebtedness;
provided, that any such Lien does not otherwise extend to or cover any property
or assets other than the property or assets securing Indebtedness so refinanced,
extended or refunded.

     SECTION 4.02. Sale and Leaseback Transactions. Except as provided in
Section 4.03, the Company shall not, and shall not permit any Significant
Subsidiary to, after the date hereof, enter into any arrangement with any Person
providing for the leasing by the Company or any Significant Subsidiary of any
Principal Property now owned or hereafter acquired which has been or is to be
sold or transferred by the Company or such Significant Subsidiary to such Person
with the intention of taking back a lease of such Principal Property (a "Sale
and Leaseback Transaction"), unless the net proceeds of such sale or transfer
have been determined by the Board of Directors to be at least equal to the fair
market value of such Principal Property or asset at the time of such sale and
transfer and either (i) the Company or such Significant Subsidiary applies or
causes to be applied an amount equal to the net proceeds of such sale or
transfer, within 180 days of receipt thereof, to the retirement or prepayment
(other than any mandatory retirement or prepayment, except mandatory retirements
or prepayments required as a result of such Sale and Leaseback Transaction) of
Funded Debt of the Company or

                                       40
<PAGE>   42

any Significant Subsidiary ranking senior to or pari passu with the Notes or to
the purchase, construction or development of property or assets to be used in
the ordinary course of business, or (ii) the Company or such Significant
Subsidiary would, on the effective date of such sale or transfer, be entitled,
pursuant to this Indenture, to issue, assume or guarantee Indebtedness secured
by a Lien upon such Principal Property, at least equal in amount to the
Attributable Debt in respect of such Sale and Leaseback Transaction without
equally and ratably securing the Notes. The foregoing restriction shall not
apply to any Sale and Leaseback Transaction (i) between the Company and any
Significant Subsidiary or among Significant Subsidiaries, provided that the
lessor shall be the Company or a Wholly Owned Significant Subsidiary, (ii)
involving the leasing by the Company or any Subsidiary of model homes in the
Company's communities; (iii) which has a lease of less than three years in
length, or (iv) entered into within 180 days after the later of the purchase,
construction of development of such Principal Property or assets, or the
commencement of operation of such Principal Property.

     SECTION 4.03. Exempted Debt. Notwithstanding Sections 4.01 and 4.02 hereof,
the Company or any Significant Subsidiary may, in addition to amounts permitted
under such restrictions, create Indebtedness secured by Liens, or enter into
Sale and Leaseback Transactions, provided that, at the time of such transactions
and after giving effect thereto, the aggregate outstanding amount of all such
Indebtedness secured by Liens plus Attributable Debt resulting from such Sale
and Leaseback Transactions does not exceed 20% of Consolidated Shareholders'
Equity.

     SECTION 4.04. Waiver of Certain Covenants. The Company may, in any
particular instance, be excused from failing to comply with any term, provision
or condition set forth in Sections 4.01 to 4.03 hereof, with respect to the
Notes if before the time for such compliance the Holders of at least a majority
in Principal Amount at Final Maturity of the outstanding Notes shall, by act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company, and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive compliance with any
covenant or condition hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any such compliance, whether or not such Holders remain
Holders after such record date; provided that unless the Holders of at least a
majority in Principal Amount at Final Maturity of the outstanding Notes affected
shall have waived such compliance prior to the date which is 90 days after such
record date, any such waiver previously given shall automatically and without
further action by any Holder be canceled and of no further effect.

                                       41
<PAGE>   43

                                  ARTICLE FIVE

                                    REMEDIES

     SECTION 5.01. Additional Events of Default. In addition to the applicable
Events of Default set forth in Section 6.01 of the Indenture, any one of the
following events shall constitute an "Event of Default" hereunder and thereunder
whenever used with respect to the Notes in this Supplemental Indenture (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

     (1) a default by the Company in the payment of the any Principal Amount at
Final Maturity (or, if the Notes have been converted to semiannual cash pay
notes following the occurrence of a Tax Event, the Restated Principal Amount),
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price, or Fundamental Change Purchase Price due with respect to the Notes;

     (2) a default by the Company in the payment of any contingent interest or
of interest which becomes payable after the Notes have been converted to
semiannual cash pay notes following the occurrence of a Tax Event, which
default, in either case, continues for 30 days;

     (3) a default by the Company or any Significant Subsidiary with respect to
its obligation to pay Indebtedness for borrowed money (other than Indebtedness
which is non-recourse to the Company or the Significant Subsidiary), which
default shall have resulted in the acceleration of, or be a failure to pay at
final maturity, Indebtedness aggregating more than $75 million;

     (4) a failure to perform any other covenant or warranty of the Company
herein, in the Notes and in the Indenture, which continues for 30 days after
written notice as provided in Section 6.01 of the Indenture;

     (5) final judgments or orders are rendered against the Company or any of
its Subsidiaries which require the payment by the Company or any of its
Significant Subsidiaries of an amount (to the extent not covered by insurance)
in excess of $75 million and such judgments or orders remain unstayed or
unsatisfied for more than 60 days and are not being contested in good faith by
appropriate proceedings; or

     (6) any event described in Sections 6.01(4) or 6.01(5) of the Indenture
with respect to the Company or any of its Subsidiaries.

     SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, unless the principal of the Notes has
already become due and payable, the Trustee by notice to the Company, or the
Holders of not less than 25 percent in aggregate Principal Amount at Final
Maturity of the Notes then outstanding by notice to the Company and the Trustee
may declare the Issue Price and accrued Original Issue Discount to the date of
declaration, and any accrued and unpaid interest (including contingent interest)

                                       42
<PAGE>   44

through the date of such declaration on all of the Notes to be immediately due
and payable. Upon such a declaration, such Issue Price and accrued Original
Issue Discount, and such accrued and unpaid interest (including contingent
interest), if any, shall be due and payable immediately. If an Event of Default
specified in Section 6.01(4) or (5) of the Indenture or Section 5.01(6) of this
Supplemental Indenture occurs and is continuing, the Issue Price and accrued
Original Issue Discount accrued to the date of the occurrence of the bankruptcy
or insolvency on all of the Notes shall automatically become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in aggregate Principal Amount at Final
Maturity of the Notes then outstanding, on behalf of the Holders of all of the
Notes, by notice to the Company and the Trustee (and without notice to any other
Holder), may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of the Issue Price and
accrued Original Issue Discount on any of the Notes that have become due solely
as a result of acceleration and if all amounts due to the Trustee under Section
7.07 of the Indenture have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

     In case the Trustee shall have proceeded to enforce any right under this
Supplemental Indenture and such proceedings shall have been discontinued or
abandoned because of such waiver or rescission and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in every
such case the Company, the Holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder and all rights,
remedies and powers of the Company, the Holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

     If of a Default or any Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall within 120 days after the occurrence of
such Default or Event of Default, mail to all Holders, as the names and
addresses of such Holders appear upon the Note register, notice of all Defaults
or Events of Default known to the Trustee, unless such Default or Event of
Default is cured or waived before the giving of such notice and provided that,
except in the case of default in the payment of the Principal Amount at Final
Maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, as the case may be, on any of
the Notes, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders.

     The Holders of a majority in Principal Amount at Final Maturity of the
Notes then outstanding shall have the right to direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, subject
to certain limitations specified in the Indenture.

                                  ARTICLE SIX

                       DISCHARGE OF SUPPLEMENTAL INDENTURE

     SECTION 6.01. Discharge of Supplemental Indenture. When (1) the Company
shall deliver to the Trustee for cancellation all Notes theretofore
authenticated (other

                                       43
<PAGE>   45

than any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (2) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
canceled upon redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee, in trust, monies sufficient to pay at the Final Maturity Date
or upon redemption all of the Notes (other than any Notes which shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including the Principal
Amount at Final Maturity, accrued Original Issue Discount and interest
(including contingent interest, if any) accrued and unpaid to such Final
Maturity Date or Redemption Date, as the case may be, and if in either case the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then the Indenture with respect to the Notes and this Supplemental
Indenture shall cease to be of further effect (except as to (i) remaining rights
of registration of transfer, substitution and exchange and conversion of Notes;
(ii) rights hereunder of Holders to receive payments of the Principal Amount at
Final Maturity, including Original Issue Discount and interest (including
contingent interest, if any) due with respect to the Notes and the other rights,
duties and obligations of Holders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee; and (iii) the rights,
obligations and immunities of the Trustee hereunder and under the Indenture with
respect to the Notes), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an opinion of Counsel as required by Section 6.03
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging the Indenture with respect to the
Notes and this Supplemental Indenture; the Company, however, hereby agrees to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
the Indenture with respect to the Notes, this Supplemental Indenture or the
Notes.

     SECTION 6.02. Reinstatement. If the Trustee or the Paying Agent is unable
to apply any money in accordance with Section 8.02 of the Indenture by reason of
any order or judgment of any court of governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under the Indenture with respect to the Notes, this Supplemental Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 6.01 until such time as the Trustee or the Paying Agent is
permitted to apply all such money in accordance with Section 8.02 of the
Indenture; provided, however, that if the Company makes any payment of Principal
Amount at Final Maturity or Original Issue Discount or interest (including
contingent interest), if any, of any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

     SECTION 6.03. Officers' Certificate; Opinion of Counsel. Upon any
application or demand by the Company to the Trustee to take any action under
Section 6.01, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in the Indenture and
this Supplemental Indenture relating to the

                                       44
<PAGE>   46

proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

     Each certificate or Opinion of Counsel provided for in this Supplemental
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant pursuant to the previous paragraph 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 statement or opinion contained in
such certificate or opinion is 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.

                                 ARTICLE SEVEN

                             SUPPLEMENTAL INDENTURES

     SECTION 7.01. With Consent of Holders. In addition to those matters
described in Section 9.02 of the Indenture which require the consent of the
Holder so affected to amend, supplement or waive any provision of the Indenture
or this Supplemental Indenture, without the consent of the Holder so affected,
the Company and the Trustee may not:

     (1) extend the fixed maturity of any Note, reduce the Principal Amount at
Final Maturity, Issue Price, Purchase Price, Fundamental Change Purchase Price,
Redemption Price or amount of Cash paid in lieu of shares of Common Stock,
change the obligation of the Company to repurchase any Note upon the occurrence
of any Fundamental Change in a manner adverse to Holders of Notes, impair the
right of a Holder to institute suit for the payment thereof, change the currency
in which the Notes are payable, or impair the right to convert the Notes into
Common Stock in any material respect, or change any Purchase Date;

     (2) make any change in the manner or rate of accrual in connection with
Original Issue Discount, make any change in the manner of calculation of, or
that adversely affects the right to receive, contingent interest, reduce the
rate of interest referred to in paragraph 1 of the Notes, reduce the rate of
interest referred to in Section 2.09 upon the occurrence of a Tax Event, or
extend the time for payment of Original Issue Discount, contingent interest or
interest, if any, on any Note; or

     (3) reduce the aforesaid percentage of Notes the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of all of the Notes then outstanding.

     Except as set forth in this Article Seven to the contrary, the terms in
Article Nine of the Indenture shall govern.

                                       45
<PAGE>   47

                                 ARTICLE EIGHT

                           SUBORDINATION OF THE NOTES

     SECTION 8.01. Agreement to Subordinate. The Company agrees, and each Holder
by accepting a Note agrees, that the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article Eight, to the prior payment in full of all Senior Indebtedness of
the Company and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. Only Senior Indebtedness of the Company
shall rank senior to the Notes in accordance with the provisions set forth
herein. The Notes shall in all respects rank pari passu with, or be senior to,
all other Indebtedness of the Company.

     SECTION 8.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or dissolution of the Company, in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, an assignment by the Company for the benefit of its creditors or the
marshaling of the assets and liabilities of the Company:

     (1) holders of Senior Indebtedness of the Company shall be entitled to
receive payment in full of all Obligations due in respect thereof before Holders
shall be entitled to receive any payment of principal or interest on the Notes;
and

     (2) until such Senior Indebtedness is paid in full, any distribution to
which Holders would be entitled but for this Article Eight shall be made to
holders of such Senior Indebtedness as their interests may appear.

     SECTION 8.03. Default on Designated Senior Indebtedness of the Company. The
Company may not pay the principal of or interest on the Notes and may not
repurchase, redeem or otherwise retire any Notes (collectively, "pay the
Notes"), other than payments and other distributions in the form of Common Stock
if:

          (i) a payment default on Designated Senior Indebtedness of the Company
     occurs and is continuing beyond any applicable grace period; or

          (ii) any other default occurs and is continuing on Designated Senior
     Indebtedness of the Company that permits the holders thereof to accelerate
     its maturity and the Trustee receives a notice of that default (a "Payment
     Blockage Notice") from the Company or the holders of such Designated Senior
     Indebtedness.

Payments on the Notes may and shall be resumed:

          (x) in the case of a Payment Blockage Notice relating to a payment
     default, upon the date on which it is cured or waived; and

          (y) in case of a Payment Blockage Notice relating to a nonpayment
     default, the earlier of the date on which it is cured or waived or 179 days
     after the

                                       46
<PAGE>   48

     date on which such Payment Blockage Notice is received, unless the maturity
     of the relevant Designated Senior Indebtedness of the Company has been
     accelerated.

No new Payment Blockage Notice may be delivered unless and until:

     (1) 365 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice; and

     (2) all scheduled payments of principal of and interest on the Notes that
have come due have been paid in full in cash.

No nonpayment default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless that default shall have been cured or
waived for a period of not less than 180 days.

     SECTION 8.04. Acceleration of Payment of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of the Designated Senior Indebtedness of the Company
(or their Representative) of the acceleration.

     SECTION 8.05. When Distribution Must Be Paid Over. If a distribution is
made to Holders that because of this Article Eight should not have been made to
them, the Holders who receive the distribution shall hold it in trust for
holders of Senior Indebtedness of the Company and pay it over to them as their
interests may appear.

     SECTION 8.06. Subrogation. After all Senior Indebtedness of the Company is
paid in full and until the Notes are paid in full, Holders shall be subrogated
to the rights of holders of such Senior Indebtedness to receive distributions
applicable to such Senior Indebtedness. A distribution made under this Article
Eight to holders of such Senior Indebtedness which otherwise would have been
made to Holders is not, as between the Company and Holders, a payment by the
Company on such Senior Indebtedness.

     SECTION 8.07. Relative Rights. This Article Eight defines the relative
rights of Holders and holders of Senior Indebtedness of the Company. Nothing in
this Supplemental Indenture shall:

     (1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay its obligations in respect
of this Supplemental Indenture and the Notes in accordance with their terms; or

     (2) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Senior Indebtedness
of the Company to receive distributions otherwise payable to Holders as provided
in this Article Eight.

     SECTION 8.08. Subordination May Not Be Impaired by Company. No right of any
holder of Senior Indebtedness of the Company to enforce the subordination of the

                                       47
<PAGE>   49

Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or by its failure to comply with this Supplemental Indenture.

     SECTION 8.09. Limitation on Senior Indebtedness. The Company shall not
incur any Indebtedness that is subordinate in right of payment to any Senior
Indebtedness unless such Indebtedness is pari passu with, or subordinated in
right of payment to, the Notes.

     SECTION 8.10. Rights of Trustee and Paying Agent. (a) Notwithstanding
Section 8.03, the Trustee or Paying Agent may continue to make payments on the
Notes and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article Eight. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that if the holders of an issue of Senior Indebtedness of the Company
have a Representative, only the Representative may give the notice.

     (b) The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article Eight with respect to any Senior Indebtedness of the Company which
may at any time be held by it, to the same extent as any other holder of such
Senior Indebtedness.

     SECTION 8.11. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).

     SECTION 8.12. Article Eight Not to Prevent Events of Default or Limit Right
to Accelerate. The failure to make a payment pursuant to the Notes by reason of
any provision in this Article Eight shall not be construed as preventing the
occurrence of a Default. Nothing in this Article Eight shall have any effect on
the right of the Holders or the Trustee to accelerate the maturity of the Notes.

     SECTION 8.13. Trustee Entitled to Rely. Upon any payment or distribution
pursuant to this Article Eight, the Trustee and the Holders shall be entitled to
rely (a) upon any order or decree of a court of competent jurisdiction in which
any proceedings of the nature referred to in Section 8.02 are pending, (b) upon
a certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Holders or (c) upon the
Representative for the holders of Senior Indebtedness of the Company for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such 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
Eight. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article Eight, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to

                                       48
<PAGE>   50

the amount of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article Eight, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

     SECTION 8.14. Trustee to Effectuate Subordination. Each Holder by accepting
a Note authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article Eight and appoints the Trustee as
attorney-in-fact for any and all such purposes.

     SECTION 8.15. Trustee Not Fiduciary for Holders of Senior Indebtedness. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Holders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article Eight or otherwise.

     SECTION 8.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions. Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness of the Company,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Notes, to acquire and continue to hold, or to continue to hold,
such Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.

                                  ARTICLE NINE

                                  MISCELLANEOUS

     SECTION 9.01. TIA Controls. If any provision hereof limits, qualifies or
conflicts with the duties imposed by Section 310 through 317 of the TIA, the
imposed duties shall control.

     SECTION 9.02. Conflict with Indenture. To the extent not expressly amended
or modified by this Supplemental Indenture, the Indenture shall remain in full
force and effect. If any provision of this Supplemental Indenture relating to
the Notes is inconsistent with any provision of the Indenture, the provision of
this Supplemental Indenture shall control with regard to the Notes.

     SECTION 9.03. Governing Law. This Supplemental Indenture and the Notes
shall be governed by and construed in accordance with the laws of the State of
New York. The Company submits to the jurisdiction of the courts of the State of
New York sitting in the Borough of Manhattan, City of New York, and of the
United States District Court for the Southern District of New York, in any
action or proceeding to enforce any of its obligations under this Supplemental
Indenture or with regard to the Notes, and agrees not to seek a transfer

                                       49
<PAGE>   51

of any such action or proceeding on the basis of inconvenience of the forum or
otherwise (but the Company shall not be prevented from removing any such action
or proceeding from a state court to the United States District Court for the
Southern District of New York). The Company agrees that process in any such
action or proceeding may be served upon it by registered mail or in any other
manner permitted by the rules of the court in which the action or proceeding is
brought.

     SECTION 9.04. Successors. All agreements of the Company in the Indenture,
this Supplemental Indenture and the Notes shall bind its successors. All
agreements of the Trustee in the Indenture and this Supplemental Indenture shall
bind its successors.

     SECTION 9.05. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

                                       50
<PAGE>   52

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

                                    LENNAR CORPORATION

                                    By: /s/ David B. McCain
                                        --------------------------

                                    BANK ONE TRUST COMPANY, N.A.

                                    By: /s/ Mary R. Fonti
                                       ------------------------
                                       Name:  Mary R. Fonti
                                       Title: Vice President

                                       51
<PAGE>   53

                                                                       EXHIBIT A

                        [FORM OF FACE OF GLOBAL SECURITY]

FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS APRIL 4, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 5.125%
PER ANNUM.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES
REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER 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.

                               LENNAR CORPORATION

            ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2021

<TABLE>
<CAPTION>
<S>                                              <C>
No. __________                                   Original Issue Discount:
Issue Date: April 4, 2001                        $636.54 (for each $1,000
Issue Price: $363.46                             Principal Amount at Final
(for each $1,000 Principal                       Maturity)
Amount at Final Maturity)
                                                 CUSIP:_________________
</TABLE>

     Lennar Corporation, a Delaware corporation, promises to pay to __________
or registered assigns, on April 4, 2021 the Principal Amount of __________
Dollars ($__________).

                                      A-1
<PAGE>   54

     This Note shall not bear periodic interest except as specified on the other
side of this instrument. Original Issue Discount shall accrue as specified on
the other side of this Note. This Note is convertible as specified on the other
side of this Note.

     Additional provisions of this Note are set forth on the other side of this
Note.

                                      A-2
<PAGE>   55

     IN WITNESS WHEREOF, Lennar Corporation has caused this instrument to be
duly executed under its corporate seal.

                                    LENNAR CORPORATION

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

                                     Attest:

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

[SEAL]

Dated:  April 4, 2001

TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

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

BANK ONE TRUST COMPANY, N.A., as Trustee

By:
   ---------------------------------------
         Authorized Signatory

                                      A-3
<PAGE>   56

                    [FORM OF REVERSE SIDE OF GLOBAL SECURITY]

                               LENNAR CORPORATION

            ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2021

1.   INTEREST

     This Note shall not bear periodic interest, except as specified in this
paragraph and in paragraphs 5 and 11 hereof. If the Principal hereof or any
portion of such Principal is not paid when due (whether upon acceleration
pursuant to Section 5.02 of the Supplemental Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 6 hereof, upon the date
set for payment of a Purchase Price or Fundamental Change Purchase Price
pursuant to paragraph 7 hereof or upon the Final Maturity of this Note) or if
interest (including contingent interest, if any) due hereon or any portion of
such interest is not paid when due in accordance with paragraph 5 or 11 hereof,
then in each such case the overdue amount shall bear interest at the rate of
5.125% per annum, compounded semiannually (to the extent that the payment of
such interest shall be legally enforceable), which interest shall accrue from
the date such overdue amount was due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.

     The Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Final Maturity of the Note) in the period during which a
Note remains outstanding, shall accrue at 5.125% per annum, on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on the Issue Date of this Note.

2.   METHOD OF PAYMENT

     Subject to the terms and conditions of the Supplemental Indenture, the
Company shall make payments in respect of the Notes to the Persons who are
registered Holders of Notes at the close of business on the Business Day
preceding the Redemption Date or Final Maturity, as the case may be, or at the
close of business on a Purchase Date or Fundamental Change Purchase Date, as the
case may be. Holders must surrender Notes to a Paying Agent to collect such
payments in respect of the Notes. The Company shall pay cash amounts in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may make such cash payments by
check payable in such money.

3.   PAYING AGENT, CONVERSION AGENT, BID AGENT AND REGISTRAR

     Initially, Bank One Trust Company, N.A., a national banking association
(the "Trustee"), shall act as Paying Agent, Conversion Agent, Bid Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Bid Agent, Registrar or co-registrar without notice, other than notice to
the Trustee except that the Company will maintain at least one Paying Agent in
the State of New York, City of New York, Borough of Manhattan, which shall
initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or

                                      A-4
<PAGE>   57

any of their Affiliates may act as Paying Agent, Conversion Agent, Bid Agent,
Registrar or co-registrar.

4.   SUPPLEMENTAL INDENTURE

     The Company issued the Notes under a supplemental indenture (the
"Supplemental Indenture"), dated as of April 4, 2001, between the Company and
the Trustee. Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Supplemental Indenture. The Notes are subject
to all such terms, and Holders are referred to the Supplemental Indenture for a
statement of those terms.

     The Notes are general unsecured obligations of the Company limited to
$632,807,000 aggregate Principal Amount at Final Maturity. The Supplemental
Indenture does not limit other indebtedness of the Company.

5.   CONTINGENT INTEREST

     Subject to the accrual and record date provisions specified in this
paragraph 5, the Company shall pay contingent interest to the Holders during any
six-month period (a "Contingent Interest Period") from April 4 to October 3 and
from October 4 to April 3, commencing after April 4, 2006, if the average Note
Market Price for the Five-Day Period with respect to such Contingent Interest
Period equals 120% or more of the sum of the Issue Price of a Note and Original
Issue Discount accrued thereon to the trading day immediately preceding the
first day of the relevant Contingent Interest Period.

     The amount of contingent interest payable per $1,000 Principal Amount at
Final Maturity hereof in respect of any Contingent Interest Period shall equal
the greater of (x) Cash Dividends paid by the Company per share of Common Stock
during that Contingent Interest Period multiplied by the number of shares of
Common Stock into which $1,000 Principal Amount at Final Maturity hereof is
convertible pursuant to paragraph 10 hereof as of the accrual date for such
contingent interest or (y) 0.125% of the average Note Market Price for the
Five-Day Period with respect to such Contingent Interest Period.

     Contingent interest, if any, will accrue and be payable to Holders as of
the record date for the related Cash Dividend or, if no Cash Dividend is paid by
the Company during any quarter within a Contingent Interest Period, to Holders
as of the 15th day preceding the last day of the relevant Contingent Interest
Period. Such payments shall be paid on the payment date of the related Cash
Dividend or, if no Cash Dividend is paid by the Company during any quarter
within a Contingent Interest Period, on the last day of the relevant Contingent
Interest Period. Original Issue Discount will continue to accrue at 5.125% per
annum whether or not contingent interest is paid.

     "Five-Day Period" means, with respect to any Contingent Interest Period,
the five trading days ending on the second trading day immediately preceding the
first day of such Contingent Interest Period; provided, however, if the Company
shall have declared a Cash Dividend on its Common Stock that is payable during
such Contingent Interest Period but for which the record date for determining
stockholders entitled thereto precedes the first day of such Contingent Interest
Period, then "Five-Day Period" means, with respect to such Contingent

                                      A-5
<PAGE>   58

Interest Period, the five trading days ending on the second trading day
immediately preceding such record date.

     "Cash Dividends" means all cash dividends on the Company's common stock
(whether regular, periodic, extraordinary, special, nonrecurring or otherwise)
as declared by the Company's Board of Directors as part of its cash dividend
payment practices.

     "Note Market Price" means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 Principal Amount at Final
Maturity obtained by the Bid Agent for $10 million Principal Amount at Maturity
of Notes at approximately 4:00 p.m. (New York City time) on such determination
date from three recognized securities dealers in The City of New York (none of
which shall be an Affiliate of the Company) selected by the Company; provided,
however, if (a) at least three such bids are not obtained by the Bid Agent or
(b) in the Company's reasonable judgment, the bid quotations are not indicative
of the secondary market value of the Notes as of such determination date, then
the Note Market Price for such determination date shall equal (i) the Conversion
Rate in effect as of such determination date multiplied by (ii) the average Sale
Price for the five trading days ending on such determination date, appropriately
adjusted to take into account the occurrence, during the period commencing on
the first of such trading days during such five trading day period and ending on
such determination date, of any event described in Section 2.07(1), 2.07(2) or
2.07(3) (subject to the conditions set forth in Sections 2.08(1) and 2.08(2)) of
the Supplemental Indenture.

     Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
issue a press release and publish such information on its web site at
www.lennar.com.

6.   REDEMPTION AT THE OPTION OF THE COMPANY

     No sinking fund is provided for the Notes. The Notes are redeemable as a
whole, or from time to time in part, at any time at the option of the Company at
the Redemption Prices set forth below, provided that the Notes are not
redeemable prior to April 4, 2006.

     The table below shows Redemption Prices of a Note per $1,000 Principal
Amount at Final Maturity on the dates shown below and at Final Maturity, which
prices reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Note redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table to but excluding the actual
Redemption Date.
<TABLE>
<CAPTION>
REDEMPTION DATE                   ISSUE       ACCRUED OID AT      REDEMPTION
                                 PRICE(1)        5.125%(2)        PRICE (1+2)
                                 --------        ---------        -----------
<S>                              <C>          <C>                 <C>
April 4, 2006..............      $363.46         $104.64             $468.10
April 4, 2007..............      $363.46          128.94              492.40
April 4, 2008..............      $363.46          154.50              517.96
April 4, 2009..............      $363.46          181.39              544.85
April 4, 2010..............      $363.46          209.67              573.13
April 4, 2011..............      $363.46          239.42              602.88
April 4, 2012..............      $363.46          270.71              634.17
April 4, 2013..............      $363.46          303.63              667.09
</TABLE>

                                      A-6
<PAGE>   59

<TABLE>
<CAPTION>
REDEMPTION DATE                   ISSUE       ACCRUED OID AT      REDEMPTION
                                 PRICE(1)        5.125%(2)        PRICE (1+2)
                                 --------        ---------        -----------
<S>                              <C>          <C>                 <C>
April 4, 2014..............      $363.46          338.25              701.71
April 4, 2015..............      $363.46          374.68              738.14
April 4, 2016..............      $363.46          412.99              776.45
April 4, 2017..............      $363.46          453.29              816.75
April 4, 2018..............      $363.46          495.69              859.15
April 4, 2019..............      $363.46          540.29              903.75
April 4, 2020..............      $363.46          587.20              950.66
April 4, 2021..............      $363.46          636.54            1,000.00
</TABLE>

If this Note has been converted to a semiannual cash pay note following the
occurrence of a Tax Event, the Redemption Price will be equal to the Restated
Principal Amount plus accrued and unpaid interest from the date of such
conversion to the Redemption Date; but in no event will this Note be redeemable
before April 4, 2006.

In addition to the Redemption Price payable with respect to all Notes or
portions thereof to be redeemed as of a Redemption Date, the Holders of such
Notes (or portions thereof) shall be entitled to receive accrued and unpaid
contingent interest, if any, with respect thereto, which contingent interest
shall be paid in cash on the Redemption Date.

7.   PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; PURCHASE AT THE OPTION
     OF THE HOLDER UPON A FUNDAMENTAL CHANGE

     (a) Subject to the terms and conditions of the Supplemental Indenture, a
Holder of Notes shall have the option to require the Company to purchase the
Notes held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Final Maturity, upon delivery of
a Purchase Notice containing the information set forth in the Supplemental
Indenture, from the opening of business on the date that is 20 Business Days
prior to such Purchase Date until the close of business on such Purchase Date
and upon delivery of the Notes to the Paying Agent by the Holder as set forth in
the Supplemental Indenture. Such Purchase Prices may be paid, at the option of
the Company, in cash or by the issuance and delivery of shares of Common Stock
of the Company, or in any combination thereof.

<TABLE>
<CAPTION>
Purchase Date                                               Purchase Price
-------------                                               --------------
<S>                                                         <C>
April 4, 2006.............................................     $ 468.10
April 4, 2011.............................................       602.88
April 4, 2016.............................................       776.45
</TABLE>

Notes in denominations larger than $1,000 of Principal Amount at Final
Maturity may be purchased in part, but only in multiples of $1,000 of
Principal Amount at Final Maturity.

     (b) If prior to a Purchase Date this Note has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.

     (c) If a Fundamental Change shall occur at any time prior to April 4, 2006,
each Holder of Notes shall have the right, at such Holder's option and subject
to the terms and conditions of the Supplemental Indenture, to require the
Company to purchase such Holder's Notes on the

                                      A-7
<PAGE>   60

Business Day that is 95 days after the date of the Fundamental Change for a
Fundamental Change Purchase Price equal to the Issue Price plus accrued Original
Issue Discount to the Fundamental Change Purchase Date, which Fundamental Change
Purchase Price shall be paid at the option of the Company in cash or by the
issuance and delivery of shares of Common Stock of the Company. Notes in
denominations larger than $1,000 of Principal Amount at Final Maturity may be
redeemed in part in connection with a Fundamental Change, but only in multiples
of $1,000 of Principal Amount at Final Maturity.

     (d) In addition to the Purchase Price or Fundamental Change Purchase Price,
as the case may be, payable with respect to all Notes or portions thereof to be
purchased as of the Purchase Date or the Fundamental Change Purchase Date, as
the case may be, the Holders of such Notes (or portions thereof) shall be
entitled to receive accrued and unpaid contingent interest, if any, with respect
thereto, which contingent interest shall be paid in cash promptly following the
later of the Purchase Date or the Fundamental Change Purchase Date, as the case
may be, and the time of delivery of such Notes to the Paying Agent pursuant to
the Supplemental Indenture.

     (e) Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, by delivery to the Paying Agent of a
written notice of withdrawal in accordance with the provisions of the
Supplemental Indenture.

     (f) If cash (and/or Common Stock if permitted under the Supplemental
Indenture) sufficient to pay a Fundamental Change Purchase Price or cash (and/or
Common Stock if permitted under the Supplemental Indenture) sufficient to pay a
Purchase Price, as the case may be, of, together with any accrued and unpaid
contingent interest with respect to, all Notes or portions thereof to be
purchased as of the Purchase Date or the Fundamental Change Purchase Date, as
the case may be, is deposited with the Paying Agent on the Business Day
following the Purchase Date or the Fundamental Change Purchase Date, as the case
may be, Original Issue Discount and interest (including contingent interest), if
any, ceases to accrue on such Notes (or portions thereof) on and after such
date, and the Holder thereof shall have no other rights as such (other than the
right to receive the Purchase Price or Fundamental Change Purchase Price, as the
case may be, and accrued and unpaid contingent interest, if any, upon surrender
or such Note).

8.   NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY

     Notice of redemption at the option of the Company shall be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at the Holder's registered address. If money sufficient to
pay the Redemption Price of, together with any accrued and unpaid contingent
interest with respect to, all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, on and after such date Original Issue Discount and interest (including
contingent interest), if any, ceases to accrue on such Notes or portions
thereof. Notes in denominations larger than $1,000 Principal Amount at Final
Maturity may be redeemed in part but only in multiples of $1,000 or Principal
Amount at Final Maturity.

                                      A-8
<PAGE>   61

9.   RANKING

     The Notes shall be direct, unsecured senior subordinated obligations of the
Company and shall rank equally in right of payment with all other unsecured
senior subordinated indebtedness of the Company and be subject to the provisions
regarding subordination contained in Article Eight of the Supplemental
Indenture. The Notes are not guaranteed.

10.  CONVERSION

     Subject to the next two succeeding sentences and the right of the Company
to elect to pay the Cash Conversion Price instead of issuing shares of Common
Stock if the Conversion Date is prior to April 4, 2006, a Holder of a Note may
convert this Note for Common Stock of the Company at any time on or before the
close of business on April 4, 2021 if at least one of the following conditions
is satisfied:

     (a) the Twenty-Day Average Price on the Conversion Date is (i) for the
period from issuance of the Notes to April 3, 2006, 120% or more of the Accreted
Conversion Price, (ii) for the period from April 4, 2006 to April 3, 2007, 115%
or more of the Accreted Conversion Price, or (iii) for the period from April 4,
2007 to April 4, 2001, 110% or more of the Accreted Conversion Price;

     (b) the initial credit rating assigned to the Notes has been reduced by two
levels by any two of the following agencies: Moody's Investors Service, Inc.
Standard & Poor's Ratings Services or Fitch IBCA Duff & Phelps (for the
avoidance of doubt, the foregoing reference to "levels" is intended to refer to
any subcategories such rating agencies employ in their announced ratings of
securities, including plusses and minuses, but not including any
characterization as to likelihood of future action in respect of securities'
ratings) and continues to be rated at or below such reduced rating level;

     (c) the Note has been called for redemption by the Company, at any time
prior to the close of business on the second Business Day prior to the
Redemption Date; or

     (d) the Company elects (i) to distribute to all Holders of Common Stock
rights entitling them to purchase, for a period expiring within 60 days, Common
Stock at less than the Sale Price at the time, (ii) to distribute to all Holders
of Common Stock assets, debt, securities or rights to purchase securities of the
Company, which distribution has a per share value as determined by the Company's
Board of Directors exceeding 15% of the Sale Price of the Common Stock on the
day preceding the declaration date for such distribution, or (iii) in the event
the Company is a party to a consolidation, merger or binding share exchange
pursuant to which the Common Stock would be converted into cash, securities or
other property, at any time from and after the date which is 15 days prior to
the date the Company announces the anticipated effective time until 15 days
after the actual effective date of such transaction.

     In the case of the foregoing clauses (d)(i) and (ii), the Company must
notify the Holders of Notes at least 20 days prior to the Ex-Dividend Date for
such distribution. Once the Company has given such notice, Holders may surrender
their Notes for conversion at any time thereafter until the earlier of the close
of business on the Business Day prior to the Ex-Dividend Date or the Company's
announcement that such distribution will not take place.

                                      A-9
<PAGE>   62

     If this Note is called for redemption, the Holder may convert it at any
time before the close of business on the last Business Day prior to the
Redemption Date. A Note in respect of which a Holder has delivered a notice of
exercise of the option to require the Company to purchase such Note or to
purchase such Note in the event of a Fundamental Change may be converted only if
the notice of exercise is withdrawn in accordance with the terms of the
Supplemental Indenture.

     The initial Conversion Rate is 6.3842 shares of Common Stock per $1,000
Principal Amount at Final Maturity, subject to adjustment in certain events
described in the Supplemental Indenture. The Company shall deliver cash or a
check in lieu of any fractional share of Common Stock.

     In the event the Company exercises its option pursuant to Section 2.09 of
the Supplemental Indenture to have interest in lieu of Original Issue Discount
accrue on the Note following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the Company
exercises such option, Notes surrendered for conversion during the period from
the close of business on any Regular Record Date next preceding any Interest
Payment Date to the opening of business of such Interest Payment Date (except
Notes with respect to which the Company has mailed a notice of redemption) must
be accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Notes surrendered for conversion
must be accompanied by payment as described above, no interest on converted
Notes will be payable by the Company on any Interest Payment Date subsequent to
the date of conversion.

     Notes surrendered for conversion during the period from the close of
business on any date on which contingent interest accrues to the opening of
business on the date on which such contingent interest is payable (except Notes
with respect to which the Company has mailed a notice of redemption) must be
accompanied by payment of an amount equal to the contingent interest with
respect thereto that the registered Holder is to receive. Except where Notes
surrendered for conversion must be accompanied by payment as described above, no
contingent interest on converted Notes will accrue after the date of conversion.

     To convert this Note a Holder must (1) complete and manually sign the
conversion notice on the back of this Note (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent at the
office maintained by the Conversion Agent for such purpose, (2) surrender this
Note to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.

     A Holder may convert a portion of this Note only if the Principal Amount at
Final Maturity of such portion is $1,000 or a multiple of $1,000. No payment or
adjustment shall be made for dividends on the Common Stock except as provided in
the Supplemental Indenture. On conversion of this Note, that portion of accrued
Original Issue Discount (or, interest, if the Company has exercised its option
provided for in paragraph 11 hereof) attributable to the period from the Issue
Date (or, if the Company has exercised the option referred to in paragraph 11
hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid)

                                      A-10
<PAGE>   63

to the Conversion Date and (except as provided below) accrued contingent
interest with respect to the converted portion of this Note shall not be
canceled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Common Stock (together
with any cash payment in lieu of fractional shares) in exchange for the portion
of this Note being converted pursuant to the terms hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for Original Issue Discount (or interest, if the Company has
exercised its option provided for in paragraph 11 hereof) accrued through the
Conversion Date and accrued contingent interest, and the balance, if any, of
such fair market value of such Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.

11.  TAX EVENT

     (a) From and after (i) the date (the "Tax Event Date") of the occurrence of
a Tax Event and (ii) the date the Company exercises such option, whichever is
later (the "Option Exercise Date"), at the option of the Company, interest in
lieu of future Original Issue Discount shall accrue at the rate of 5.125% per
annum on a principal amount per $1,000 original Principal Amount at Final
Maturity (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued through the Option Exercise Date and shall be
payable semiannually on April 4 and October 4 of each year (each an "Interest
Payment Date") to holders of record at the close of business on March 21 or
September 19 (each a "Regular Record Date") immediately preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months and will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Option
Exercise Date.

     (b) Interest on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Note is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for such
purpose. Each installment of interest on any Note shall be paid in same-day
funds by transfer to an account maintained by the payee located inside the
United States.

     (c) From and after the Option Exercise Date, contingent interest provided
for in paragraph 5 hereof shall cease to accrue on this Note.

12.  DEFAULTED INTEREST

     Except as otherwise specified with respect to the Notes, any Defaulted
Interest on any Note shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date or accrual date, as the case
may be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company as provided for in Section 2.11(3)(b) of the Supplemental
Indenture.

13.  DENOMINATIONS; TRANSFER; EXCHANGE

     The Notes are in registered form, without coupons, in denominations of
$1,000 of Principal Amount at Final Maturity and multiplies of $1,000. A Holder
may transfer or convert

                                      A-11
<PAGE>   64

Notes in accordance with the Supplemental Indenture. 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
Supplemental Indenture. The Registrar need not transfer or exchange any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given and not
withdrawn (except, in the case of a Note to be purchased in part, the portion of
the Note not to be purchased) or any Notes for a period of 15 days before any
selection of Notes to be redeemed.

14.  PERSONS DEEMED OWNERS

     The registered Holder of this Note may be treated as the owner of this Note
for all purposes.

15.  UNCLAIMED MONEY OR PROPERTY

     The Trustee and the Paying Agent shall return to the Company upon written
request any money or property held by them for the payment of any amount with
respect to the Notes that remains unclaimed for two years, provided, however,
that the Trustee or such Paying Agent, before being required to make any such
return, shall 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 or property 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 money or property then remaining
shall be returned to the Company. After return to the Company, Holders entitled
to the money or property must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.

16.  AMENDMENT; WAIVER

     Subject to certain exceptions set forth in the Indenture and the
Supplemental Indenture, (i) the Supplemental Indenture or the Notes may be
amended with the written consent of the Holders of at least a majority in
aggregate Principal Amount at Final Maturity of the Notes at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written consent of the Holders of a majority in aggregate
Principal Amount at Final Maturity of the Notes at the time outstanding. Subject
to certain exceptions set forth in the Indenture and the Supplemental Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Supplemental Indenture or the Notes to cure any ambiguity, defect or
inconsistency, to make any change that does not adversely affect the right of
any Holder, to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Notes, any property or assets, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any property or
assets, to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company, to add to the covenants of
the Company such further covenants, restrictions or conditions as the Board of
Directors and the Trustee shall consider to be for the benefit of the Holders of
Notes, and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions or

                                      A-12
<PAGE>   65

conditions a default or an Event of Default permitting the enforcement of all or
any of the several remedies provided in the Supplemental Indenture, to evidence
and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Notes, or to modify, eliminate or add to the provisions of
the Supplemental Indenture to such extent as shall be necessary to comply with
the Supplemental Indenture under the TIA, or under any similar federal statue
hereafter enacted.

17.  DEFAULTS AND REMEDIES

     Under the Supplemental Indenture, Events of Default include (i) a default
by the Company in the payment of any principal (including accrued Original Issue
Discount), Redemption Price, Purchase Price, or Fundamental Change Purchase
Price due with respect to the Notes; (ii) default in the payment of contingent
interest when the same becomes due and payable or of interest which becomes due
and payable upon exercise by the Company of its option provided for in paragraph
11 hereof which default in either case continues for 30 days; (iii) a default by
the Company or any Significant Subsidiary with respect to its obligation to pay
Indebtedness for borrowed money (other than Indebtedness which is non-recourse
to the Company or the Subsidiary), which default shall have resulted in the
acceleration of, or be a failure to pay at final maturity, Indebtedness
aggregating more than $75 million; (iv) a failure to perform any other covenant
or warranty of the Company herein, in the Supplemental Indenture and in the
Indenture, which continues for 30 days after written notice as provided in
Section 6.01 of the Indenture; (v) final judgments or orders are rendered
against the Company or any of its Significant Subsidiaries which require the
payment by the Company or any of its Significant Subsidiaries of an amount (to
the extent not covered by insurance) in excess of $75 million and such judgments
or orders remain unstayed or unsatisfied for more than 60 days and are not being
contested in good faith by appropriate proceedings; and (vi) any event described
in Sections 6.01(4) or 6.01(5) of the Indenture with respect to the Company or
any of its Subsidiaries. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount of the
Notes at the time outstanding, may declare the Issue Price and accrued Original
Issue Discount of all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which shall result in
the Notes being declared due and payable immediately upon the occurrence of such
Events of Default.

     Holders may not enforce the Supplemental Indenture or the Notes except as
provided in the Indenture or the Supplemental Indenture. The Trustee may refuse
to enforce the Supplemental Indenture or the Notes unless it receives reasonable
indemnity or security. Subject to certain limitations, conditions and
exceptions, Holders of a majority in aggregate Principal Amount at Final
Maturity of the Notes at the time outstanding may direct the Trustee in its
exercise of any trust or power, including the annulment of a declaration of
acceleration. The Trustee may withhold from Holders notice of any continuing
default (except a default in payment of amounts specified in clause (i) above)
if it determines that withholding notice is in their interests.

18.  TRUSTEE DEALINGS WITH THE COMPANY

     The Trustee under the Indenture and under the Supplemental Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with

                                      A-13
<PAGE>   66

and collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.

19.  NO RECOURSE AGAINST OTHERS

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

20.  AUTHENTICATION

     This Note shall not be valid until an authorized officer of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.

21.  ABBREVIATIONS

     Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TENANT (=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 Gift to Minors Act).

22.  GOVERNING LAW

     THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE SUPPLEMENTAL INDENTURE
AND THIS NOTE.

     The Company shall furnish to any Holder upon written request and without
charge a copy of the Supplemental Indenture which has in it the text of this
Note in larger type. Requests may be made to:

            Lennar Corporation
            700 N.W. 107th Avenue
            Miami, Florida  33172
            Attn: Bruce E. Gross
                  Vice President and Chief Financial Officer

                                      A-14
<PAGE>   67

                            FORM OF CONVERSION NOTICE

To: Lennar Corporation

     The undersigned registered holder of this Note hereby exercises the option
to convert this Note, or portion hereof (which is $1,000 Principal Amount at
Final Maturity or a multiple thereof) designated below, for shares of Common
Stock of Lennar Corporation in accordance with the terms of the Supplemental
Indenture referred to in this Note, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for cash
deliverable upon such conversion, and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or any portion of
this Note not converted are to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.

     This notice shall be deemed to be an irrevocable exercise of the option to
convert this Note unless the Conversion Date is prior to April 4, 2006 and the
Company delivers timely notice of its election to deliver cash instead of
issuing shares of Common Stock in accordance with Section 2.06(2) of the
Supplemental Indenture. If the Company delivers such notice, the undersigned may
withdraw this notice in accordance with Section 2.06(2) of the Supplemental
Indenture.

Dated:
                                                  ------------------------------

                                                  ------------------------------
                                                           Signature(s)

Fill in for registration of shares
if to be delivered, and Notes if to
be issued other than to and in the
name of registered holder:

                                               Principal Amount at Final
---------------------------                    Maturity to be purchased (if
(Name)                                         less than all):

---------------------------
(Street Address)                               $__,000

---------------------------                    Social Security or Other
(City, state and zip code)                     Taxpayer Number

Please print name and address

                                      A-15
<PAGE>   68

                   FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To:  Lennar Corporation

     The undersigned registered holder of this Note hereby acknowledges receipt
of a notice from Lennar Corporation (the "Company") as to the occurrence of a
Fundamental Change with respect to the Company and requests and instructs the
Company to repurchase this Note, or the portion hereof (which is $1,000
Principal Amount at Final Maturity or a multiple thereof) designated below, in
accordance with the terms of the Supplemental Indenture referred to in this Note
and directs that the check in payment for this Note or the portion thereof (or,
if the Company elects in accordance with Section 2.04(3) of the Supplemental
Indenture, Common Stock) and any Notes representing any unrepurchased principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If any portion of this Note not
repurchased is to be issued in the name of a Person other than the undersigned,
the undersigned shall pay all transfer taxes payable with respect thereto.

Dated:

                                               ---------------------------------
                                                          Signature(s)

Fill in for registration of shares
if to be delivered, and Notes if
to be issued other than to and in
the name of registered holder:

---------------------------
(Name)

---------------------------
(Street Address)

---------------------------
(City, state and zip code)

Please print name and address

                                               Principal Amount at Final
                                               Maturity to be purchased (if
                                               less than all):  $__,000

                                      A-16
<PAGE>   69

If the Company has elected to pay the Fundamental Change Purchase Price, in
whole or in part, in Common Stock but such portion of the Fundamental Change
Purchase Price shall ultimately be payable in Cash because any of the conditions
to the payment of the Fundamental Change Purchase Price in Common Stock are not
satisfied I elect [check one]:

      __to withdraw such Purchase Notice as to the Notes to which such
      Fundamental Change Purchase Notice relates in the Principal Amount at
      Final Maturity of $_____,000, with certificate numbers _________, or

      __ to receive Cash in respect of the entire Purchase Price for all Notes
      (or portions thereof) to which such Purchase Notice relates

                                               Social Security or Other
                                               Taxpayer Number

                                      A-17
<PAGE>   70

                                 ASSIGNMENT FORM

      For value received ____________ hereby sell(s), assign(s) and transfer(s)
unto __________ (Please insert social security or other Taxpayer Identification
Number of assignee) the within Note, and hereby irrevocably constitutes and
appoints __________ attorney to transfer the said Note on the books of the
Company, with full power of substitution in the premises.

Dated:

                                                --------------------------------
                                                          Signature(s)
                                                Signature(s) must be guaranteed
                                                by a commercial bank or trust
                                                company or a member firm of a
                                                major stock exchange if shares
                                                of Common Stock are to be
                                                issued, or Notes to be
                                                delivered, other than to or in
                                                the name of the registered
                                                holder.

                                                --------------------------------
                                                       Signature Guarantee

NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.

                                      A-18
<PAGE>   71

                                                                       EXHIBIT B

                         PROJECTED PAYMENT SCHEDULE*
                         --------------------------

<TABLE>
<CAPTION>
       Semi-annual Period Ending               Projected Payment Per Note
       -------------------------               --------------------------
<S>                                            <C>
         April 4, 2006                                    $0.00
         October 4, 2006                                  $0.00
         April 4, 2007                                    $0.00
         October 4, 2007                                  $0.00
         April 4, 2008                                    $0.00
         October 4, 2008                                  $0.00
         April 4, 2009                                    $0.83
         October 4, 2009                                  $0.88
         April 4, 2010                                    $0.93
         October 4, 2010                                  $0.98
         April 4, 2011                                    $1.04
         October 4, 2011                                  $1.10
         April 4, 2012                                    $1.16
         October 4, 2012                                  $1.23
         April 4, 2013                                    $1.29
         October 4, 2013                                  $1.37
         April 4, 2014                                    $1.45
         October 4, 2014                                  $1.53
         April 4, 2015                                    $1.61
         October 4, 2015                                  $1.71
         April 4, 2016                                    $1.80
         October 4, 2016                                  $1.91
         April 4, 2017                                    $2.01
         October 4, 2017                                  $2.13
         April 4, 2018                                    $2.25
         October 4, 2018                                  $2.38
         April 4, 2019                                    $2.51
         October 4, 2019                                  $2.65
         April 4, 2020                                    $2.80
         October 4, 2020                                  $2.96
         April 4, 2021                                 $2508.71
</TABLE>

*    The comparable yield means the annual yield the Company would pay, as of
the Issue Date, on a fixed-rate cash-pay nonconvertible debt security with no
contingent payments but with terms and conditions otherwise comparable to those
of the Notes. The schedule of projected payments is determined on the basis of
the comparable yield and an assumption of linear growth of the Company's stock
price and a constant dividend yield. The comparable yield and the schedule of
projected payments are not determined for any purpose other than for the
determination of interest accruals and adjustment thereof in respect of the
Notes for United States federal income tax purposes. The comparable yield and
the schedule of projected payments do not constitute a projection or
representation regarding the future stock price or the amounts payable on the
Notes.

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