D.R. HORTON, INC. AND THE GUARANTORS PARTY HERETO 2.00% Convertible Senior Notes due 2014 Thirtieth Supplemental Indenture

Exhibit 4.1

EXECUTION VERSION

D.R. HORTON, INC. AND THE GUARANTORS PARTY HERETO

2.00% Convertible Senior Notes due 2014

Thirtieth Supplemental Indenture

Dated as of May 13, 2009

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

Trustee

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EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF NOTATION OF GUARANTEE
EXHIBIT C FORM OF NOTICE OF CONVERSION
EXHIBIT D FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE

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     THIRTIETH SUPPLEMENTAL INDENTURE dated as of May 13, 2009 (“ Supplemental Indenture ”), to the Indenture dated as of June 9, 1997 (as amended, modified or supplemented from time to time in accordance therewith, the “ Base Indenture ”), by and among D.R. HORTON, INC., a Delaware corporation (the “ Company ”), each of the GUARANTORS (as defined herein) and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, formerly known as American Stock Transfer & Trust Company, as trustee (the “ Trustee ”).

     Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of Notes (each as defined herein):

     WHEREAS, the Company, the Guarantors and the Trustee have duly authorized the execution and delivery of the Base Indenture to provide for the issuance from time to time of senior debt securities (the “ Securities ”) to be issued in one or more series as in the Base Indenture provided;

     WHEREAS, the Company and the Guarantors desire and have requested the Trustee to join them in the execution and delivery of this Supplemental Indenture in order to establish and provide for the issuance by the Company of a series of Securities designated as its 2.00% Convertible Senior Notes due 2014, substantially in the form attached hereto as Exhibit A (the “ Notes ”), guaranteed by the Guarantors, on the terms set forth herein;

     WHEREAS, Section 2.01 of the Base Indenture provides that a supplemental indenture may be entered into by the Company, the Guarantors and the Trustee for such purpose provided certain conditions are met;

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

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

     NOW, THEREFORE:

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

ARTICLE ONE

Scope of Supplemental Indenture; General; Additional Notes

     The changes, modifications and supplements to the Base Indenture effected by this Supplemental Indenture as well as all other provisions of this Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes, which shall not be limited in aggregate principal amount, and shall not apply to any other Securities that may be issued under the Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications, supplements and provisions.

     Pursuant to this Supplemental Indenture, there is hereby created and designated a series of Securities under the Indenture entitled “2.00% Convertible Senior Notes due 2014.” On the date hereof, an ini-

tial principal amount of $500,000,000 of Notes are being issued (the “ Initial Notes ”). The Initial Notes are being issued at a public offering price equal to 100% of face amount. The Notes shall be substantially in the form of Exhibit A hereto and will mature and bear interest as provided in such form and have the other terms and conditions set forth therein, this Supplemental Indenture and the Base Indenture (to the extent not superseded hereby). The Company shall pay interest on overdue principal at the rate borne by the Notes; it shall pay interest on overdue installments of interest at the same rate. The Notes shall be guaranteed by the Guarantors as provided in the form of Exhibit B hereto and the Indenture. The Trustee will initially be the Registrar, Paying Agent and Conversion Agent for the Notes.

     The Company may, from time to time and without the consent of the Holders, issue additional Notes on terms and conditions identical to those of the Notes, other than with respect to the date of issuance, issue price, the first Interest Payment Date and the amount of interest payable on the first Interest Payment Date applicable thereto (the “ Additional Notes ”), which Additional Notes shall increase the aggregate principal amount of, and shall be consolidated and form a single series with, the other Notes, including the Initial Notes. The Initial Notes and any such Additional Notes shall vote on all matters, and otherwise be treated, as a single class for all purposes under the Indenture. If required, Additional Notes may bear an appropriate legend regarding original issue discount for federal income tax purposes and may bear different CUSIP or ISIN numbers.

     The following Sections of the Base Indenture shall not apply to the Notes:

          (a) Article Three (Redemption); and

          (b) Article Eight (Discharge of Indenture).

     For purposes of Section 11.07 of the Base Indenture, the place of payment of the Notes shall be deemed to be New York, New York.

ARTICLE TWO

Certain Definitions

     Section 2.01. Certain Definitions .

     The following terms used and defined in the Base Indenture shall not apply to the Notes:

          (a) Restricted Subsidiary; and

          (b) Unrestricted Subsidiary.

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

     “ Additional Interest ” means all amounts, if any, payable pursuant to Section 5.03 hereof.

     “ Additional Notes ” has the meaning set forth in Article One.

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

     “ Base Indenture ” has the meaning set forth in the Preamble.

     “ Board of Directors ” means the board of directors of the Company or, other then when used in the definition of “Fundamental Change” below, any authorized committee thereof.

     “ Business Day ” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in Fort Worth, Texas or New York, New York are authorized or obligated by law or executive order to close.

     “ Capital Stock ” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of or in such Person’s capital stock or other equity interests.

     “ Capitalized Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

     “ Cash Settlement Averaging Period ” means, with respect to any Note surrendered for conversion, the twenty consecutive Trading Day period beginning on, and including, the third Trading Day immediately following the Conversion Date for such Note; provided that, with respect to any Conversion Date occurring during the period beginning on, and including, the 23rd Scheduled Trading Day immediately preceding the Maturity Date and ending at the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, the “Cash Settlement Averaging Period” means the twenty consecutive Trading Day period beginning on, and including, the twenty-second Scheduled Trading Day immediately preceding the Maturity Date.

     “ close of business ” means 5:00 p.m. (New York City time).

     “ Commission ” means the Securities and Exchange Commission.

     “ Common Equity ” of any Person means Capital Stock of such Person that is generally (without regard to the occurrence of any contingency) entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

     “ Common Stock ” means, subject to Section 6.06, shares of common stock of the Company, par value $0.01 per share, at the date of this Supplemental Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and that have no preference in respect of dividends and of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and that are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion that the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

     “ Company ” has the meaning set forth in the Preamble hereto.

     “ Continuing Director ” means a director who either was a member of the Board of Directors on the Issue Date or who becomes a member of the Board of Directors subsequent to that date and whose election, appointment or nomination for election by the stockholders of the Company is duly approved by a majority of the Continuing Directors on the Board of Directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the entire Board of Directors in which such individual is named as nominee for director.

     “ Conversion Agent ” has the meaning set forth in Section 6.08.

     “ Conversion Date ” has the meaning set forth in Section 6.02(c).

     “ Conversion Obligation ” has the meaning set forth in Section 6.01.

     “ Conversion Price ” means as of any date, $1,000, divided by the Conversion Rate as of such date.

     “ Conversion Rate ” has the meaning set forth in Section 6.01.

     “ control ” means, when used with respect to any Person, 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.

     “ Currency Agreement ” of any Person means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect such Person or any of its Subsidiaries against fluctuations in currency values.

     “ Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

     “ Daily Conversion Value ” means, for each of the twenty consecutive Trading Days during the Cash Settlement Averaging Period, one-twentieth (1/20th) of the product of (a) the then-applicable Conversion Rate on such Trading Day and (b) the Daily VWAP of the Common Stock on such Trading Day.

     “ Daily Measurement Value ” is equal to the Specified Dollar Amount, divided by twenty.

     “ Daily Settlement Amount ,” for each of the twenty (20) consecutive Trading Days during the Cash Settlement Averaging Period, shall consist of:

     (a) cash equal to the lesser of the Daily Measurement Value and the Daily Conversion Value for such Trading Day; and

     (b) to the extent the Daily Conversion Value for such Trading Day exceeds the Daily Measurement Value, a number of shares of Common Stock equal to the Daily Share Amount.

     “ Daily Share Amount ” means, to the extent the Daily Conversion Value exceeds the Daily Measurement Value, (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP of the Common Stock for such Trading Day.

     “ Daily VWAP ” for the Common Stock, in respect of any Trading Day, means the per share volume-weighted average price on the New York Stock Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg page “DHI.N <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled opening of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day as determined by the Board of Directors in a commercially reasonable manner, using a volume-weighted average price method) and will be determined without regard to after hours trading or any other trading outside of the regular trading session.

     “ Default ” means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.

     “ Defaulted Interest ” means any interest, including Additional Interest, if any, that is payable, but is not punctually paid or duly provided for, on any May 15 or November 15 of each year, beginning November 15, 2009.

     “ Depository ” means, with respect to the Global Notes the Person specified as the Depository with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “Depository” shall mean or include such successor.

     “ Designated Institution ” has the meaning set forth in Section 6.11.

     “ Dollars ” and “ $ ” mean United States Dollars.

     “ Effective Date ” has the meaning set forth in Section 6.03(a).

     “ Event of Default ” has the meaning set forth in Section 5.01.

     “ Ex-Dividend Date ” means, with respect to any issuance, dividend or distribution in which the holders of Common Stock (or other security) have the right to receive any cash, Notes or other property, the first date on which the shares of the Common Stock (or other security) trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ Expiration Date ” has the meaning set forth in Section 6.04(e).

     “ Expiration Time ” has the meaning set forth in Section 6.04(e).

     “ Fundamental Change ” means the occurrence after the Issue Date of any of the following events:

     (a) any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) other than the Company, its Subsidiaries or Permitted Holders files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of the voting power of the Company’s Common Equity;

     (b) any Permitted Holder has, or any Permitted Holders have, become the direct or indirect beneficial owners of the Company’s Common Equity representing more than 80%, in the aggregate, of the voting power of the Company’s Common Equity;

     (c) consummation of any binding share exchange, exchange offer, tender offer, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one or more of the Company’s Subsidiaries (for use in this definition, any such exchange, offer, consolidation, merger, transaction or series of transactions being referred to herein as a “ Merger Event ”); provided , however , that any such

Merger Event where the holders of more than 50% of the Company’s shares of Common Stock immediately prior to such Merger Event, own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving Person or transferee or the parent thereof immediately after such Merger Event shall not be a Fundamental Change;

     (d) the first day on which Continuing Directors cease to constitute at least a majority of the Board of Directors;

     (e) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company (other than any liquidation or dissolution that is part of a Merger Event and excluded from the definition of Fundamental Change by reason of the proviso in clause (c) above); or

     (f) the Common Stock (or other common stock into which the Notes are then convertible) ceases to be quoted or listed on at least one United States national or regional securities exchange,

provided , however , (x) in the case of an event described in clause (c) above, (i) if at least 90% of the consideration, excluding cash payments for fractional shares, in the transaction or event constituting the Fundamental Change consists of shares of Publicly Traded Securities, and (ii) as a result of the transaction or event, the Notes become convertible into such Publicly Traded Securities and, subject to clause (i), other consideration, subject to Section 6.02(j), such event shall not be a Fundamental Change; (y) if any transaction in which the Common Stock is replaced by the securities of another Person shall occur, following completion of any related Make-Whole Fundamental Change period and any related Fundamental Change Repurchase Date, references to the Company in this definition shall instead apply to such other Person and, (z) any filing that would otherwise constitute a Fundamental Change under clause (a) above shall not constitute a Fundamental Change if (i) the filing occurs in connection with a transaction in which the Company’s Common Stock is replaced by the securities of another Person and (ii) no such filing is made or is in effect with respect to Common Equity representing more than 50% of the voting power of such other Person.

     “ Fundamental Change Company Notice ” has the meaning set forth in Section 7.01(b).

     “ Fundamental Change Expiration Time ” has the meaning set forth in Section 7.01(b)(ix).

     “ Fundamental Change Repurchase Date ” has the meaning set forth in Section 7.01(a).

     “ Fundamental Change Repurchase Notice ” has the meaning set forth in Section 7.01(a)(i).

     “ Fundamental Change Repurchase Price ” has the meaning set forth in Section 7.01(a).

     “ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.

     “ Global Note ” means a Note in global form registered to the Depository.

     “ Guarantors ” means (i) initially, each of:

C. Richard Dobson Builders, Inc., a Virginia corporation;
CH Investments of Texas, Inc., a Delaware corporation;
CHI Construction Company, an Arizona corporation;
CHTEX of Texas, Inc., a Delaware corporation;
Continental Homes, Inc., a Delaware corporation;
Continental Homes of Texas, L.P., a Texas limited partnership;
Continental Residential, Inc., a California corporation;
D.R. Horton—Emerald, Ltd., a Texas limited partnership;
D.R. Horton, Inc.—Birmingham, an Alabama corporation;
D.R. Horton, Inc.—Chicago, a Delaware corporation;
D.R. Horton, Inc.—Dietz-Crane, a Delaware corporation;
D.R. Horton, Inc.—Fresno, a Delaware corporation;
D.R. Horton, Inc.—Greensboro, a Delaware corporation;
D.R. Horton, Inc.—Gulf Coast, a Delaware corporation;
D.R. Horton, Inc.—Jacksonville, a Delaware corporation;
D.R. Horton, Inc.—Louisville, a Delaware corporation;
D.R. Horton, Inc.—Minnesota, a Delaware corporation;
D.R. Horton, Inc.—New Jersey, a Delaware corporation;
D.R. Horton, Inc.—Portland, a Delaware corporation;
D.R. Horton, Inc.—Sacramento, a California corporation;
D.R. Horton, Inc.—Torrey, a Delaware corporation;
D.R. Horton LA North, Inc., a Delaware corporation;
D.R. Horton Los Angeles Holding Company, Inc., a California corporation;
D.R. Horton Management Company, Ltd., a Texas limited partnership;
D.R. Horton Materials, Inc., a Delaware corporation;
D.R. Horton OCI, Inc., a Delaware corporation;
D.R. Horton VEN, Inc., a California corporation;
D.R. Horton—Schuler Homes, LLC, a Delaware limited liability company;
D.R. Horton—Texas, Ltd., a Texas limited partnership;
DRH Cambridge Homes, Inc., a California corporation;
DRH Cambridge Homes, LLC, a Delaware limited liability company;
DRH Construction, Inc., a Delaware corporation;
DRH Regrem VII, LP, a Texas limited partnership;
DRH Regrem VIII, LLC, a Delaware limited liability company;
DRH Regrem XI, Inc., a Delaware corporation;
DRH Regrem XII, LP, a Texas limited partnership;
DRH Regrem XIII, Inc., a Delaware corporation;
DRH Regrem XIV, Inc., a Delaware corporation;
DRH Regrem XV, Inc., a Delaware corporation;
DRH Regrem XVI, Inc., a Delaware corporation;
DRH Regrem XVII, Inc., a Delaware corporation;
DRH Regrem XVIII, Inc., a Delaware corporation;
DRH Regrem XIX, Inc., a Delaware corporation;
DRH Regrem XX, Inc., a Delaware corporation;
DRH Regrem XXI, Inc., a Delaware corporation;
DRH Regrem XXII, Inc., a Delaware corporation;
DRH Regrem XXIII, Inc., a Delaware corporation;
DRH Regrem XXIV, Inc., a Delaware corporation;
DRH Regrem XXV, Inc., a Delaware corporation;
DRH Southwest Construction, Inc., a California corporation;

DRH Tucson Construction, Inc., a Delaware corporation;
HPH Homebuilders 2000 L.P., a California limited partnership;
KDB Homes, Inc., a Delaware corporation;
Meadows I, Ltd., a Delaware corporation;
Meadows II, Ltd., a Delaware corporation;
Meadows VIII, Ltd., a Delaware corporation;
Meadows IX, Inc., a New Jersey corporation;
Meadows X, Inc., a New Jersey corporation;
Melmort Co., a Colorado corporation;
Melody Homes, Inc., a Delaware corporation;
Schuler Homes of Arizona LLC, a Delaware limited liability company;
Schuler Homes of California, Inc., a California corporation;
Schuler Homes of Oregon, Inc., an Oregon corporation;
Schuler Homes of Washington, Inc., a Washington corporation;
Schuler Mortgage, Inc., a Delaware corporation;
Schuler Realty Hawaii, Inc., a Hawaii corporation;
SGS Communities at Grande Quay, L.L.C., a New Jersey limited liability company;
SHA Construction LLC, a Delaware limited liability company;
SHLR of California, Inc., a California corporation;
SHLR of Colorado, Inc., a Colorado corporation;
SHLR of Nevada, Inc., a Nevada corporation;
SHLR of Utah, Inc., a Utah corporation;
SHLR of Washington, Inc., a Washington corporation;
SRHI LLC, a Delaware limited liability company;
SSHI LLC, a Delaware limited liability company;
Vertical Construction Corporation, a Delaware corporation;
Western Pacific Funding, Inc., a California corporation;
Western Pacific Housing Co., a California Limited Partnership, a California limited partnership;
Western Pacific Housing Management, Inc., a California corporation;
Western Pacific Housing, Inc., a Delaware corporation;
Western Pacific Housing—Antigua, LLC, a Delaware limited liability company;
Western Pacific Housing—Aviara, L.P., a California limited partnership;
Western Pacific Housing—Boardwalk, LLC, a Delaware limited liability company;
Western Pacific Housing—Broadway, LLC, a Delaware limited liability company;
Western Pacific Housing—Canyon Park, LLC, a Delaware limited liability company;
Western Pacific Housing—Carmel, LLC, a Delaware limited liability company;
Western Pacific Housing—Carrillo, LLC, a Delaware limited liability company;
Western Pacific Housing—Communications Hill, LLC, a Delaware limited liability company;
Western Pacific Housing—Copper Canyon, LLC, a Delaware limited liability company;
Western Pacific Housing—Creekside, LLC, a Delaware limited liability company;
Western Pacific Housing—Culver City, L.P., a California limited partnership;
Western Pacific Housing—Del Valle, LLC, a Delaware limited liability company;
Western Pacific Housing—Lomas Verdes, LLC, a Delaware limited liability company;
Western Pacific Housing—Lost Hills Park, LLC, a Delaware limited liability company;
Western Pacific Housing—McGonigle Canyon, LLC, a Delaware limited liability company;
Western Pacific Housing—Mountaingate, L.P., a California limited partnership;
Western Pacific Housing—Norco Estates, LLC, a Delaware limited liability company;

Western Pacific Housing—Oso, L.P., a California limited partnership;
Western Pacific Housing—Pacific Park II, LLC, a Delaware limited liability company;
Western Pacific Housing—Park Avenue East, LLC, a Delaware limited liability company;
Western Pacific Housing—Park Avenue West, LLC, a Delaware limited liability company;
Western Pacific Housing—Playa Vista, LLC, a Delaware limited liability company;
Western Pacific Housing—Poinsettia, L.P., a California limited partnership;
Western Pacific Housing—River Ridge, LLC, a Delaware limited liability company;
Western Pacific Housing—Robinhood Ridge, LLC, a Delaware limited liability company;
Western Pacific Housing—Santa Fe, LLC, a Delaware limited liability company;
Western Pacific Housing—Scripps, L.P., a California limited partnership;
Western Pacific Housing—Scripps II, LLC, a Delaware limited liability company;
Western Pacific Housing—Seacove, L.P., a California limited partnership;
Western Pacific Housing—Studio 528, LLC, a Delaware limited liability company;
Western Pacific Housing—Terra Bay Duets, LLC, a Delaware limited liability company;
Western Pacific Housing—Torrance, LLC, a Delaware limited liability company;
Western Pacific Housing—Torrey Commercial, LLC, a Delaware limited liability company;
Western Pacific Housing—Torrey Meadows, LLC, a Delaware limited liability company;
Western Pacific Housing—Torrey Multi-Family, LLC, a Delaware limited liability company;
Western Pacific Housing—Torrey Village Center, LLC, a Delaware limited liability company;
Western Pacific Housing—Vineyard Terrace, LLC, a Delaware limited liability company;
Western Pacific Housing—Windemere, LLC, a Delaware limited liability company;
Western Pacific Housing—Windflower, L.P., a California limited partnership;
WPH—Camino Ruiz, LLC, a Delaware limited liability company;

and (ii) each of the Company’s Subsidiaries which becomes a guarantor of the Notes pursuant to the provisions of the Indenture, in the case of (i) and (ii) until subsequently released from its Guarantee pursuant to the provisions of the Indenture.

     “ Holder ” means the Person in whose name a Note is registered in the registration books of the Registrar for the Notes.

     “ Indebtedness ” of any Person means, without duplication, (i) any liability of such Person (a) for borrowed money or under any reimbursement obligation relating to a letter of credit or other similar instruments (other than standby letters of credit or similar instruments issued for the benefit of or surety, performance, completion or payment bonds, earnest money notes or similar purpose undertakings or indemnifications issued by, such Person in the ordinary course of business), (b) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind or with services incurred in connection with capital expenditures (other than any obligation to pay a contingent purchase price as long as such obligation remains contingent), or (c) in respect of Capitalized Lease Obligations (to the extent of the capitalized amount thereof determined in accordance with GAAP), (ii) any Indebtedness of others described in clause (i) above that such Person has guaranteed to the extent of the guarantee and (iii) all Indebtedness of others described in clause (i) above secured by a Security Interest on any property of such Person,

whether or not such Indebtedness is assumed by such Person; provided , that Indebtedness shall not include accounts payable, liabilities to trade creditors of such Person or other accrued expenses arising in the ordinary course of business or obligations under Currency Agreements or Interest Protection Agreements.

     “ Indenture ” means the Base Indenture, solely to the extent it governs the Notes, as supplemented by this Supplemental Indenture as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions of the Base Indenture, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Supplemental Indenture and any such supplemental indenture, respectively.

     “ Initial Dividend Threshold ” has the meaning set forth in Section 6.04(d).

     “ Initial Notes ” has the meaning set forth in Article One.

     “ Interest Payment Date ” means each May 15 and November 15 of each year, beginning on November 15, 2009, subject to Section 11.07 of the Base Indenture.

     “ Interest Protection Agreement ” of any Person means any interest rate swap agreement, interest rate collar agreement, option or futures contract or other similar agreement or arrangement designed to protect such Person or any of its Subsidiaries against fluctuations in interest rates with respect to Indebtedness.

     “ Interest Record Date ,” with respect to any Interest Payment Date, means the May 1 or November 1 (whether or not such day is a Business Day) immediately preceding the relevant Interest Payment Date, respectively.

     “ Issue Date ” means May 13, 2009, the date on which the Notes are originally issued under the Indenture.

     “ Last Reported Sale Price ” of the Common Stock or other Capital 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 the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock or other Capital Stock is listed for trading. The Last Reported Sale Price will be determined without reference to after-hours or extended market trading. If the Common Stock or other Capital Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, then the “Last Reported Sale Price” of the Common Stock or other Capital Stock will be the last quoted bid price for the Common Stock or other Capital Stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or similar organization. If the Common Stock or other Capital Stock is not so quoted, the “Last Reported Sale Price” of the Common Stock or other Capital Stock will be determined by a U.S. nationally recognized independent investment banking firm selected by the Company for this purpose. Solely in respect of the Last Reported Sale Price for a Trading Day during the period referred to in Section 6.04(i), the Board of Directors shall make adjustments to such Last Reported Sale Price to appropriately reflect the impact of the applicable issuance, dividend or distribution (relating to a required Conversion Rate adjustment) and the intent of Article Six and to avoid unjust or inequitable results. Such adjustments shall be made in good faith by the Board of Directors (whose good faith determination shall be conclusive).

     “ Make-Whole Conversion Rate Adjustment ” has the meaning set forth in Section 6.03(a).

     “ Make-Whole Fundamental Change ” means any transaction or event that constitutes a Fundamental Change under clause (a), (b) or (c) of the definition thereof (in the case of any Fundamental Change described in clause (c) of the definition thereof, determined without regard to the proviso in such clause (c) but subject to the clauses (x) and (y) immediately following clause (f) of the definition of Fundamental Change.

     “ Make-Whole Fundamental Change Period ” has the meaning set forth in Section 6.03(a).

     “ Market Disruption Event ” means, with respect to the Common Stock or any other Capital Stock, (a) a failure by the primary exchange or quotation system on which the Common Stock or other Capital Stock trades or is quoted, as the case may be, to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Trading Day for the Common Stock or other Capital Stock of an aggregate one-half hour period, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or other Capital Stock or in any options, contracts or future contracts relating to the Common Stock or other Capital Stock.

     “ Maturity Date ” means May 15, 2014.

     “ Non-Recourse Indebtedness ” with respect to any Person means Indebtedness of such Person for which (i) the sole legal recourse for collection of principal and interest on such Indebtedness is against the specific property identified in the instruments evidencing or securing such Indebtedness (and any accessions thereto and proceeds thereof) and such property was acquired with the proceeds of such Indebtedness or such Indebtedness was incurred within 180 days after the acquisition of such property and (ii) no other assets of such Person may be realized upon in collection of principal or interest on such Indebtedness. Indebtedness which is otherwise Non-Recourse Indebtedness will not lose its character as Non-Recourse Indebtedness because there is recourse to the borrower, any guarantor or any other Person for (a) environmental or tax warranties and indemnities and such other representations, warranties, covenants and indemnities as are customarily required in such transactions, or (b) indemnities for and liabilities arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, insurance and condemnation proceeds and other sums actually received by the borrower from secured assets to be paid to the lender, waste and mechanics’ liens.

     “ Notes ” has the meaning provided in the Recitals, and shall include the Initial Notes and any Additional Notes issued pursuant to the Indenture.

     “ Notice of Conversion ” has the meaning set forth in Section 6.02(b).

     “ opening of business ” means 9:00 a.m. (New York City time).

     “ Paying Agent ” means the Trustee or any successor paying agent.

     “ Permitted Holder ” means any of Donald R. Horton, Terrill J. Horton, or their respective wives, children, grandchildren and other descendants, or any trust or other entity controlled by any of such individuals.

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

     “ Publicly Traded Debt Securities ” means any issue of debt securities of the Company or any of its Subsidiaries originally issued in a public offering registered with the Commission or in an offering pursuant to Rule 144A under the Securities Act and of which issue at least $50 million aggregate principal amount is outstanding.

     “ Publicly Traded Securities ” means shares of common stock, depositary receipts or other certificates representing Common Equity, in each case, that are traded on a national or regional securities exchange or that will be so traded when issued or exchanged in connection with a Fundamental Change described in clause (c) of the definition thereof.

     “ Record Date ” has the meaning set forth in Section 6.04(g).

     “ Reference Property ” has the meaning set forth in Section 6.06(b).

     “ Registrar ” means American Stock Transfer & Trust Company, LLC or any successor registrar of the Notes.

     “ Scheduled Trading Day ” means any day that is scheduled to be a Trading Day.

     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Security Interest ” means any mortgage, pledge, lien, or other security interest which secures the payment or performance of an obligation.

     “ Settlement Amount ” has the meaning set forth in Section 6.02(a).

     “ Settlement Method ” means, with respect to a conversion of Notes, the relative proportions of cash and/or shares of Common Stock with which such conversion is settled under the Indenture, as elected (or deemed elected) by the Company.

     “ Settlement Notice ” has the meaning set forth in Section 6.02(a)(iii).

     “ Significant Subsidiary ” means any Subsidiary of the Company which would constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act (as such definition is in effect on the Issue Date).

     “ Significant Transaction ” has the meaning set forth in Section 6.06.

     “ Specified Date ” has the meaning set forth in Section 5.03.

     “ Specified Dollar Amount ” means an amount of cash per $1,000 principal amount of a converted Note specified by the Company in the Settlement Notice related to such converted Note.

     “ Spin-Off ” has the meaning set forth in Section 6.04(c).

     “ Stock Price ” means (a) in the case of a Make-Whole Fundamental Change described in clause (c) of the definition of Fundamental Change in which holders of Common Stock receive solely cash consideration in connection with such Make-Whole Fundamental Change, the amount of cash paid per share of the Common Stock and (b) in the case of all other Make-Whole Fundamental Changes, the average of the Last Reported Sale Prices per share of Common Stock over the period of five consecutive Trading Days ending on, and including, the Trading Day immediately preceding the Effective Date of such Make-

Whole Fundamental Change. The Board of Directors will make appropriate adjustments, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date or Record Date of the event occurs, during such five consecutive Trading Day period.

     “ Subsidiary ” of any Person means any corporation or other entity of which a majority of the Capital Stock having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions is at the time directly or indirectly owned or controlled by such Person.

     “ Successor ” has the meaning set forth in Section 4.01(a).

     “ Supplemental Indenture ” has the meaning provided in the Preamble.

     “ Trading Day ” means, with respect to the Common Stock or any other Capital Stock a day during which trading in the Common Stock or other Capital Stock generally occurs on the primary exchange or quotation system on which the Common Stock or other Capital Stock then trades or is quoted and there is no Market Disruption Event. If the Common Stock or other Capital Stock (or other security for which a Last Reported Sale Price or Daily VWAP must be determined) is not so traded or quoted, “ Trading Day ” means “ Business Day .”

     “ Trigger Event ” has the meaning set forth in Section 6.04(c).

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

     “ Trust Indenture Act ” means the Trust Indenture Act of 1939, as in effect from time to time.

     “ Valuation Period ” has the meaning set forth in Section 6.04(c).

     “ Weighted Average Consolidation ” has the meaning set forth in Section 6.06(c)(iv).

     Section 2.02. Interpretation .

     Section 1.04 of the Base Indenture shall apply to this Supplemental Indenture. In addition:

     (a) “including” means including without limitation; and

     (b) all Section and similar references are to this Supplemental Indenture, unless otherwise specified or the context otherwise requires.

ARTICLE THREE

Covenants

     Section 3.01. Reports by Company .

     The Company will deliver to the Trustee, within 15 days after the Company is required to file the same with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of any document or other report that the Company is required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act. Documents filed by the Company

with the Commission via the IDEA system will be deemed furnished to the Trustee as of the time such documents are filed via the IDEA system. The Trustee will be under no obligation to analyze or make any credit decisions with respect to any financial statements or reports received by it hereunder, but will hold such financial statements or reports solely for the benefit of, and review by, Holders of the Notes.

     Section 3.02. Compliance Certificate .

     Section 4.03 of the Base Indenture (immediately following the Section heading) is replaced with the following in its entirety:

     The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate stating whether or not the signers know of any continuing Default by the Company in performing any of its obligations under the Indenture. If they do know of such a Default, the certificate shall describe the Default.

     Section 3.03. Payment of Taxes; Maintenance of Corporate Existence; Maintenance of Properties .

     Section 4.04 of the Base Indenture (immediately following the Section heading) is replaced with the following in its entirety:

     The Company will:

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

          (b) cause to be done all things necessary to preserve and keep in full force and effect the corporate existence of the Company and each of the Guarantors and to comply with all applicable laws; provided , however , that nothing in this subsection (b) shall prevent a consolidation or merger of the Company or any Guarantor not prohibited by the provisions of Article Nine of the Base Indenture or Article Four of the Supplemental Indenture or any other provision of the Indenture and the Company may fail to comply with any such law if, in the judgment of the Company, such non-compliance shall not be advantageous to the Company in the conduct of its business and if the failure to comply does not, in its judgment, materially adversely affect the ability of the Company and the Guarantors to pay all obligations under the Indenture when due; and

          (c) at all times keep, maintain and preserve all the property of the Company and the Guarantors in good repair, working order and condition (reasonable wear and tear excepted) and from time to time make all needful and proper repairs, renewals, replacements, betterments and improvements

thereto, so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided , however , that nothing in this subsection (c) shall prevent the Company from discontinuing the operation and maintenance of any such properties if such discontinuance, in the judgment of the Company, does not materially adversely affect the ability of the Company and the Guarantors to pay all obligations under the Indenture when due.

     Section 3.04. Additional Guarantors .

     Section 4.05 of the Base Indenture (immediately following the Section heading) is replaced with the following in its entirety:

          (a) If (x) the Company or any of the Guarantors shall organize or acquire another Subsidiary which guarantees any Publicly Traded Debt Securities, (y) any Subsidiary that is not a Guarantor shall guarantee any Publicly Traded Debt Securities, or (z) the Company elects to add any Subsidiary as a Guarantor, then such Subsidiary will:

     (i) execute and deliver to the Trustee a supplemental indenture in form reasonably satisfactory to the Trustee pursuant to which such Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes on the terms set forth in the Indenture, and

     (ii) deliver to the Trustee an Opinion of Counsel that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and constitutes a legal, valid, binding and enforceable obligation of such Subsidiary.

     Thereafter, such Subsidiary shall be a Guarantor for all purposes of this Indenture (as it relates to the Notes), until released from its obligations as a Guarantor pursuant to the provisions of the Indenture.

ARTICLE FOUR

Successor Corporation

     Article Five of the Base Indenture is replaced with the following in its entirety:

     Section 4.01. Limitations on Mergers, Consolidations and Sales of Assets .

          Neither the Company nor any Guarantor will consolidate or merge with or into, or sell, lease, convey or otherwise dispose of all or substantially all of its assets (including, without limitation, by way of liquidation or dissolution), to any Person (in each case other than in a transaction in which the Company or a Guarantor is the survivor of a consolidation or merger, or the transferee in a sale, lease, conveyance or other disposition) unless:

          (a) the Person formed by or surviving such consolidation or merger (if other than the Company or the Guarantor, as the case may be), or to which such sale, lease, conveyance or other disposition will be made (collectively, the “ Successor ”), is a corporation or other legal entity organized and existing under the laws of the United States or any state thereof or the District of Columbia, and the Successor assumes by supplemental indenture in a form reasonably satisfactory to the Trustee all of the obligations of the Company or the Guarantor, as the case may be, under the Notes or a Guarantee, as the case may be, and the Indenture, and

          (b) immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing.

     The foregoing provisions shall not apply to:

     (i) a transaction involving the sale or disposition of Capital Stock of a Guarantor, or the consolidation or merger of a Guarantor, or the sale, lease, conveyance or other disposition of all or substantially all of the assets of a Guarantor where such Capital Stock, or the assets of such Guarantor being merged or consolidated or the assets being sold, leased, conveyed or otherwise disposed of, as the case may be, do not constitute all or substantially all of the assets of the Company (determined on a consolidated basis), or

     (ii) a transaction the purpose of which is to change the state of incorporation of the Company or any Guarantor.

          Upon any such consolidation, merger, sale, lease, conveyance or other disposition, the Successor will be substituted for the Company or the relevant Guarantor under the Indenture. The Successor may then exercise every power and right of the Company or the relevant Guarantor under the Indenture, and the Company or the relevant Guarantor will be released from all of its liabilities and obligations in respect of the Notes and the Indenture. If the Company or a Guarantor leases all or substantially all of its assets, the lessee will be the Successor to the Company or such Guarantor and may exercise every power and right of the Company or such Guarantor under the Indenture, but the Company or such Guarantor will not be released from its obligations to pay the principal of and premium, if any, and interest, if any, on the Notes.

ARTICLE FIVE

Defaults and Remedies

     Section 6.01 and Section 6.02 of the Base Indenture are replaced with Sections 5.01 and 5.02 hereof in their entirety:

     Section 5.01. Events of Default .

          An “ Event of Default ” on the Notes occurs, if voluntarily or involuntarily, whether by operation of law or otherwise, any of the following occurs:

     (a) the failure by the Company to pay interest (including Additional Interest, if any) on any Note when the same becomes due and payable and the continuance of any such failure for a period of 30 days;

     (b) the failure by the Company to pay the principal or premium of any Note when the same becomes due and payable at maturity, upon acceleration or otherwise;

     (c) the failure by the Company or any of its Subsidiaries to comply with any of its agreements or covenants in, or provisions of the Notes, the Guarantees or the Indenture and such failure continues for the period and after the notice specified below (except in the case of a default under Section 4.01 which will constitute an Event of Default with notice but without passage of time);

     (d) the acceleration of any Indebtedness (other than Non-Recourse Indebtedness) of the Company or any Guarantor that has an outstanding principal amount of $50 million or more, individually or in the aggregate, and such acceleration does not cease to exist, or such Indebtedness is not satisfied, in either case within 30 days after such acceleration;

     (e) the failure by the Company or any Guarantor to make any principal or interest payment in an amount of $50 million or more, individually or in the aggregate, in respect of Indebtedness (other than Non-Recourse Indebtedness) of the Company or any Guarantor within 30 days of such principal or interest (including Additional Interest, if any) becoming due and payable (after giving effect to any applicable grace period set forth in the documents governing such Indebtedness);

     (f) the Company or any Guarantor that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

     (A) commences a voluntary case,

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

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

     (D) makes a general assignment for the benefit of its creditors;

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

     (A) is for relief against the Company or any Guarantor that is a Significant Subsidiary as debtor in an involuntary case,

     (B) appoints a Custodian of the Company or any Guarantor that is a Significant Subsidiary or a Custodian for all or substantially all of the property of the Company or any Guarantor that is a Significant Subsidiary, or

     (C) orders the liquidation of the Company or any Guarantor that is a Significant Subsidiary, and the order or decree remains unstayed and in effect for 60 days;

     (h) any Guarantee of a Guarantor that is a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Guarantee and the Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Guarantee (other than by reason of release of a Guarantor from its Guarantee in accordance with the terms of the Indenture and the Guarantee);

     (i) the failure by the Company to comply with the obligation to convert the Notes into Common Stock, cash or a combination of cash and Common Stock, as applicable, upon exercise of a Holder’s conversion right and such failure continues for five days; or

     (j) the failure by the Company to timely issue a Fundamental Change Company Notice in accordance with Section 7.01.

          A Default as described in clause (c) above will not be deemed an Event of Default until the Trustee notifies the Company, or the Holders of at least 25 percent in principal amount of the then outstanding Notes notify the Company and the Trustee, of the Default and (except in the case of a default with respect to Section 4.01) the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.” If such a Default is cured within such time period, it ceases.

     Section 5.02. Acceleration .

          If an Event of Default (other than an Event of Default with respect to the Company resulting from Sections 5.01(f) or (g)) shall have occurred and be continuing under the Indenture, the Trustee by notice to the Company, or the Holders of at least 25 percent in principal amount of the Notes then outstanding by notice to the Company and the Trustee, may declare all Notes to be due and payable immediately. Upon such declaration of acceleration, the amounts due and payable on the Notes will be due and payable immediately. If an Event of Default with respect to the Company specified in Sections 5.01(f) or (g) occurs, such an amount will ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee and the Company or any Holder.

          The Holders of a majority in principal amount of the Notes then outstanding by written notice to the Trustee and the Company may waive any Default or Event of Default (other than any Default or Event of Default in payment of principal or interest or Additional Interest, if any) on the Notes under the Indenture. Holders of a majority in principal amount of the then outstanding Notes may rescind an acceleration and its consequence (except an acceleration due to nonpayment of principal or interest (including Additional Interest, if any) on the Notes) if the rescission would not conflict with any judgment or decree and if all existing Events of Default (other than the non-payment of accelerated principal) have been cured or waived. No such rescission shall extend to or shall affect any subsequent Event of Default, or shall impair any right or power consequent thereon.

     Section 5.03. Additional Interest .

          (a) Notwithstanding anything in the Indenture or in the Notes to the contrary, if the Company so elects, any failure to file reports as required under Section 3.01 will not result in the occurrence of an Event of Default until the expiration of the first 180 calendar days after the date (the “Specified Date”) on which an Event of Default would otherwise occur as a result of any such failure (which would be the 120th calendar day after written notice is provided to the Company in accordance with Section 5.01(c)), provided that the Company pays Additional Interest on the Notes at an annual rate equal to (x) 0.25% of the outstanding principal amount of the Notes for the first 90 calendar days of such 180-day period and (y) 0.50% of the outstanding principal amount of the Notes for the remaining 90 calendar days of such 180-day period. Additional Interest will be payable in arrears on each Interest Payment Date following the Specified Date in the same manner as regular interest on the Notes. On the 181st calendar day after the Specified Date (if such violation is not cured or waived prior to such 181st day), an Event of Default will be deemed to occur and the Notes will be subject to acceleration as provided in Section 5.02. This Section 5.03(a) will not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default. Whenever in the Indenture there is mentioned, in any context, the payment of interest on, or in respect of, any Note, such mention shall be deemed to include mention of payment of “Additional Interest” as provided for in this Section 5.03 to the extent that, in such context, Additional Interest, is, was or would be payable in respect thereof pursuant to the provisions of such sections, and express mention of the payment of Additional Interest (if applicable) shall not be construed as excluding Additional Interest in those provisions where such express mention is not made.

          (b) In order to elect to pay Additional Interest relating to the failure to comply with the reporting obligations as required under Section 3.01, the Company must notify all Holders of Notes and the Trustee and Paying Agent of such election on or before the close of business on the 5th Business Day after the Specified Date. If the Company fails to timely give such notice or pay Additional Interest, the Notes will be immediately subject to acceleration as provided in Section 5.02.

ARTICLE SIX

Conversion of Notes

     Section 6.01. Conversion Privilege .

          Upon compliance with the provisions of this Article Six, a Holder shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $2,000 principal amount or an integral multiple or $1,000 in excess thereof) of such Note prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, in each case, at an initial conversion rate (the “ Conversion Rate ”) of 76.5697 shares of Common Stock (subject to adjustment as provided in Section 6.04) per $1,000 principal amount of Notes (subject to the settlement provisions of Section 6.02, the “ Conversion Obligation ”).

     Section 6.02. Conversion Procedure .

          (a) Subject to this Section 6.02, upon any conversion of any Note, the Company will deliver to converting Holders, in respect of each $1,000 principal amount of Notes being converted, solely cash, solely shares of Common Stock or a combination of cash and Common Stock, at its election, as set forth in this Section 6.02 (the “ Settlement Amount ”).

     (i) All conversions on or after the 23rd Scheduled Trading Day immediately preceding the Maturity Date will be settled using the same Settlement Method.

     (ii) On any Conversion Date prior to the 23rd Scheduled Trading Day immediately preceding the Maturity Date, the Company will elect (or be deemed to have elected) the same Settlement Method for all conversions occurring on such Conversion Date. Except for conversions that occur on or after the 23rd Scheduled Trading Day immediately preceding the Maturity Date, the Company need not elect the same Settlement Method with respect to conversions that occur on different Trading Days.

     (iii) If, in respect of any Conversion Date (or the period beginning on, and including, the 23rd Scheduled Trading Day immediately preceding the Maturity Date and ending on, and including, the second Scheduled Trading Day immediately preceding the Maturity Date, as the case may be), the Company elects to deliver a notice (the “ Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the second Business Day immediately following the relevant Conversion Date. Such Settlement Notice shall specify whether the Company shall satisfy its Conversion Obligation by (A) delivering solely shares of Common Stock, (B) paying solely cash or (C) paying and delivering, as the case may be, a combination of cash and shares of Common Stock. In the case of an election to pay and deliver, as the case may be, a combination of cash and shares of Common Stock, the relevant Settlement Notice shall indicate the Specified Dollar Amount. If the Company does not deliver a Settlement Notice, the Company will be deemed to have elected

to deliver a combination of cash and shares of Common Stock in respect of its Conversion Obligation, and the Specified Dollar Amount shall be deemed to be equal to $1,000. If the Company delivers a Settlement Notice electing to pay and deliver, as the case may be, a combination of cash and shares of Common Stock in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount in such Settlement Notice, the Specified Dollar Amount shall be deemed to be equal to $1,000.

     (iv) The Settlement Amount in respect of any conversion of Notes shall be computed as follows:

     (v) The Company will also deliver to each converting Holder cash in lieu of fractional shares of Common Stock as set forth pursuant to Section 6.02(j).

     (vi) The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last day of the Cash Settlement Averaging Period. Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash deliverable in lieu of fractional shares (if any), the Company shall notify the Trustee and the Conversion Agent of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash deliverable in lieu of fractional shares of Common Stock. The Trustee and the Conversion Agent shall have no responsibility for any such determination.

          (b) Before any Holder of a Note shall be entitled to convert the same as set forth above, such Holder shall (i) in the case of a Global Note, comply with the procedures of the Depository in effect at that time and, if required, pay funds equal to the amount of interest (including Additional Interest, if any) payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 6.02(h) and, if required, all transfer or similar taxes, if any, and (ii) in the case of a Note issued in

certificated form, (1) complete and manually sign and deliver an irrevocable notice to the Conversion Agent in the form on the reverse of such certificated Note (or a facsimile thereof) ( Exhibit C hereto) (a “ Notice of Conversion ”) at the office of the Conversion Agent and shall state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock, if any, to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, pay funds equal to interest (including Additional Interest, if any) payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 6.02(h), (4) if required, furnish appropriate endorsements and transfer documents, and (5) if required, pay all transfer or similar taxes, if any as set forth in Section 6.02(e). The Trustee (and if different, the relevant Conversion Agent) shall notify the Company of any conversion pursuant to this Article Six on the date of such conversion. No Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such Notes and not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Sections 7.01 and 7.02, unless the Company defaults in the payment of the Fundamental Change Repurchase Price.

     If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.

          (c) A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “ Conversion Date ”) that the Holder has complied with the requirements set forth in clause (b) of this Section 6.02. The Company shall pay or deliver, as the case may be, such cash and/or shares of Common Stock on the third Trading Day immediately following the last Trading Day of the Cash Settlement Averaging Period; provided , that if the Company elects to fulfill its Conversion Obligation solely in shares of Common Stock, the Company shall deliver such Common Stock on the third Trading Day immediately following the relevant Conversion Date; provided , further , that if prior to the relevant Conversion Date, the Common Stock has been replaced by Reference Property consisting solely of cash, pursuant to Section 6.06(b), the Company shall pay such cash on the third Trading Day immediately following the relevant Conversion Date. Notwithstanding the foregoing, if any information required to calculate the Conversion Obligation is not available as of the applicable settlement date, the Company will deliver the additional shares of Common Stock resulting from such adjustment on the third Trading Day after the earliest Trading Day on which such calculation can be made. If application of the provisions described above would result in settlement of a conversion during the ten Trading Days immediately following the Effective Date of a Fundamental Change, settlement will instead take place on the tenth Trading Day following the relevant Effective Date. If any shares of Common Stock are due to converting Holders, the Company shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depository for the number of full shares of Common Stock.

          (d) In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered, without charge to such Holder, a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note.

          (e) If a Holder submits a Note for conversion, the Company shall pay all stamp and other duties, if any, that may be imposed by the United States or any political subdivision thereof or tax-

ing authority thereof or therein with respect to the issuance of shares of Common Stock, if any, upon the conversion. However, the Holder shall pay any such tax that is due because the Holder requests any shares of Common Stock to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that will 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.

          (f) Except as provided in Section 6.04, no adjustment shall be made for dividends on any shares of Common Stock issued upon the conversion of any Note as provided in this Article.

          (g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.

          (h) Upon conversion, a Holder shall not receive any additional cash payment for accrued and unpaid interest (including Additional Interest, if any) except as set forth below. The Company’s settlement of the Conversion Obligations pursuant to Section 6.02 shall be deemed to satisfy its obligation to pay the principal amount of the Note and accrued and unpaid interest (including Additional Interest, if any) to, but not including, the Conversion Date. As a result, accrued and unpaid interest (including Additional Interest, if any) to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Notwithstanding the preceding sentence, if Notes are converted after the close of business on a Interest Record Date, Holders of such Notes as of the close of business on the Interest Record Date will receive the interest (including Additional Interest, if any) payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the close of business on any Interest Record Date to the opening of business on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest (including Additional Interest, if any) payable on the Notes so converted; provided , however , that no such payment shall be required (1) if the Company has specified a Fundamental Change Repurchase Date that is after an Interest Record Date but on or prior to the corresponding Interest Payment Date, (2) to the extent of any Defaulted Interest, if any, existing at the time of conversion with respect to such Note or (3) if the Notes are surrendered for conversion after the close of business on the Interest Record Date immediately preceding the Maturity Date. Except as set forth in this Section 6.02(h), no payment or adjustment will be made for accrued and unpaid interest (including Additional Interest, if any) on converted Notes.

          (i) The Person in whose name the certificate for any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date (if the Company elects to satisfy the related Conversion Obligation solely in shares of Common Stock) or the last Trading Day of the related Cash Settlement Averaging Period (in the case of any other Settlement Method), as the case may be; provided , however , if such Conversion Date or such last Trading Day of the Cash Settlement Averaging Period occurs on any date when the stock transfer books of the Company shall be closed, such occurrence shall not be effective to constitute the Person or Persons entitled to receive any such shares of Common Stock due upon conversion as the record holder or holders of such shares of Common Stock on such date, but such occurrence 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. Upon conversion of Notes, such Person shall no longer be a Holder.

          (j) For each Note surrendered for conversion, if the Company has elected to deliver a combination of cash and shares of Common Stock in respect of its Conversion Obligation, the number of full shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Cash Settlement Averaging Period and any fractional shares remaining after such computation shall be paid in cash. If more than one Note shall be surrendered for conversion at one time by the same Holder, the number of full shares that shall be issued upon conversion thereof (and the number of fractional shares remaining) shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered. The Company shall not issue fractional shares of Common Stock upon conversion of Notes. Instead, the Company shall pay cash in lieu of fractional shares based on the Daily VWAP on the relevant Conversion Date (if the Company elects to satisfy its Conversion Obligation solely in shares of Common Stock) or based on the Daily VWAP on the last Trading Day of the relevant Cash Settlement Averaging Period (in the case of any other Settlement Method).

     Section 6.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes .

          (a) Notwithstanding anything herein to the contrary, the Conversion Rate applicable to each Note that is surrendered for conversion, in accordance with this Article Six, at any time from, and including, the date on which a Make-Whole Fundamental Change occurs (the “ Effective Date ”), until, and including, the close of business on the second Scheduled Trading Day immediately preceding the related Fundamental Change Repurchase Date corresponding to such Make-Whole Fundamental Change, or the twentieth Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change (in the case of a Make-Whole Fundamental Change that does not constitute a Fundamental Change by virtue of the parenthetical in the definition of Make-Whole Fundamental Change) (such period, the “ Make-Whole Fundamental Change Period ”), shall be increased to an amount equal to the Conversion Rate that would, but for this Section 6.03, otherwise apply to such Note pursuant to this Article Six, plus an amount equal to the Make-Whole Conversion Rate Adjustment.

     As used herein, “ Make-Whole Conversion Rate Adjustment ” means, with respect to a Make-Whole Fundamental Change, the amount set forth in the following table that corresponds to the Effective Date of such Make-Whole Fundamental Change and the Stock Price for such Make-Whole Fundamental Change, all as determined by the Company:

Make-Whole Conversion Rate Adjustment
(per $1,000 principal amount of Notes)