10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2010

Commission file number 1-11749

Lennar Corporation

(Exact name of registrant as specified in its charter)

Delaware	95-4337490
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

700 Northwest 107th Avenue, Miami, Florida 33172

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (305) 559-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock, par value 10¢	New York Stock Exchange
Class B Common Stock, par value 10¢	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YES  þ  NO  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YES  ¨  NO  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  þ  NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  þ  NO  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  YES  ¨  NO  þ

The aggregate market value of the registrant’s Class A and Class B common stock held by non-affiliates of the registrant (148,575,861 Class A shares and 9,661,358 Class B shares) as of May 31, 2010, based on the closing sale price per share as reported by the New York Stock Exchange on such date, was $2,708,519,815.

As of December 31, 2010, the registrant had outstanding 155,346,780 shares of Class A common stock and 31,291,294 shares of Class B common stock.

DOCUMENTS INCORPORATED BY REFERENCE:

Related Section	Documents
III	Definitive Proxy Statement to be filed pursuant to Regulation 14A on or before March 30, 2011.

PART I

Item 1.    Business.

Overview of Lennar Corporation

We are one of the nation’s largest homebuilders, a provider of financial services and through our Rialto Investments (“Rialto”) segment, an investor in distressed real estate assets. Our homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly and through unconsolidated entities in which we have investments. We have grouped our homebuilding activities into four reportable segments, which we refer to as Homebuilding East, Homebuilding Central, Homebuilding West and Homebuilding Houston. Information about homebuilding activities in states in which our homebuilding activities are not economically similar to those in other states in the same geographic area is grouped under “Homebuilding Other.” Our reportable homebuilding segments and Homebuilding Other have divisions located in:

East: Florida, Maryland, New Jersey and Virginia

Central: Arizona, Colorado and Texas (1)

West: California and Nevada

Houston: Houston, Texas

Other: Georgia, Illinois, Minnesota, North Carolina and South Carolina

          (1) Texas in the Central reportable segment excludes Houston, Texas, which is its own reportable segment.

We have one Financial Services reportable segment that provides primarily mortgage financing, title insurance and closing services for both buyers of our homes and others. Substantially all of the loans we originate are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements. Our Financial Services segment operates generally in the same states as our homebuilding operations, as well as in other states.

Our Rialto segment is a new reportable segment. Rialto’s objective is to generate superior, risk-adjusted returns by focusing on commercial and residential real estate opportunities arising from dislocation in the United States real estate markets and the eventual restructure and recapitalization of those markets. Rialto expects to be able to deliver these returns through its abilities to source, underwrite, price, manage and ultimately monetize real estate assets, as well as by providing similar services to others in markets across the country.

For financial information about our Homebuilding, Lennar Financial Services and Rialto operations, you should review Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is Item 7 of this Report, and our consolidated financial statements and the notes to our consolidated financial statements, which are included in Item 8 of this Report.

A Brief History of Our Company

We are a national homebuilder that operates in various states with deliveries of 10,955 new homes in 2010. Our company was founded as a local Miami homebuilder in 1954. We completed our initial public offering in 1971, and listed our common stock on the New York Stock Exchange in 1972. During the 1980s and 1990s, we entered and expanded operations in some of our current major homebuilding markets including California, Florida and Texas through both organic growth and acquisitions such as Pacific Greystone Corporation in 1997, amongst others. In 1997, we completed the spin-off of our commercial real estate business to LNR Property Corporation. In 2000, we acquired U.S. Home Corporation, which expanded our operations into New Jersey, Maryland, Virginia, Minnesota and Colorado and strengthened our position in other states. From 2002 through 2005, we acquired several regional homebuilders, which brought us into new markets and strengthened our position in several existing markets. During 2010, we made several investments through our Rialto segment in distressed real estate assets to take advantage of opportunities arising from dislocation in the United States real estate market.

Recent Business Developments

Overview

During 2010, we continued to see a housing market that was trying to stabilize. As expected, this stabilization process was impacted by the expiration of the Federal homebuyer tax credit at the end of April, which resulted in a decline in the housing market sales pace. High unemployment, foreclosures, tight lending standards and low consumer confidence have continued to present challenges for the housing market.

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Despite challenges in the housing market, we returned to profitability in 2010, ending the year with net earnings of $95.3 million, or $0.51 per diluted share, compared to a net loss of $417.1 million, or $2.45 per diluted share, for the year ended November 30, 2009. We also ended 2010 with $1.2 billion in Lennar Homebuilding cash and cash equivalents. We extended our debt maturities by issuing $250 million of 6.95% senior notes maturing in 2018, $276.5 million of 2.00% convertible senior notes and $446 million of 2.75% convertible senior notes, both maturing in 2020. In addition, during the year we repurchased and retired $624.9 million of senior notes and other debt. We continued to reduce the number of Lennar Homebuilding unconsolidated joint ventures in which we have investments to 42 at the end of 2010 from 61 at the end of 2009 and our maximum recourse debt exposure related to those investments was reduced to $173 million at the end of 2010 from $288 million at the end of 2009.

In 2010, we continued focusing on refining our product offering, reducing the number of floor plans and targeting first time and value oriented homebuyers. Our more efficient product offerings have significantly reduced our construction costs and allowed us to meet our customers’ demands. Our intense focus on construction costs, product re-engineering and reduced selling, general and administrative expenses, combined with reduced sales incentives, contributed to improved gross and operating margins year over year.

As demand in some of our markets showed signs of stabilization and our balance sheet strengthened, we continued to contract for new potentially high-margin communities to improve our profitability. These strategic land purchases utilize conservative underwriting standards and began generating high returns as we started delivering those homes in the second half of 2010.

During 2010, our Lennar Financial Services segment had operating earnings of $31.3 million, compared to $36.0 million in the same period last year. The decrease in operating earnings was primarily due to decreased volume in the segment’s mortgage and title operations.

In December 2009, Rialto became a sub-advisor to Alliance Bernstein L.P. (“AB”) with regard to a fund formed under the Federal government’s Public-Private Investment Program (“PPIP”) to purchase real estate related securities from banks and other financial institutions. Rialto receives management fees for sub-advisory services. We committed to invest $75 million of the total equity commitments of approximately $1.2 billion made by private investors in this fund, and the U.S. Treasury has committed to a matching amount of approximately $1.2 billion of equity in the fund, as well as agreed to extend up to approximately $2.3 billion of debt financing. During the year ended November 30, 2010, we invested $63.8 million in the AB PPIP fund. As of November 30, 2010, the carrying value of our investment in the AB PPIP fund was $77.3 million.

During 2010, we also invested in several distressed real estate opportunities through our Rialto segment. In February 2010, our Rialto segment acquired indirectly 40% managing member equity interests in two limited liability companies (“LLCs”), in partnership with the Federal Deposit Insurance Corporation (“FDIC”), for approximately $243 million (net of transaction costs and a $22 million working capital reserve). The LLCs hold performing and non-performing loans formerly owned by 22 failed financial institutions. The two portfolios originally consisted of more than 5,500 distressed residential and commercial real estate loans with an aggregate unpaid principal balance of approximately $3 billion and an initial fair value of approximately $1.2 billion. The FDIC retained a 60% equity interest in the LLCs and provided $626.9 million of notes with 0% interest, which are non-recourse to us.

In September 2010, Rialto completed the acquisitions of over $700 million of distressed real estate assets, in separate transactions, from three financial institutions. The combined portfolios included approximately 400 loans with a total aggregate unpaid principal balance of over $500 million and over 300 real estate owned (“REO”) properties with an original appraised value of approximately $200 million. We paid $310 million for the distressed real estate assets of which $125 million was financed through a 5-year senior unsecured note provided by one of the selling institutions.

In November 2010, Rialto completed its first closing of a real estate investment fund (the “Fund”) with initial equity commitments of $300 million (including $75 million committed by us). The Fund’s objective during its three-year investment period is to invest in distressed real estate assets and other related investments that fit within the Fund’s investment parameters.

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Homebuilding Operations

Overview

We primarily sell single-family attached and detached homes in communities targeted to first-time, move-up and active adult homebuyers. The average sales price of a Lennar home was $243,000 in both fiscal 2010 and fiscal 2009, compared to $270,000 in fiscal 2008. We operate primarily under the Lennar brand name.

Through our own efforts and those of unconsolidated entities in which Lennar Homebuilding has investments, we are involved in all phases of planning and building in our residential communities including land acquisition, site planning, preparation and improvement of land and design, construction and marketing of homes. For additional information about our investments in and relationships with unconsolidated entities, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Report.

Inventory Impairments and Valuation Adjustments related to Lennar Homebuilding Investments in Unconsolidated Entities

We continued evaluating our balance sheet quarterly for impairment on an asset-by-asset basis during fiscal 2010. Based on our evaluations and assessments, during the years ended November 30, 2010, 2009 and 2008, we recorded the following inventory impairments:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Valuation adjustments to finished homes, CIP and land on which we intend to build homes	$	44,717		180,239		195,518
Valuation adjustments to land we intend to sell or have sold to third parties		3,436		95,314		47,791
Write-offs of option deposits and pre-acquisition costs		3,105		84,372		97,172
Total inventory impairments	$	51,258		359,925		340,481

During the years ended November 30, 2010, 2009 and 2008, we recorded the following valuation adjustments related to Lennar Homebuilding investments in unconsolidated entities:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Our share of valuation adjustments related to assets of Lennar Homebuilding unconsolidated entities	$	10,461		101,893		32,245
Valuation adjustments to Lennar Homebuilding investments in unconsolidated entities		1,735		88,972		172,790
Total valuation adjustments to Lennar Homebuilding investments in unconsolidated entities	$	12,196		190,865		205,035

The inventory impairments and valuation adjustments to Lennar Homebuilding investments in unconsolidated entities recorded above were estimated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or our assumptions change.

Lennar Homebuilding Investments in Unconsolidated Entities

For a number of years, we created and participated in joint ventures that acquired and developed land for our homebuilding operations, for sale to third parties or for use in their own homebuilding operations. Through these joint ventures, we reduced the amount we had to invest in order to assure access to potential future homesites, thereby mitigating certain risks associated with land acquisitions, and, in some instances, we obtained access to land to which we could not otherwise have obtained access or could not have obtained access on as favorable terms. Although these ventures initially served their intended purpose of risk mitigation, as the homebuilding market deteriorated and asset impairments resulted in the loss of equity, some of our joint venture partners became financially unable or unwilling to fulfill their obligations. During 2010, we continued reevaluating all of our joint venture arrangements, with particular focus on those ventures with recourse indebtedness, and reduced

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the number of joint ventures in which we were participating as well as the recourse indebtedness of those joint ventures. As of November 30, 2010, we had reduced the number of Lennar Homebuilding unconsolidated joint ventures in which we were participating to 42 from 270 joint ventures at the peak in 2006 and reduced our maximum recourse debt exposure related to Lennar Homebuilding unconsolidated joint ventures to $172.9 million from $1,764.4 million at the peak in 2006. At November 30, 2010, our net recourse exposure related to Lennar Homebuilding unconsolidated entities was $114.0 million.

Management and Operating Structure

We balance a local operating structure with centralized corporate level management. Decisions related to our overall strategy, acquisitions of land and businesses, risk management, financing, cash management and information systems are centralized at the corporate level. Our local operating structure consists of divisions, which are managed by individuals who generally have significant experience in the homebuilding industry and, in most instances, in their particular markets. They are responsible for operating decisions regarding land identification, entitlement and development, the management of inventory levels for our current volume levels, community development, home design, construction and marketing of our homes.

Diversified Program of Property Acquisition

We generally acquire land for development and for the construction of homes that we sell to homebuyers. Land is subject to specified underwriting criteria and is acquired through our diversified program of property acquisition, which may consist of the following:

• Acquiring land directly from individual land owners/developers or homebuilders;

• Acquiring local or regional homebuilders that own, or have options to purchase, land in strategic markets;

• Acquiring land through option contracts, which generally enables us to control portions of properties owned by third parties (including land funds) and unconsolidated entities until we have determined whether to exercise the option;

• Acquiring parcels of land through joint ventures, primarily to reduce and share our risk, among other factors, by limiting the amount of our capital invested in land, while increasing our access to potential future homesites and allowing us to participate in strategic ventures; and

• Acquiring distressed assets from banks, government sponsored enterprises and opportunity funds.

At November 30, 2010, we owned 84,482 homesites and had access through option contracts to an additional 19,974 homesites, of which 8,490 were through option contracts with third parties and 11,484 were through option contracts with Lennar Homebuilding unconsolidated entities in which we have investments. At November 30, 2009, we owned 82,703 homesites and had access through option contracts to an additional 21,173 homesites, of which 7,423 were through option contracts with third parties and 13,750 were through option contracts with Lennar Homebuilding unconsolidated entities in which we have investments.

Construction and Development

We generally supervise and control the development of land and the design and building of our residential communities with a relatively small labor force. We hire subcontractors for site improvements and virtually all of the work involved in the construction of homes. Arrangements with our subcontractors generally provide that our subcontractors will complete specified work in accordance with price schedules and applicable building codes and laws. The price schedules may be subject to change to meet changes in labor and material costs or for other reasons. We believe that the sources and availability of raw materials to our subcontractors are adequate for our current and planned levels of operation. We generally do not own heavy construction equipment. We finance construction and land development activities primarily with cash generated from operations, debt issuances and equity offerings.

Marketing

We offer a diversified line of homes for first-time, move-up and active adult homebuyers available in a variety of environments ranging from urban infill communities to golf course communities. We sell our homes primarily from models that we have designed and constructed. During 2010, the homes we delivered had an average sales price of $243,000.

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We employ sales associates who are paid salaries, commissions or both to complete on-site sales of homes. We also sell homes through independent brokers. We advertise our communities through newspapers, radio advertisements and other local and regional publications, on billboards and on the Internet, including our website, www.lennar.com. In addition, we advertise our active adult communities in areas where prospective active adult homebuyers live.

Quality Service

We strive to continually improve homeowner customer satisfaction throughout the pre-sale, sale, construction, closing and post-closing periods. Through the participation of sales associates, on-site construction supervisors and customer care associates, all working in a team effort, we strive to create a quality homebuying experience for our customers, which we believe leads to enhanced customer retention and referrals. The quality of our homes is substantially affected by the efforts of on-site management and others engaged in the construction process, by the materials we use in particular homes or by other similar factors.

We warrant our new homes against defective materials and workmanship for a minimum period of one year after the date of closing. Although we subcontract virtually all segments of construction to others and our contracts call for the subcontractors to repair or replace any deficient items related to their trades, we are primarily responsible to the homebuyers for the correction of any deficiencies.

Deliveries

The table below indicates the number of deliveries for each of our homebuilding segments and Homebuilding Other during our last three fiscal years:

	2010		2009		2008
East		4,195		3,817		4,957
Central		1,682		1,796		2,442
West		2,079		2,480		4,031
Houston		1,645		2,150		2,736
Other		1,354		1,235		1,569
Total		10,955		11,478		15,735

Of the total home deliveries listed above, 96, 56 and 391, respectively, represent deliveries from unconsolidated entities for the years ended November 30, 2010, 2009 and 2008.

Backlog

Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales contracts if they fail to qualify for financing or under certain other circumstances. We experienced a cancellation rate of 17% in 2010, compared to 18% and 26%, respectively, in 2009 and 2008. Substantially all homes currently in backlog will be delivered in fiscal year 2011. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.

The table below indicates the backlog dollar value for each of our homebuilding segments and Homebuilding Other as of the end of our last three fiscal years:

	2010		2009		2008
	(In thousands)
East	$	190,095		179,175		202,791
Central		52,923		36,158		23,736
West		58,072		143,868		108,779
Houston		58,822		60,876		57,785
Other		47,380		59,494		63,179
Total	$	407,292		479,571		456,270

Of the dollar value of homes in backlog listed above, $2.1 million, $7.2 million and $12.5 million, respectively, represent the backlog dollar value from unconsolidated entities at November 30, 2010, 2009 and 2008.

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Lennar Financial Services Operations

Mortgage Financing

We primarily originate conforming conventional, FHA-insured, VA-guaranteed residential mortgage loan products and other products to our homebuyers and others through our financial services subsidiaries, Universal American Mortgage Company, LLC and Eagle Home Mortgage, LLC, which are located generally in the same states as our homebuilding operations as well as other states. In 2010, our financial services subsidiaries provided loans to 85% of our homebuyers who obtained mortgage financing in areas where we offered services. Because of the availability of mortgage loans from our financial services subsidiaries, as well as independent mortgage lenders, we believe most creditworthy purchasers of our homes have access to financing.

During 2010, we originated approximately 15,200 mortgage loans totaling $3.3 billion, compared to 17,900 mortgage loans totaling $4.0 billion during 2009. Substantially all of the loans we originate are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements. Therefore, we have limited direct exposure related to the residential mortgages we originate.

We have a corporate risk management policy under which we hedge our interest rate risk on rate-locked loan commitments and loans held-for-sale to mitigate exposure to interest rate fluctuations. We finance our mortgage loan activities with borrowings under our financial services warehouse repurchase facilities or from our operating funds. One of our warehouse repurchase facilities with a maximum aggregate commitment of $150 million and an additional uncommitted amount of $50 million matures in April 2011, and the other warehouse repurchase facility with a maximum aggregate commitment of $175 million matures in July 2011. We expect the facilities to be renewed or replaced with other facilities when they mature.

Title Insurance and Closing Services

We provide title insurance and closing services to our homebuyers and others. During 2010, we provided title and closing services for approximately 102,500 real estate transactions, and issued approximately 107,600 title insurance policies through our underwriter, North American Title Insurance Company, compared to 120,500 real estate transactions and 92,500 title insurance policies issued during 2009. Title and closing services are provided by agency subsidiaries in Arizona, California, Colorado, District of Columbia, Florida, Illinois, Maryland, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Texas, Virginia and Wisconsin. Title insurance services are provided in these same states, as well as in Alabama, Delaware, Georgia, North Carolina, Ohio, South Carolina and Tennessee.

Rialto Investments Operations

The Rialto segment was formed to focus on acquisitions of distressed debt and other real estate assets utilizing Rialto’s abilities to source, underwrite, price, turnaround and ultimately monetize such assets in markets across the United States. For more detail regarding the acquisitions and investments made by our Rialto segment during 2010, refer to the Overview of Lennar Corporation section discussed earlier in Item 1 of this Report.

Seasonality

We have historically experienced variability in our results of operations from quarter-to-quarter due to the seasonal nature of the homebuilding business.

Competition

The residential homebuilding industry is highly competitive. We compete for homebuyers in each of the market regions where we operate with numerous national, regional and local homebuilders, as well as with resales of existing homes and with the rental housing market. In recent years, lenders’ efforts to sell foreclosed homes have become an increasingly competitive factor within the homebuilding industry. We compete for homebuyers on the basis of a number of interrelated factors including location, price, reputation, amenities, design, quality and financing. In addition to competition for homebuyers, we also compete with other homebuilders for desirable properties, raw materials and reliable, skilled labor. We compete for land buyers with third parties in our efforts to sell land to homebuilders and others. We believe we are competitive in the market regions where we operate primarily due to our:

• Balance sheet, where we continue to focus on inventory management and liquidity;

• Access to land, particularly in land-constrained markets;

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• Pricing to current market conditions through sales incentives offered to homebuyers;

• Cost efficiencies realized through our national purchasing programs and production of value-engineered homes; and

• Quality construction and home warranty program, which are supported by a responsive customer care team.

Our financial services operations compete with other mortgage lenders, including national, regional and local mortgage bankers and brokers, banks, savings and loan associations and other financial institutions, in the origination and sale of mortgage loans. Principal competitive factors include interest rates and other features of mortgage loan products available to the consumer. We compete with other title insurance agencies and underwriters for closing services and title insurance. Principal competitive factors include service and price.

Rialto’s business of purchasing distressed assets is highly competitive and fragmented. A number of entities and funds have been formed recently for the purpose of acquiring real estate related assets at prices that reflect the depressed state of the real estate market, and it is likely that additional entities and funds will be formed for this purpose in the next several years. We compete with other purchasers of distressed assets. We compete in the marketplace for distressed asset portfolios based on many factors, including purchase price, representations, warranties and indemnities, timeliness of purchase decisions and reputation. We believe that our major distinction from the competition is that our team is made up of already in place managers who are already working out loans and dealing with similar borrowers. Additionally, because of the high content of loans made to developers, we believe having our homebuilding team participating in the underwriting process provides us with a distinct advantage in our evaluation of these assets. We believe that our experienced team and the infrastructure already in place, including our investment in a service provider, are ahead of our competitors. This has us well positioned for the large pipeline of opportunity that has been building.

Regulation

Homes and residential communities that we build must comply with state and local laws and regulations relating to, among other things, zoning, construction permits or entitlements, construction material requirements, density requirements, and requirements relating to building design and property elevation, building codes and handling of waste. These include laws requiring the use of construction materials that reduce the need for energy-consuming heating and cooling systems. These laws and regulations are subject to frequent change and often increase construction costs. In some instances, we must comply with laws that require commitments from us to provide roads and other offsite infrastructure to be in place prior to the commencement of new construction. These laws and regulations are usually administered by counties and municipalities and may result in fees and assessments or building moratoriums. In addition, certain new development projects are subject to assessments for schools, parks, streets and highways and other public improvements, the costs of which can be substantial.

The residential homebuilding industry is also subject to a variety of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment. These environmental laws include such areas as storm water and surface water management, soil, groundwater and wetlands protection, subsurface conditions and air quality protection and enhancement. Environmental laws and existing conditions may result in delays, may cause us to incur substantial compliance and other costs and may prohibit or severely restrict homebuilding activity in environmentally sensitive regions or areas.

In recent years, several cities and counties in which we have developments have submitted to voters “slow growth” initiatives and other ballot measures that could impact the affordability and availability of land suitable for residential development within those localities. Although many of these initiatives have been defeated, we believe that if similar initiatives were approved, residential construction by us and others within certain cities or counties could be seriously impacted.

In order to make it possible for some of our homebuyers to obtain FHA-insured or VA-guaranteed mortgages, we must construct the homes they buy in compliance with regulations promulgated by those agencies.

Various states have statutory disclosure requirements relating to the marketing and sale of new homes. These disclosure requirements vary widely from state-to-state. In addition, some states require that each new home be registered with the state at or before the time title is transferred to a buyer (e.g., the Texas Residential Construction Commission Act).

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In some states, we are required to be registered as a licensed contractor and comply with applicable rules and regulations. In various states, our new home consultants are required to be registered as licensed real estate agents and to adhere to the laws governing the practices of real estate agents.

Our mortgage and title subsidiaries must comply with applicable real estate laws and regulations. The subsidiaries are licensed in the states in which they do business and must comply with laws and regulations in those states. These laws and regulations include provisions regarding capitalization, operating procedures, investments, lending and privacy disclosures, forms of policies and premiums.

A subsidiary of Newhall, an unconsolidated entity of which we currently indirectly own 15%, provides water to a portion of Los Angeles County, California. This subsidiary is subject to extensive regulation by the California Public Utilities Commission.

Several federal, state and local laws, rules, regulations and ordinances, including, but not limited to, the Federal Fair Debt Collection Practices Act (“FDCPA”) and the Federal Trade Commission Act and comparable state statutes, regulate consumer debt collection activity. Although, for a variety of reasons, we may not be specifically subject to the FDCPA or certain state statutes that govern debt collectors, it is our policy to comply with applicable laws in our collection activities. To the extent that some or all of these laws apply to our collection activities or failure to comply with such laws could have a material adverse effect on us.

Compliance Policy

We have a Code of Business and Ethics that requires every associate (i.e., employee) and officer to at all times deal fairly with the Company’s customers, subcontractors, suppliers, competitors and associates, and states that all our associates, officers and directors are expected to comply at all times with all applicable laws, rules and regulations. Despite this, there are instances in which subcontractors or others through which we do business engage in practices that do not comply with applicable regulations and guidelines. There have been instances in which some of our associates were aware of these practices and did not take adequate steps to prevent them. When we learn of practices relating to homes we build or financing we provide that do not comply with applicable regulations or guidelines, we move actively to stop the non-complying practices as soon as possible and we have taken disciplinary action with regard to our associates who were aware of the practices, including in some instances terminating their employment. Our Code of Business and Ethics also has procedures in place that allows whistleblowers to submit their concerns regarding our operations, financial reporting, business integrity or any other related matter anonymously to the Audit Committee of our Board of Directors and/or to the non-management directors of our Board of Directors, thus helping protect them from any possibility of retaliation.

Associates

At December 31, 2010, we employed 4,087 individuals of whom 2,208 were involved in the Lennar Homebuilding operations, 1,767 were involved in the Lennar Financial Services operations, and 112 were involved in the Rialto operations, compared to November 30, 2009, when we employed 3,873 individuals of whom 2,204 were involved in the Lennar Homebuilding operations and 1,669 were involved in Lennar Financial Services operations. We do not have collective bargaining agreements relating to any of our associates. However, we subcontract many phases of our homebuilding operations and some of the subcontractors we use have associates who are represented by labor unions.

Relationship with LNR Property Corporation

In 1997, we transferred our commercial real estate investment and management business to LNR Property Corporation (“LNR”), and spun-off LNR to our stockholders. As a result, LNR became a publicly-traded company, and the family of Stuart A. Miller, our President, Chief Executive Officer and a Director, which had voting control of our company, became the controlling shareholder of LNR.

Since the spin-off, we have entered into a number of joint ventures and other transactions with LNR. Many of the joint ventures were formed to acquire and develop land, part of which was subsequently sold to us or other homebuilders for residential building and part of which was subsequently sold to LNR for commercial development. In February 2005, LNR was acquired by a privately-owned entity. Although Mr. Miller’s family was required to purchase a 20.4% financial interest in that privately-owned entity, this interest is non-voting and

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neither Mr. Miller nor anyone else in his family is an officer or director, or otherwise is involved in the management, of LNR or its parent. Nonetheless, because the Miller family continues to have a financial, non-voting, interest in LNR’s parent, although reduced from the percentage interest initially acquired, significant transactions with LNR, or entities in which it has an interest, have historically been and continued to be reviewed and approved by the Independent Directors Committee of our Board of Directors.

LandSource/Newhall Transactions

In January 2004, a company of which we and LNR each owned 50% acquired The Newhall Land and Farming Company for approximately $1 billion, including $200 million we contributed and $200 million that LNR contributed (the remainder came from borrowings and sales of properties to LNR). Subsequently, we and LNR each transferred our interests in most of our joint ventures to the jointly-owned company that had acquired The Newhall Land and Farming Company, and that company was renamed LandSource Communities Development LLC (“LandSource”).

In February 2007, LandSource admitted MW Housing Partners as a new strategic partner. As part of the transaction, the joint venture obtained $1.6 billion of non-recourse financing, which consisted of a $200 million five-year Revolving Credit Facility, a $1.1 billion six-year Term Loan B Facility and a $244 million seven-year Second Lien Term Facility. The transaction resulted in a cash distribution to us of $707.6 million and a similar distribution to LNR. Our resulting ownership of LandSource was 16%.

In June 2008, LandSource and a number of its subsidiaries commenced proceedings under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In November 2008, our land purchase options with LandSource were terminated, thus, in 2008 we recognized a deferred profit of $101.3 million (net of $31.8 million of write-offs of option deposits and pre-acquisition costs and other write-offs) related to the 2007 recapitalization of LandSource.

In July 2009, the United States Bankruptcy Court for the District of Delaware confirmed the plan of reorganization for LandSource. As a result of the bankruptcy proceedings, LandSource was reorganized into a new company named Newhall Land Development, LLC, (“Newhall”). The reorganized company emerged from Chapter 11 free of its previous bank debt. As part of the reorganization, we invested $140 million in exchange for approximately a 15% equity interest in the reorganized Newhall, ownership in several communities that were formerly owned by LandSource, the settlement and release of any claims that might have been asserted against us and certain other claims LandSource had against third parties.

NYSE Certification

We submitted our 2009 Annual CEO Certification to the New York Stock Exchange on April 16, 2010. The certification was not qualified in any respect.

Available Information

Our corporate website is www.lennar.com. We make available on our website, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file these documents with, or furnish them to, the Securities and Exchange Commission. Information on our website is not part of this document.

Our website also includes printable versions of our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and the charters for each of our Audit, Compensation and Nominating and Corporate Governance Committees of our Board of Directors. Each of these documents is also available in print to any stockholder who requests a copy by addressing a request to:

Lennar Corporation

Attention: Office of the General Counsel

700 Northwest 107^th Avenue

Miami, Florida 33172

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Item 1A.    Risk Factors.

The following are what we believe to be the principal risks that could cause a material adverse effect upon our business, financial condition, results of operations, cash flows, strategies and prospects.

Homebuilding Market and Economic Risks

The homebuilding industry has experienced a significant downturn over the last several years. A continuing decline in demand for new homes coupled with an increase in the inventory of available new homes and alternatives to new homes could adversely affect our sales volume and pricing even more than has occurred to date.

The homebuilding industry has experienced a significant downturn over the last several years. As a result, we have experienced a significant decline in demand for newly built homes in almost all of our markets. This decline in demand, together with an oversupply of alternatives to new homes, such as rental properties and used homes (including foreclosed homes), has depressed prices and reduced margins. This combination of lower demand and higher inventories affects both the number of homes we can sell and the prices at which we can sell them. In 2008 and 2009, we experienced periods of significant decline in our sales results, significant reductions in our margins as a result of higher levels of sales incentives and price concessions, and a higher than normal cancellation rate. In 2010, our margins improved to closer to normal market levels, but demand continued to be weak and there continued to be a significant stock of used homes, including foreclosed homes. We have no basis for predicting how long demand and supply will remain out of balance in various homebuilding markets or whether sales volumes or pricing will return to pre-2007 levels.

Demand for new homes is sensitive to economic conditions over which we have no control, such as the availability of mortgage financing and the level of employment.

Demand for new homes is sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumer income, the availability of financing and interest rate levels. During 2008, 2009 and 2010, the mortgage lending industry experienced significant instability. As a result of increased default rates, particularly (but not entirely) with regard to sub-prime and other non-conforming loans, many lenders have reduced their willingness to make, and tightened their credit requirements with regard to, residential mortgage loans. Fewer loan products, stricter loan qualification standards and higher down payment requirements have made it more difficult for some borrowers to finance the purchase of our homes. Although our finance company subsidiaries offer mortgage loans to potential buyers of most of the homes we build, we may no longer be able to offer financing terms that are attractive to our potential buyers. Lack of availability of mortgage financing at acceptable rates reduces demand for the homes we build, including in some instances causing potential buyers to cancel contracts they have signed.

There has also been a substantial loss of jobs in the United States during the last several years. People who are not employed or are concerned about loss of their jobs are unlikely to purchase new homes and may be forced to try to sell the homes they own. Therefore, the current employment situation can adversely affect us both by reducing demand for the homes we build and by increasing the supply of homes for sale.

Mortgage defaults by homebuyers who financed homes using non-traditional financing products are increasing the number of homes available for resale.

During the period of high demand in the homebuilding industry, many homebuyers financed their purchases using non-traditional adjustable rate or interest only mortgages or other mortgages, including sub-prime mortgages that involved, at least during initial years, monthly payments that were significantly lower than those required by conventional fixed rate mortgages. As a result, new homes became more affordable. However, as monthly payments for these homes have increased either as a result of increasing adjustable interest rates or as a result of principal payments coming due, some of these homebuyers have defaulted on their payments and had their homes foreclosed, which has increased the inventory of homes available for resale. This is likely to continue. Foreclosure sales and other distress sales may result in further declines in market prices for homes. In an environment of declining home prices, many homebuyers may delay purchases of homes in anticipation of lower prices in the future. In addition, as lenders perceive deterioration in credit quality among homebuyers, lenders have been eliminating some of the available non-traditional and sub-prime financing products and increasing the qualifications needed for mortgages or adjusting their terms to address increased credit risk. In general, to the extent mortgage rates increase or lenders make it more difficult for prospective buyers to finance home purchases, it becomes more difficult or costly for customers to purchase our homes, which has an adverse effect on our sales volume.

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It has become more difficult for potential homebuyers to obtain mortgage financing, which is reducing demand for homes we offer.

Many lenders and other holders of mortgage loans have been adversely affected in recent years by a combination of reduced ability of homeowners to meet mortgage obligations and reduced value of the homes that secure mortgage loans. As a result, many lenders and secondary market mortgage purchasers have eliminated most of their non-traditional and sub-prime financing products and increased the qualifications needed to obtain mortgage loans. In addition, if a home appraises for less than the sales price, a greater down-payment may need to be provided by the potential homebuyer in order to meet the lender requirement or the sales price may need to be reduced. Although mortgage interest rates were very low during 2010, the factors that have made mortgage loans more difficult to obtain could lead to higher interest rates on mortgage loans that are made. To the extent lenders make it more difficult or more expensive for prospective buyers to finance home purchases, it becomes more difficult or costly for customers to purchase our homes, which has an adverse effect on our sales volume.

We have had to take significant write-downs of the carrying values of the land we own and of our investments in unconsolidated entities, and a continuing decline in land values could result in additional write-downs.

Some of the land we currently own was purchased at high prices and had to be written down to reduced values that reflect current market conditions. Also, prior to 2007, we obtained options to purchase land at prices that no longer are attractive, and in connection with those options, we made substantial non-refundable deposits and, in some instances, incurred pre-acquisition costs. When demand fell, we were required to take significant write-downs of the carrying value of our land inventory and we elected not to exercise many high price options, even though that required us to forfeit deposits and write-off pre-acquisition costs.

Additionally, as a result of these market conditions, we recorded significant valuation adjustments to our investments in unconsolidated entities and recorded our share of adjustments made by unconsolidated entities to the carrying values of their assets.

The combination of land inventory impairments, write-offs of option deposits and pre-acquisition costs and valuation adjustments relating to our investments in unconsolidated entities had a material negative effect on our operating results for fiscal 2007, 2008 and 2009, contributing to most of our net loss in fiscal 2008 and 2009. Write downs were a lot less during 2010, however, if market conditions deteriorate further or our strategy related to certain assets change, some of our assets may be subject to further write-downs in the future, decreasing the asset values reflected on our balance sheet and adversely affecting our stockholders’ equity.

Inflation can adversely affect us, particularly in a period of declining home sale prices.

Inflation can have a long-term impact on us because increasing costs of land, materials and labor require us to attempt to increase the sale prices of homes in order to maintain satisfactory margins. Although the rate of inflation has been low for the last several years, some economists predict that government spending programs and other factors could lead to significant inflation in the future. An excess of supply over demand for new homes, such as the one we are currently experiencing, requires that we reduce prices, rather than increase them, but it does not necessarily result in reductions, or prevent increases, in the costs of materials and labor. The effect of cost increases that we cannot recover by increasing prices would be to reduce the margins on the homes we sell. That would make it more difficult for us to recover the full cost of previously purchased land, and could lead to significant reductions in the value of our land inventory.

We face significant competition in our efforts to sell new homes.

The homebuilding industry is highly competitive. We compete in each of our markets with numerous national, regional and local homebuilders. This competition with other homebuilders could reduce the number of homes we deliver or cause us to accept reduced margins in order to maintain sales volume.

We also compete with the resale of existing homes, including foreclosed homes, sales by housing speculators and available rental housing. As demand for homes has slowed, competition, including competition with homes purchased for speculation rather than as places to live and competition with foreclosed homes, has created increased downward pressure on the prices at which we are able to sell homes, as well as upon the number of homes we can sell.

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Operational Risks

Homebuilding is subject to warranty and liability claims in the ordinary course of business that can be significant.

As a homebuilder, we are subject to home warranty and construction defect claims arising in the ordinary course of business. We are also subject to liability claims for injuries that occur in the course of construction activities. We record warranty and other reserves for the homes we sell based on historical experience in our markets and our judgment of the qualitative risks associated with the types of homes we built. We have, and many of our subcontractors have, general liability, property, errors and omissions, workers compensation and other business insurance. These insurance policies protect us against a portion of our risk of loss from claims, subject to certain self-insured retentions, deductibles and other coverage limits. However, because of the uncertainties inherent in these matters, we cannot provide assurance that our insurance coverage or our subcontractors’ insurance and financial resources will be adequate to address all warranty, construction defect and liability claims in the future. Additionally, the coverage offered and the availability of general liability insurance for construction defects are currently limited and costly. As a result, an increasing number of our subcontractors are unable to obtain insurance, and we have in many cases waived our customary insurance requirements. There can be no assurance that coverage will not be further restricted and become even more costly.

Performance of subcontractors and quality and suitability of building materials.

We rely on subcontractors to perform the actual construction of our homes, and in many cases, to select and obtain raw materials. Despite our detailed specifications and quality control procedures, in some cases, improper construction processes or defective materials, such as Chinese drywall, were used in the construction of our homes. When we find these issues, we repair them in accordance with our warranty obligations. Defective products widely used by the homebuilding industry can result in the need to perform extensive repairs to large numbers of homes. The cost to the Company of complying with our warranty obligations in these cases may be significant if we are unable to recover the cost of repair from subcontractors, materials suppliers and insurers.

Natural disasters and severe weather conditions could delay deliveries, increase costs and decrease demand for new homes in affected areas.

Many of our homebuilding operations are conducted in areas that are subject to natural disasters and severe weather. The occurrence of natural disasters or severe weather conditions can delay new home deliveries, increase costs by damaging inventories and negatively impact the demand for new homes in affected areas. Furthermore, if our insurance does not fully cover business interruptions or losses resulting from these events, our results of operations, liquidity or capital resources could be adversely affected.

Supply shortages and other risks related to the demand for skilled labor and building materials could increase costs and delay deliveries.

Increased costs or shortages of skilled labor and/or lumber, framing, concrete, steel and other building materials could cause increases in construction costs and construction delays. We generally are unable to pass on increases in construction costs to customers who have already entered into sales contracts, as those sales contracts generally fix the price of the homes at the time the contracts are signed, which may be well in advance of the construction of the home. Sustained increases in construction costs may, over time, erode our margins, particularly if pricing competition restricts our ability to pass on any additional costs of materials or labor, thereby decreasing our margins.

Reduced numbers of home sales extend the time it takes us to recover land purchase and property development costs.

We incur many costs even before we begin to build homes in a community. These include costs of preparing land and installing roads, sewers and other utilities, as well as taxes and other costs related to ownership of the land on which we plan to build homes. Reducing the rate at which we build homes extends the length of time it takes us to recover these costs. Also, when we have terminated land purchase options, we have forfeited deposits we made with regard to the options, and in many instances, lost the benefit of pre-acquisition costs we incurred with regard to properties that were the subject of the options. We may never recover those costs.

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We do not have a corporate credit line.

Our business requires that we be able to finance the development of our residential communities. In the past we have had a corporate credit facility (with Lennar Corporation as the borrower and most of our subsidiaries, other than finance company subsidiaries, as guarantors) that we used to help finance development activities. However, because of the decline in our land purchasing, development and building activities, and our ability to obtain debt and equity financing through the capital markets, we have had little need for the credit facility in recent years. Therefore, in February 2010, we terminated the Credit Facility in order to eliminate the cost of maintaining it. While we believe that under current circumstances, the funds we generate through our operations, together with our ability to sell debt and equity securities into capital markets, give us access to all the funds we need, if market conditions lead us to want to increase our homebuilding activities to a level that requires us to incur short-term borrowings, but we are not able to arrange a new credit facility, the absence of a credit facility may prevent us from taking full advantage of market opportunities.

We do not have an investment grade credit rating, which makes it more difficult and costly for us to access capital on favorable terms.

Our ability to access capital on favorable terms has been an important factor in growing our business and operations in a profitable manner. In 2007 and 2008, each of the principal credit rating agencies lowered our credit ratings, and as a result we no longer have investment grade ratings. This makes it more costly, and under some circumstances could make it more difficult, for us to access the debt capital markets for funds we may require in order to implement our business plans and achieve our growth objectives.

Despite not having an investment grade rating, during 2010, we were able to sell debt securities in capital market transactions at significantly lower interest rates than prior year. We sold $250 million principal amount of 6.95% senior notes due 2018, $276.5 million of 2.00% convertible senior notes and $446 million of 2.75% convertible senior notes, both due in 2020. The interest rates with regard to that debt are higher than they probably would have been if we had had an investment grade rating. However, unless and until our credit rating improves, our cost of borrowing in capital market transactions will almost always be higher than it would be if we had an investment grade rating. If we were subject to further downgrades, that would exacerbate such difficulties.

The repurchase warehouse credit facilities of our Financial Services segment will expire in 2011.

Our Lennar Financial Services segment has a warehouse repurchase facility with a maximum aggregate commitment of $150 million and an additional uncommitted amount of $50 million that matures in April 2011, and another warehouse repurchase facility with a maximum aggregate commitment of $175 million that matures in July 2011. The Financial Services segment uses these facilities to finance its mortgage lending activities until the mortgage loans are sold to investors and expects both facilities to be renewed or replaced with other facilities when they mature. If we are unable to renew or replace these facilities when they mature, that could seriously impede the activities of our Financial Services segment, unless we are willing and able to provide the funds our Financial Services segment needs to finance its mortgage originations until the mortgages can be sold.

We conduct some of our operations through unconsolidated joint ventures with independent third parties in which we do not have a controlling interest and we can be adversely impacted by joint venture partners’ failure to fulfill their obligations.

For a number of years, we created and participated in joint ventures that acquired and developed land for our homebuilding operations, for sale to third parties or for use in their own homebuilding operations. Through these joint ventures, we reduced the amount we had to invest in order to assure access to potential future homesites, and, in some instances, we obtained access to land to which we could not otherwise have obtained access or could not have obtained access on as favorable terms. However, as the homebuilding market deteriorated beginning in 2006, many of our joint venture partners became financially unable or unwilling to fulfill their obligations.

Most joint ventures borrowed money to help finance their activities, and although recourse on the loans was generally limited to the joint ventures and their properties, frequently we and our joint venture partners were required to provide maintenance guarantees (guarantees that the values of the joint ventures’ assets would be at least specified percentages of their borrowings) or limited repayment guarantees.

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If a joint venture partner does not perform its obligations, we may be required to make significant financial expenditures or otherwise undertake the performance of obligations not satisfied by our partner at significant cost to us. Also, when we have guaranteed joint venture obligations, we have been given the right to be reimbursed by our joint venture partners for any amounts by which we pay more than our pro rata share of the joint ventures’ obligations. However, particularly if our joint venture partners are having financial problems, we may have difficulty collecting the sums they owe us, and therefore, we may be required to pay a disproportionately large portion of the guaranteed amounts. In addition, because we lack a controlling interest in these joint ventures, we are usually unable to require that they sell assets, return invested capital or take any other action without the consent of at least one of our joint venture partners. As a result, without joint venture partner consent, we may be unable to liquidate our joint venture investments to generate cash. Even if we are able to liquidate joint venture investments, the amounts received upon liquidation may be insufficient to cover the costs we have incurred in satisfying joint venture obligations.

During 2007 through 2010, we have significantly reduced the number of joint ventures in which we participate and our exposure to recourse indebtedness of such joint ventures. However, the risks to us from joint ventures in which we are a participant are likely to continue at least as long as the value of residential properties continues to decline.

The unconsolidated entities in which we have investments may not be able to modify the terms of their debt arrangements.

Some of the unconsolidated entities’ debt arrangements contain financial covenants they may not be able to meet. Additionally, certain joint venture loan agreements have minimum number of homesite takedown requirements in which the joint ventures are required to sell a minimum number of homesites over a stated period of time. Due to the deterioration of the homebuilding market, many of the joint ventures are in the process of repaying, refinancing, renegotiating or extending their loans. This action may be required, for example, in the case of an expired maturity date or a failure to comply with the loan’s covenants. There can be no assurance that the joint ventures will be able to finance, refinance, renegotiate or extend, on terms we and our joint venture partners deem acceptable, all of the joint venture loans that are currently being renegotiated. If joint ventures are unsuccessful in these efforts, we could be required to provide at least a portion of the funds the joint ventures need to be able to repay the loans.

We could be adversely impacted by the loss of key management personnel.

Our future success depends, to a significant degree, on the efforts of our senior management. Our operations could be adversely affected if key members of senior management cease to be active in our company. As a result of a decline in our stock price, previous retention mechanisms, such as equity awards, have diminished in value.

Our Financial Services segment is adversely affected by reduced demand for our homes.

A majority of the mortgage loans made by our Financial Services segment are made to buyers of homes we build. Therefore, a decrease in the demand for our homes adversely affects the financial results of this segment of our business.

If our ability to resell mortgages is impaired, we may be required to reduce home sales unless we are willing to become a long term investor in loans we originate.

Substantially all of the loans we originate are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements. The secondary mortgage market has been severely impacted by the decline in property values over the past several years. To date, our financial company subsidiaries have been able to sell substantially all the mortgages they have originated. If, however we became unable to sell loans into the secondary mortgage market or directly to Fannie Mae and Freddie Mac, we would either have to curtail our origination of mortgage loans, which among other things, could significantly reduce our ability to sell homes, or to commit our own funds to long term investments in mortgage loans, which could, among other things, delay the time when we recognize revenues from home sales on our statements of operations.

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Our Financial Services segment receives demands that it repurchase mortgage loans it sold in the secondary mortgage market and we may be required to repurchase loans in excess of amounts reserved.

Particularly during 2008, 2009 and 2010, our Financial Services segment received demands that it repurchase certain loans that it sold to entities in the secondary mortgage market. The demands have related primarily to loans originated during 2005 through 2007 and are frequently based on assertions that information borrowers gave our Financial Services segment was not accurate. In many instances, we have successfully disputed the claims. However, in some instances we have settled claims to maintain our business relationships with the claimants or to avoid litigation costs. In other instances, there are active disputes regarding certain loans. While we believe we have significant defenses against virtually all of the currently unresolved repurchase demands, we have established a reserve based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received, our actual past repurchases and losses through the disposition of affected loans. At November 30, 2010, this reserve was $9.9 million. If there is an unexpected increase in the amount of repurchase demands we receive, or if we are not able to resolve repurchase demands on a basis consistent with our experience to date, the cost to us with regard to the repurchase demands could exceed the reserve we have established.

Our Rialto segment invests in distressed loans and real estate related assets at significant discounts; however, if the real estate markets deteriorate significantly we could suffer losses.

Almost all the investments to date by our Rialto segment have involved acquisitions of portfolios of, or interests in portfolios of, distressed loans and other real estate related assets. That is consistent with the Rialto segment’s objective of focusing on commercial and residential real estate opportunities arising from dislocations in the United States real estate markets and the restructuring and recapitalization of those markets. However, the Rialto segment’s investing in distressed loans and other real estate related assets presents many risks in addition to those inherent in normal lending activities, including the risk that the anticipated restructuring and recapitalization of the United States real estate markets will not take place for many years, the risk that defaults on debt instruments in which the Rialto segment invests will be greater than anticipated and the risk that if the Rialto segment has to liquidate its investments into the market, it could suffer losses in doing so. There is also the possibility that, even if the Rialto segment’s investments perform as expected, absence of a liquid market for these investments will result in a need to reduce the value at which they are carried on our financial statements.

There is substantial competition for the types of investments on which our Rialto segment is focused, and this may limit the ability of the Rialto segment to make investments on terms that are attractive to it.

Our Rialto segment currently is focused on investments in distressed mortgage debt, foreclosed properties and other real estate related assets that have been adversely affected by the dislocations during the last several years in the markets for real estate, mortgage loans and real estate related securities. Many of the opportunities to acquire these types of assets arise under programs involving co-investments with and financing provided by agencies of the Federal government. There are many firms and investment funds that are trying to acquire the types of assets on which our Rialto segment is focused, and it is likely that a significant number of additional investment funds will be formed in the next year or more with the objective of acquiring those types of assets. At least some of the firms with which the Rialto segment competes, or will compete, for investment opportunities have, or will have, a cost of capital that is lower than that of the Rialto segment, and therefore may be able to pay more for investment opportunities than would be prudent for our Rialto segment.

Our Rialto segment could be adversely affected by court and governmental responses to improper residential mortgage foreclosure procedures.

During recent years it appears that residential mortgage lenders and residential mortgage loan servicers have in a number of instances failed to comply with the requirements for obtaining and foreclosing residential mortgage loans. Although our Rialto segment owns or manages entities that own large numbers of mortgage loans, those loans all were acquired by our Rialto segment and the entities it manages within the past year, and our Rialto segment has procedures designed to ensure that any mortgage foreclosures which it undertakes will comply with all applicable requirements. However, even if neither our Rialto segment nor any servicing organization it uses does anything improper in foreclosing mortgages held by the Rialto segment or entities it manages, reaction by courts and regulatory agencies against apparently widespread instances of improper mortgage foreclosure procedures could make it more difficult and more expensive for our Rialto segment to foreclose mortgages that secure loans that it or entities it manages own.

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The ability of our Rialto segment to profit from the investments it makes may depend to a significant extent on its ability to manage resolutions related to the distressed loans and other real estate related assets.

A principal factor in a prospective purchaser’s decision regarding the price it will pay for a portfolio of mortgage loans or other real estate related assets is the cash flow the prospective purchaser expects the portfolio to generate. The cash flow a portfolio of distressed mortgage loans and related assets will generate can be affected by the way the assets in the portfolio are managed. We believe the backgrounds and experience of the personnel in our Rialto segment will enable the Rialto segment to generate better cash flows from the distressed assets it manages than what is generally expected with regard to similar assets. If it is not able to do that, the Rialto segment probably will not generate the returns it is seeking.

The supply of real estate related assets available at discounts from normal prices will likely decrease if and when the real estate markets improve, which could require our Rialto segment to change its investment objectives.

The current objectives of our Rialto segment is to focus on investments in commercial and residential real estate related assets that are available at below market prices because of the dislocations in the United States real estate markets over the past several years. A recovery of the real estate markets would probably benefit the investments the Rialto segment has made, but it probably would substantially reduce or end the availability of the types of investments the Rialto segment has made and currently is seeking. That would require the Rialto segment to rethink, and probably to change, its investment strategy.

Restrictions in agreements related to a fund that the Rialto segment manages could prevent the Rialto segment from making investments.

The Rialto segment manages the Rialto Real Estate Fund (the “Fund”), a fund that was formed to make investments in, among other things, distressed loans and real estate related assets. In order to protect investors in the Fund against the possibility that we would keep attractive investment opportunities for ourselves instead of presenting them to the Fund, we agreed that we would not make investments that are suitable for the Fund except to the extent an Advisory Committee consisting of representatives of Fund investors decides that the Fund should not make particular investments. There is an exception that permits us to purchase properties for use in connection with our homebuilding operations and to co-invest with the Fund (of which we will own between 10% and 25% depending on the total amount of the investments in the Fund).

Regulatory Risks

Federal laws and regulations that adversely affect liquidity in the secondary mortgage market could hurt our business.

There have been significant concerns about the continuing viability of Fannie Mae and Freddie Mac and a number of proposals to curtail their activities. These organizations provide significant liquidity to the secondary mortgage market. Any curtailment of their activities could increase mortgage interest rates and increase the effective cost of our homes, which could reduce demand for our homes and adversely affect our results of operations.

Our homebuyers’ ability to qualify for and obtain affordable mortgages could be impacted by changes in government sponsored entities and private mortgage insurance companies supporting the mortgage market.

Changes made by Fannie Mae, Freddie Mac, FHA/VA sponsored mortgage programs, as well as changes made by private mortgage insurance companies, have reduced the ability of many potential homebuyers to qualify for mortgages. Principal among these have been tighter lending standards such as higher income requirements, larger required down payments, increased reserves and higher required credit scores. Higher income requirements could reduce the amount that homebuyers can qualify for when buying new homes. Larger down payment requirements and increased asset reserve thresholds appear to be preventing or delaying some homebuyers from entering the market. Increased credit score requirements eliminate a segment of potential homebuyers.

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Government entities in regions where we operate have adopted or may adopt, slow or no growth initiatives, which could adversely affect our ability to build or timely build in these areas.

Some state and local governments in areas where we operate have approved, and others where we operate may approve, various slow growth or no growth homebuilding initiatives and other ballot measures that could negatively impact the availability of land and building opportunities within those jurisdictions. Approval of slow growth, no growth or similar initiatives (including the effect of these initiatives on existing entitlements and zoning) could adversely affect our ability to build or timely build and sell homes in the affected markets and/or create additional administrative and regulatory requirements and costs, which, in turn, could have an adverse effect on our future revenues and earnings.

Compliance with federal, state and local regulations related to our business could create substantial costs both in time and money, and some regulations could prohibit or restrict some homebuilding ventures.

We are subject to extensive and complex laws and regulations that affect the land development and homebuilding process, including laws and regulations related to zoning, permitted land uses, levels of density, building design, elevation of properties, water and waste disposal and use of open spaces. In addition, we are subject to laws and regulations related to workers’ health and safety. We also are subject to a variety of local, state and federal laws and regulations concerning the protection of health and the environment. In some of the markets where we operate, we are required by law to pay environmental impact fees, use energy-saving construction materials and give commitments to municipalities to provide certain infrastructure such as roads and sewage systems. We generally are required to obtain permits, entitlements and approvals from local authorities to commence and carry out residential development or home construction. Such permits, entitlements and approvals may, from time-to-time, be opposed or challenged by local governments, neighboring property owners or other interested parties, adding delays, costs and risks of non-approval to the process. Our obligation to comply with the laws and regulations under which we operate, and our need to ensure that our associates, subcontractors and other agents comply with these laws and regulations, could result in delays in construction and land development, cause us to incur substantial costs and prohibit or restrict land development and homebuilding activity in certain areas in which we operate. Budget reductions by state and local governmental agencies may increase our builder fees and the time it takes to obtain required approvals and therefore may aggregate the delays we could encounter.

We can be injured by failures of persons who act on our behalf to comply with applicable regulations and guidelines.

Although we expect all of our associates (i.e., employees), officers and directors to comply at all times with all applicable laws, rules and regulations, there may be instances in which subcontractors or others through whom we do business engage in practices that do not comply with applicable regulations or guidelines. When we learn of practices relating to homes we build or financing we provide that do not comply with applicable regulations or guidelines, we move actively to stop the non-complying practices as soon as possible and we have taken disciplinary action with regard to our associates who were aware of the practices, including in some instances terminating their employment. However, regardless of the steps we take after we learn of practices that do not comply with applicable regulations or guidelines, we can in some instances be subject to fines or other governmental penalties, and our reputation can be injured, due to the practices’ having taken place.

Tax law changes could make home ownership more expensive or less attractive.

Significant expenses of owning a home, including mortgage interest expense and real estate taxes, generally are deductible expenses for the purpose of calculating an individual’s federal, and in some cases state, taxable income. If the government were to make changes to income tax laws that eliminate or substantially reduce these income tax deductions, the after-tax cost of owning a home would increase substantially. This could adversely impact demand for, and/or sales prices of, new homes.

Other Risks

We have a stockholder who can exercise significant influence over matters that are brought to a vote of our stockholders.

Stuart A. Miller, our President, Chief Executive Officer and a Director, has voting control, through personal holdings and family-owned entities, of Class A and Class B common stock that enables Mr. Miller to cast approximately 46% of the votes that may be cast by the holders of our outstanding Class A and Class B common

17

stock combined. That effectively gives Mr. Miller the power to control the election of our directors and the approval of matters that are presented to our stockholders. Mr. Miller’s voting power might discourage someone from acquiring us or from making a significant equity investment in us, even if we needed the investment to meet our obligations and to operate our business. Also, because of his voting power, Mr. Miller may be able to authorize actions that are contrary to our other stockholders’ desires.

We may not be able to benefit from net operating loss (“NOL”) carryforwards.

We suffered significant losses in 2007, 2008 and 2009 for tax (as well as for financial statement) purposes. We were able to carry back 100% of our 2007 tax loss and most of our 2008 tax loss to recover taxes we had paid with regard to prior years. However, we would not have been able to carry back our 2009 fiscal year tax loss without legislation enacted in November 2009 that expanded the NOL carryback to 5 years, but only allowed 50% of taxable income earned in 2004 to be offset with 2009 loss. We will not receive any tax benefits with regard to tax losses we could not carry back, except to the extent we have taxable income in the 20 year NOL carryforward period. In our financial statements, we have fully reserved against all our deferred tax assets due to the possibility that we may not have taxable income that will enable us to benefit from them. However, those reserves will be reversed when it becomes more likely than not that we will have sufficient future taxable income to take advantage of the deferred tax assets.

Trading in our shares could substantially reduce our ability to use tax loss carryforwards.

Under the Internal Revenue Code, if there is a greater than 50% change of ownership of our stock during any three-year period caused by more than 5% shareholders, the ability to utilize NOL carryforwards is limited to the market value of the Company times the long-term federal tax exempt rate. This change of ownership limitation can occur as a result of purchases and sales in the market by persons who become owners of more than 5% of our stock, even without becoming a new majority owner. During the past three years, there have not been any significant changes in our holdings by 5% shareholders. However, it is possible that as a result of future stock trading, within a three-year period buyers could acquire in the market 5% or greater ownership interests in our stock totaling more than 50%. If that occurred, our ability to apply our tax loss carryforwards could become limited.

Item 1B.    Unresolved Staff Comments.

Not applicable.

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Executive Officers of Lennar Corporation

The following individuals are our executive officers as of January 28, 2011:

Name	Position	Age
Stuart A. Miller	President and Chief Executive Officer		53
Richard Beckwitt	Executive Vice President		51
Jonathan M. Jaffe	Vice President and Chief Operating Officer		51
Bruce E. Gross	Vice President and Chief Financial Officer		52
Diane J. Bessette	Vice President and Treasurer		50
Mark Sustana	Secretary and General Counsel		49
David M. Collins	Controller		41

Mr. Miller is one of our Directors and has served as our President and Chief Executive Officer since 1997. Effective if and when our stockholders approve an amendment to our bylaws relating to the titles and functions of officers, Mr. Miller will cease to be our President, but will continue to serve as our Chief Executive Officer. Before 1997, Mr. Miller held various executive positions with us.

Mr. Beckwitt has served as our Executive Vice President since March 2006 and beginning January 12, 2011 was elected our President, subject to stockholders approval of an amendment to our bylaws. As our Executive Vice President, Mr. Beckwitt was involved in all operational aspects of our company. Mr. Beckwitt served on the Board of Directors of D.R. Horton, Inc. from 1993 to November 2003. From 1993 to March 2000, he held various executive officer positions at D.R. Horton, including President of the company. From March 2000 to April 2003, Mr. Beckwitt was the owner and principal of EVP Capital, L.P., (a venture capital and real estate advisory company). Mr. Beckwitt retired in May 2003 to design and personally construct a second home in Maine.

Mr. Jaffe has served as Vice President since 1994 and has served as our Chief Operating Officer since December 2004. Before that time, Mr. Jaffe served as a Regional President in our Homebuilding operations. Additionally, prior to his appointment as Chief Operating Officer, Mr. Jaffe was one of our Directors from 1997 through June 2004.

Mr. Gross has served as Vice President and our Chief Financial Officer since 1997. Before that, Mr. Gross was Senior Vice President, Controller and Treasurer of Pacific Greystone Corporation.

Ms. Bessette joined us in 1995 and served as our Controller from 1997 to 2008. Since February 2008, she has served as our Treasurer. She was appointed a Vice President in 2000.

Mr. Sustana has served as our Secretary and General Counsel since 2005.

Mr. Collins joined us in 1998 and has served as our Controller since February 2008. Before becoming Controller, Mr. Collins served as our Executive Director of Financial Reporting.

Item 2.    Properties.

We lease and maintain our executive offices in an office complex in Miami, Florida. Our homebuilding, financial services and Rialto Investments offices are located in the markets where we conduct business, primarily in leased space. We believe that our existing facilities are adequate for our current and planned levels of operation.

Because of the nature of our homebuilding operations, significant amounts of property are held as inventory in the ordinary course of our homebuilding business. We discuss these properties in the discussion of our homebuilding operations in Item 1 of this Report.

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Item 3.    Legal Proceedings.

We are party to various claims and lawsuits which arise in the ordinary course of business, but we do not consider the volume of our claims and lawsuits unusual given the number of homes we deliver and the fact that the lawsuits often relate to homes delivered several years before the lawsuits are commenced. Although the specific allegations in the lawsuits differ, they most commonly involve claims that we failed to construct homes in particular communities in accordance with plans and specifications or applicable construction codes and seek reimbursement for sums allegedly needed to remedy the alleged deficiencies, assert contract issues or relate to personal injuries. Lawsuits of these types are common within the homebuilding industry. We are a plaintiff in many cases in which we seek contribution from our subcontractors for home repair costs. The costs incurred by us in construction defect lawsuits are offset by warranty reserves, our third party insurers, subcontractor insurers and indemnity contributions from subcontractors. We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business, financial position, results of operations or cash flows. From time-to-time, we also receive notices from environmental agencies regarding alleged violations of environmental laws. We typically settle these matters before they reach litigation for amounts that are not material to us.

In April 2008, we were named as a nominal defendant in a derivative suit in the United States District Court for the Southern District of Florida, Miami Division, entitled Doris Staehr, Derivatively on Behalf of Lennar Corporation v. Stuart A. Miller, et al., Case No. 08-20990-CIV, in which the plaintiff purports to assert claims for our benefit against some of our current and former officers and directors, primarily relating to allegedly inadequate or incorrect disclosures about the likelihood of a decline in the housing market and the effects it would have on us. Because the suit was allegedly brought for our benefit, it did not seek any damages from us. In August 2008, we moved to dismiss the suit on the ground that the plaintiff failed to make a demand on our directors that under most circumstances is a prerequisite to a derivative suit. The director defendants moved to dismiss for that and other reasons. On March 31, 2010, the Court issued an order dismissing the plaintiff’s claims.

Item 4.    Submission of Matters to a Vote of Security Holders.

Not applicable.

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PART II

Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our Class A and Class B common stock are listed on the New York Stock Exchange under the symbols “LEN” and “LEN.B,” respectively. The following table shows the high and low sales prices for our Class A and Class B common stock for the periods indicated, as reported by the NYSE, and cash dividends declared per share:

	Class A Common Stock High/Low Prices		Cash Dividends Per Class A Share
Fiscal Quarter	2010	2009	2010			2009
First	$17.88 – 11.56	$11.56 –   5.54		4	¢		4	¢
Second	$21.79 – 15.86	$11.25 –   5.72		4	¢		4	¢
Third	$17.16 – 11.93	$15.92 –   7.28		4	¢		4	¢
Fourth	$16.61 – 13.42	$17.66 – 12.05		4	¢		4	¢
	Class B Common Stock High/Low Prices		Cash Dividends Per Class B Share
Fiscal Quarter	2010	2009	2010			2009
First	$14.25 –   8.63	$  8.99 –   4.09		4	¢		4	¢
Second	$18.07 – 12.71	$  8.93 –   4.36		4	¢		4	¢
Third	$14.18 –   9.25	$12.49 –   5.58		4	¢		4	¢
Fourth	$13.61 – 10.74	$13.87 –   9.18		4	¢		4	¢

As of December 31, 2010, the last reported sale price of our Class A common stock was $18.75 and the last reported sale price of our Class B common stock was $15.57. As of December 31, 2010, there were approximately 970 and 700 holders of record, respectively, of our Class A and Class B common stock.

On January 12, 2011, our Board of Directors declared a quarterly cash dividend of $0.04 per share for both our Class A and Class B common stock, which is payable on February 8, 2011 to holders of record at the close of business on January 25, 2011. Our Board of Directors evaluates each quarter the decision whether to declare a dividend and the amount of the dividend.

In June 2001, our Board of Directors authorized a stock repurchase program to permit future purchases of up to 20 million shares of our outstanding common stock. During the three months and year ended November 30, 2010, there were no shares repurchased under this program.

The information required by Item 201(d) of Regulation S-K is provided in Item 12 of this Report.

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Performance Graph

The following graph compares the five-year cumulative total return of our Class A common stock with the Dow Jones U.S. Home Construction Index and the Dow Jones U.S. Total Market Index. The graph assumes $100 invested on November 30, 2005 in our Class A common stock, the Dow Jones U.S. Home Construction Index and the Dow Jones U.S. Total Market Index, and the reinvestment of all dividends.

Comparison of Five-Year Cumulative Total Return

Fiscal Year Ended November 30

(2005=$100)

	2005		2006		2007		2008		2009		2010
Lennar Corporation	$	100		92		26		12		22		26
Dow Jones U.S. Home Construction Index	$	100		80		33		23		28		25
Dow Jones U.S. Total Market Index	$	100		114		123		76		97		109

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Item 6.    Selected Financial Data.

The following table sets forth our selected consolidated financial and operating information as of or for each of the years ended November 30, 2006 through 2010. The information presented below is based upon our historical financial statements.

	At or for the Years Ended November 30,
	2010			2009			2008			2007			2006
	(Dollars in thousands, except per share amounts)
Results of Operations:
Revenues:
Lennar Homebuilding	$	2,705,639			2,834,285			4,263,038			9,730,252			15,623,040
Lennar Financial Services	$	275,786			285,102			312,379			456,529			643,622
Rialto Investments	$	92,597			—			—			—			—
Total revenues	$	3,074,022			3,119,387			4,575,417			10,186,781			16,266,662
Operating earnings (loss):
Lennar Homebuilding (1)	$	100,060			(676,293	)		(404,883	)		(2,912,072	)		999,568
Lennar Financial Services (2)	$	31,284			35,982			(30,990	)		6,120			149,803
Rialto Investments	$	57,307			(2,528	)		—			—			—
Corporate general and administrative expenses	$	(93,926	)		(117,565	)		(129,752	)		(173,202	)		(193,307	)
Earnings (loss) before income taxes	$	94,725			(760,404	)		(565,625	)		(3,079,154	)		956,064
Net earnings (loss) attributable to Lennar (3)	$	95,261			(417,147	)		(1,109,085	)		(1,941,081	)		593,869
Diluted earnings (loss) per share	$	0.51			(2.45	)		(7.01	)		(12.31	)		3.68
Cash dividends declared per each—Class A and Class B common stock	$	0.16			0.16			0.52			0.64			0.64
Financial Position:
Total assets	$	8,787,851			7,314,791			7,424,898			9,102,747			12,408,266
Debt:
Lennar Homebuilding	$	3,128,154			2,761,352			2,544,935			2,295,436			2,613,503
Rialto Investments	$	752,302			—			—			—			—
Lennar Financial Services	$	271,678			217,557			225,783			541,437			1,149,231
Stockholders’ equity	$	2,608,949			2,443,479			2,623,007			3,822,119			5,701,372
Total equity	$	3,194,383			2,588,014			2,788,753			3,850,647			5,756,765
Shares outstanding (000s)		186,636			184,896			160,558			159,887			158,155
Stockholders’ equity per share	$	13.98			13.22			16.34			23.91			36.05
Lennar Homebuilding Data (including unconsolidated entities):
Number of homes delivered		10,955			11,478			15,735			33,283			49,568
New orders		10,928			11,510			13,391			25,753			42,212
Backlog of home sales contracts		1,604			1,631			1,599			4,009			11,608
Backlog dollar value	$	407,292			479,571			456,270			1,384,137			3,980,428

(1) Lennar Homebuilding operating earnings (loss) include $51.3 million, $359.9 million, $340.5 million, $2,445.1 million and $501.8 million, respectively, of valuation adjustments for the years ended November 30, 2010, 2009, 2008, 2007 and 2006. In addition, it includes $10.5 million, $101.9 million, $32.2 million, $364.2 million and $126.4 million, respectively, of valuation adjustments related to assets of unconsolidated entities in which we have investments for the years ended November 30, 2010, 2009, 2008, 2007 and 2006, and $1.7 million, $89.0 million, $172.8 million, $132.2 million and $14.5 million, respectively of valuation adjustments to our investments in unconsolidated entities for the years ended November 30, 2010, 2009, 2008, 2007 and 2006. During the year ended November 30, 2007, Lennar Homebuilding operating earnings (loss) also includes $190.2 million of goodwill impairments.

(2) Lennar Financial Services operating loss for the year ended November 30, 2008 includes a $27.2 million impairment of the Lennar Financial Services segment’s goodwill.

(3) Net earnings (loss) attributable to Lennar for the year ended November 30, 2010 includes a $25.7 million benefit for income taxes, primarily due to settlements with various taxing authorities. Net earnings (loss) attributable to Lennar for the year ended November 30, 2009 primarily includes a partial reversal of our deferred tax asset valuation allowance of $351.8 million, primarily due to a change in tax legislation, which allowed us to carryback our fiscal year 2009 tax loss to recover previously paid income taxes. Net earnings (loss) attributable to Lennar for the year ended November 30, 2008 includes a $730.8 million valuation allowance recorded against our deferred tax assets.

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Financial Data” and our audited consolidated financial statements and accompanying notes included elsewhere in this Report.

Special Note Regarding Forward-Looking Statements

Some of the statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Annual Report on Form 10-K, are “forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption “Risk Factors” in Item 1A of this Report. We do not undertake any obligation to update forward-looking statements, except as required by Federal securities laws.

Outlook

During our 2010 fiscal year, we continued to see a housing market that was trying to stabilize. This stabilization process was impacted by the expiration of the Federal homebuyer tax credit at the end of April 2010, which contributed to a reduction in the pace of home sales. The rate at which homes sold nationally was also adversely affected by high unemployment, lenders’ effort to sell foreclosed homes, tight lending standards and low consumer confidence. All these factors contributed to a 5% decline in our new orders during our 2010 fiscal year compared with prior year. Overall, recovery of the housing market is still sporadic, and how long it will take for the housing market to return to historical conditions is uncertain.

We have remained focused on improving our core business and we returned to profitability in 2010. Our principal focus in our homebuilding operations is on maintaining and improving our gross profit margin on the homes we sell. We have taken steps over the past several years to reduce costs and right-size our overhead structure. We have also repositioned our product offering to target first-time and value-focused homebuyers, the result of which has only recently begun to be reflected in our operating results. We continue to make carefully underwritten strategic land acquisitions in well-positioned markets that will support our homebuilding operations going forward. As a result, we are beginning to open communities with land that we purchased relatively recently at prices that reflect the recent depressed state of the market with respect to land that is suitable for residential homebuilding.

Our Rialto Investments (“Rialto”) segment added significant profits to our bottom line, generating operating earnings of $24.2 million (net of $33.2 million of net earnings attributable to noncontrolling interests) in year ended November 30, 2010. During our 2010 fiscal year, we acquired for $243 million, a 40% interest (with the FDIC holding the other 60%) in a pool of real estate loans with an aggregate unpaid principal balance of approximately $3 billion acquired by the FDIC from 22 failed banks, and acquired for approximately $310 million, portfolios of mortgage loans and REO from three financial institutions. In the fourth quarter, we also completed the first closing of our Rialto real estate investment fund (the “Fund”) with initial equity commitments of approximately $300 million (including $75 million committed by us). Through the Fund, we will continue to invest in distressed opportunities that we expect will contribute to our future earnings.

Although high unemployment, tight lending standards and low consumer confidence continue to present challenges for the housing market, we believe that 2011 will be another profitable year. We believe that our homebuilding operations are on track to achieving sustainable profitability as the housing market stabilizes and ultimately recovers and our financial services and Rialto Investments segments will continue to enhance our earnings.

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Results of Operations

Overview

Our net earnings attributable to Lennar in 2010 were $95.3 million, or $0.51 per basic and diluted share, compared to a net loss attributable to Lennar of $417.1 million, or $2.45 per basic and diluted share, in 2009. Our gross margin percentage improved in 2010, compared to 2009, primarily due to a reduction in valuation adjustments and reduced sales incentives offered to homebuyers as a percentage of revenues from home sales.

The following table sets forth financial and operational information for the years indicated related to our operations.

	Years Ended November 30,
	2010			2009			2008
	(Dollars in thousands, except average sales price)
Lennar Homebuilding revenues:
Sales of homes	$	2,631,314			2,776,850			4,150,717
Sales of land		74,325			57,435			112,321
Total Lennar Homebuilding revenues		2,705,639			2,834,285			4,263,038
Lennar Homebuilding costs and expenses:
Cost of homes sold		2,113,393			2,524,850			3,641,090
Cost of land sold		52,968			236,277			245,536
Selling, general and administrative		376,962			449,259			655,255
Total Lennar Homebuilding costs and expenses		2,543,323			3,210,386			4,541,881
Lennar Homebuilding operating margins		162,316			(376,101	)		(278,843	)
Lennar Homebuilding equity in loss from unconsolidated entities		(10,966	)		(130,917	)		(59,156	)
Lennar Homebuilding other income (expense), net		19,135			(98,425	)		(172,387	)
Other interest expense		(70,425	)		(70,850	)		(27,594	)
Gain on recapitalization of unconsolidated entity		—			—			133,097
Lennar Homebuilding operating earnings (loss)		100,060			(676,293	)		(404,883	)
Lennar Financial Services revenues		275,786			285,102			312,379
Lennar Financial Services costs and expenses (1)		244,502			249,120			343,369
Lennar Financial Services operating earnings (loss)		31,284			35,982			(30,990	)
Rialto Investments revenues		92,597			—			—
Rialto Investments costs and expenses		67,904			2,528			—
Rialto Investments equity in earnings from unconsolidated entities		15,363			—			—
Rialto Investments other income, net		17,251			—			—
Rialto Investments operating earnings (loss)		57,307			(2,528	)		—
Total operating earnings (loss)		188,651			(642,839	)		(435,873	)
Corporate general and administrative expenses		(93,926	)		(117,565	)		(129,752	)
Earnings (loss) before income taxes	$	94,725			(760,404	)		(565,625	)
Gross margin on home sales		19.7	%		9.1	%		12.3	%
SG&A expenses as a % of revenues from home sales		14.3	%		16.2	%		15.8	%
Operating margin as a % of revenues from home sales		5.4	%		(7.1	)%		(3.5	)%
Gross margin on home sales excluding valuation adjustments (2)		21.4	%		15.6	%		17.0	%
Operating margin as a % of revenues from home sales excluding valuation adjustments (2)		7.1	%		(0.6	)%		1.2	%
Average sales price	$	243,000			243,000			270,000

(1) Lennar Financial Services costs and expenses for the year ended November 30, 2008 include a $27.2 million impairment of goodwill.

(2) Gross margin on home sales excluding valuation adjustments and operating margin as a percentage of revenues from home sales excluding valuation adjustments are non-GAAP financial measures disclosed by certain of our competitors and have been presented because we find it useful in evaluating our performance and believe that it helps readers of our financial statements compare our operations with those of our competitors. See the Non-GAAP Financial Measure section.

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2010 versus 2009

Revenues from home sales decreased 5% in the year ended November 30, 2010 to $2.6 billion from $2.8 billion in 2009. Revenues were lower primarily due to a 5% decrease in the number of home deliveries, excluding unconsolidated entities. New home deliveries, excluding unconsolidated entities, decreased to 10,859 homes in the year ended November 30, 2010 from 11,422 homes last year. The average sales price of homes delivered for both the years ended November 30, 2010 and 2009 was $243,000. Sales incentives offered to homebuyers were $32,800 per home delivered in the year ended November 30, 2010, or 11.9% as a percentage of home sales revenue, compared to $44,800 per home delivered in the prior year, or 15.6% as a percentage of home sales revenue.

Gross margins on home sales were $517.9 million, or 19.7%, in the year ended November 30, 2010, which included $44.7 million of valuation adjustments, compared to gross margins on home sales of $252.0 million, or 9.1%, in the year ended November 30, 2009, which included $180.2 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $562.6 million, or 21.4%, in the year ended November 30, 2010, compared to $432.2 million, or 15.6%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year, due primarily to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales, reduced construction costs and product re-engineering, as well as third-party recoveries related to Chinese drywall. Gross margins on home sales excluding valuation adjustments is a non-GAAP financial measure, which is discussed in the Non-GAAP Financial Measure section.

Selling, general and administrative expenses were reduced by $72.3 million, or 16%, in the year ended November 30, 2010, compared to the same period last year, primarily due to reductions in legal, personnel and occupancy expenses. As a percentage of revenues from home sales, selling, general and administrative expenses improved to 14.3% in the year ended November 30, 2010, from 16.2% in 2009.

Gross profits on land sales totaled $21.4 million in the year ended November 30, 2010, primarily due to the reduction of an obligation related to a profit participation agreement. Gross profits on land sales were net of $3.4 million of valuation adjustments and $3.1 million in write-offs of deposits and pre-acquisitions costs. Losses on land sales totaled $178.8 million in the year ended November 30, 2009, which included $108.9 million of valuation adjustments and $84.4 million in write-offs of deposits and pre-acquisition costs.

Lennar Homebuilding equity in loss from unconsolidated entities was $11.0 million in the year ended November 30, 2010, which included $10.5 million of valuation adjustments related to assets of unconsolidated entities in which we have investments. In the year ended November 30, 2009, Lennar Homebuilding equity in loss from unconsolidated entities was $130.9 million, which included $101.9 million of valuation adjustments related to assets of unconsolidated entities in which we have investments.

Lennar Homebuilding other income (expense), net, totaled $19.1 million in the year ended November 30, 2010, which included a $19.4 million pre-tax gain on the extinguishment of other debt and other income, partially offset by a $10.8 million pre-tax loss related to the repurchase of senior notes through a tender offer and $1.7 million of valuation adjustments to our investments in unconsolidated entities. Lennar Homebuilding other income (expense), net, totaled ($98.4) million in the year ended November 30, 2009, which included $89.0 million of valuation adjustments to our investments in unconsolidated entities and $9.7 million of write-offs of notes and other receivables.

Homebuilding interest expense was $143.9 million in the year ended November 30, 2010 ($71.5 million was included in cost of homes sold, $2.0 million in cost of land sold and $70.4 million in other interest expense), compared to $147.4 million in the year ended November 30, 2009 ($67.4 million was included in cost of homes sold, $9.2 million in cost of land sold and $70.9 million in other interest expense). Despite an increase in debt, interest expense decreased primarily due to an increase in qualifying assets eligible for interest capitalization and savings resulting from the termination of our senior unsecured revolving credit facility during the first quarter of 2010.

Net earnings (loss) attributable to noncontrolling interests were $25.2 million and ($28.9) million, respectively, in the years ended November 30, 2010 and 2009. Net earnings attributable to noncontrolling interests during the year ended November 30, 2010 were primarily related to the FDIC’s interest in the portfolio of real estate loans that we acquired in partnership with the FDIC.

26

Sales of land, Lennar Homebuilding equity in loss from unconsolidated entities, other income (expense), net and net earnings (loss) attributable to noncontrolling interests may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments.

Operating earnings for the Lennar Financial Services segment were $31.3 million in the year ended November 30, 2010, compared to $36.0 million in the same period last year. The decrease in operating earnings was primarily due to decreased volume in the segment’s mortgage and title operations.

In the year ended November 30, 2010, operating earnings for the Rialto Investments segment were $57.3 million (which included $33.2 million of net earnings attributable to noncontrolling interests), compared to an operating loss of $2.5 million in the prior year. In the year ended November 30, 2010, revenues in this segment were $92.6 million, which consisted primarily of accretable interest income associated with the portfolios of real estate loans acquired in partnership with the FDIC. In the year ended November 30, 2010, other income, net was $17.3 million, which consisted primarily of gains on the sale of real estate owned (“REO”) and gains from acquisition of REO through foreclosure. The segment also had equity in earnings from unconsolidated entities of $15.4 million during the year ended November 30, 2010, consisting primarily of interest income and unrealized gains related to our investment in the AllianceBernstein L.P. (“AB”) fund formed under the Federal government’s Public-Private Investment Program (“PPIP”). In the year ended November 30, 2010, expenses in this segment were $67.9 million, which consisted primarily of the carrying costs related to its portfolio operations, underwriting expenses related to both completed and abandoned transactions, and other general and administrative expenses.

Corporate general and administrative expenses were reduced by $23.6 million, or 20%, in the year ended November 30, 2010, compared to the same period last year primarily due to our cost reduction initiatives implemented during the downturn. As a percentage of total revenues, corporate general and administrative expenses decreased to 3.1% in the year ended November 30, 2010, from 3.8% in the prior year.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on available evidence, it is more likely than not that such assets will not be realized. Based upon an evaluation of all available evidence, during the year ended November 30, 2010, we recorded a reversal of the deferred tax asset valuation allowance of $37.9 million, primarily due to the recording of a deferred tax liability from the issuance of 2.75% convertible senior notes due 2020 and the net earnings generated during the year. The reversal of the deferred tax asset valuation allowance related to the issuance of the 2.75% convertible senior notes due 2020 was recorded as an adjustment to additional paid-in capital. At November 30, 2010, the deferred tax asset valuation allowance was $609.5 million.

At November 30, 2010, we owned 84,482 homesites and had access to an additional 19,974 homesites through either option contracts with third parties or agreements with unconsolidated entities in which we have investments. At November 30, 2010, 2% of the homesites we owned were subject to home purchase contracts. Our backlog of sales contracts was 1,604 homes ($407.3 million) at November 30, 2010, compared to 1,631 homes ($479.6 million) at November 30, 2009.

2009 versus 2008

Revenues from home sales decreased 33% in the year ended November 30, 2009 to $2.8 billion from $4.2 billion in 2008. Revenues were lower primarily due to a 26% decrease in the number of home deliveries, excluding unconsolidated entities, and a 10% decrease in the average sales price of homes delivered in 2009. New home deliveries, excluding unconsolidated entities, decreased to 11,422 homes in the year ended November 30, 2009 from 15,344 homes in 2008. In the year ended November 30, 2009, new home deliveries were lower in each of our Lennar Homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $243,000 in the year ended November 30, 2009 from $270,000 in 2008. Sales incentives offered to homebuyers were $44,800 per home delivered in the year ended November 30, 2009, compared to $48,700 per home delivered in 2008.

Gross margins on home sales were $252.0 million, or 9.1%, in the year ended November 30, 2009, which included $180.2 million of valuation adjustments, compared to gross margins on home sales of $509.6 million, or 12.3%, in the year ended November 30, 2008, which included $195.5 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $432.2 million, or 15.6%, in the year ended November 30, 2009, compared to $705.1 million, or 17.0%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, decreased compared to 2008, due primarily to reduced sales prices.

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Selling, general and administrative expenses were reduced by $206.0 million, or 31%, in the year ended November 30, 2009, compared to 2008, primarily due to reductions in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 16.2% in the year ended November 30, 2009, from 15.8% in 2008, due to lower revenues.

Losses on land sales totaled $178.8 million in the year ended November 30, 2009, which included $108.9 million of valuation adjustments and $84.4 million of write-offs of deposits and pre-acquisition costs related to homesites under option that we did not intend to purchase. In the year ended November 30, 2008, losses on land sales totaled $133.2 million, which included $47.8 million of valuation adjustments and $97.2 million of write-offs of deposits and pre-acquisition costs related to homesites that were under option.

Lennar Homebuilding equity in loss from unconsolidated entities was $130.9 million in the year ended November 30, 2009, which included $101.9 million of valuation adjustments related to assets of unconsolidated entities in which we have investments, compared to Lennar Homebuilding equity in loss from unconsolidated entities of $59.2 million in the year ended November 30, 2008, which included $32.2 million of valuation adjustments related to assets of unconsolidated entities in which we have investments.

Lennar Homebuilding other expense, net totaled $98.4 million in the year ended November 30, 2009, which included $89.0 million of valuation adjustments to our investments in unconsolidated entities and $9.7 million of write-offs of notes and other receivables, compared to Lennar Homebuilding other expense, net of $172.4 million in the year ended November 30, 2008, which included $172.8 million of valuation adjustments to our investments in unconsolidated entities and $25.0 million of write-offs of notes and other receivables.

Homebuilding interest expense was $147.4 million in the year ended November 30, 2009 ($67.4 million was included in cost of homes sold, $9.2 million in cost of land sold and $70.9 million in other interest expense), compared to $130.4 million in the year ended November 30, 2008 ($99.3 million was included in cost of homes sold, $3.4 million in cost of land sold and $27.6 million in other interest expense). Despite a decrease in deliveries during the year ended November 30, 2009, compared to 2008, interest expense increased primarily due to the interest related to the $400 million 12.25% senior notes due 2017 issued during the second quarter of 2009, as well as a reduction in qualifying assets eligible for interest capitalization as a result of a decrease in inventories from prior year.

Net loss attributable to noncontrolling interests was $28.9 million in the year ended November 30, 2009, which included $13.6 million of noncontrolling interest income as a result of $27.2 million of valuation adjustments to inventories of 50%-owned consolidated joint ventures, compared to net loss attributable to noncontrolling interests of $4.1 million in the year ended November 30, 2008.

Sales of land, Lennar Homebuilding equity in loss from unconsolidated entities, other income (expense), net and net earnings (loss) attributable to noncontrolling interests may vary significantly from period to period depending on the timing of land sales and other transactions entered into by us and unconsolidated entities in which we have investments.

Operating earnings for the Lennar Financial Services segment was $36.0 million in the year ended November 30, 2009, compared to an operating loss of $31.0 million in 2008. The increase in profitability in the Lennar Financial Services segment was primarily due to lower fixed costs as a result of successful cost reduction initiatives implemented throughout the downturn. In addition, in the year ended November 30, 2008, there was a $27.2 million write-off of goodwill related to the segment’s mortgage operations, compared to no write-off in the year ended November 30, 2009.

Operating loss for the Rialto Investments segment was $2.5 million in the year ended November 30, 2009, which related primarily to general and administrative expenses incurred to start up the Rialto Investments segment.

Corporate general and administrative expenses were reduced by $12.2 million, or 9%, for the year ended November 30, 2009, compared to 2008. As a percentage of total revenues, corporate general and administrative expenses increased to 3.8% in the year ended November 30, 2009, from 2.8% in 2008, due to lower revenues.

As a result of our net operating loss during the year ended November 30, 2009, we generated deferred tax assets of $269.6 million and recorded a non-cash valuation allowance against the entire amount of the deferred tax assets. In addition, we recorded a reversal of our deferred tax asset valuation allowance of $351.8 million during the fourth quarter of 2009, primarily due to a change in tax legislation, which allowed us to carry back our fiscal year 2009 tax loss to recover previously paid income taxes.

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At November 30, 2009, we owned 82,703 homesites and had access to an additional 21,173 homesites through either option contracts with third parties or agreements with unconsolidated entities in which we have investments. At November 30, 2009, 2% of the homesites we owned were subject to home purchase contracts. Our backlog of sales contracts was 1,631 homes ($479.6 million) at November 30, 2009, compared to 1,599 homes ($456.3 million) at November 30, 2008.

Non-GAAP Financial Measure

Gross margins on home sales excluding valuation adjustments is a non-GAAP financial measure, and is defined by us as sales of homes revenue less cost of homes sold excluding valuation adjustments recorded during the period. Management finds this to be an important and useful measure in evaluating our performance because it discloses the profit we generate on homes we actually delivered during the period, as our valuation adjustments generally relate to inventory that we did not deliver during the period. Gross margins on home sales excluding valuation adjustments also is important to our management, because it assists our management in making strategic decisions regarding our construction pace, product mix and product pricing based upon the profitability we generated on homes we actually delivered during previous periods. We believe investors also find gross margins on home sales excluding valuation adjustments to be important and useful because it discloses a profitability measure on homes we actually delivered in a period that can be compared to the profitability on homes we delivered in a prior period without regard to the variability of valuation adjustments recorded from period to period. In addition, to the extent that our competitors provide similar information, disclosure of our gross margins on home sales excluding valuation adjustments helps readers of our financial statements compare our ability to generate profits with regard to the homes we deliver in a period to our competitors’ ability to generate profits with regard to the homes they deliver in the same period.

Although management finds gross margins on home sales excluding valuation adjustments to be an important measure in conducting and evaluating our operations, this measure has limitations as an analytical tool as it is not reflective of the actual profitability generated by our company during the period. This is because it excludes charges we recorded relating to inventory that was impaired during the period. In addition, because gross margins on home sales excluding valuation adjustments is a financial measure that is not calculated in accordance with generally accepted accounting principles (“GAAP”), it may not be completely comparable to similarly titled measures of our competitors due to differences in methods of calculation and charges being excluded. Our management compensates for the limitations of using gross margins on home sales excluding valuation adjustments by using this non-GAAP measure only to supplement our GAAP results in order to provide a more complete understanding of the factors and trends affecting our operations. In order to analyze our overall performance and actual profitability relative to our homebuilding operations, we also compare our gross margins on home sales during the period, inclusive of valuation adjustments, with the same measure during prior comparable periods. Due to the limitations discussed above, gross margins on home sales excluding valuation adjustments should not be viewed in isolation as it is not a substitute for GAAP measures of gross margins.

The table set forth below reconciles our gross margins on home sales excluding valuation adjustments for the years ended November 30, 2010, 2009 and 2008 to our gross margins on home sales for the years ended November 30, 2010, 2009 and 2008:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Sales of homes	$	2,631,314		2,776,850		4,150,717
Cost of homes sold		2,113,393		2,524,850		3,641,090
Gross margins on home sales		517,921		252,000		509,627
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		44,717		180,239		195,518
Gross margins on homes sales excluding valuation adjustments	$	562,638		432,239		705,145

Homebuilding Segments

Our Homebuilding operations construct and sell homes primarily for first-time, move-up and active adult homebuyers primarily under the Lennar brand name. In addition, our homebuilding operations also purchase, develop and sell land to third parties. In certain circumstances, we diversify our operations through strategic alliances and attempt to minimize our risks by investing with third parties in joint ventures.

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We have grouped our homebuilding activities into four reportable segments, which we refer to as Homebuilding East, Homebuilding Central, Homebuilding West and Homebuilding Houston. Information about homebuilding activities in states that do not have economic characteristics that are similar to those in other states in the same geographic area is grouped under “Homebuilding Other.” Reference in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to homebuilding segments are to those reportable segments.

At November 30, 2010, our reportable homebuilding segments and Homebuilding Other consisted of homebuilding divisions located in:

East: Florida, Maryland, New Jersey and Virginia.

Central: Arizona, Colorado and Texas. (1)

West: California and Nevada.

Houston: Houston, Texas.

Other: Georgia, Illinois, Minnesota, North Carolina and South Carolina.

          (1) Texas in the Central reportable segment excludes Houston, Texas, which is its own reportable segment.

The following tables set forth selected financial and operational information related to our homebuilding operations for the years indicated:

Selected Financial and Operational Data

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Revenues:
East:
Sales of homes	$	922,947		844,689		1,252,725
Sales of land		16,503		27,569		23,033
Total East		939,450		872,258		1,275,758
Central:
Sales of homes		348,486		361,273		512,957
Sales of land		9,246		5,910		20,153
Total Central		357,732		367,183		533,110
West:
Sales of homes		650,844		810,459		1,408,051
Sales of land		32,646		15,778		32,112
Total West		683,490		826,237		1,440,163
Houston:
Sales of homes		357,590		429,127		542,288
Sales of land		8,348		5,691		8,565
Total Houston		365,938		434,818		550,853
Other:
Sales of homes		351,447		331,302		434,696
Sales of land		7,582		2,487		28,458
Total Other		359,029		333,789		463,154
Total homebuilding revenues	$	2,705,639		2,834,285		4,263,038

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	Years Ended November 30,
	2010			2009			2008
	(In thousands)
Operating earnings (loss):
East:
Sales of homes	$	122,235			(70,878	)		(37,361	)
Sales of land		1,042			(92,968	)		(41,242	)
Equity in loss from unconsolidated entities		(871	)		(5,660	)		(31,422	)
Other income (expense), net		12,962			(11,900	)		(37,633	)
Other interest expense		(22,376	)		(24,847	)		(9,376	)
Total East		112,992			(206,253	)		(157,034	)
Central:
Sales of homes		(7,910	)		(39,309	)		(67,124	)
Sales of land		(353	)		406			(11,330	)
Equity in loss from unconsolidated entities		(4,727	)		(8,143	)		(1,310	)
Other expense, net		(2,261	)		(13,371	)		(9,954	)
Other interest expense		(10,661	)		(10,223	)		(5,369	)
Total Central		(25,912	)		(70,640	)		(95,087	)
West:
Sales of homes		4,019			(80,294	)		(67,757	)
Sales of land		16,502			(48,125	)		(74,987	)
Equity in loss from unconsolidated entities		(6,113	)		(114,373	)		(25,113	)
Other income (expense), net		5,451			(66,568	)		(100,597	)
Other interest expense		(25,720	)		(21,710	)		(8,339	)
Gain on recapitalization of unconsolidated entity		—			—			133,097
Total West		(5,861	)		(331,070	)		(143,696	)
Houston:
Sales of homes		25,138			25,854			39,897
Sales of land		1,683			(3,424	)		807
Equity in earnings (loss) from unconsolidated entities		766			(1,801	)		(920	)
Other income (expense), net		1,413			(900	)		(978	)
Other interest expense		(2,970	)		(3,287	)		—
Total Houston		26,030			16,442			38,806
Other:
Sales of homes		(2,523	)		(32,632	)		(13,283	)
Sales of land		2,483			(34,731	)		(6,463	)
Equity in loss from unconsolidated entities		(21	)		(940	)		(391	)
Other income (expense), net		1,570			(5,686	)		(23,226	)
Other interest expense		(8,698	)		(10,783	)		(4,509	)
Total Other		(7,189	)		(84,772	)		(47,872	)
Total homebuilding operating earnings (loss)	$	100,060			(676,293	)		(404,883	)

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Summary of Homebuilding Data

Deliveries:

	Years Ended November 30,
	Homes
	2010		2009		2008
East		4,195		3,817		4,957
Central		1,682		1,796		2,442
West		2,079		2,480		4,031
Houston		1,645		2,150		2,736
Other		1,354		1,235		1,569
Total		10,955		11,478		15,735

Of the total home deliveries above, 96, 56 and 391, respectively, represent deliveries from unconsolidated entities for the years ended November 30, 2010, 2009 and 2008.

	Years Ended November 30,
	Dollar Value (In thousands)						Average Sales Price
	2010		2009		2008		2010		2009		2008
East	$	922,947		844,689		1,276,454	$	220,000		221,000		258,000
Central		348,486		361,273		512,957		207,000		201,000		210,000
West		711,822		856,285		1,519,219		342,000		345,000		377,000
Houston		357,590		429,127		542,288		217,000		200,000		198,000
Other		351,447		331,852		504,336		260,000		269,000		321,000
Total	$	2,692,292		2,823,226		4,355,254	$	246,000		246,000		277,000

Of the total dollar value of home deliveries above, $61.0 million, $46.4 million and $204.5 million, respectively, represent the dollar value of home deliveries from unconsolidated entities for the years ended November 30, 2010, 2009 and 2008. The home deliveries from unconsolidated entities had an average sales price of $635,000, $828,000 and $523,000, respectively, for the years ended November 30, 2010, 2009 and 2008.

Sales Incentives (1):

	Years Ended November 30,
	(In thousands)
	2010		2009		2008
East	$	130,170		190,600		260,118
Central		53,034		65,448		97,136
West		65,988		129,476		253,732
Houston		63,255		72,480		67,408
Other		44,040		54,030		68,124
Total	$	356,487		512,034		746,518

	Years Ended November 30,
	Average Sales Incentives Per Home Delivered						Sales Incentives as a % of Revenue
	2010		2009		2008		2010			2009			2008
East	$	31,000		49,900		53,400		12.3	%		18.4	%		17.2	%
Central		31,500		36,400		39,800		13.2	%		15.4	%		15.9	%
West		33,300		53,400		66,600		9.2	%		13.8	%		15.3	%
Houston		38,500		33,700		24,600		15.0	%		14.4	%		11.1	%
Other		32,500		43,800		45,900		11.1	%		14.0	%		13.6	%
Total	$	32,800		44,800		48,700		11.9	%		15.6	%		15.3	%

(1) Sales incentives relate to home deliveries during the period, excluding deliveries by unconsolidated entities.

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New Orders (2):

	Years Ended November 30,
	Homes
	2010		2009		2008
East		4,270		3,710		3,953
Central		1,769		1,840		2,280
West		1,922		2,569		3,396
Houston		1,641		2,130		2,416
Other		1,326		1,261		1,346
Total		10,928		11,510		13,391

Of the new orders above, 90, 58 and 174, respectively, represent new orders from unconsolidated entities for the years ended November 30, 2010, 2009 and 2008.

	Years Ended November 30,
	Dollar Value (In thousands)						Average Sales Price
	2010		2009		2008		2010		2009		2008
East	$	940,311		820,209		910,749	$	220,000		221,000		230,000
Central		365,667		373,084		470,721		207,000		203,000		206,000
West		625,469		892,002		1,249,733		325,000		347,000		368,000
Houston		355,771		432,380		471,733		217,000		203,000		195,000
Other		339,393		328,858		357,718		256,000		261,000		266,000
Total	$	2,626,611		2,846,533		3,460,654	$	240,000		247,000		258,000

Of the total dollar value of new orders above, $55.9 million, $41.5 million and $97.5 million, respectively, represent the dollar value of new orders from unconsolidated entities for the years ended November 30, 2010, 2009 and 2008. The new orders from unconsolidated entities had an average sales price of $621,000, $716,000 and $560,000, respectively, for the years ended November 30, 2010, 2009 and 2008.

(2) New orders represent the number of new sales contracts executed by homebuyers, net of cancellations, during the years ended November 30, 2010, 2009 and 2008.

Backlog:

	November 30,
	Homes
	2010		2009		2008
East		757		682		787
Central		254		167		123
West		179		336		247
Houston		245		249		269
Other		169		197		173
Total		1,604		1,631		1,599

Of the total homes in backlog above, 3 homes, 9 homes and 8 homes, respectively, represent homes in backlog from unconsolidated entities at November 30, 2010, 2009 and 2008.

	November 30,
	Dollar Value (In thousands)						Average Sales Price
	2010		2009		2008		2010		2009		2008
East	$	190,095		179,175		202,791		251,000		263,000		258,000
Central		52,923		36,158		23,736		208,000		217,000		193,000
West		58,072		143,868		108,779		324,000		428,000		440,000
Houston		58,822		60,876		57,785		240,000		244,000		215,000
Other		47,380		59,494		63,179		280,000		302,000		365,000
Total	$	407,292		479,571		456,270		254,000		294,000		285,000

Of the total dollar value of homes in backlog above, $2.1 million, $7.2 million and $12.5 million, respectively, represent the dollar value of homes in backlog from unconsolidated entities at November 30, 2010, 2009 and 2008. The homes in backlog from unconsolidated entities had an average sales price of $716,000, $804,000 and $1,558,000, respectively, at November 30, 2010, 2009 and 2008.

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Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales if they fail to qualify for financing or under certain other circumstances. We experienced cancellation rates in our homebuilding segments and Homebuilding Other as follows:

	Years Ended November 30,
	2010			2009			2008
Cancellation Rates
East		16	%		22	%		31	%
Central		18	%		17	%		22	%
West		18	%		15	%		24	%
Houston		18	%		19	%		27	%
Other		18	%		16	%		23	%
Total		17	%		18	%		26	%

During the fourth quarter of 2010, our cancellation rate was 20%. Our cancellation rate during 2010 was consistent with 2009. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.

2010 versus 2009

East: Homebuilding revenues increased in 2010, compared to 2009, primarily due to an increase in the number of home deliveries in all of the states in this segment, except New Jersey. Gross margins on home sales were $232.4 million, or 25.2%, in 2010 including valuation adjustments of $10.4 million, compared to gross margins on home sales of $36.2 million, or 4.3%, in 2009 including $73.7 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $242.8 million, or 26.3%, in 2010, compared to $109.8 million, or 13.0%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year primarily due to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales (12.3% in 2010 and 18.4% in 2009) and third-party recoveries related to Chinese drywall.

Gross profits on land sales were $1.0 million in 2010 (net of $2.7 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $0.1 million of valuation adjustments), compared to losses on land sales of $93.0 million in 2009 (including $64.1 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $37.0 million of valuation adjustments).

Central: Homebuilding revenues decreased in 2010, compared to 2009, primarily due to a decrease in the number of home deliveries in all of the states in this segment, except Colorado. Gross margins on home sales were $44.2 million, or 12.7%, in 2010 including valuation adjustments of $9.2 million, compared to gross margins on home sales of $29.2 million, or 8.1%, in 2009 including $13.6 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $53.4 million, or 15.3%, in 2010, compared to $42.8 million, or 11.9%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year primarily due to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales (13.2% in 2010 and 15.4% in 2009).

Loss on land sales were $0.4 million in 2010 (including $2.1 million of valuation adjustments), compared to gross profits on land sales of $0.4 million in 2009 (net of $0.1 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $1.3 million of valuation adjustments).

West: Homebuilding revenues decreased in 2010, compared to 2009, primarily due to a decrease in the number of home deliveries and average sales price of homes delivered in all of the states in this segment. Gross margins on home sales were $125.5 million, or 19.3%, in 2010 including valuation adjustments of $7.1 million, compared to gross margins on home sales of $92.8 million, or 11.5%, in 2009 including $64.1 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $132.7 million, or 20.4%, in 2010, compared to $156.9 million, or 19.4%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year primarily due to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales (9.2% in 2010, compared to 13.8% in 2009).

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Gross profits on land sales were $16.5 million in 2010, primarily due to the reduction of an obligation related to a profit participation agreement. Gross profits on land sales were net of $0.4 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $1.2 million of valuation adjustments. Losses on land sales were $48.1 million in 2009 (including $13.9 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $38.7 million of valuation adjustments).

Houston: Homebuilding revenues decreased in 2010, compared to 2009, primarily due to a decrease in the number of home deliveries in this segment. Gross margins on home sales were $68.1 million, or 19.0%, in 2010 including valuation adjustments of $0.2 million, compared to gross margins on home sales of $75.3 million, or 17.5%, in 2009 including $1.1 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $68.3 million, or 19.1%, in 2010, compared to $76.4 million, or 17.8%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year primarily due to an increase in average sales price.

Gross profits on land sales were $1.7 million in 2010, compared to losses on land sales of $3.4 million in 2009 (including $2.5 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $0.7 million of valuation adjustments).

Other: Homebuilding revenues increased in 2010, compared to 2009, primarily due to an increase in the number of home deliveries in all of the states in Homebuilding Other except Illinois. Gross margins on home sales were $47.8 million, or 13.6% in 2010 including valuation adjustments of $17.7 million, compared to gross margins on home sales of $18.5 million, or 5.6%, in 2009 including $27.8 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $65.5 million, or 18.6%, in 2010, compared to $46.2 million, or 14.0%, in 2009. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year primarily due to reduced sales incentives offered to homebuyers as a percentage of revenues from home sales (11.1% in 2010, compared to 14.0% in 2009).

Gross profits on land sales were $2.5 million in 2010, compared to losses on land sales of $34.7 million in 2009 (including $3.8 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $31.2 million of valuation adjustments).

2009 versus 2008

East: Homebuilding revenues decreased in 2009, compared to 2008, primarily due to a decrease in the number of home deliveries and in the average sales price of homes delivered in all of the states in this segment. Gross margins on home sales were $36.2 million, or 4.3%, in 2009 including valuation adjustments of $73.7 million, compared to gross margins on home sales of $164.5 million, or 13.1%, in 2008 including $76.8 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $109.8 million, or 13.0%, in 2009, compared to $241.3 million, or 19.3%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, decreased compared to 2008 due to reduced pricing and higher sales incentives offered to homebuyers as a percentage of revenues from home sales (18.4% in 2009 and 17.2% in 2008).

Losses on land sales were $93.0 million in 2009 (including $64.1 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $37.0 million of valuation adjustments), compared to losses on land sales of $41.2 million in 2008 (including $19.0 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $23.3 million of valuation adjustments).

Central: Homebuilding revenues decreased in 2009, compared to 2008, primarily due to a decrease in the number of home deliveries in all of the states in this segment and a decrease in the average sales price of homes delivered in Arizona, partially offset by a slight increase in the average selling price in Colorado and Texas, excluding Houston. Gross margins on home sales were $29.2 million, or 8.1%, in 2009 including valuation adjustments of $13.6 million, compared to gross margins on home sales of $31.8 million, or 6.2%, in 2008 including $28.1 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $42.8 million, or 11.9%, in 2009, compared to $59.9 million, or 11.7%, in 2008. Sales incentives offered to homebuyers as a percentage of revenues from home sales were 15.4% in 2009 and 15.9% in 2008.

Gross profits on land sales were $0.4 million in 2009 (net of $0.1 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $1.3 million of valuation

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adjustments), compared to losses on land sales of $11.3 million in 2008 (including $6.0 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $12.4 million of valuation adjustments).

West: Homebuilding revenues decreased in 2009, compared to 2008, primarily due to a decrease in the number of home deliveries and average sales price of homes delivered in all of the states in this segment. Gross margins on home sales were $92.8 million, or 11.5%, in 2009 including valuation adjustments of $64.1 million, compared to gross margins on home sales of $154.1 million, or 10.9%, in 2008 including $75.6 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $156.9 million, or 19.4%, in 2009, compared to $229.7 million, or 16.3%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, increased compared to 2008 primarily due to a decrease of sales incentives offered to homebuyers as a percentage of home sales revenues (13.8% in 2009, compared to 15.3% in 2008).

Losses on land sales were $48.1 million in 2009 (including $13.9 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $38.7 million of valuation adjustments), compared to losses on land sales of $75.0 million in 2008 (including $62.4 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $11.1 million of valuation adjustments).

Houston: Homebuilding revenues decreased in 2009, compared to 2008, primarily due to a decrease in the number of home deliveries in this segment. Gross margins on home sales were $75.3 million, or 17.5%, in 2009 including valuation adjustments of $1.1 million, compared to gross margins on home sales of $103.9 million, or 19.2%, in 2008 including $2.3 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $76.4 million, or 17.8%, in 2009, compared to $106.2 million, or 19.6%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, decreased compared to 2008 primarily due to higher sales incentives offered to homebuyers as a percentage of revenues from home sales (14.4% in 2009, compared to 11.1% in 2008).

Losses on land sales were $3.4 million in 2009 (including $2.5 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $0.7 million of valuation adjustments), compared to gross profits on land sales of $0.8 million in 2008 (net of $0.7 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $0.1 million of valuation adjustments).

Other: Homebuilding revenues decreased in 2009, compared to 2008, primarily due to a decrease in the number of home deliveries in all of the states in Homebuilding Other except in North and South Carolina combined, and a decrease in the average sales price of homes delivered in North and South Carolina combined and Minnesota. Gross margins on home sales were $18.5 million, or 5.6% in 2009 including valuation adjustments of $27.8 million, compared to gross margins on home sales of $55.3 million, or 12.7%, in 2008 including $12.7 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments were $46.2 million, or 14.0%, in 2009, compared to $68.0 million, or 15.7%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, decreased compared to 2008 due to reduced pricing and higher sales incentives offered to homebuyers as a percentage of revenues from home sales (14.0% in 2009, compared to 13.6% in 2008).

Losses on land sales were $34.7 million in 2009 (including $3.8 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $31.2 million of valuation adjustments), compared to losses on land sales of $6.5 million in 2008 (including $9.0 million of write-offs of deposits and pre-acquisition costs related to land under option that we do not intend to purchase and $0.9 million of valuation adjustments).

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Gross margins on home sales excluding valuation adjustments is a non-GAAP financial measure that is discussed previously under “Non-GAAP Financial Measure.” The table set forth below reconciles our gross margins on home sales excluding valuation adjustments for the years ended November 30, 2010, 2009 and 2008 for each of our reportable homebuilding segments and Homebuilding Other to our gross margins on home sales for the three respective years:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
East:
Sales of homes	$	922,947		844,689		1,252,725
Cost of homes sold		690,584		808,528		1,088,229
Gross margins on home sales		232,363		36,161		164,496
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		10,410		73,670		76,791
Gross margins on homes sales excluding valuation adjustments		242,773		109,831		241,287
Central:
Sales of homes		348,486		361,273		512,957
Cost of homes sold		304,329		332,040		481,176
Gross margins on home sales		44,157		29,233		31,781
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		9,205		13,603		28,142
Gross margins on homes sales excluding valuation adjustments		53,362		42,836		59,923
West:
Sales of homes		650,844		810,459		1,408,051
Cost of homes sold		525,310		717,631		1,253,952
Gross margins on home sales		125,534		92,828		154,099
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		7,139		64,095		75,614
Gross margins on homes sales excluding valuation adjustments		132,673		156,923		229,713
Houston:
Sales of homes		357,590		429,127		542,288
Cost of homes sold		289,474		353,838		438,368
Gross margins on home sales		68,116		75,289		103,920
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		219		1,116		2,262
Gross margins on homes sales excluding valuation adjustments		68,335		76,405		106,182
Other:
Sales of homes		351,447		331,302		434,696
Cost of homes sold		303,696		312,813		379,365
Gross margins on home sales		47,751		18,489		55,331
Valuation adjustments to finished homes, CIP and land on which we intend to build homes		17,744		27,755		12,709
Gross margins on homes sales excluding valuation adjustments		65,495		46,244		68,040
Total gross margins on home sales	$	517,921		252,000		509,627
Total valuation adjustments	$	44,717		180,239		195,518
Total gross margins on home sales excluding valuation adjustments	$	562,638		432,239		705,145

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Lennar Financial Services Segment

We have one Lennar Financial Services reportable segment that provides primarily mortgage financing, title insurance and closing services for both buyers of our homes and others. Substantially all of the loans the Lennar Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements. The following table sets forth selected financial and operational information relating to the Lennar Financial Services segment:

	Years Ended November 30,
	2010			2009			2008
	(Dollars in thousands)
Revenues	$	275,786			285,102			312,379
Costs and expenses (1)		244,502			249,120			343,369
Operating earnings (loss) (1)	$	31,284			35,982			(30,990	)
Dollar value of mortgages originated	$	3,272,000			4,020,000			4,290,000
Number of mortgages originated		15,200			17,900			18,300
Mortgage capture rate of Lennar homebuyers		85	%		87	%		85	%
Number of title and closing service transactions		102,500			120,500			105,900
Number of title policies issued		107,600			92,500			96,700

(1) Financial Services costs and expenses and operating loss for the year ended November 30, 2008 include a $27.2 million impairment of goodwill.

Rialto Investments Segment

Our Rialto segment is a new reportable segment that met the reportable segment criteria set forth in GAAP beginning in fiscal 2010. All prior year segment information has been restated to conform with the 2010 presentation. The change had no effect on the Company’s consolidated financial statements, except for certain reclassifications. Rialto’s objective is to generate superior, risk-adjusted returns by focusing on commercial and residential real estate opportunities arising from dislocations in the United States real estate markets and the eventual restructure and recapitalization of those markets. Rialto believes it will be able to deliver these returns through its abilities to source, underwrite, price, manage and ultimately monetize real estate assets, as well as providing similar services to others in markets across the country.

The following table presents the results of operations of our Rialto segment for the periods indicated:

	Years Ended November 30,
	2010		2009
	(In thousands)
Revenues	$	92,597		—
Costs and expenses		67,904		2,528
Rialto Investments equity in earnings from unconsolidated entities		15,363		—
Rialto Investments other income, net		17,251		—
Operating earnings (loss) (1)	$	57,307		(2,528	)

(1) Operating earnings for the year ended November 30, 2010 include $33.2 million of net earnings attributable to noncontrolling interests.

Distressed Asset Portfolios

In February 2010, the Rialto segment acquired indirectly 40% managing member equity interests in two limited liability companies (“LLCs”), in partnership with the FDIC, for approximately $243 million (net of transactions costs and a $22 million working capital reserve). The LLCs hold performing and non-performing loans formerly owned by 22 failed financial institutions. The two portfolios originally consisted of more than 5,500 distressed residential and commercial real estate loans with an aggregate unpaid principal balance of approximately $3 billion and an initial fair value of approximately $1.2 billion. The FDIC retained a 60% equity

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interest in the LLCs and provided $626.9 million of notes with 0% interest, which are non-recourse to us. In accordance with GAAP, interest has not been imputed because the notes are with, and guaranteed by, a governmental agency. The notes are secured by the loans held by the LLCs. Additionally, if the LLCs exceed expectations and meet certain internal rate of return and distribution thresholds, our equity interest in the LLCs could be reduced from 40% down to 30%, with a corresponding increase to the FDIC’s equity interest from 60% up to 70%. Although our equity interest could decrease, we believe we would most likely yield a higher return on our investment if the thresholds are met. As of November 30, 2010, the notes payable balance was $626.9 million; however, during the year ended November 30, 2010, $101.3 million of cash collections on loans in excess of expenses were deposited in a defeasance account, established for the repayment of the notes payable, under the agreement with the FDIC. The funds in the defeasance account will be used to retire the notes payable upon their maturity.

The LLCs met the accounting definition of variable interest entities (“VIEs”) and since we were determined to be the primary beneficiary, we consolidated the LLCs. We determined that we were the primary beneficiary because we have the power to direct the activities of the LLCs that most significantly impact the LLCs’ economic performance through our management and servicer contracts. At November 30, 2010, these consolidated LLCs had total combined assets and liabilities of $1.4 billion and $0.6 billion, respectively.

In September 2010, the Rialto segment completed the acquisitions of over $700 million of distressed real estate assets, in separate transactions, from three financial institutions. The combined portfolio includes approximately 400 loans with a total aggregate unpaid principal balance of over $500 million and over 300 real estate owned (“REO”) properties with an original appraised value of approximately $200 million. We paid $310 million for the distressed real estate assets of which $125 million was financed through a 5-year senior unsecured note provided by one of the selling institutions.

The loans consist primarily of non-performing residential and commercial acquisition development and construction loans. The largest concentration of collateral for these loans is finished/partially-finished homesites, undeveloped land and completed/partially-completed homes. The real estate properties primarily consist of land, homesites, and single-family and multi-family residential communities at varying stages of completion. In the combined portfolio, 65% of the assets are residential and 35% are commercial. The acquired assets are located in 17 states, primarily in the Mid-Atlantic and Southeast regions of the United States with the largest concentration of assets in Florida, Georgia and North Carolina.

Investments

An affiliate in the Rialto segment is a sub-advisor to the AB PPIP fund and receives management fees for sub-advisory services. During the year ended November 30, 2010, we invested $63.8 million, in the AB PPIP fund. As of November 30, 2010, the carrying value of our investment in the AB PPIP fund was $77.3 million.

In November 2010, the Rialto segment completed the closing of its Fund with initial equity commitments of approximately $300 million (including $75 million committed by us). The Fund’s objective during its three-year investment period is to invest in distressed real estate assets and other related investments that fit within the Fund’s investment parameters. In addition, the Rialto segment also invested in approximately $43 million of non-investment grade commercial mortgage-backed securities (“CMBS”) for $19.4 million, representing a 55% discount to par value.

We have grouped these investments in the Rialto segment, along with our $7.3 million, or approximately 5%, investment in a service and infrastructure provider to the residential home loan market (the “Service Provider”), which provides services to the LLCs.

Financial Condition and Capital Resources

At November 30, 2010, we had cash and cash equivalents related to our homebuilding, financial services and Rialto operations of $1.4 billion, compared to $1.5 billion and $1.2 billion, respectively, at November 30, 2009 and 2008.

We finance our land acquisition and development activities, construction activities, financial services activities, Rialto activities and general operating needs primarily with cash generated from our operations, debt issuances and equity offerings, as well as cash borrowed under our warehouse lines of credit.

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Operating Cash Flow Activities

During 2010 and 2009, cash provided by operating activities totaled $274.2 million and $420.8 million, respectively. During 2010, cash provided by operating activities was positively impacted by the receipt of tax refunds of $343.0 million generated primarily from losses incurred prior to fiscal 2010 and our net earnings. This was partially offset by a net increase in inventories of $115.2 million, primarily due to a higher level of land purchases in strategic markets during the year ended November 30, 2010 and a decrease in accounts payable and other liabilities.

During 2009, cash provided by operating activities was positively impacted by a decrease in inventories as a result of reducing completed, unsold inventory, a reduction in construction in progress resulting from lower new home starts in early 2009 and write-offs and valuation adjustments pertaining to the respective inventory, which was partially offset by land acquisitions. Cash provided by operating activities was partially offset by our net loss, a decrease in accounts payable and other liabilities and an increase in our receivables as a result of an increase in our income tax receivables primarily due to a change in tax legislation, which allowed us to carryback our fiscal year 2009 tax loss to recover previously paid income taxes.

Investing Cash Flow Activities

During 2010 and 2009, cash used in investing activities totaled $673.4 million and $275.1 million, respectively. During the year ended November 30, 2010, our Rialto segment contributed $243 million of cash (net of $22 million working capital reserve) to acquire indirectly 40% managing member interests in two LLCs in partnership with the FDIC. Upon consolidation of the LLCs that hold the two portfolios of real estate loans acquired in the FDIC transaction, the Company consolidated $93.7 million of cash, resulting in net contributions to consolidated entities by the Rialto segment of $171.4 million during the year ended November 30, 2010. In addition, during 2010 cash collections of $101.3 million on loans in excess of expenses were deposited in a defeasance account established for the repayment of the notes payable under the agreement with the FDIC. In September 2010, our Rialto segment used $183.4 million of cash to acquire portfolios of distressed loans and real estate assets, in separate transactions, from three financial institutions. The Rialto segment also contributed $64.3 million of cash to unconsolidated entities related primarily to the AB PPIP fund.

Additionally, during 2010 we contributed $209.3 million of cash to Lennar Homebuilding unconsolidated entities of which $113.5 million was to retire and extend debt of the Lennar Homebuilding unconsolidated entities thereby decreasing leverage at the Lennar Homebuilding unconsolidated entities and $95.8 million was for working capital. Specifically, we contributed $69.6 million to one Lennar Homebuilding unconsolidated entity of which $50.3 million was a loan paydown, representing both our and our partner’s share, in return for a 4-year loan extension and the rights to obtain preferred returns and priority distributions at that unconsolidated entity. We also made a $19.3 million payment to extinguish debt at a discount and buy out the partner of a Lennar Homebuilding unconsolidated entity resulting in a net pre-tax gain of $7.7 million.

During the year ended November 30, 2009, we contributed $316.1 million of cash to Lennar Homebuilding unconsolidated entities of which $94.5 million related to our investment in the reorganized Newhall, as well as the purchase of equity interests in other joint ventures previously owned by LandSource.

We are always evaluating the possibility of acquiring homebuilders and other companies. However, at November 30, 2010, we had no agreements or understandings regarding any significant transactions.

Financing Cash Flow Activities

During 2010 and 2009, our cash provided by financing activities was primarily attributed to the issuance of new debt, partially offset by the redemption of senior notes and principal payments on other borrowings.

During 2010 and 2009, we exercised certain land option contracts from a land investment venture that we sold land to in 2007, reducing the liabilities reflected on our consolidated balance sheet related to consolidated inventory not owned by $39.3 million and $33.7 million, respectively. Due to our continuing involvement, the transaction did not qualify as a sale under GAAP; thus, the inventory remained on our balance sheet in consolidated inventory not owned.

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Debt to total capital ratios are financial measures commonly used in the homebuilding industry and are presented to assist in understanding the leverage of our Lennar Homebuilding operations. Management believes providing a measure of leverage of our Lennar Homebuilding operations enables management and readers of our financial statements to better understand our financial position and performance. Lennar Homebuilding debt to total capital and net Lennar Homebuilding debt to total capital are calculated as follows:

	November 30,
	2010			2009
	(Dollars in thousands)
Lennar Homebuilding debt	$	3,128,154			2,761,352
Total stockholders’ equity		2,608,949			2,443,479
Total capital	$	5,737,103			5,204,831
Lennar Homebuilding debt to total capital		54.5	%		53.1	%
Lennar Homebuilding debt	$	3,128,154			2,761,352
Less: Lennar Homebuilding cash and cash equivalents		1,207,247			1,330,603
Net Lennar Homebuilding debt	$	1,920,907			1,430,749
Net Lennar Homebuilding debt to total capital (1)		42.4	%		36.9	%

(1) Net Lennar Homebuilding debt to total capital consists of net Lennar Homebuilding debt (Lennar Homebuilding debt less Lennar Homebuilding cash and cash equivalents) divided by total capital (net Lennar Homebuilding debt plus total stockholders’ equity).

At November 30, 2010, net Lennar Homebuilding debt to total capital was higher compared to prior year primarily due to the increase in Lennar Homebuilding debt as a result of an increase in senior notes and other debts payable and a decrease in Lennar Homebuilding cash and cash equivalents, partially offset by an increase in stockholders’ equity.

In addition to the use of capital in our homebuilding, financial services and Rialto operations, we actively evaluate various other uses of capital, which fit into our homebuilding, financial services and Rialto strategies and appear to meet our profitability and return on capital goals. This may include acquisitions of, or investments in, other entities, the payment of dividends or repurchases of our outstanding common stock or debt. These activities may be funded through any combination of our warehouse lines of credit, cash generated from operations, sales of assets or the issuance into capital markets of debt, common stock or preferred stock.

The following table summarizes our Lennar Homebuilding senior notes and other debts payable:

	November 30,
	2010		2009
	(Dollars in thousands)
5.95% senior notes due 2011		113,189		244,727
5.95% senior notes due 2013		266,319		347,471
5.50% senior notes due 2014		248,657		248,365
5.60% senior notes due 2015		501,216		501,424
6.50% senior notes due 2016		249,788		249,760
12.25% senior notes due 2017		393,031		392,392
6.95% senior notes due 2018		247,323		—
2.00% convertible senior notes due 2020		276,500		—
2.75% convertible senior notes due 2020		375,875		—
5.125% senior notes due 2010		—		249,955
Mortgage notes on land and other debt		456,256		527,258
	$	3,128,154		2,761,352

Our Lennar Homebuilding average debt outstanding was $2.8 billion in 2010, compared to $2.6 billion in 2009. The average rate for interest incurred was 6.1% and 6.0%, respectively in 2010 and 2009. Interest incurred related to Lennar Homebuilding debt for the year ended November 30, 2010 was $181.5 million, compared to $172.1 million in 2009. The majority of our short-term financing needs, including financings for land acquisition and development activities and general operating needs, are met with cash generated from operations and proceeds of debt issuances.

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In November 2010, we issued $446.0 million of 2.75% convertible senior notes due 2020 (the “2.75% Convertible Senior Notes”) at a price of 100% in a private placement. Proceeds from the offering, after payment of expenses, were $436.4 million. The net proceeds are being used for general corporate purposes, including repayments or repurchases of existing senior notes or other indebtedness. The 2.75% Convertible Senior Notes are convertible into cash, shares of Class A common stock or a combination of both, at our election. However, it is our intent to settle the face value of the 2.75% Convertible Senior Notes in cash. Holders may convert the 2.75% Convertible Senior Notes at the initial conversion rate of 45.1794 shares of common stock per $1,000 principal amount or 20,150,012 Class A common shares if all the 2.75% Convertible Senior Notes are converted, which is equivalent to an initial conversion price of approximately $22.13 per share of Class A common stock, subject to anti-dilution adjustments. The shares are not included in the calculation of diluted earnings per share primarily because it is our intent to settle the face value of the 2.75% Convertible Senior Notes in cash and our stock price does not exceed the conversion price.

Holders of the 2.75% Convertible Senior Notes will have the right to convert them, if during any fiscal quarter commencing after the fiscal quarter ended on November 30, 2010 (and only during such fiscal quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day. Holders of the 2.75% Convertible Senior Notes will have the right to require us to repurchase them for cash equal to 100% of their principal amount, plus accrued but unpaid interest, on December 15, 2015. We will have the right to redeem the 2.75% Convertible Senior Notes at any time on or after December 20, 2015 for 100% of their principal amount, plus accrued but unpaid interest. Interest on the 2.75% Convertible Senior Notes is due semi-annually beginning June 15, 2011. Beginning with the period commencing December 20, 2015, under certain circumstances based on the average trading price of the 2.75% Convertible Senior Notes, we may be required to pay contingent interest. The 2.75% Convertible Senior Notes are unsecured and unsubordinated, and currently are guaranteed by substantially all of our wholly-owned subsidiaries.

Certain provisions under ASC Topic 470, Debt, require the issuer of convertible debt instruments that may be settled in cash on conversion to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. We have applied these provisions related to our 2.75% Convertible Senior Notes. We estimated the fair value of the 2.75% Convertible Senior Notes using similar debt instruments at issuance that did not have a conversion feature and allocated the residual fair value to an equity component that represents the estimated fair value of the conversion feature at issuance. The debt discount of the 2.75% Convertible Senior Notes is being amortized over five years and the annual effective interest is 7.1% after giving effect to the amortization of the discount and deferred financing costs. At November 30, 2010, the principal amount of the 2.75% Convertible Senior Notes was $446.0 million, the unamortized discount included in stockholders’ equity was $70.1 million and the net carrying amount of the 2.75% Convertible Senior Notes was $375.9 million. The carrying amount of the equity component of the 2.75% Convertible Senior Notes was $71.2 million at November 30, 2010. During the year ended November 30, 2010, the amount of interest recognized relating to both the contractual interest and amortization of the discount was $1.7 million.

In May 2010, we issued $250 million of 6.95% senior notes due 2018 (the “6.95% Senior Notes”) at a price of 98.929% in a private placement. Proceeds from the offering, after payment of initial purchaser’s discount and expenses, were $243.9 million. We used the net proceeds of the sale of the 6.95% Senior Notes to fund purchases pursuant to our tender offer for our 5.125% senior notes due October 2010, our 5.95% senior notes due 2011 and our 5.95% senior notes due 2013. Interest on the 6.95% Senior Notes is due semi-annually beginning December 1, 2010. The 6.95% Senior Notes are unsecured and unsubordinated, and currently are guaranteed by substantially all of our wholly-owned subsidiaries. Subsequently, most of the privately placed 6.95% Senior Notes were exchanged for substantially identical 6.95% senior notes that had been registered under the Securities Act of 1933. At November 30, 2010, the carrying amount of the 6.95% Senior Notes was $247.3 million.

In May 2010, we also issued $276.5 million of 2.00% convertible senior notes due 2020 (the “2.00% Convertible Senior Notes”) at a price of 100% in a private placement. Proceeds from the offering, after payment of expenses, were $271.2 million. The net proceeds are being used for general corporate purposes, including repayments or repurchases of existing senior notes or other indebtedness. The 2.00% Convertible Senior Notes are convertible into shares of Class A common stock at the initial conversion rate of 36.1827 shares of common stock per $1,000 principal amount of the 2.00% Convertible Senior Notes or 10,004,517 Class A common shares if all the 2.00% Convertible Senior Notes are converted, which is equivalent to an initial conversion price of approximately $27.64 per share of Class A common stock, subject to anti-dilution adjustments. The shares are

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included in the calculation of diluted earnings per share. Holders of the 2.00% Convertible Senior Notes will have the right to require us to repurchase them for cash equal to 100% of their principal amount, plus accrued but unpaid interest, on each of December 1, 2013 and December 1, 2015. We will have the right to redeem the 2.00% Convertible Senior Notes at any time on or after December 1, 2013 for 100% of their principal amount, plus accrued but unpaid interest. Interest on the 2.00% Convertible Senior Notes is due semi-annually beginning December 1, 2010. Beginning with the six-month interest period commencing December 1, 2013, under certain circumstances based on the average trading price of the 2.00% Convertible Senior Notes, we may be required to pay contingent interest. The 2.00% Convertible Senior Notes are unsecured and unsubordinated, and are currently guaranteed by substantially all of our wholly-owned subsidiaries. At November 30, 2010, the carrying amount of the 2.00% Convertible Senior Notes was $276.5 million.

In May 2010, we repurchased $289.4 million aggregate principal amount of our senior notes due 2010, 2011 and 2013 through a tender offer, resulting in a pre-tax loss of $10.8 million. Through the tender offer, we repurchased $76.4 million principal amount of our 5.125% senior notes due October 2010, $130.8 million principal amount of our 5.95% senior notes due 2011 and $82.3 million principal amount of our 5.95% senior notes due 2013.

During the years ended November 30, 2010 and 2009, we redeemed $150.8 million (including the amount redeemed through the tender offer) and $50.0 million, respectively, of our 5.125% senior notes due October 2010. In October 2010, we retired the remaining $99.2 million of our 5.125% senior notes due October 2010 for 100% of the outstanding principal amount plus accrued and unpaid interest as of the maturity date.

During the years ended November 30, 2010 and 2009, we redeemed $131.8 million (including the amount redeemed through the tender offer) and $5.0 million, respectively, of our 5.95% senior notes due 2011. At November 30, 2010 and 2009, the carrying amount of our 5.95% senior notes due 2011 was $113.2 million and $244.7 million, respectively.

During the year ended November 30, 2010, we redeemed $82.3 million (including the amount redeemed through the tender offer) of our 5.95% senior notes due 2013. At November 30, 2010 and 2009, the carrying amount of our 5.95% senior notes due 2013 was $266.3 million and $347.5 million, respectively.

Currently, substantially all of our wholly-owned subsidiaries are guaranteeing all our Senior Notes (the “Guaranteed Notes”). The guarantees are full and unconditional. The principal reason our wholly-owned subsidiaries guaranteed the Guaranteed Notes is so holders of the Guaranteed Notes will have rights at least as great with regard to our subsidiaries as any other holders of a material amount of our unsecured debt. Therefore, the guarantees of the Guaranteed Notes will remain in effect only while the guarantor subsidiaries guarantee a material amount of the debt of Lennar Corporation, as a separate entity, to others. At any time, when a guarantor subsidiary is no longer guaranteeing at least $75 million of Lennar Corporation’s debt other than the Guaranteed Notes, either directly or by guaranteeing other subsidiaries’ obligations as guarantors of Lennar Corporation’s debt, the guarantor subsidiaries’ guarantee of the Guaranteed Notes will be suspended. Therefore, if, the guarantor subsidiaries cease guaranteeing Lennar Corporation’s obligations under its letter of credit facility and are not guarantors of any new debt, the guarantor subsidiaries’ guarantees of the Guaranteed Notes will be suspended until such time, if any, as they again are guaranteeing at least $75 million of Lennar Corporation’s debt other than the Guaranteed Notes.

If our guarantor subsidiaries are guaranteeing a revolving credit lines totaling at least $75 million, we will treat the guarantees of the Guaranteed Notes as remaining in effect even during periods when Lennar Corporation’s borrowings under the revolving credit lines are less than $75 million.

In February 2010, we terminated our $1.1 billion senior unsecured revolving credit facility (the “Credit Facility”) and entered into cash-collateralized letter of credit agreements with two banks with a capacity totaling $225 million. At that time, we had no outstanding borrowings under the Credit Facility as it was only being used to issue letters of credit. In November 2010, we terminated our cash-collateralized letter of credit agreements and simultaneously entered into a $150 million Letter of Credit and Reimbursement Agreement (“LC Agreement”) with certain financial institutions. The LC Agreement may be increased to $200 million, although there are currently no commitments for the additional $50 million. At November 30, 2010, we believe we were in compliance with our debt covenants.

Our performance letters of credit outstanding were $78.9 million and $97.7 million, respectively, at November 30, 2010 and 2009. Our financial letters of credit outstanding were $195.0 million and $205.4 million, respectively, at November 30, 2010 and 2009. Performance letters of credit are generally posted with regulatory

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bodies to guarantee our performance of certain development and construction activities, and financial letters of credit are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral.

At November 30, 2010, our Lennar Financial Services segment had a warehouse repurchase facility with a maximum aggregate commitment of $150 million and an additional uncommitted amount of $50 million that matures in April 2011, and another warehouse repurchase facility with a maximum aggregate commitment of $175 million that matures in July 2011. The maximum aggregate commitment under these facilities totaled $325 million. Our Lennar Financial Services segment uses these facilities to finance its lending activities until the mortgage loans are sold to investors and expects the facilities to be renewed or replaced with other facilities when they mature. Borrowings under the facilities were $271.6 million and $217.5 million, respectively, at November 30, 2010 and 2009, and were collateralized by mortgage loans and receivables on loans sold to investors but not yet paid for with outstanding principal balances of $286.0 million and $266.9 million, respectively, at November 30, 2010 and 2009. These facilities have several interest rate-pricing options, which fluctuate with market rates. The combined effective interest rate on the facilities at November 30, 2010 was 3.9%.

Since our Lennar Financial Services segment’s borrowings under the warehouse repurchase facilities are generally repaid with the proceeds from the sale of mortgage loans and receivables on loans that secure those borrowings, the facilities are not likely to be a call on our current cash or future cash resources. If the facilities are not renewed, the borrowings under the lines of credit will be paid off by selling the mortgage loans held-for-sale and by collecting on receivables on loans sold but not yet paid. Without the facilities, our Lennar Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.

Our Lennar Financial Services segment, in the normal course of business, uses derivative financial instruments to reduce its exposure to fluctuations in interest rates. Our Lennar Financial Services segment enters into forward commitments and, to a lesser extent, option contracts to protect the value of loans held-for-sale from increases in market interest rates. We do not anticipate that we will suffer credit losses from counterparty non-performance.

Changes in Capital Structure

We have a stock repurchase program which permits the purchase of up to 20 million shares of our outstanding common stock. During 2010, 2009 and 2008, there were no share repurchases of common stock under the stock repurchase program. As of November 30, 2010, 6.2 million shares of common stock can be repurchased in the future under the program.

Treasury stock increased by 0.1 million Class A common shares and 0.3 million Class A common shares, respectively, during the years ended November 30, 2010 and November 30, 2009, due to activity related to our equity compensation plan and forfeitures of restricted stock.

In April 2009, we entered into distribution agreements with J.P Morgan Securities, Inc., Citigroup Global Markets Inc., Merril Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., relating to an offering of our Class A common stock into the market from time to time for an aggregate of up to $275 million. As of November 30, 2009, we had sold a total of 21.0 million shares of our Class A common stock under the equity offering for gross proceeds of $225.5 million, or an average of $10.76 per share. After compensation to the distributors of $4.5 million, we received net proceeds of $221.0 million. We used the proceeds from the offering for general corporate purposes. There was no activity related to these distribution agreements during 2010.

During 2010 and 2009, Class A and Class B common stock holders received a per share annual dividend of $0.16. In October 2008, the Company’s Board of Directors voted to decrease the annual dividend rate with regard to the Company’s Class A and Class B common stock to $0.16 per share per year (payable quarterly) from $0.64 per share per year (payable quarterly). During 2008, Class A and Class B common stockholders received per share annual dividends of $0.52.

Based on our current financial condition and credit relationships, we believe that our operations and borrowing resources will provide for our current and long-term capital requirements at our anticipated levels of activity.

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Off-Balance Sheet Arrangements

Lennar Homebuilding—Investments in Unconsolidated Entities

At November 30, 2010, we had equity investments in 42 unconsolidated entities (of which 14 had recourse debt, 11 had non-recourse debt and 17 had no debt), compared to 61 unconsolidated entities at November 30, 2009. Historically, we invested in unconsolidated entities that acquire and develop land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our partner. Each joint venture is governed by an executive committee consisting of members from the partners.

Although the strategic purposes of our joint ventures and the nature of our joint ventures partners vary, the joint ventures are generally designed to acquire, develop and/or sell specific assets during a limited life-time. The joint ventures are typically structured through non-corporate entities in which control is shared with our venture partners. Each joint venture is unique in terms of its funding requirements and liquidity needs. We and the other joint venture participants typically make pro-rata cash contributions to the joint venture. In many cases, our risk is limited to our equity contribution and potential future capital contributions. Additionally, most joint ventures obtain third-party debt to fund a portion of the acquisition, development and construction costs of their communities. The joint venture agreements usually permit, but do not require, the joint ventures to make additional capital calls in the future. However, capital calls relating to the repayment of joint venture debt under payment or maintenance guarantees generally is required.

Under the terms of our joint venture agreements, we generally have the right to share in earnings and distributions of the entities on a pro-rata basis based on our ownership percentage. Some joint venture agreements provide for a different allocation of profit and cash distributions if and when the cumulative results of the joint venture exceed specified targets (such as a specified internal rate of return). Lennar Homebuilding equity in earnings (loss) from unconsolidated entities excludes our pro-rata share of joint ventures’ earnings resulting from land sales to our homebuilding divisions. Instead, we account for those earnings as a reduction of our costs of purchasing the land from the joint ventures. This in effect defers recognition of our share of the joint ventures’ earnings related to these sales until we deliver a home and title passes to a third-party homebuyer.

In some instances, we are designated as the manager under the direction of a management committee that has shared power amongst the partners of the unconsolidated entity and receive fees for such services. In addition, we often enter into option contracts to acquire properties from our joint ventures, generally for market prices at specified dates in the future. Option contracts generally require us to make deposits using cash or irrevocable letters of credit toward the exercise price. These option deposits are generally negotiated by management on a case by case basis.

We regularly monitor the results of our unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. Joint ventures in which we have investments are subject to a variety of financial and non-financial debt covenants related primarily to equity maintenance, fair value of collateral and minimum homesite takedown or sale requirements. We monitor the performance of joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our investment.

Our arrangements with joint ventures generally do not restrict our activities or those of the other participants. However, in certain instances, we agree not to engage in some types of activities that may be viewed as competitive with the activities of these ventures in the localities where the joint ventures do business.

As discussed above, the joint ventures in which we invest generally supplement equity contributions with third-party debt to finance their activities. In many instances, the debt financing is non-recourse, thus neither we nor the other equity partners are a party to the debt instruments. In other cases, we and the other partners agree to provide credit support in the form of repayment or maintenance guarantees.

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Material contractual obligations of our unconsolidated joint ventures primarily relate to the debt obligations described above. The joint ventures generally do not enter into lease commitments because the entities are managed either by us, or another of the joint venture participants, who supply the necessary facilities and employee services in exchange for market-based management fees. However, they do enter into management contracts with the participants who manage them. Some joint ventures also enter into agreements with developers, which may be us or other joint venture participants, to develop raw land into finished homesites or to build homes.

The joint ventures often enter into option agreements with buyers, which may include us or other joint venture participants, to deliver homesites or parcels in the future at market prices. Option deposits are recorded by the joint ventures as liabilities until the exercise dates at which time the deposit and remaining exercise proceeds are recorded as revenue. Any forfeited deposit is recognized as revenue at the time of forfeiture. Our unconsolidated joint ventures generally do not enter into off-balance sheet arrangements.

As described above, the liquidity needs of joint ventures in which we have investments vary on an entity-by-entity basis depending on each entity’s purpose and the stage in its life cycle. During formation and development activities, the entities generally require cash, which is provided through a combination of equity contributions and debt financing, to fund acquisition and development of properties. As the properties are completed and sold, cash generated is available to repay debt and for distribution to the joint venture’s members. Thus, the amount of cash available for a joint venture to distribute at any given time is primarily a function of the scope of the joint venture’s activities and the stage in the joint venture’s life cycle.

We track our share of cumulative earnings and cumulative distributions of our joint ventures. For purposes of classifying distributions received from joint ventures in our statements of cash flows, cumulative distributions are treated as returns on capital to the extent of cumulative earnings and included in our consolidated statements of cash flows as operating activities. Cumulative distributions in excess of our share of cumulative earnings are treated as returns of capital and included in our consolidated statements of cash flows as investing activities.

Summarized financial information on a combined 100% basis related to Lennar Homebuilding’s unconsolidated entities that are accounted for by the equity method was as follows:

Statements of Operations and Selected Information	Years Ended November 30,
	2010			2009			2008
	(Dollars in thousands)
Revenues	$	236,752			339,993			862,728
Costs and expenses		378,997			1,212,866			1,394,601
Net loss of unconsolidated entities (1)	$	(142,245	)		(872,873	)		(531,873	)
Our share of net loss	$	(13,301	)		(131,138	)		(55,598	)
Our share of net loss—recognized (2)	$	(10,966	)		(130,917	)		(59,156	)
Our cumulative share of net earnings—deferred at November 30	$	8,689			12,052			21,491
Our investments in unconsolidated entities	$	626,185			599,266			766,752
Equity of the unconsolidated entities	$	2,148,610			2,249,289			2,688,365
Our investment % in the unconsolidated entities		29	%		27	%		29	%

(1) The net loss of unconsolidated entities for the years ended November 30, 2010 and 2009 was primarily related to valuation adjustments and operating losses recorded by the unconsolidated entities. Our exposure to such losses was significantly lower as a result of our small ownership interest in the respective unconsolidated entities or our previous valuation adjustments to our investments in unconsolidated entities. In addition, for the year ended November 30, 2010, we recorded a net pre-tax gain of $7.7 million from a transaction related to one of our Lennar Homebuilding unconsolidated entities.

(2) For the years ended November 30, 2010, 2009 and 2008, our share of net loss recognized from unconsolidated entities includes $10.5 million, $101.9 million and $32.2 million, respectively, of our share of valuation adjustments related to assets of the unconsolidated entities in which we have investments.

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Balance Sheets	November 30,
	2010		2009
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	82,573		171,946
Inventories		3,371,435		3,628,491
Other assets		307,244		403,383
	$	3,761,252		4,203,820
Liabilities and equity:
Accounts payable and other liabilities	$	327,824		366,141
Debt		1,284,818		1,588,390
Equity		2,148,610		2,249,289
	$	3,761,252		4,203,820

In fiscal 2007, we sold a portfolio of land to a strategic land investment venture with Morgan Stanley Real Estate Fund II, L.P., an affiliate of Morgan Stanley & Co., Inc., in which we have a 20% ownership interest and 50% voting rights. Due to our continuing involvement, the transaction did not qualify as a sale under GAAP; thus, the inventory has remained on our consolidated balance sheet in consolidated inventory not owned. As of November 30, 2010 and 2009, the portfolio of land (including land development costs) of $424.5 million and $477.9 million, respectively, is reflected as inventory in the summarized condensed financial information related to unconsolidated entities in which we have investments.

In February 2007, LandSource Communities Development LLC (“LandSource”) admitted MW Housing Partners as a new strategic partner. As a result we received a distribution from LandSource of $707.6 million and our ownership in LandSource was reduced to 16%. In June 2008, LandSource and a number of its subsidiaries commenced proceedings under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In November 2008, our land purchase options with LandSource were terminated, thus, in 2008, we recognized a deferred profit of $101.3 million (net of $31.8 million of write-offs of option deposits and pre-acquisition costs and other write-offs) related to the 2007 recapitalization of LandSource. In July 2009, the United States Bankruptcy Court for the District of Delaware confirmed the plan of reorganization for LandSource. As a result of the bankruptcy proceedings, LandSource was reorganized into a new company called Newhall Land Development, LLC, (“Newhall”). The reorganized company emerged from Chapter 11 free of its previous bank debt. As part of the reorganization plan, during the year ended November 30, 2009, we invested $140 million in exchange for approximately 15% equity interest in the reorganized Newhall, ownership in several communities that were formerly owned by LandSource, the settlement and release of all claims that might have been asserted against us and certain other claims LandSource had against third parties.

Debt to total capital of the Lennar Homebuilding unconsolidated entities in which we have investments was calculated as follows:

	November 30,
	2010			2009
	(Dollars in thousands)
Debt	$	1,284,818			1,588,390
Equity		2,148,610			2,249,289
Total capital	$	3,433,428			3,837,679
Debt to total capital of our unconsolidated entities		37.4	%		41.4	%

Our investments in Lennar Homebuilding unconsolidated entities by type of venture were as follows:

	November 30,
	2010		2009
	(In thousands)
Land development	$	530,004		555,799
Homebuilding		96,181		43,467
Total investment	$	626,185		599,266

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During the year ended November 30, 2010, we recorded $10.5 million of our share of valuation adjustments related to the assets of unconsolidated entities in which we have investments, compared to $101.9 million for the year ended November 30, 2009. In addition, we recorded $1.7 million and $89.0 million, respectively, of valuation adjustments to our investments in unconsolidated entities for the years ended November 30, 2010 and 2009. We will continue to monitor our investments in joint ventures and the recoverability of assets owned by those joint ventures.

The summary of our net recourse exposure related to the Lennar Homebuilding unconsolidated entities in which we have investments was as follows:

	November 30,
	2010			2009
	(In thousands)
Several recourse debt—repayment	$	33,399			42,691
Several recourse debt—maintenance		29,454			75,238
Joint and several recourse debt—repayment		48,406			85,799
Joint and several recourse debt—maintenance		61,591			81,592
Land seller debt and other debt recourse exposure		—			2,420
Lennar’s maximum recourse exposure		172,850			287,740
Less: joint and several reimbursement agreements with our partners		(58,878	)		(93,185	)
Lennar’s net recourse exposure	$	113,972			194,555

During the year ended November 30, 2010, we reduced our maximum recourse exposure related to indebtedness of our Lennar Homebuilding unconsolidated entities by $114.9 million, of which $82.5 million was paid by us primarily through capital contributions to unconsolidated entities and $32.4 million related to a reduction in the number of joint ventures in which we have investments, the reduction of joint and several recourse debt and the joint ventures selling inventory.

As of November 30, 2010, we had $10.2 million of obligation guarantees recorded as a liability on our consolidated balance sheet, compared to $14.1 million as of November 30, 2009. During the year ended November 30, 2010, the liability was reduced by $11.0 million as a result of the debt extinguishment related to one of our unconsolidated entities and by $2.1 million due to cash paid related to an obligation guarantee previously recorded. This was partially offset by an accrual of $9.2 million established by us to cover claims arising under obligation guarantees. The obligation guarantees are estimated based on current facts and circumstances and any unexpected changes may lead us to incur additional liabilities under our obligation guarantees in the future.

Indebtedness of an unconsolidated entity is secured by its own assets. Some unconsolidated entities own multiple properties and other assets. There is no cross collateralization of debt to different unconsolidated entities. We also do not use our investment in one unconsolidated entity as collateral for the debt in another unconsolidated entity or commingle funds among our unconsolidated entities.

In connection with a loan to an unconsolidated entity, we and our partners often guarantee to a lender either jointly and severally or on a several basis, any, or all of the following: (i) the completion of the development, in whole or in part, (ii) indemnification of the lender from environmental issues, (iii) indemnification of the lender from “bad boy acts” of the unconsolidated entity (or full recourse liability in the event of unauthorized transfer or bankruptcy) and (iv) that the loan to value and/or loan to cost will not exceed a certain percentage (maintenance or remargining guarantee) or that a percentage of the outstanding loan will be repaid (repayment guarantee).

In connection with loans to an unconsolidated entity where there is a joint and several guarantee, we generally have a reimbursement agreement with our partner. The reimbursement agreement provides that neither party is responsible for more than its proportionate share of the guarantee. However, if our joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, we may be liable for more than our proportionate share, up to our maximum exposure, which is the full amount covered by the joint and several guarantee.

The recourse debt exposure in the previous table represents our maximum exposure to loss from guarantees and does not take into account the underlying value of the collateral or the other assets of the borrowers that are

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available to repay debt or to reimburse us for any payments on our guarantees. Our Lennar Homebuilding unconsolidated entities that have recourse debt have a significant amount of assets and equity. The summarized balance sheets of our Lennar Homebuilding unconsolidated entities with recourse debt were as follows.

	November 30,
	2010		2009
	(In thousands)
Assets	$	990,028		1,324,993
Liabilities		487,606		777,836
Equity		502,422		547,157

In addition, in most instances in which we have guaranteed debt of a Lennar Homebuilding unconsolidated entity, our partners have also guaranteed that debt and are required to contribute their share of the guarantee payment. Some of our guarantees are repayment guarantees and some are maintenance guarantees. In a repayment guarantee, we and our venture partners guarantee repayment of a portion or all of the debt in the event of a default before the lender would have to exercise its rights against the collateral. In the event of default, if our venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, we may be liable for more than our proportionate share, up to our maximum recourse exposure, which is the full amount covered by the joint and several guarantee. The maintenance guarantees only apply if the value of the collateral (generally land and improvements) is less than a specified percentage of the loan balance. If we are required to make a payment under a maintenance guarantee to bring the value of the collateral above the specified percentage of the loan balance, the payment would generally constitute a capital contribution or loan to the Lennar Homebuilding unconsolidated entity and increase our share of any funds the unconsolidated entity distributes.

In connection with many of the loans to Lennar Homebuilding unconsolidated entities, we and our joint venture partners (or entities related to them) have been required to give guarantees of completion to the lenders. Those completion guarantees may require that the guarantors complete the construction of the improvements for which the financing was obtained. If the construction is to be done in phases, the guarantee generally is limited to completing only the phases as to which construction has already commenced and for which loan proceeds were used.

During the year ended November 30, 2010, there were: (1) payments of $10.0 million under our maintenance guarantees, (2) at our election, a loan paydown of $50.3 million, representing both our and our partner’s share, in return for 4-year loan extension and the rights to obtain preferred returns and priority distributions at one of our unconsolidated entities, and (3) a $19.3 million payment to extinguish debt at a discount and buy out the partner of one of our unconsolidated entities resulting in a net pre-tax gain of $7.7 million. In addition, during the year ended November 30, 2010, there were other loan paydowns of $28.1 million, a portion of which related to amounts paid under our repayment guarantees. During the year ended November 30, 2009, there were payments of $31.6 million under our maintenance guarantees and there were other loan repayments of $72.4 million, a portion of which related to amounts paid under our repayment guarantees. During the years ended November 30, 2010, there were no payments under completion guarantees. During the years ended November 30, 2009, there was a payment of $5.6 million under a completion guarantee related to one joint venture.

As of November 30, 2010, the fair values of the maintenance guarantees, completion guarantees and repayment guarantees were not material. We believe that as of November 30, 2010, in the event we become legally obligated to perform under a guarantee of the obligation of a Lennar Homebuilding unconsolidated entity due to a triggering event under a guarantee, most of the time the collateral should be sufficient to repay at least a significant portion of the obligation or we and our partners would contribute additional capital into the venture.

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The total debt of Lennar Homebuilding unconsolidated entities in which we have investments was as follows:

	November 30,
	2010			2009
	(Dollars in thousands)
Lennar’s net recourse exposure	$	113,972			194,555
Reimbursement agreements from partners		58,878			93,185
Lennar’s maximum recourse exposure		172,850			287,740
Non-recourse bank debt and other debt (partner’s share of several recourse)		79,921			140,078
Non-recourse land seller debt or other debt		58,604			47,478
Non-recourse debt with completion guarantees		600,297			608,397
Non-recourse debt without completion guarantees		373,146			504,697
Non-recourse debt to Lennar		1,111,968			1,300,650
Total debt	$	1,284,818			1,588,390
Lennar’s maximum recourse exposure as a % of total JV debt		13	%		18	%

In view of current credit market conditions, it is not uncommon for lenders to real estate developers, including joint ventures in which we have interests, to assert non-monetary defaults (such as failure to meet construction completion deadlines or declines in the market value of collateral below required amounts) or technical monetary defaults against the real estate developers. In most instances, those asserted defaults are resolved by modifications of the loan terms, additional equity investments or other concessions by the borrowers. In addition, in some instances, real estate developers, including joint ventures in which we have interests, are forced to request temporary waivers of covenants in loan documents or modifications of loan terms, which are often, but not always obtained. However, in some instances developers, including joint ventures in which we have interests, are not able to meet their monetary obligations to lenders, and are thus declared in default. Because we sometimes guarantee all or portions of the obligations to lenders of joint ventures in which we have interests, when these joint ventures default on their obligations, lenders may or may not have claims against us. Normally, we do not make payments with regard to guarantees of joint venture obligations while the joint ventures are contesting assertions regarding sums due to their lenders. When it is determined that a joint venture is obligated to make a payment that we have guaranteed and the joint venture will not be able to make that payment, we accrue the amounts probable to be paid by us as a liability. Although we generally fulfill our guarantee obligations within a reasonable time after we determine that we are obligated with regard to them, at any point in time it is likely that we will have some balance of unpaid guarantee liability. At November 30, 2010, the liability for unpaid guarantees of joint venture indebtedness on our consolidated balance sheet totaled $10.2 million.

The following table summarizes the principal maturities of our Lennar Homebuilding unconsolidated entities (“JVs”) debt as per current debt arrangements as of November 30, 2010 and does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.

			Principal Maturities of Unconsolidated JVs by Period
	Total JV Assets (1)		Total JV Debt		2011 (2)		2012		2013		Thereafter		Other Debt (3)
			(In thousands)
Net recourse debt to Lennar	$			113,972		68,237		24,983		13,548		7,204		—
Reimbursement agreements				58,878		—		23,444		8,434		27,000		—
Maximum recourse debt exposure to Lennar	$	990,028		172,850		68,237		48,427		21,982		34,204		—
Debt without recourse to Lennar		2,450,048		1,111,968		815,481		58,082		44,493		133,388		60,524
Total	$	3,440,076		1,284,818		883,718		106,509		66,475		167,592		60,524

(1) Excludes unconsolidated joint venture assets where the joint venture has no debt.

(2) Subsequent to November 30, 2010, one of our Lennar Homebuilding unconsolidated entities extended the maturity of its $573.5 million debt without recourse to Lennar until 2018. In exchange for the favorable

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extension, all the partners agreed to provide a limited several repayment guarantee on the outstanding debt, which will result in a $36.3 million increase to our maximum recourse debt exposure related to Lennar Homebuilding unconsolidated entities.

(3) Represents land seller debt and other debt.

The following table is a breakdown of the assets, debt and equity of the Lennar Homebuilding unconsolidated joint ventures by partner type as of November 30, 2010:

	Total JV Assets		Maximum Recourse Debt Exposure to Lennar		Reimbursement Agreements		Net Recourse Debt to Lennar		Total Debt Without Recourse to Lennar		Total JV Debt		Total JV Equity		JV Debt  to Total Capital Ratio			Remaining Homes/ Homesites in JV
	(Dollars in thousands)
Partner Type:
Financial	$	2,464,122		30,000		27,000		3,000		823,857		853,857	$	1,303,777		40	%		41,987
Land Owners/Developers		539,386		50,506		—		50,506		118,476		168,982		314,975		35	%		20,577
Other Builders		371,919		32,152		8,434		23,718		76,282		108,434		247,806		30	%		6,549
Strategic		385,825		60,192		23,444		36,748		32,829		93,021		282,052		25	%		6,711
Total	$	3,761,252		172,850		58,878		113,972		1,051,444		1,224,294	$	2,148,610		36	%		75,824
Land seller debt and other debt	$			—		—		—		60,524		60,524
Total JV debt	$			172,850		58,878		113,972		1,111,968		1,284,818

The table below indicates the assets, debt and equity of our 10 largest Lennar Homebuilding unconsolidated joint venture investments as of November 30, 2010:

	Lennar’s Investment		Total JV Assets		Maximum Recourse Debt Exposure to Lennar		Reimbursement Agreements		Net Recourse Debt to Lennar		Total Debt Without Recourse to Lennar		Total JV Debt		Total JV Equity		JV Debt to Total Capital Ratio
	(Dollars in thousands)
Top Ten JVs (1):
Platinum Triangle Partners	$	107,468		270,383		46,889		23,445		23,444		—		46,889		213,381		18	%
Heritage Fields El Toro		82,541		1,288,756		—		—		—		573,467		573,467		649,025		47	%
Central Park West Holdings		62,268		197,745		30,000		27,000		3,000		120,251		150,251		44,697		77	%
Newhall Land Development		47,085		452,832		—		—		—		—		—		271,961		—
Runkle Canyon		37,014		75,375		—		—		—		—		—		74,029		—
Ballpark Village		35,878		124,927		—		—		—		52,910		52,910		71,376		43	%
LS College Park		34,649		68,300		—		—		—		—		—		67,805		—
MS Rialto Residential Holdings		29,268		436,285		—		—		—		103,310		103,310		314,415		25	%
Treasure Island Community Development		21,449		45,594		—		—		—		—		—		42,929		—
Rocking Horse Partners		19,205		48,085		—		—		—		8,628		8,628		38,411		18	%
10 largest JV investments		476,825		3,008,282		76,889		50,445		26,444		858,566		935,455		1,788,029		34	%
Other JVs		149,360		752,970		95,961		8,433		87,528		192,878		288,839		360,581		44	%
Total	$	626,185		3,761,252		172,850		58,878		113,972		1,051,444		1,224,294		2,148,610		36	%
Land seller debt and other debt	$					—		—		—		60,524		60,524
Total JV debt	$					172,850		58,878		113,972		1,111,968		1,284,818

(1) All of the joint ventures presented in the table above operate in our Homebuilding West segment except for Rocking Horse Partners, which operates in our Homebuilding Central segment, and MS Rialto Residential Holdings, which operates in all of our homebuilding segments and Homebuilding Other.

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The table below indicates the percentage of assets, debt and equity of our 10 largest Lennar Homebuilding unconsolidated joint venture investments as of November 30, 2010:

	% of Total JV Assets			% of Maximum Recourse Debt Exposure to Lennar			% of Net Recourse Debt to Lennar			% of Total Debt Without Recourse to Lennar			% of Total JV Equity
10 largest JVs		80	%		44	%		23	%		82	%		83	%
Other		20	%		56	%		77	%		18	%		17	%
Total		100	%		100	%		100	%		100	%		100	%

Rialto Investments—Investments in Unconsolidated Entities

In March 2009, the Legacy Securities program was announced by the U.S. Department of the Treasury (the “U.S. Treasury”) under the Federal government’s PPIP. The PPIP matches private capital with public capital and financing provided by the U.S. Treasury, which provides an opportunity for private investors to invest in certain non-agency residential mortgage-backed securities and CMBS issued prior to 2009 that were originally rated AAA, or an equivalent rating, by two or more nationally recognized statistical organizations without ratings enhancements. These securities are backed directly by actual mortgage loans and not by other securities.

During fiscal 2009, we committed to invest $75 million in the Federal government’s PPIP fund managed by AB. An affiliate of Rialto is a sub-advisor to the AB PPIP fund and receives management fees for sub-advisory services. Total equity commitments of approximately $1.2 billion were made by private investors in this fund, and the U.S. Treasury has committed to a matching amount of approximately $1.2 billion of equity in the fund, as well as agreeing to extend up to approximately $2.3 billion of debt financing. As of November 30, 2010, 85% of committed capital has been called including our portion, $63.8 million of the $75 million we committed to invest. As of November 30, 2010, the AB PPIP has invested approximately $4.0 billion to purchase $6.4 billion in face amount of non-agency residential mortgage-backed securities and commercial mortgage-backed securities and it is reflected in investments in the summarized condensed balance sheets of Rialto’s unconsolidated entities. The gross yield of the fund since its inception has totaled approximately 39%. As of November 30, 2010, the carrying value of our investment in the AB PPIP fund was $77.3 million.

In November 2010, our Rialto segment completed the closing of its Fund with initial equity commitments of approximately $300 million (including $75 million committed by us). The Fund’s objective during its three-year investment period is to invest in distressed real estate assets and other related investments that fit within the Fund’s investment parameters.

As of November 30, 2010, a subsidiary in our Rialto segment also has a $7.3 million, or approximately 5%, investment in the Service Provider, which provides services to the consolidated LLCs.

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Summarized condensed financial information on a combined 100% basis related to Rialto’s investment in unconsolidated entities in which Rialto has investments that are accounted for by the equity method as of November 30, 2010 was as follows:

Balance Sheets	November 30,
	2010		2009 (1)
	(In thousands)
Assets:
Cash and cash equivalents	$	42,793		2,229
Investments		4,341,226		—
Other assets		181,600		179,985
	$	4,565,619		182,214
Liabilities and equity:
Accounts payable and other liabilities	$	110,921		58,209
Partner loans		137,820		135,570
Debt due to the U.S. Treasury		1,955,000		—
Equity		2,361,878		(11,565	)
	$	4,565,619		182,214

	Years Ended November 30,
Statements of Operations	2010		2009 (1)
	(In thousands)
Revenues	$	357,330		58,464
Costs and expenses		209,103		89,570
Other gains		311,468		—
Net earnings (loss) of unconsolidated entities	$	459,695		(31,106	)
Rialto Investments’ share of net earnings recognized	$	15,363		—

(1) Amounts included as of and for the year ended November 30, 2009 relate only to the Service Provider because the Company did not invest in the AB PPIP fund until December 2009.

Option Contracts

We have access to land through option contracts, which generally enables us to control portions of properties owned by third parties (including land funds) and unconsolidated entities until we have determined whether to exercise the option.

A majority of our option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land. Until recently, these option deposits generally have approximated 10% of the exercise price. Our option contracts sometimes include price adjustment provisions, which adjust the purchase price of the land to its approximate fair value at the time of acquisition or are based on fair value at the time of takedown. The exercise periods of our option contracts generally range from one-to-ten years.

Our investments in option contracts are recorded at cost unless those investments are determined to be impaired, in which case our investments are written down to fair value. We review option contracts for indicators of impairment during each reporting period. The most significant indicator of impairment is a decline in the fair value of the optioned property such that the purchase and development of the optioned property would no longer meet our targeted return on investment. Such declines could be caused by a variety of factors including increased competition, decreases in demand or changes in local regulations that adversely impact the cost of development. Changes in any of these factors would cause us to re-evaluate the likelihood of exercising our land options.

Some option contracts contain a predetermined take-down schedule for the optioned land parcels. However, in almost all instances, we are not required to purchase land in accordance with those take-down schedules. In substantially all instances, we have the right and ability to not exercise our option and forfeit our deposit without further penalty, other than termination of the option and loss of any unapplied portion of our deposit and pre-acquisition costs. Therefore, in substantially all instances, we do not consider the take-down price to be a firm contractual obligation.

When we intend not to exercise an option, we write-off any deposit and pre-acquisition costs associated with the option contract. For the years ended November 30, 2010, 2009 and 2008, we wrote-off $3.1 million, $84.4 million and $97.2 million, respectively, of option deposits and pre-acquisition costs related to homesites under option that we do not intend to purchase.

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The table below indicates the number of homesites owned and homesites to which we had access through option contracts with third parties (“optioned”) or unconsolidated joint ventures (“JVs”) (i.e., controlled homesites) at November 30, 2010 and 2009:

November 30, 2010	Controlled Homesites						Owned Homesites		Total Homesites
	Optioned		JVs		Total
East		4,856		1,631		6,487		26,565		33,052
Central		1,061		1,721		2,782		16,236		19,018
West		304		7,753		8,057		26,213		34,270
Houston		1,431		305		1,736		5,926		7,662
Other		838		74		912		9,542		10,454
Total homesites		8,490		11,484		19,974		84,482		104,456

	Controlled Homesites						Owned Homesites		Total Homesites
November 30, 2009	Optioned		JVs		Total
East		4,701		1,900		6,601		28,406		35,007
Central		1,273		2,381		3,654		15,607		19,261
West		78		7,667		7,745		24,770		32,515
Houston		901		1,728		2,629		6,672		9,301
Other		470		74		544		7,248		7,792
Total homesites		7,423		13,750		21,173		82,703		103,876

We evaluate all option contracts for land when entered into or upon a reconsideration event to determine whether they are VIEs and, if so, whether we are the primary beneficiary of certain of these option contracts. Although we do not have legal title to the optioned land, if we are deemed to be the primary beneficiary, we are required to consolidate the land under option at the purchase price of the optioned land. During the year ended November 30, 2010, the effect of consolidation of these option contracts was a net increase of $19.8 million to consolidated inventory not owned with a corresponding increase to liabilities related to consolidated inventory not owned in our consolidated balance sheet as of November 30, 2010. To reflect the purchase price of the inventory consolidated, we reclassified the related option deposits from land under development to consolidated inventory not owned in the accompanying consolidated balance sheet as of November 30, 2010. The liabilities related to consolidated inventory not owned primarily represent the difference between the option exercise prices for the optioned land and our cash deposits. However, consolidated inventory not owned decreased due to (1) our exercise of options to acquire land under certain contracts previously consolidated and (2) the deconsolidation of certain option contracts totaling $75.5 million related to the adoption of certain new provisions under ASC Topic 810, Consolidation, (“ASC 810”), resulting in a net decrease in consolidated inventory not owned of $139.2 million for the year ended November 30, 2010.

Our exposure to loss related to our option contracts with third parties and unconsolidated entities consisted of our non-refundable option deposits and pre-acquisition costs totaling $157.4 million and $127.4 million, respectively, at November 30, 2010 and 2009. Additionally, we had posted $48.9 million and $58.2 million, respectively, of letters of credit in lieu of cash deposits under certain option contracts as of November 30, 2010 and 2009.

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Contractual Obligations and Commercial Commitments

The following table summarizes our contractual obligations at November 30, 2010:

Contractual Obligations			Payments Due by Period
	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
	(In thousands)
Lennar Homebuilding—Senior notes and other debts payable	$	3,128,154		206,985		591,530		784,188		1,545,451
Lennar Financial Services—Notes and other debts payable		271,678		271,623		42		13		—
Interest commitments under interest bearing debt (1)		940,502		177,096		314,100		248,010		201,296
Rialto Investments—Notes payable (2)		752,302		—		503,907		222,000		26,395
Operating leases		115,254		35,031		40,730		24,012		15,481
Other contractual obligations (3)		86,185		86,185		—		—		—
Total contractual obligations (4)	$	5,294,075		776,920		1,450,309		1,278,223		1,788,623

(1) Interest commitments on variable interest-bearing debt are determined based on the interest rate as of November 30, 2010.

(2) Amount includes $626.9 million of notes payable that consolidated as part of the LLC consolidation related to the FDIC transaction and is non-recourse to Lennar; however, $101.3 million of cash collections on loans in excess of expenses was deposited in a defeasance account established for the repayment of the notes payable. The notes payable have extension provisions which could extend the maturity of amounts due for up to seven years from origination.

(3) Commitments to fund Rialto segment’s equity investments ($11.2 million in the AB PPIP fund and $75 million in the Fund).

(4) Total contractual obligations exclude our gross unrecognized tax benefits of $46.0 million as of November 30, 2010, because we are unable to make reasonable estimates as to the period of cash settlement with the respective taxing authorities.

We are subject to the usual obligations associated with entering into contracts (including option contracts) for the purchase, development and sale of real estate in the routine conduct of our business. Option contracts for the purchase of land generally enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our option. This reduces our financial risk associated with land holdings. At November 30, 2010, we had access to 19,974 homesites through option contracts with third parties and unconsolidated entities in which we have investments. At November 30, 2010, we had $157.4 million of non-refundable option deposits and pre-acquisition costs related to certain of these homesites and $48.9 million of letters of credit posted in lieu of cash deposits under certain option contracts.

At November 30, 2010, we had letters of credit outstanding in the amount of $273.9 million (which included the $48.9 million of letters of credit discussed above). These letters of credit are generally posted either with regulatory bodies to guarantee our performance of certain development and construction activities, or in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. Additionally, at November 30, 2010, we had outstanding performance and surety bonds related to site improvements at various projects (including certain projects in our joint ventures) of $684.7 million. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all of the development and construction activities are completed. As of November 30, 2010, there were approximately $314.7 million, or 46%, of costs to complete related to these site improvements. We do not presently anticipate any draws upon these bonds, but if any such draws occur, we do not believe they would have a material effect on our financial position, results of operations or cash flows.

Our Lennar Financial Services segment had a pipeline of loan applications in process of $546.9 million at November 30, 2010. Loans in process for which interest rates were committed to the borrowers and builder commitments for loan programs totaled $202.3 million as of November 30, 2010. Substantially all of these commitments were for periods of 60 days or less. Since a portion of these commitments is expected to expire without being exercised by the borrowers or borrowers may not meet certain criteria at the time of closing, the total commitments do not necessarily represent future cash requirements.

Our Lennar Financial Services segment uses mandatory mortgage-backed securities (“MBS”) forward commitments, option contracts and investor commitments to hedge our mortgage-related interest rate exposure.

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These instruments involve, to varying degrees, elements of credit and interest rate risk. Credit risk associated with MBS forward commitments, option contracts and loan sales transactions is managed by limiting our counterparties to investment banks, federally regulated bank affiliates and other investors meeting our credit standards. Our risk, in the event of default by the purchaser, is the difference between the contract price and fair value of the MBS forward commitments and option contracts. At November 30, 2010, we had open commitments amounting to $270.8 million to sell MBS with varying settlement dates through February 2011.

The following sections discuss economic conditions, market and financing risk, seasonality and interest rates and changing prices that may have an impact on our business:

Economic Conditions

Throughout 2010, market conditions in the homebuilding industry have remained challenging. High unemployment and foreclosures have continued to present challenges for the housing market. Despite a decrease of 5% in our sales of homes revenue, home deliveries and new orders year over year, our gross margins on home sales improved to $517.9 million, or 19.7%, in the year ended November 30, 2010, from $252.0 million, or 9.1%, in the year ended November 30, 2009. The improvement in gross margins was primarily due to lower valuation adjustments, reduced sales incentives offered to homebuyers as a percentage of revenues from home sales, reduced construction costs and product re-engineering, as well as third-party recoveries relating to Chinese drywall. In addition, during the year ended November 30, 2010, we returned to profitability with net earnings of $95.3 million , or $0.51 per diluted share, compared to a net loss of $417.1 million, or $2.45 per diluted share during the year ended November 30, 2009. A continued decline in the sales pace could adversely affect our revenues and margins.

Market and Financing Risk

We finance our contributions to JVs, land acquisition and development activities, construction activities, financial services activities, Rialto activities and general operating needs primarily with cash generated from operations, debt issuances, equity issuances, as well as borrowings under our warehouse repurchase facilities. We also purchase land under option agreements, which enables us to control homesites until we have determined whether to exercise the option. We tried to manage the financial risks of adverse market conditions associated with land holdings by what we believed to be prudent underwriting of land purchases in areas we viewed as desirable growth markets, careful management of the land development process and, until recent years, limitation of risks by using partners to share the costs of purchasing and developing land, as well as obtaining access to land through option contracts. Although we believed our land underwriting standards were conservative, we did not anticipate the severe decline in land values and the sharply reduced demand for new homes encountered since 2007.

Seasonality

We have historically experienced variability in our results of operations from quarter-to-quarter due to the seasonal nature of the homebuilding business.

Interest Rates and Changing Prices

Inflation can have a long-term impact on us because increasing costs of land, materials and labor result in a need to increase the sales prices of homes. In addition, inflation is often accompanied by higher interest rates, which can have a negative impact on housing demand and the costs of financing land development activities and housing construction. Rising interest rates, as well as increased materials and labor costs, may reduce gross margins. An increase in material and labor costs is particularly a problem during a period, like the current period, of declining home prices. Conversely, deflation can impact the value of real estate and make it difficult for us to recover our land costs. Therefore, either inflation or deflation could adversely impact our future results of operations.

New Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-06, Improving Disclosures about Fair Value Measurements, (“ASU 2010-06”), which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the rollforward of activity in Level 3 fair value measurements. We adopted ASU 2010-06 for our second quarter ending May 31, 2010, except for the Level 3 activity disclosures which will be effective for our fiscal year beginning December 1, 2011. ASU 2010-06 has not and is not expected to have a material effect on our consolidated financial statements.

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In April 2010, the FASB issued ASU 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset, (“ASU 2010-18”). Under ASU 2010-18, modification of loans accounted for within a pool under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310-30”) does not result in removal of such loans from the pool even if the modification would otherwise be considered a troubled debt restructuring. An entity must continue to consider whether the pool of assets in which the modified loan is included is impaired if expected cash flows for the pool change. ASU 2010-18 does not affect the accounting for loans acquired with deteriorated credit quality that are not accounted for within a pool. Loans accounted for individually that were acquired with deteriorated credit quality continue to be subject to the accounting provisions for troubled debt restructuring by creditors. The amended guidance is to be applied prospectively, with early application permitted. ASU 2010-18 is effective for modifications of loans accounted for within a pool that occur on or after September 1, 2010. The adoption of this ASU did not have a material effect on our consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20, Disclosures About the Credit Quality of Financing Receivables and the Allowance for Credit Losses, (“ASU 2010-20”). ASU 2010-20 enhances current disclosure requirements to assist users of financial statements in assessing an entity’s credit risk exposure and evaluating the adequacy of an entity’s allowance for credit losses. ASU 2010-20 requires entities to disclose the nature of credit risk inherent in their finance receivables, the procedure for analyzing and assessing credit risk, and the changes in both the receivables and the allowance for credit losses by portfolio segment and class. ASU 2010-20 is effective for our fiscal year beginning December 1, 2010. We are evaluating the effect the ASU will have on the disclosures in our consolidated financial statements.

Critical Accounting Policies and Estimates

Our accounting policies are more fully described in Note 1 of the notes to our consolidated financial statements included in Item 8 of this document. As discussed in Note 1, the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and such differences may be material to our consolidated financial statements. Listed below are those policies and estimates that we believe are critical and require the use of significant judgment in their application.

Valuation of Deferred Tax Assets

We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as attributable to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets are assessed each reporting period by us based on the more-likely-than-not realization threshold criterion. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with loss carryforwards not expiring unused and tax planning alternatives. Based upon an evaluation of all available evidence, we recorded a valuation allowance against our deferred tax assets of $730.8 million during the year ended November 30, 2008, and increased it by $269.6 million during the year ended November 30, 2009. In addition, for the year ended November 30, 2009, we recorded a reversal of our deferred tax asset valuation allowance of $351.8 million, primarily due to a change in tax legislation, which allowed us to carry back our fiscal year 2009 tax loss to recover previously paid income taxes. During the year ended November 30, 2010, we recorded a reversal of the deferred tax asset valuation allowance of $37.9 million primarily due to the recording of a deferred tax liability from the issuance of 2.75% Convertible Senior Notes, and the net earnings generated

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during the year. The reversal of the deferred tax asset valuation allowance related to the issuance of the 2.75% Convertible Senior Notes was recorded as an adjustment to additional paid-in capital. At November 30, 2010 and 2009, our deferred tax asset valuation allowance was $609.5 million and $647.4 million, respectively. In future periods, the allowance could be reduced based on sufficient evidence indicating that it is more likely than not that a portion or all of our deferred tax assets will be realized. At both November 30, 2010 and 2009, we had no net deferred tax assets.

We believe that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. We base our estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. Changes in existing tax laws or rates could affect actual tax results and future business results, which may affect the amount of deferred tax liabilities or the valuation of deferred tax assets over time. Our accounting for deferred tax consequences represents our best estimate of future events.

Lennar Homebuilding Operations

Revenue Recognition

Revenues from sales of homes are recognized when sales are closed and title passes to the new homeowner, the new homeowner’s initial and continuing investment is adequate to demonstrate a commitment to pay for the home, the new homeowner’s receivable is not subject to future subordination and we do not have a substantial continuing involvement with the new home. Revenues from sales of land are recognized when a significant down payment is received, the earnings process is complete, title passes and collectability of the receivable is reasonably assured. We believe that the accounting policy related to revenue recognition is a critical accounting policy because of the significance of revenue.

Inventories

Inventories are stated at cost unless the inventory within a community is determined to be impaired, in which case the impaired inventory is written down to fair value. Inventory costs include land, land development and home construction costs, real estate taxes, deposits on land purchase contracts and interest related to development and construction. We review our inventory for indicators of impairment by evaluating each community during each reporting period. The inventory within each community is categorized as finished homes and construction in progress or land under development based on the development state of the community. There were 440 and 390 active communities as of November 30, 2010 and 2009, respectively. If the undiscounted cash flows expected to be generated by a community are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such community to its fair value.

In conducting our review for indicators of impairment on a community level, we evaluate, among other things, the margins on homes that have been delivered, margins on homes under sales contracts in backlog, projected margins on homes with regard to future home sales over the life of the community, projected margins with regard to future land sales, and the estimated fair value of the land itself. We pay particular attention to communities in which inventory is moving at a slower than anticipated absorption pace and communities whose average sales price and/or margins are trending downward and are anticipated to continue to trend downward. From this review, we identify communities whose carrying values exceed their undiscounted cash flows. Although gross margins for all of our homebuilding segments, and Homebuilding Other, except Homebuilding Houston, have improved for the year ended November 30, 2010, revenues of our Homebuilding Central, Homebuilding West and Homebuilding Houston segments decreased 4%, 20% and 17%, respectively, for the year ended November 30, 2010, compared to the year ended November 30, 2009 due to a decrease in absorption pace.

We estimate the fair value of our communities using a discounted cash flow model. The projected cash flows for each community are significantly impacted by estimates related to market supply and demand, product type by community, homesite sizes, sales pace, sales prices, sales incentives, construction costs, sales and marketing expenses, the local economy, competitive conditions, labor costs, costs of materials and other factors for that particular community. Every division evaluates the historical performance of each of its communities as well as the current trends in the market and economy impacting the community and its surrounding areas. These trends are analyzed for each of the estimates listed above. For example, since the start of the downturn in the housing market, we have found ways to reduce our construction costs in many communities, and this reduction in construction costs in addition to changes in product type in many communities has impacted future estimated cash flows.

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Each of the homebuilding markets in which we operate is unique, as homebuilding has historically been a local business driven by local market conditions and demographics. Each of our homebuilding markets has specific supply and demand relationships reflective of local economic conditions. Our projected cash flows are impacted by many assumptions. Some of the most critical assumptions in our cash flow models are our projected absorption pace for home sales, sales prices and costs to build and deliver our homes on a community by community basis.

In order to arrive at the assumed absorption pace for home sales included in our cash flow models, we analyze our historical absorption pace in the community as well as other communities in the geographical area. In addition, we analyze internal and external market studies and trends, which generally include, but are not limited to, statistics on population demographics, unemployment rates and availability of competing product in the geographic area where the community is located. When analyzing our historical absorption pace for home sales and corresponding internal and external market studies, we place greater emphasis on more current metrics and trends such as the absorption pace realized in our most recent quarters as well as forecasted population demographics, unemployment rates and availability of competing product. Generally, if we notice a variation from historical results over a span of two fiscal quarters, we consider such variation to be the establishment of a trend and adjust our historical information accordingly in order to develop assumptions on the projected absorption pace in the cash flow model for a community.

In order to determine the assumed sales prices included in our cash flow models, we analyze the historical sales prices realized on homes we delivered in the community and other communities in the geographical area as well as the sales prices included in our current backlog for such communities. In addition, we analyze internal and external market studies and trends, which generally include, but are not limited to, statistics on sales prices in neighboring communities and sales prices on similar products in non-neighboring communities in the geographic area where the community is located. When analyzing our historical sales prices and corresponding market studies, we also place greater emphasis on more current metrics and trends such as future forecasted sales prices in neighboring communities as well as future forecasted sales prices for similar product in non-neighboring communities. Generally, if we notice a variation from historical results over a span of two fiscal quarters, we consider such variation to be the establishment of a trend and adjust our historical information accordingly in order to develop assumptions on the projected sales prices in the cash flow model for a community.

In order to arrive at our assumed costs to build and deliver our homes, we generally assume a cost structure reflecting contracts currently in place with our vendors adjusted for any anticipated cost reduction initiatives or increases in cost structure. Costs assumed in our cash flow models for our communities are generally based on the rates we are currently obligated to pay under existing contracts with our vendors adjusted for any anticipated cost reduction initiatives or increases in cost structure.

Due to the fact that the estimates and assumptions included in our cash flow models are based upon historical results and projected trends, they do not anticipate unexpected changes in market conditions or strategies that may lead to us incurring additional impairment charges in the future.

Using all the available trend information, we calculate our best estimate of projected cash flows for each community. While many of the estimates are calculated based on historical and projected trends, all estimates are subjective and change from market to market and community to community as market and economic conditions change. The determination of fair value also requires discounting the estimated cash flows at a rate we believe a market participant would determine to be commensurate with the inherent risks associated with the assets and related estimated cash flow streams. The discount rate used in determining each asset’s fair value depends on the community’s projected life and development stage. We generally use a discount rate of approximately 20%, subject to the perceived risks associated with the community’s cash flow streams relative to its inventory.

We estimate the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or our assumptions change. For example, further market deterioration or changes in our assumptions may lead to us incurring additional impairment charges on previously impaired inventory, as well as on inventory not currently impaired, but for which indicators of impairment may arise if further market deterioration occurs.

We also have access to land inventory through option contracts, which generally enables us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our option. A majority of our option contracts require a non-refundable cash deposit or

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irrevocable letter of credit based on a percentage of the purchase price of the land. Our option contracts are recorded at cost. In determining whether to walk-away from an option contract, we evaluate the option primarily based upon the expected cash flows from the property that is the subject of the option. If we intend to walk-away from an option contract, we record a charge to earnings in the period such decision is made for the deposit amount and related pre-acquisition costs associated with the option contract.

We believe that the accounting related to inventory valuation and impairment is a critical accounting policy because: (1) assumptions inherent in the valuation of our inventory are highly subjective and susceptible to change and (2) the impact of recognizing impairments on our inventory has been and could continue to be material to our consolidated financial statements. Our evaluation of inventory impairment, as discussed above, includes many assumptions. The critical assumptions include the timing of the home sales within a community, management’s projections of selling prices and costs and the discount rate applied to estimate the fair value of the homesites within a community on the balance sheet date. Our assumptions on the timing of home sales are critical because the homebuilding industry has historically been cyclical and sensitive to changes in economic conditions such as interest rates, credit availability, unemployment levels and consumer sentiment. Changes in these economic conditions could materially affect the projected sales price, costs to develop the homesites and/or absorption rate in a community. Our assumptions on discount rates are critical because the selection of a discount rate affects the estimated fair value of the homesites within a community. A higher discount rate reduces the estimated fair value of the homesites within the community, while a lower discount rate increases the estimated fair value of the homesites within a community. Because of changes in economic and market conditions and assumptions and estimates required of management in valuing inventory during changing market conditions, actual results could differ materially from management’s assumptions and may require material inventory impairment charges to be recorded in the future.

During the years ended November 30, 2010, 2009 and 2008, we recorded the following inventory impairments:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Valuation adjustments to finished homes, CIP and land on which we intend to build homes (1)	$	44,717		180,239		195,518
Valuation adjustments to land we intend to sell or have sold to third parties		3,436		95,314		47,791
Write-offs of option deposits and pre-acquisition costs		3,105		84,372		97,172
Total inventory impairments	$	51,258		359,925		340,481

(1) Valuation adjustments to finished homes, CIP and land on which we intend to build homes for the years ended November 30, 2010, 2009 and 2008 relate to 33 communities, 131 communities and 146 communities, respectively.

The valuation adjustments were estimated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or our assumptions change. See Note 2 of the notes to our consolidated financial statements included in Item 8 of this document for details related to valuation adjustments and write-offs by reportable segment and Homebuilding Other.

Warranty Costs

Although we subcontract virtually all aspects of construction to others and our contracts call for the subcontractors to repair or replace any deficient items related to their trades, we are primarily responsible to homebuyers to correct any deficiencies. Additionally, in some instances, we may be held responsible for the actions of or losses incurred by subcontractors. Warranty reserves are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home. Reserves are determined based upon historical data and trends with respect to similar product types and geographical areas. We believe the accounting estimate related to the reserve for warranty costs is a critical accounting estimate because the estimate requires a large degree of judgment.

At November 30, 2010, the reserve for warranty costs was $109.2 million, which included $23.3 million related to defective drywall manufactured in China that was purchased and installed by various of our subcontractors. While we believe that the reserve for warranty costs is adequate, there can be no assurances that

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historical data and trends will accurately predict our actual warranty costs. Additionally, there can be no assurances that future economic or financial developments might not lead to a significant change in the reserve.

Lennar Homebuilding Investments in Unconsolidated Entities

We strategically invest in unconsolidated entities that acquire and develop land (1) for our homebuilding operations or for sale to third parties or (2) for construction of homes for sale to third-party homebuyers. Our partners generally are unrelated homebuilders, land owners/developers and financial or other strategic partners.

Most of the unconsolidated entities through which we acquire and develop land are accounted for by the equity method of accounting because we are not the primary beneficiary, and we have a significant, but less than controlling, interest in the entities. We record our investments in these entities in our consolidated balance sheets as “Lennar Homebuilding Investments in Unconsolidated Entities” and our pro-rata share of the entities’ earnings or losses in our consolidated statements of operations as “Lennar Homebuilding Equity in Earnings (Loss) from Unconsolidated Entities,” as described in Note 4 of the notes to our consolidated financial statements. Advances to these entities are included in the investment balance.

Management looks at specific criteria and uses its judgment when determining if we are the primary beneficiary of, or have a controlling interest in, an unconsolidated entity. Factors considered in determining whether we have significant influence or we have control include risk and reward sharing, experience and financial condition of the other partners, voting rights, involvement in day-to-day capital and operating decisions and continuing involvement. The accounting policy relating to the use of the equity method of accounting is a critical accounting policy due to the judgment required in determining whether we are the primary beneficiary or have control or significant influence.

As of November 30, 2010, we believe that the equity method of accounting is appropriate for our investments in Lennar Homebuilding unconsolidated entities where we are not the primary beneficiary and we do not have a controlling interest, but rather share control with our partners. At November 30, 2010, the Lennar Homebuilding unconsolidated entities in which we had investments had total assets of $3.8 billion and total liabilities of $1.6 billion.

We evaluate our investments in Lennar Homebuilding unconsolidated entities for indicators of impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of our investment in the Lennar Homebuilding unconsolidated entity has occurred which is other-than-temporary. The amount of impairment recognized is the excess of the investment’s carrying amount over its estimated fair value.

The evaluation of our investment in Lennar Homebuilding unconsolidated entities includes certain critical assumptions: (1) projected future distributions from the unconsolidated entities, (2) discount rates applied to the future distributions and (3) various other factors.

Our assumptions on the projected future distributions from the Lennar Homebuilding unconsolidated entities are dependent on market conditions. Specifically, distributions are dependent on cash to be generated from the sale of inventory by the Lennar Homebuilding unconsolidated entities. Such inventory is also reviewed for potential impairment by the Lennar Homebuilding unconsolidated entities. The review for inventory impairment performed by our Lennar Homebuilding unconsolidated entities is materially consistent with our process, as discussed above, for evaluating our own inventory as of the end of a reporting period. The Lennar Homebuilding unconsolidated entities generally also use a discount rate of approximately 20% in their reviews for impairment, subject to the perceived risks associated with the community’s cash flow streams relative to its inventory. If a valuation adjustment is recorded by an unconsolidated entity related to its assets, our proportionate share of it is reflected in our Lennar Homebuilding equity in loss from unconsolidated entities with a corresponding decrease to our Lennar Homebuilding investment in unconsolidated entities. In certain instances, we may be required to record additional losses relating to our Lennar Homebuilding investment in unconsolidated entities; such losses are included in Lennar Homebuilding other income (expense), net. We believe our assumptions on the projected future distributions from the Lennar Homebuilding unconsolidated entities are critical because the operating results of the Lennar Homebuilding unconsolidated entities from which the projected distributions are derived are dependent on the status of the homebuilding industry, which has historically been cyclical and sensitive to changes in economic conditions such as interest rates, credit availability, unemployment levels and consumer sentiment. Changes in these economic conditions could materially affect the projected operational results of the Lennar Homebuilding unconsolidated entities from which the distributions are derived.

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In addition, we believe our assumptions on discount rates are critical accounting policies because the selection of the discount rates affects the estimated fair value of our Lennar Homebuilding investments in unconsolidated entities. A higher discount rate reduces the estimated fair value of our Lennar Homebuilding investments in unconsolidated entities, while a lower discount rate increases the estimated fair value of our Lennar Homebuilding investments in unconsolidated entities. Because of changes in economic conditions, actual results could differ materially from management’s assumptions and may require material valuation adjustments to our Lennar Homebuilding investments in unconsolidated entities to be recorded in the future.

Additionally, we consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary. These factors include age of the venture, intent and ability for us to recover our investment in the entity, financial condition and long-term prospects of the entity, short-term liquidity needs of the unconsolidated entity, trends in the general economic environment of the land, entitlement status of the land held by the unconsolidated entity, overall projected returns on investments, defaults under contracts with third parties (including bank debt), recoverability of the investment through future cash flows and relationships with the other partners and banks. If we believe that the decline in the fair value of the investment is temporary, then no impairment is recorded.

During the years ended November 30, 2010, 2009 and 2008, we recorded the following valuation adjustments related to our Lennar Homebuilding investments in unconsolidated entities:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Our share of valuation adjustments related to assets of Lennar Homebuilding unconsolidated entities	$	10,461		101,893		32,245
Valuation adjustments to our Lennar Homebuilding investments in unconsolidated entities		1,735		88,972		172,790
Total valuation adjustments to our Lennar Homebuilding investments in unconsolidated entities	$	12,196		190,865		205,035

These valuation adjustments were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or our assumptions change. See Note 2 of the notes to our consolidated financial statements included in Item 8 of this document for details related to valuation adjustments and write-offs by reportable segment and homebuilding other.

Consolidation of Variable Interest Entities

GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Our variable interest in VIEs may be in the form of (1) equity ownership, (2) contracts to purchase assets, (3) management services and development agreements between us and a VIE, (4) loans provided by us to a VIE or other partner and/or (5) guarantees provided by members to banks and other third parties. We examine specific criteria and use our judgment when determining if we are the primary beneficiary of a VIE. Factors considered in determining whether we are the primary beneficiary include risk and reward sharing, experience and financial condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality between us and the other partner(s) and contracts to purchase assets from VIEs. The accounting policy relating to variable interest entities is a critical accounting policy because the determination whether an entity is a VIE and, if so, whether we are primary beneficiary may require us to exercise significant judgment.

Generally, all major decision making in our joint ventures is shared between all partners. In particular, business plans and budgets are generally required to be unanimously approved by all partners. Usually, management and other fees earned by us are nominal and believed to be at market and there is no significant economic disproportionality between us and other partners. Generally, we purchase less than a majority of the JV’s assets and the purchase prices under our option contracts are believed to be at market.

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Generally, our Lennar Homebuilding unconsolidated entities become VIEs and consolidate when the other partner(s) lack the intent and financial wherewithal to remain in the entity. As a result, we continue to fund operations and debt paydowns through partner loans or substituted capital contributions.

Financial Services Operations

Revenue Recognition

Premiums from title insurance policies are recognized as revenue on the effective date of the policies. Escrow fees and loan origination revenues are recognized at the time the related real estate transactions are completed, usually upon the close of escrow. Expected gains and losses from the sale of loans and their related servicing rights are included in the measurement of all written loan commitments that are accounted for at fair value through earnings at the time of commitment. Interest income on loans held-for-sale and loans held-for-investment is recognized as earned over the terms of the mortgage loans based on the contractual interest rates. We believe that the accounting policy related to revenue recognition is a critical accounting policy because of the significance of revenue.

Loan Origination Liabilities

Substantially all of the loans we originate are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreement. There has been an increased industry-wide effort by purchasers to defray their losses in an unfavorable economic environment by purporting to have found inaccuracies related to sellers’ representations and warranties in particular loan sale agreements. Our mortgage operations has established liabilities for anticipated losses associated with mortgage loans previously originated and sold to investors. We establish liabilities for such anticipated losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received, our actual past repurchases, and losses through the disposition of affected loans. While we believe that we have adequately reserved for losses known and projected repurchase requests, given the volatility in the mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed our expectations, additional recourse expense may be incurred. This allowance requires management’s judgment and estimate. For these reasons, we believe that the accounting estimate related to the loan origination losses is a critical accounting estimate.

Goodwill

At both November 30, 2010 and 2009, our goodwill was $34.0 million, which is part of our Lennar Financial Services segment. Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Evaluating goodwill for impairment involves the determination of the fair value of our reporting units in which we have recorded goodwill. A reporting unit is a component of an operating segment for which discrete financial information is available and reviewed by management on a regular basis. Inherent in the determination of fair value of our reporting units are certain estimates and judgments, including the interpretation of current economic indicators and market valuations as well as our strategic plans with regard to our operations. To the extent additional information arises or our strategies change, it is possible that our conclusion regarding goodwill impairment could change, which could have a material effect on our financial position and results of operations. For these reasons, we believe that the accounting estimate related to goodwill impairment is a critical accounting estimate.

We review goodwill annually (or whenever indicators of impairment exist) for impairment. Due to operating losses in the title operations of our Lennar Financial Services segment through the nine months ended August 31, 2010 and other factors, we evaluated the carrying value of our Lennar Financial Services segment’s goodwill in both our third and fourth quarters of 2010. The evaluations concluded that an impairment was not required for our Lennar Financial Services segment’s goodwill during 2010.

During the year ended November 30, 2009, we did not record goodwill impairment charges. During the year ended November 30, 2008, we impaired $27.2 million of our Lennar Financial Services segment’s goodwill. As of November 30, 2010 and 2009, there were no material identifiable intangible assets, other than goodwill.

For our review of the Lennar Financial Services segment’s goodwill during the years ended November 30, 2010 and 2009, we determined the fair value of our Lennar Financial Services segment based entirely on the

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income approach due to a lack of guideline companies with adequate comparisons to our Lennar Financial Services segment on a stand alone basis.

The income approach establishes fair value by methods which discount or capitalize earnings and/or cash flow by a discount or capitalization rate that reflects market rate of return expectations, market conditions and the risk of the relative investment. We used a discounted cash flow method when applying the income approach. This analysis includes operating income, interest expense, taxes and incremental working capital, as well as other factors. The projections used in the analysis are for a five-year period and represent what we consider to be normalized earnings.

In determining the fair value of our Lennar Financial Services segment under the income approach, our expected cash flows are affected by various assumptions. The most significant assumptions affecting our expected cash flows are the discount rate, projected revenue growth rate and operating profit margin. The impact of a change in any of our significant underlying assumptions +/- 1% would not result in a materially different fair value.

Rialto Investments

Loans Acquired with Deteriorated Credit Quality

All of the acquired loans for which (1) there was evidence of credit quality deterioration since origination and (2) for which it was deemed probable that we would be unable to collect all contractually required principal and interest payments were accounted under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310-30”). For loans accounted for under ASC 310-30, management determined upon acquisition the loan’s value based on extensive due diligence on each of the loans, the underlying properties and the borrowers. We determined fair value by discounting the cash flows expected to be collected adjusted for factors that a market participant would consider when determining fair value. Factors considered in the valuation were projected cash flows for the loans, type of loan and related collateral, classification status and current discount rates. Since the estimates are based on projections, all estimates are subjective and can change due to unexpected changes in economic conditions and loan performance. For these reasons, we believe that the accounting related to loans with deteriorated credit quality is a critical accounting policy.

Revenue Recognition—Accretable Yield

Under ASC 310-30, loans were pooled together according to common risk characteristics. The excess of the cash flows expected to be collected from the loans receivable at acquisition over the initial investment for those loans receivable is referred to as the accretable yield and is recognized in interest income over the expected life of the pools primarily using the effective yield method. The difference between contractually required payments at acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. Changes in the expected cash flows of loans receivable from the date of acquisition will either impact the accretable yield or result in a charge to the provision for loan losses in the period in which the changes become probable. Prepayments are treated as a reduction of cash flows expected to be collected and a reduction of contractually required payments such that the nonaccretable difference is not affected. Subsequent significant decreases to the expected cash flows will generally result in a charge to the provision for loan losses, resulting in an increase to the allowance for loan losses, and a reclassification from accretable yield to nonaccretable difference. Subsequent probable and significant increases in cash flows will result in a recovery of any previously recorded allowance for loan losses, to the extent applicable, and a reclassification from nonaccretable difference to accretable yield. Amounts related to the ASC 310-30 loans are estimates and may change as we obtain additional information related to the respective loans and the inherent uncertainty associated with estimating the amount and timing of the expected cash flows associated with distressed residential and commercial real estate loans. The timing and amount of expected cash flows and related accretable yield can also be impacted by disposal of loans, loans payoffs or expected foreclosures, which result in removal of the loans from the pools. Since the cash flows are based on projections, they are subjective and can change due to unexpected changes in economic conditions and loan performance. We believe that the accretable yield is a critical accounting policy because of the significant judgment required.

Nonaccrual Loans—Revenue Recognition & Impairment

Management classifies certain loans as nonaccrual and discontinues accruing interest income when future collectability of the recorded loan balance is doubtful. When a loan is classified as nonaccrual, unpaid accrued interest income recognized is reversed and any subsequent cash receipt is accounted for using either the cost recovery or cash basis method. Loans are generally returned to accrual status when payments are made that bring the loan account current under the terms of the agreement or when the loan becomes well secured and is in

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the process of collection. A loan is considered impaired when, based on current information and events, the carrying value of the receivable is in excess of its fair value. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loans obtainable market price, or the fair value of the collateral. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we recognize impairment through an allowance estimate or a charge-off to the allowance.

Real Estate Owned

Real estate owned represents real estate which our Rialto segment has taken control of in partial or full satisfaction of loans receivable. At the time of acquisition, REO is recorded at fair value less estimated costs to sell, which becomes the property’s new basis. The amount by which the recorded investment in the loan is greater or less than the REO’s fair value (net of estimated cost to sell), is recorded as a gain or loss on foreclosure within Rialto Investments other income, net, in our consolidated statement of operations. Subsequently, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Any subsequent valuation adjustments, operating expenses or income, and gains and losses on disposition of such properties are also recognized in Rialto Investments other income, net. We believe that the accounting for REO is a critical accounting policy because of the significant judgment required.

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Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks related to fluctuations in interest rates on our investments, debt obligations, loans held-for-sale and loans held-for-investment. We utilize forward commitments and option contracts to mitigate the risks associated with our mortgage loan portfolio. The table below provides information at November 30, 2010 about our significant financial instruments that are sensitive to changes in interest rates. For loans held-for-sale, loans held-for-investment, net and investments held-to-maturity, senior notes and other debts payable and notes and other debts payable, the table presents principal cash flows and related weighted average effective interest rates by expected maturity dates and estimated fair values at November 30, 2010. Weighted average variable interest rates are based on the variable interest rates at November 30, 2010. Rialto Investments loans receivable are not included in the table below because income is recorded through accretable yield due to the loans acquired having deteriorated credit quality, thus we believe they are not sensitive to changes in interest rates. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and Notes 1 and 14 of the notes to consolidated financial statements in Item 8 for a further discussion of these items and our strategy of mitigating our interest rate risk.

Information Regarding Interest Rate Sensitivity

Principal (Notional) Amount by

Expected Maturity and Average Interest Rate

November 30, 2010

	Years Ending November 30,															Thereafter			Total			Fair Value at November 30, 2010
	2011			2012			2013			2014			2015
	(Dollars in millions)
ASSETS
Rialto Investments:
Investments held-to-maturity:
Fixed rate	$	—			—			—			—			—			19.5			19.5			19.5
Average interest rate		—			—			—			—			—			4.0	%		4.0	%		—
Lennar Financial Services:
Loans held-for-sale:
Fixed rate	$	—			—			—			—			—			236.1			236.1			236.1
Average interest rate		—			—			—			—			—			4.3	%		4.3	%		—
Variable rate	$	—			—			—			—			—			9.3			9.3			9.3
Average interest rate		—			—			—			—			—			3.1	%		3.1	%		—
Loans held-for-investment, net and investments held-to-maturity:
Fixed rate	$	2.8			1.4			0.5			0.6			0.6			13.1			19.0			20.3
Average interest rate		1.9	%		3.0	%		7.1	%		7.1	%		7.2	%		6.6	%		5.7	%		—
Variable rate	$	0.1			0.1			0.2			0.2			0.2			5.1			5.9			5.9
Average interest rate		3.6	%		3.6	%		3.7	%		3.7	%		3.7	%		4.0	%		4.0	%		—
LIABILITIES
Lennar Homebuilding:
Senior notes and other debts payable:
Fixed rate	$	131.5			6.4			267.3			270.1			504.6			1,544.5			2,724.4			2,749.3
Average interest rate		5.8	%		4.4	%		5.9	%		5.7	%		5.6	%		6.3	%		6.1	%		—
Variable rate	$	75.5			231.9			85.9			9.5			—			1.0			403.8			403.8
Average interest rate		2.9	%		3.3	%		4.8	%		5.5	%		—			3.5	%		3.6	%		—
Rialto Investments:
Notes payable:
Fixed rate (1)	$	—			156.9			314.0			156.0			—			—			626.9			600.1
Average interest rate		—			0.0	%		0.0	%		0.0	%		—			—			—			—
Variable rate	$	—			13.0			20.0			33.0			33.0			26.4			125.4			119.6
Average interest rate		—			4.5	%		4.5	%		4.5	%		4.5	%		4.5	%		4.5	%		—
Lennar Financial Services:
Notes and other debts payable:
Fixed rate	$	0.1			—			—			—			—			—			0.1			0.1
Average interest rate		8.0	%		—			—			—			—			—			8.0	%		—
Variable rate	$	271.6			—			—			—			—			—			271.6			271.6
Average interest rate		3.8	%		—			—			—			—			—			3.8	%		—

(1) The notes payable have extension provisions which could extend the maturity of amounts due for up to seven years from origination.

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Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of November 30, 2010. The effectiveness of our internal control over financial reporting as of November 30, 2010 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Lennar Corporation

We have audited the internal control over financial reporting of Lennar Corporation and subsidiaries (the “Company”) as of November 30, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended November 30, 2010 of the Company and our report dated January 31, 2011 expressed an unqualified opinion on those financial statements and included an explanatory paragraph related to retrospective adjustments for the adoption of certain accounting standards related to the presentation of noncontrolling interests and the disclosure guidance applicable to variable interest entities and the adoption of other provisions of the amended consolidation guidance applicable to variable interest entities which resulted in the deconsolidation of certain option contracts.

/s/ DELOITTE & TOUCHE LLP

Certified Public Accountants

Miami, Florida

January 31, 2011

68

Item 8.    Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Lennar Corporation

We have audited the accompanying consolidated balance sheets of Lennar Corporation and subsidiaries (the “Company”) as of November 30, 2010 and 2009, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended November 30, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Lennar Corporation and subsidiaries as of November 30, 2010 and 2009 and the results of their operations and their cash flows for each of the three years in the period ended November 30, 2010, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the accompanying 2009 and 2008 consolidated financial statements have been retrospectively adjusted for the adoption, on December 1, 2009, of certain accounting standards related to the presentation of noncontrolling interests and the disclosure guidance applicable to variable interest entities. The Company also adopted other provisions of the amended consolidation guidance applicable to variable interest entities which resulted in the deconsolidation of certain option contracts on December 1, 2009.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of November 30, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 31, 2011 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Certified Public Accountants

Miami, Florida

January 31, 2011

69

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

November 30, 2010 and 2009

	2010 (1)		2009 (1)
	(In thousands, except shares and per share amounts)
ASSETS
Lennar Homebuilding:
Cash and cash equivalents	$	1,207,247		1,330,603
Restricted cash		8,195		9,225
Income tax receivables		3,783		334,428
Receivables, net		78,419		122,053
Inventories:
Finished homes and construction in progress		1,491,292		1,503,346
Land and land under development		2,223,300		1,990,430
Consolidated inventory not owned		455,016		594,213
Total inventories		4,169,608		4,087,989
Investments in unconsolidated entities		626,185		599,266
Other assets		307,810		263,803
		6,401,247		6,747,367
Rialto Investments:
Cash and cash equivalents		76,412		—
Defeasance cash to retire notes payable		101,309		—
Loans receivable		1,219,314		—
Real estate owned		258,104		—
Investments in unconsolidated entities		84,526		9,874
Other assets		37,949		—
		1,777,614		9,874
Lennar Financial Services		608,990		557,550
Total assets	$	8,787,851		7,314,791

(1) As a result of the adoption of certain provisions of Accounting Standards Codification (“ASC”) Topic 810, Consolidations, (“ASC 810”) the Company is required to separately disclose on its consolidated balance sheets the assets of consolidated variable interest entities (“VIEs”) that are owned by the consolidated VIEs and liabilities of consolidated VIEs as to which there is no recourse against the Company.

As of November 30, 2010, total assets include $2,300.2 million related to consolidated VIEs of which $34.1 million is included in Lennar Homebuilding cash and cash equivalents, $0.2 million in Lennar Homebuilding restricted cash, $6.6 million in Lennar Homebuilding receivables, net, $221.7 million in Lennar Homebuilding finished homes and construction in progress, $400.7 million in Lennar Homebuilding land and land under development, $87.4 million in Lennar Homebuilding consolidated inventory not owned, $38.8 million in Lennar Homebuilding investments in unconsolidated entities, $159.5 million in Lennar Homebuilding other assets, $72.4 million in Rialto Investments cash and cash equivalents, $101.3 million in Rialto Investments defeasance cash to retire notes payable, $974.4 million in Rialto Investments loans receivable, $188.5 million in Rialto Investments real estate owned and $14.6 million in Rialto Investments other assets.

As of November 30, 2009, total assets include $1,002.0 million related to consolidated VIEs of which $25.9 million is included in Lennar Homebuilding cash and cash equivalents, $1.5 million in Lennar Homebuilding restricted cash, $5.5 million in Lennar Homebuilding receivables, net, $253.2 million in Lennar Homebuilding finished homes and construction in progress, $341.0 million in Lennar Homebuilding land and land under development, $182.7 million in Lennar Homebuilding consolidated inventory not owned, $35.3 million in Lennar Homebuilding investments in unconsolidated entities and $156.9 million in Lennar Homebuilding other assets.

See accompanying notes to consolidated financial statements.

70

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

November 30, 2010 and 2009

	2010 (2)			2009 (2)
	(In thousands, except shares and per share amounts)
LIABILITIES AND EQUITY
Lennar Homebuilding:
Accounts payable	$	168,006			169,596
Liabilities related to consolidated inventory not owned		384,233			518,359
Senior notes and other debts payable		3,128,154			2,761,352
Other liabilities		694,142			862,584
		4,374,535			4,311,891
Rialto Investments:
Notes payable and other liabilities		770,714			—
Lennar Financial Services		448,219			414,886
Total liabilities		5,593,468			4,726,777
Stockholders’ equity:
Preferred stock		—			—
Class A common stock of $0.10 par value per share Authorized: 2010 and 2009—300,000,000 shares Issued: 2010—167,009,774 shares; 2009—165,154,591 shares		16,701			16,515
Class B common stock of $0.10 par value per share Authorized: 2010 and 2009—90,000,000 shares Issued: 2010—32,970,914 shares and 2009—32,963,579 shares		3,297			3,296
Additional paid-in capital		2,310,339			2,208,934
Retained earnings		894,108			828,424
Treasury stock, at cost; 2010—11,664,744 Class A common shares and 1,679,620 Class B common shares; 2009—11,542,970 Class A common shares and 1,679,620 Class B common shares		(615,496	)		(613,690	)
Total stockholders’ equity		2,608,949			2,443,479
Noncontrolling interests		585,434			144,535
Total equity		3,194,383			2,588,014
Total liabilities and equity	$	8,787,851			7,314,791

(2) As of November 30, 2010, total liabilities include $963.3 million related to consolidated VIEs as to which there was no recourse against the Company, of which $32.4 million is included in Lennar Homebuilding accounts payable, $60.6 million in Lennar Homebuilding liabilities related to consolidated inventory not owned, $185.4 million in Lennar Homebuilding senior notes and other debts payable, $53.1 million in Lennar Homebuilding other liabilities and $631.8 million in Rialto Investments notes payable and other liabilities.

As of November 30, 2009, total liabilities include $429.9 million related to consolidated VIEs as to which there was no recourse against the Company, of which $27.2 million is included in Lennar Homebuilding accounts payable, $155.4 million in Lennar Homebuilding liabilities related to consolidated inventory not owned, $187.2 million in Lennar Homebuilding senior notes and other debts payable and $60.1 million in Lennar Homebuilding other liabilities.

See accompanying notes to consolidated financial statements.

71

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended November 30, 2010, 2009 and 2008

	2010			2009			2008
	(Dollars in thousands, except per share amounts)
Revenues:
Lennar Homebuilding	$	2,705,639			2,834,285			4,263,038
Lennar Financial Services		275,786			285,102			312,379
Rialto Investments		92,597			—			—
Total revenues		3,074,022			3,119,387			4,575,417
Costs and expenses:
Lennar Homebuilding (1)		2,543,323			3,210,386			4,541,881
Lennar Financial Services (2)		244,502			249,120			343,369
Rialto Investments		67,904			2,528			—
Corporate general and administrative		93,926			117,565			129,752
Total costs and expenses		2,949,655			3,579,599			5,015,002
Lennar Homebuilding equity in loss from unconsolidated entities (3)		(10,966	)		(130,917	)		(59,156	)
Lennar Homebuilding other income (expense), net (4)		19,135			(98,425	)		(172,387	)
Other interest expense		(70,425	)		(70,850	)		(27,594	)
Gain on recapitalization of Lennar Homebuilding unconsolidated entity		—			—			133,097
Rialto Investments equity in earnings from unconsolidated entities		15,363			—			—
Rialto Investments other income, net		17,251			—			—
Earnings (loss) before income taxes		94,725			(760,404	)		(565,625	)
Benefit (provision) for income taxes (5)		25,734			314,345			(547,557	)
Net earnings (loss) (including net earnings (loss) attributable to noncontrolling interests)		120,459			(446,059	)		(1,113,182	)
Less: Net earnings (loss) attributable to noncontrolling interests (6)		25,198			(28,912	)		(4,097	)
Net earnings (loss) attributable to Lennar	$	95,261			(417,147	)		(1,109,085	)
Basic earnings (loss) per share	$	0.51			(2.45	)		(7.01	)
Diluted earnings (loss) per share	$	0.51			(2.45	)		(7.01	)

(1) Lennar Homebuilding costs and expenses include $51.3 million, $373.5 million and $340.5 million, respectively, of valuation adjustments and write-offs of option deposits and pre-acquisition costs for the years ended November 30, 2010, 2009 and 2008.

(2) Lennar Financial Services costs and expenses for the year ended November 30, 2008 include a $27.2 million impairment of goodwill.

(3) Lennar Homebuilding equity in loss from unconsolidated entities includes the Company’s share of valuation adjustments related to assets of unconsolidated entities in which the Company has investments of $10.5 million, $101.9 million and $32.2 million, respectively, for the years ended November 30, 2010, 2009 and 2008.

(4) Lennar Homebuilding other income (expense), net includes valuation adjustments to investments in Lennar Homebuilding unconsolidated entities of $1.7 million, $89.0 million and $172.8 million, respectively, for the years ended November 30, 2010, 2009 and 2008.

(5) Benefit (provision) for income taxes for the year ended November 30, 2010 primarily related to settlements with various taxing authorities. For the year ended November 30, 2009, benefit (provision) for income taxes includes a reversal of the Company’s deferred tax asset valuation allowance of $351.8 million. For the year ended November 30, 2008, benefit (provision) for income taxes includes a $730.8 million valuation allowance recorded against the Company’s deferred tax assets.

(6) Net earnings (loss) attributable to noncontrolling interests for the year ended November 30, 2010 includes $33.2 million related to the FDIC’s interest in the portfolio of real estate loans that the Company acquired in partnership with the FDIC. Net earnings (loss) attributable to noncontrolling interests for the year ended November 30, 2009 includes ($13.6) million recorded as a result of $27.2 million of valuation adjustments to inventories of 50%-owned consolidated joint ventures.

See accompanying notes to consolidated financial statements.

72

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

Years Ended November 30, 2010, 2009 and 2008

	2010			2009			2008
	(Dollars in thousands)
Class A common stock:
Beginning balance	$	16,515			14,050			13,931
Issuances of Class A common shares		—			2,096			—
Employee stock and director plans		186			369			119
Balance at November 30,		16,701			16,515			14,050
Class B common stock:
Beginning balance		3,296			3,296			3,296
Employee stock plans		1			—			—
Balance at November 30,		3,297			3,296			3,296
Additional paid-in capital:
Beginning balance		2,208,934			1,944,626			1,920,386
Issuances of Class A common shares		—			218,875			—
Employee stock and director plans		8,150			25,332			12,940
Tax provision from employee stock plans and vesting of restricted stock		—			—			(6,139	)
Amortization of restricted stock and performance-based stock options		22,090			20,101			17,439
Equity component of 2.75% convertible senior notes due 2020		71,165			—			—
Balance at November 30,		2,310,339			2,208,934			1,944,626
Retained earnings:
Beginning balance		828,424			1,273,159			2,496,933
Net earnings (loss) attributable to Lennar		95,261			(417,147	)		(1,109,085	)
Cash dividends—Class A common stock		(24,570	)		(22,448	)		(67,220	)
Cash dividends—Class B common stock		(5,007	)		(5,140	)		(16,267	)
Cumulative effect adjustments		—			—			(31,202	)
Balance at November 30,		894,108			828,424			1,273,159
Deferred compensation plan:
Beginning balance		—			—			(332	)
Deferred compensation activity		—			—			332
Balance at November 30,	$	—			—			—

See accompanying notes to consolidated financial statements.

73

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY—(Continued)

Years Ended November 30, 2010, 2009 and 2008

	2010			2009			2008
	(Dollars in thousands)
Deferred compensation liability:
Beginning balance	$	—		$	—			332
Deferred compensation activity		—			—			(332	)
Balance at November 30,		—			—			—
Treasury stock, at cost:
Beginning balance		(613,690	)		(612,124	)		(610,366	)
Employee stock plans		(1,806	)		(1,566	)		(1,758	)
Balance at November 30,		(615,496	)		(613,690	)		(612,124	)
Accumulated other comprehensive loss:
Beginning balance		—			—			(2,061	)
Unrealized gain on Company’s portion of unconsolidated entity’s interest rate swap liability, net of tax		—			—			2,061
Balance at November 30,		—			—			—
Total stockholders’ equity		2,608,949			2,443,479			2,623,007
Noncontrolling interests:
Beginning balance		144,535			165,746			28,528
Net earnings (loss) attributable to noncontrolling interests		25,198			(28,912	)		(4,097	)
Receipts related to noncontrolling interests		14,088			5,620			154,275
Payments related to noncontrolling interests		(4,848	)		(7,744	)		(3,240	)
Rialto Investments non-cash consolidations		397,588			—			—
Non-cash activity related to noncontrolling interests		8,873			9,825			(9,720	)
Balance at November 30,		585,434			144,535			165,746
Total equity		3,194,383			2,588,014			2,788,753
Comprehensive earnings (loss) attributable to Lennar	$	95,261			(417,147	)		(1,107,024	)
Comprehensive earnings (loss) attributable to noncontrolling interests	$	25,198			(28,912	)		(4,097	)

See accompanying notes to consolidated financial statements.

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LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended November 30, 2010, 2009 and 2008

	2010			2009			2008
	(Dollars in thousands)
Cash flows from operating activities:
Net earnings (loss) (including net earnings (loss) attributable to noncontrolling interests)	$	120,459			(446,059	)		(1,113,182	)
Adjustments to reconcile net earning (loss) (including net earnings (loss) attributable to noncontrolling interests ) to net cash provided by operating activities:
Depreciation and amortization		13,520			19,905			32,399
Amortization of discount/premium on debt, net		6,560			1,736			2,662
Gain on recapitalization of Lennar Homebuilding unconsolidated entity		—			—			(133,097	)
Lennar Homebuilding equity in loss from unconsolidated entities, including $10.5 million, $101.9 million and $32.2 million, respectively, of the Company’s share of valuation adjustments related to assets of Lennar Homebuilding unconsolidated entities in 2010, 2009 and 2008		10,966			130,917			59,156
Distribution of earnings from Lennar Homebuilding unconsolidated entities		7,280			2,498			21,069
Rialto Investments equity in earnings from unconsolidated entities		(15,363	)		—			—
Distributions of earnings from Rialto Investments unconsolidated entities		3,261			—			—
Share-based compensation expense		28,075			30,392			29,871
Tax provision from share-based awards		—			—			(6,139	)
Deferred income tax provision		—			—			772,508
Gain on retirement of Lennar Homebuilding other debt		(19,384	)		—			—
Loss (gain) on retirement of Lennar Homebuilding senior notes		11,714			(1,183	)		—
Gains on Rialto Investments real estate owned		(20,982	)		—			—
Valuation adjustments, write-offs of option deposits and pre-acquisition costs, write-offs of notes and other receivables and goodwill impairments		54,511			472,137			565,465
Changes in assets and liabilities:
Decrease (increase) in restricted cash		5,137			(4,066	)		4,624
Decrease (increase) in receivables		340,444			(117,874	)		828,646
(Increase) decrease in inventories, excluding valuation adjustments and write-offs of option deposits and pre-acquisition costs		(115,247	)		428,964			292,264
Decrease (increase) in other assets		28,269			(5,125	)		7,166
(Increase) decrease in Lennar Financial Services loans held-for-sale		(64,130	)		4,497			83,622
Decrease in accounts payable and other liabilities		(120,862	)		(95,896	)		(346,200	)
Net cash provided by operating activities		274,228			420,843			1,100,834
Cash flows from investing activities:
Net (additions) disposals of operating properties and equipment		(5,062	)		329			1,390
Investments in and contributions to Lennar Homebuilding unconsolidated entities		(209,274	)		(316,120	)		(403,709	)
Distributions of capital from Lennar Homebuilding unconsolidated entities		29,401			24,119			87,802
Investments in and contributions to Rialto Investments unconsolidated entities		(64,310	)		(9,874	)		—
Investments in and contributions to Rialto Investments consolidated entities (net of $93.7 million cash and cash equivalents consolidated)		(171,399	)		—			—
Acquisitions of Rialto Investments portfolios of distressed loans and real estate assets		(184,699	)		—			—
Increase in Rialto Investments defeasance cash to retire notes payable		(101,309	)		—			—
Receipts of principal payments on loans receivable		33,923			—			—
Proceeds from sales of real estate owned		16,853			—			—
Decrease in Lennar Financial Services loans held-for-investment, net		2,276			9,655			5,006
Investments in commercial mortgage-backed securities		(19,447	)		—			—
Purchases of investment securities		(6,043	)		(1,747	)		(176,514	)
Proceeds from sales and maturities of investment securities		5,719			18,518			220,322
Net cash used in investing activities		(673,371	)		(275,120	)		(265,703	)

See accompanying notes to consolidated financial statements.

75

LENNAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)

Years Ended November 30, 2010, 2009 and 2008

	2010			2009			2008
	(Dollars in thousands)
Cash flows from financing activities:
Net borrowings (repayments) of Lennar Financial Services debt		54,121			(8,226	)		(315,654	)
Proceeds from senior notes		247,323			392,392			—
Proceeds from convertible senior notes		722,500			—			—
Debt issuance costs of senior notes and convertible senior notes		(18,415	)		(5,500	)		—
Redemption of senior notes		(251,943	)		(281,477	)		(322	)
Partial redemption of senior notes		(222,711	)		(53,916	)		—
Proceeds from other borrowings		5,676			19,912			3,548
Principal payments on other borrowings		(141,505	)		(111,395	)		(132,055	)
Exercise of land options contracts from an unconsolidated land investment venture		(39,301	)		(33,656	)		(48,434	)
Receipts related to noncontrolling interests		14,088			5,620			154,275
Payments related to noncontrolling interests		(4,848	)		(7,744	)		(3,240	)
Common stock:
Issuances		2,238			221,437			224
Repurchases		(1,806	)		(1,566	)		(1,758	)
Dividends		(29,577	)		(27,588	)		(83,487	)
Net cash provided by (used in) financing activities		335,840			108,293			(426,903	)
Net (decrease) increase in cash and cash equivalents	$	(63,303	)		254,016			408,228
Cash and cash equivalents at beginning of year		1,457,438			1,203,422			795,194
Cash and cash equivalents at end of year	$	1,394,135			1,457,438			1,203,422
Summary of cash and cash equivalents:
Lennar Homebuilding	$	1,207,247			1,330,603			1,091,468
Rialto Investments		76,412			—			—
Lennar Financial Services		110,476			126,835			111,954
	$	1,394,135			1,457,438			1,203,422
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized	$	77,277			55,101			37,949
Cash received for income taxes, net	$	341,801			241,805			877,039
Supplemental disclosures of non-cash investing and financing activities:
Non-cash contributions to Lennar Homebuilding unconsolidated entities	$	4,899			8,150			27,434
Non-cash distributions from Lennar Homebuilding unconsolidated entities	$	59,283			125,307			56,913
Purchases of inventories financed by sellers	$	22,758			22,106			2,384
Purchase of portfolios of distressed loans and real estate assets financed by sellers	$	125,395			—			—
Rialto Investments real estate owned acquired in satisfaction of loans receivable	$	185,960			—			—
Consolidation/deconsolidation of unconsolidated/consolidated entities, net:
Receivables	$	2,077			14,466			34,346
Loans receivable	$	1,177,636			—			—
Inventories	$	83,973			360,640			647,466
Investments in Lennar Homebuilding unconsolidated entities	$	(50,953	)		(127,449	)		(183,647	)
Investments in Rialto Investments consolidated entities	$	(171,399	)		—			—
Other assets	$	68,013			68,727			620
Debts payable	$	(688,360	)		(223,942	)		(371,811	)
Other liabilities	$	(14,526	)		(79,599	)		(88,774	)
Noncontrolling interests	$	(406,461	)		(12,843	)		(38,200	)

See accompanying notes to consolidated financial statements

76

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Summary of Significant Accounting Policies

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Lennar Corporation and all subsidiaries, partnerships and other entities in which Lennar Corporation has a controlling interest and VIEs (see Note 15) in which Lennar Corporation is deemed the primary beneficiary (the “Company”). The Company’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in VIEs in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. All intercompany transactions and balances have been eliminated in consolidation.

On December 1, 2009, the Company adopted certain provisions of ASC 810. As required by these provisions, the presentation of noncontrolling interests in consolidated subsidiaries, previously referred to as minority interests, has been changed on the consolidated balance sheets to be reflected as a component of total equity and on the consolidated statements of operations to separately disclose the amount of net earnings (loss) attributable to Lennar and to the noncontrolling interests. The Company has also presented the changes in equity attributable to both Lennar Corporation and the noncontrolling interests of its subsidiaries in its consolidated statements of equity.

In addition, on December 1, 2009, the Company also adopted other provisions of ASC 810 that amended the consolidation guidance applicable to VIEs and the definition of a VIE, and require enhanced disclosures to provide more information about an enterprise’s involvement in a VIE. ASC 810 also requires ongoing assessments of whether an enterprise is the primary beneficiary of a VIE. The adoption of these provisions resulted in certain additional disclosures and in the deconsolidation of certain option contracts totaling $75.5 million, previously included in the Company’s consolidated inventory not owned in its consolidated balance sheets (see Note 15).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

Revenues from sales of homes are recognized when the sales are closed and title passes to the new homeowner, the new homeowner’s initial and continuing investment is adequate to demonstrate a commitment to pay for the home, the new homeowner’s receivable is not subject to future subordination and the Company does not have a substantial continuing involvement with the new home. Revenues from sales of land are recognized when a significant down payment is received, the earnings process is complete, title passes and collectability of the receivable is reasonably assured. See Lennar Financial Services and Rialto Investments within this Note for disclosure of revenue recognition policies related to those segments.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs were $40.2 million, $42.2 million and $65.7 million, respectively, for the years ended November 30, 2010, 2009 and 2008.

Share-Based Payments

The Company has share-based awards outstanding under three different plans which provide for the granting of stock options and stock appreciation rights and awards of restricted common stock (“nonvested shares”) to key officers, associates and directors. The exercise prices of stock options and stock appreciation rights may not be less than the market value of the common stock on the date of the grant. Exercises are permitted in installments determined when options are granted. Each stock option and stock appreciation right will expire on a date determined at the time of the grant, but not more than ten years after the date of the grant. The Company accounts for stock option awards granted under the plans based on the estimated grant date fair value.

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Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Due to the short maturity period of cash equivalents, the carrying amounts of these instruments approximate their fair values. Cash and cash equivalents as of November 30, 2010 and 2009 included $19.2 million and $5.8 million, respectively, of cash held in escrow for approximately three days.

Restricted Cash

Restricted cash consists of customer deposits on home sales held in restricted accounts until title transfers to the homebuyer, as required by the state and local governments in which the homes were sold.

Income Tax Receivables

Income tax receivables consist of tax refunds that the Company expects to receive within one year. As of November 30, 2010 and 2009, there were $3.8 million and $334.4 million, respectively, of income tax receivables.

Inventories

Inventories are stated at cost unless the inventory within a community is determined to be impaired, in which case the impaired inventory is written down to fair value. Inventory costs include land, land development and home construction costs, real estate taxes, deposits on land purchase contracts and interest related to development and construction. Construction overhead and selling expenses are expensed as incurred. Homes held-for-sale are classified as inventories until delivered. Land, land development, amenities and other costs are accumulated by specific area and allocated to homes within the respective areas. The Company reviews its inventory for indicators of impairment by evaluating each community during each reporting period. The inventory within each community is categorized as finished homes and construction in progress or land under development based on the development state of the community. There were 440 and 390 active communities as of November 30, 2010 and 2009, respectively. If the undiscounted cash flows expected to be generated by a community are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such community to its estimated fair value.

In conducting its review for indicators of impairment on a community level, the Company evaluates, among other things, the margins on homes that have been delivered, margins on homes under sales contracts in backlog, projected margins with regard to future home sales over the life of the community, projected margins with regard to future land sales and the estimated fair value of the land itself. The Company pays particular attention to communities in which inventory is moving at a slower than anticipated absorption pace and communities whose average sales price and/or margins are trending downward and are anticipated to continue to trend downward. From this review, the Company identifies communities whose carrying values exceed their undiscounted cash flows.

The Company estimates the fair value of its communities using a discounted cash flow model. The projected cash flows for each community are significantly impacted by estimates related to market supply and demand, product type by community, homesite sizes, sales pace, sales prices, sales incentives, construction costs, sales and marketing expenses, the local economy, competitive conditions, labor costs, costs of materials and other factors for that particular community. Every division evaluates the historical performance of each of its communities as well as current trends in the market and economy impacting the community and its surrounding areas. These trends are analyzed for each of the estimates listed above. For example, since the start of the downturn in the housing market, the Company has found ways to reduce its construction costs in many communities, and this reduction in construction costs in addition to change in product type in many communities has impacted future estimated cash flows.

Each of the homebuilding markets in which the Company operates is unique, as homebuilding has historically been a local business driven by local market conditions and demographics. Each of the Company’s homebuilding markets has specific supply and demand relationships reflective of local economic conditions. The

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Company’s projected cash flows are impacted by many assumptions. Some of the most critical assumptions in the Company’s cash flow model are projected absorption pace for home sales, sales prices and costs to build and deliver homes on a community by community basis.

In order to arrive at the assumed absorption pace for home sales included in the Company’s cash flow model, the Company analyzes its historical absorption pace in the community as well as other communities in the geographical area. In addition, the Company analyzes internal and external market studies and trends, which generally include, but are not limited to, statistics on population demographics, unemployment rates and availability of competing product in the geographic area where the community is located. When analyzing the Company’s historical absorption pace for home sales and corresponding internal and external market studies, the Company places greater emphasis on more current metrics and trends such as the absorption pace realized in its most recent quarters as well as forecasted population demographics, unemployment rates and availability of competing product. Generally, if the Company notices a variation from historical results over a span of two fiscal quarters, the Company considers such variation to be the establishment of a trend and adjusts its historical information accordingly in order to develop assumptions on the projected absorption pace in the cash flow model for a community.

In order to determine the assumed sales prices included in its cash flow models, the Company analyzes the historical sales prices realized on homes it delivered in the community and other communities in the geographical area as well as the sales prices included in its current backlog for such communities. In addition, the Company analyzes internal and external market studies and trends, which generally include, but are not limited to, statistics on sales prices in neighboring communities and sales prices on similar products in non-neighboring communities in the geographic area where the community is located. When analyzing its historical sales prices and corresponding market studies, the Company also places greater emphasis on more current metrics and trends such as future forecasted sales prices in neighboring communities as well as future forecasted sales prices for similar products in non-neighboring communities. Generally, if the Company notices a variation from historical results over a span of two fiscal quarters, the Company considers such variation to be the establishment of a trend and adjusts its historical information accordingly in order to develop assumptions on the projected sales prices in the cash flow model for a community.

In order to arrive at the Company’s assumed costs to build and deliver homes, the Company generally assumes a cost structure reflecting contracts currently in place with its vendors adjusted for any anticipated cost reduction initiatives or increases in cost structure. Costs assumed in the cash flow model for the Company’s communities are generally based on the rates the Company is currently obligated to pay under existing contracts with its vendors adjusted for any anticipated cost reduction initiatives or increases in cost structure.

Since the estimates and assumptions included in the Company’s cash flow models are based upon historical results and projected trends, they do not anticipate unexpected changes in market conditions or strategies that may lead the Company to incur additional impairment charges in the future.

Using all available trend information, the Company calculates its best estimate of projected cash flows for each community. While many of the estimates are calculated based on historical and projected trends, all estimates are subjective and change from market to market and community to community as market and economic conditions change. The determination of fair vale also requires discounting the estimated cash flows at a rate the Company believes a market participant would determine to be commensurate with the inherent risks associated with the assets and related estimated cash flow streams. The discount rate used in determining each asset’s fair value depends on the community’s projected life and development stage. The Company generally uses a discount rate of approximately 20%, subject to the perceived risks associated with the community’s cash flow streams relative to its inventory.

The Company estimates the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or assumptions change. For example, further market deterioration or changes in assumptions may lead to the Company incurring additional impairment charges on previously impaired inventory, as well as on inventory not currently impaired but for which indicators of impairment may arise if further market deterioration occurs.

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The Company also has access to land inventory through option contracts, which generally enables the Company to defer acquiring portions of properties owned by third parties and unconsolidated entities until it has determined whether to exercise its option. A majority of the Company’s option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land. The Company’s option contracts are recorded at cost. In determining whether to walk-away from an option contract, the Company evaluates the option primarily based upon its expected cash flows from the property under option. If the Company intends to walk away from an option contract, it records a charge to earnings in the period such decision is made for the deposit amount and related pre-acquisition costs associated with the option contract.

See Note 2 for details of inventory valuation adjustments and write-offs of option deposits and pre-acquisition costs by reportable segment and Homebuilding Other.

Investments in Unconsolidated Entities

The Company evaluates its investments in unconsolidated entities for indicators of impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in value of the Company’s investment in the unconsolidated entity has occurred which is other-than-temporary. The amount of impairment recognized is the excess of the investment’s carrying amount over its estimated fair value.

The evaluation of the Company’s investment in unconsolidated entities includes certain critical assumptions made by management: (1) projected future distributions from the unconsolidated entities, (2) discount rates applied to the future distributions and (3) various other factors.

The Company’s assumptions on the projected future distributions from the unconsolidated entities are dependent on market conditions. Specifically, distributions are dependent on cash to be generated from the sale of inventory by the unconsolidated entities. Such inventory is also reviewed for potential impairment by the unconsolidated entities. The unconsolidated entities generally use a discount rate of approximately 20% in their reviews for impairment, subject to the perceived risks associated with the community’s cash flow streams relative to its inventory. If a valuation adjustment is recorded by an unconsolidated entity related to its assets, the Company’s proportionate share is reflected in the Company’s homebuilding equity in earnings (loss) from unconsolidated entities with a corresponding decrease to its investment in unconsolidated entities. In certain instances, the Company may be required to record additional losses relating to its investment in unconsolidated entities, if the Company’s investment in the unconsolidated entity, or a portion thereof, is deemed to be other than temporarily impaired. These losses are included in Lennar Homebuilding other income (expense), net.

Additionally, the Company considers various qualitative factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include age of the venture, intent and ability for the Company to recover its investment in the entity, financial condition and long-term prospects of the entity, short-term liquidity needs of the unconsolidated entity, trends in the general economic environment of the land, entitlement status of the land held by the unconsolidated entity, overall projected returns on investment, defaults under contracts with third parties (including bank debt), recoverability of the investment through future cash flows and relationships with the other partners and banks. If the Company believes that the decline in the fair value of the investment is temporary, then no impairment is recorded.

See Note 2 for details of valuation adjustments related to the Company’s unconsolidated entities by reportable segment and Homebuilding Other.

The Company tracks its share of cumulative earnings and distributions of its joint ventures (“JVs”). For purposes of classifying distributions received from JVs in the Company’s consolidated statements of cash flows, cumulative distributions are treated as returns on capital to the extent of cumulative earnings and included in the Company’s consolidated statements of cash flows as operating activities. Cumulative distributions in excess of the Company’s share of cumulative earnings are treated as returns of capital and included in the Company’s consolidated statements of cash flows as investing activities.

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Consolidation of Variable Interest Entities

GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s variable interest in VIEs may be in the form of (1) equity ownership, (2) contracts to purchase assets, (3) management services and development agreements between the Company and a VIE, (4) loans provided by the Company to a VIE or other partner and/or (5) guarantees provided by members to banks and other third parties. The Company examines specific criteria and uses its judgment when determining if it is the primary beneficiary of a VIE. Factors considered in determining whether the Company is the primary beneficiary include risk and reward sharing, experience and financial condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality between the Company and the other partner(s) and contracts to purchase assets from VIEs. The determination whether an entity is a VIE and, if so, whether the Company is primary beneficiary may require it to exercise significant judgment.

Generally, all major decision making in the Company’s joint ventures is shared between all partners. In particular, business plans and budgets are generally required to be unanimously approved by all partners. Usually, management and other fees earned by the Company are nominal and believed to be at market and there is no significant economic disproportionality between the Company and other partners. Generally, the Company purchases less than a majority of the JV’s assets and the purchase prices under its option contracts are believed to be at market.

Generally, Lennar Homebuilding unconsolidated entities become VIEs and consolidate when the other partner(s) lack the intent and financial wherewithal to remain in the entity. As a result, the Company continues to fund operations and debt paydowns through partner loans or substituted capital contributions.

Operating Properties and Equipment

Operating properties and equipment are recorded at cost and are included in other assets in the consolidated balance sheets. The assets are depreciated over their estimated useful lives using the straight-line method. At the time operating properties and equipment are disposed of, the asset and related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to earnings. The estimated useful life for operating properties is thirty years, for furniture, fixtures and equipment is two to ten years and for leasehold improvements is five years or the life of the lease, whichever is shorter. Operating properties are reviewed for possible impairment if there are indicators that their carrying amounts are not recoverable. No impairments were recorded during the periods presented.

Investment Securities

Investment securities are classified as available-for-sale unless they are classified as trading or held-to-maturity. Securities classified as trading are carried at fair value and unrealized holding gains and losses are recorded in earnings. Available-for-sale securities are recorded at fair value. Any unrealized holding gains or losses on available-for-sale securities are reported as accumulated other comprehensive gain or loss, which is a separate component of stockholders’ equity, net of tax, until realized. Securities classified as held-to-maturity are carried at amortized cost because they are purchased with the intent and ability to hold to maturity.

At November 30, 2010 and 2009, investment securities classified as held-to-maturity totaled $3.2 million and $2.5 million, respectively, and are included in the assets of the Lennar Financial Services segment. The Lennar Financial Services held-to-maturity securities consist mainly of certificates of deposit and U.S. treasury securities. In addition, at November 30, 2010, the Rialto Investments (“Rialto”) segment had investment

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securities classified as held-to-maturity totaling $19.5 million. The Rialto segment held-to-maturity securities consist of commercial mortgage-backed securities. At November 30, 2010 and 2009, the Company had no investment securities classified as trading or available-for-sale.

Derivative Financial Instruments

The Lennar Financial Services segment, in the normal course of business, uses derivative financial instruments to reduce its exposure to fluctuations in mortgage-related interest rates. The segment uses mortgage-backed securities (“MBS”) forward commitments, option contracts and investor commitments to protect the value of fixed rate-locked loan commitments and loans held-for-sale from fluctuations in mortgage-related interest rates. These derivative financial instruments are carried at fair value with the changes in fair value included in Lennar Financial Services revenues.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations. Evaluating goodwill for impairment involves the determination of the fair value of the Company’s reporting units in which the Company has recorded goodwill. A reporting unit is a component of an operating segment for which discrete financial information is available and reviewed by the Company’s management on a regular basis. Inherent in the determination of fair value of the Company’s reporting units are certain estimates and judgments, including the interpretation of current economic indicators and market valuations as well as the Company’s strategic plans with regard to its operations. To the extent additional information arises or the Company’s strategies change, it is possible that the Company’s conclusion regarding goodwill impairment could change, which could have an effect on the Company’s financial position and results of operations.

The Company reviews goodwill annually (or whenever indicators of impairment exist) for impairment. Due to operating losses in the title operations of the Lennar Financial Services segment through the nine months ended August 31, 2010 and other factors, the Company evaluated the carrying value of the Lennar Financial Services segment’s goodwill in both its third and fourth quarters of 2010. The evaluations concluded that an impairment was not required for the Lennar Financial Services segment’s goodwill during 2010. As of both November 30, 2010 and 2009, there were no material identifiable intangible assets, other than goodwill.

During fiscal 2008, the Company impaired $27.2 million of the Lennar Financial Services segment’s goodwill. At November 30, 2010 and 2009, accumulated goodwill impairments totaled $217.4 million, which includes $27.2 million of Lennar Financial Services segment goodwill impairment during fiscal 2008 and $190.2 million of previous Lennar Homebuilding goodwill impairment. At both November 30, 2010 and 2009, goodwill was $34.0 million, all of which relates to the Lennar Financial Services segment and is included in the assets of that segment.

Interest and Real Estate Taxes

Interest and real estate taxes attributable to land and homes are capitalized as inventories while they are being actively developed. Interest related to homebuilding and land, including interest costs relieved from inventories, is included in cost of homes sold and cost of land sold. Interest expense related to the Lennar Financial Services operations is included in its costs and expenses.

During the years ended November 30, 2010, 2009 and 2008, interest incurred by the Company’s homebuilding operations related to homebuilding debt was $181.5 million, $172.1 million and $148.3 million, respectively; interest capitalized into inventories was $111.1 million, $101.3 million and $120.7 million, respectively.

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Interest expense was included in cost of homes sold, cost of land sold and other interest expense as follows:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Interest expense in cost of homes sold	$	71,473		67,414		99,319
Interest expense in cost of land sold		2,048		9,185		3,444
Other interest expense		70,425		70,850		27,594
Total interest expense	$	143,946		147,449		130,357

Income Taxes

The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and attributable to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed each reporting period by the Company based on the more-likely-than-not realization threshold criterion. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with loss carryforwards not expiring unused and tax planning alternatives.

Based upon an evaluation of all available evidence, the Company recorded a valuation allowance against its deferred tax assets of $730.8 million during the year ended November 30, 2008, and increased it by $269.6 million during the year ended November 30, 2009. In addition, for the year ended November 30, 2009, the Company recorded a reversal of its deferred tax asset valuation allowance of $351.8 million, primarily due to a change in tax legislation, which allowed the Company to carry back its fiscal year 2009 tax loss to recover previously paid income taxes. During the year ended November 30, 2010, the Company recorded a reversal of the deferred tax asset valuation allowance of $37.9 million primarily due to the recording of a deferred tax liability from the issuance of 2.75% convertible senior notes due 2020 and the net earnings generated during the year. The reversal of the deferred tax asset valuation allowance related to the issuance of the 2.75% Convertible Senior Notes was recorded as an adjustment to additional paid-in capital. At November 30, 2010 and 2009, the Company’s deferred tax asset valuation allowance was $609.5 million and $647.4 million, respectively. In future periods, the allowance could be reduced based on sufficient evidence indicating that it is more likely than not that a portion or all of our deferred tax assets will be realized. At both November 30, 2010 and 2009, the Company had no net deferred tax assets. Interest related to unrecognized tax benefits is recognized in the financial statements as a component of benefit (provision) for income taxes.

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Product Warranty

Warranty and similar reserves for homes are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home. Reserves are determined based on historical data and trends with respect to similar product types and geographical areas. The Company regularly monitors the warranty reserve and makes adjustments to its pre-existing warranties in order to reflect changes in trends and historical data as information becomes available. Warranty reserves are included in Lennar Homebuilding other liabilities in the consolidated balance sheets. The activity in the Company’s warranty reserve was as follows:

	November 30,
	2010			2009
	(In thousands)
Warranty reserve, beginning of year	$	157,896			129,449
Warranties issued during the period		25,134			28,710
Adjustments to pre-existing warranties from changes in estimates		7,091			69,324
Payments		(80,942	)		(69,587	)
Warranty reserve, end of year	$	109,179			157,896

As of November 30, 2010, the Company has identified approximately 920 homes delivered in Florida primarily during its 2006 and 2007 fiscal years that are confirmed to have defective Chinese drywall and resulting damage. This represents a small percentage of homes the Company delivered nationally (1.1%) during those fiscal years. Defective Chinese drywall appears to be an industry-wide issue as other homebuilders have publicly disclosed that they are experiencing similar issues with defective Chinese drywall.

Based on its efforts to date, the Company has not identified defective Chinese drywall in homes delivered by the Company outside of Florida. The Company is continuing its investigation of homes delivered during the relevant time period in order to determine whether there are additional homes, not yet inspected, with defective Chinese drywall and resulting damage. If the outcome of the Company’s inspections identifies more homes than the Company has estimated to have defective Chinese drywall, it might require an increase in the Company’s warranty reserve in the future. The Company has replaced defective Chinese drywall when it has been found in homes the Company has built.

Through November 30, 2010, the Company has accrued $82.2 million of warranty reserves related to homes confirmed as having defective Chinese drywall, as well as an estimate for homes not yet inspected that may contain Chinese drywall. As of November 30, 2010, the warranty reserve, net of payments was $23.3 million. During the year ended November 30, 2010, the Company received payments of $61.2 million under its insurance coverage and through third party recoveries relative to the costs it has incurred and expects to incur remedying the homes confirmed and estimated to have defective Chinese drywall and resulting damage. The Company continues to seek additional reimbursement from its subcontractors, insurers and others for costs the Company has incurred or expects to incur to investigate and repair defective Chinese drywall and resulting damage.

Self-Insurance

Certain insurable risks such as general liability, medical and workers’ compensation are self-insured by the Company up to certain limits. Undiscounted accruals for claims under the Company’s self-insurance program are based on claims filed and estimates for claims incurred but not yet reported.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings of the Company.

Effective December 1, 2009, the Company adopted certain provisions under ASC Topic 260, Earnings per Share. Under these provisions, all outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method. The

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two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock (“nonvested shares”) are considered participating securities. For the years ended November 30, 2009 and 2008, the nonvested shares were excluded from the calculation of the denominator for diluted loss per share because including them would be anti-dilutive due to the Company’s net loss during those periods. The adoption of these provisions did not have a material impact to the Company’s basic and diluted loss per share.

Lennar Financial Services

Premiums from title insurance policies are recognized as revenue on the effective date of the policies. Escrow fees and loan origination revenues are recognized at the time the related real estate transactions are completed, usually upon the close of escrow. Expected gains and losses from the sale of loans and their related servicing rights are included in the measurement of all written loan commitments that are accounted for at fair value through earnings at the time of commitment. Interest income on loans held-for-sale and loans held-for-investment is recognized as earned over the terms of the mortgage loans based on the contractual interest rates.

Loans held-for-sale by the Lennar Financial Services segment are carried at fair value and changes in fair value are reflected in earnings. Premiums and discounts recorded on these loans are presented as an adjustment to the carrying amount of the loans and are not amortized. Management believes carrying loans held-for-sale at fair value improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions.

In addition, the Lennar Financial Services segment recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower in accordance with ASC Topic 815-10-S99, SEC Materials, (“ASC 815-10-S99”). The fair value of these servicing rights is included in the Company’s loans held-for-sale as of November 30, 2010 and 2009. Fair value of the servicing rights is determined based on values in the Company’s servicing sales contracts. At November 30, 2010 and 2009, loans held-for-sale, all of which were accounted for at fair value, had an aggregate fair value of $245.4 million and $182.7 million, respectively and an aggregate outstanding principal balance of $240.8 million and $175.5 million, respectively, at November 30, 2010 and 2009.

Substantially all of the loans the Lennar Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreement. The Company’s mortgage operations has established liabilities for anticipated losses associated with mortgage loans previously originated and sold to investors. The Company establishes liabilities for such anticipated losses based upon, among other things, an analysis of repurchase requests received, an estimate of potential repurchase claims not yet received, its actual past repurchases, and losses through the disposition of affected loans. While the Company believes that it has adequately reserved for known losses and projected repurchase requests, given the volatility in the mortgage industry and the uncertainty regarding the ultimate resolution of these claims, if either actual repurchases or the losses incurred resolving those repurchases exceed the Company’s expectations, additional recourse expense may be incurred. Loan origination liabilities are included in Lennar Financial Services’ liabilities in the consolidated balance sheets. The activity in the Company’s loan origination liabilities for the years ended November 30, 2010 and 2009 was as follows:

	November 30,
	2010			2009
	(In thousands)
Loan origination liabilities, beginning of year	$	9,518		$	5,271
Provision for losses issued during the period		416			303
Adjustments to pre-existing provision for losses from changes in estimates		2,901			14,109
Payments/settlements		(2,963	)		(10,165	)
Loan origination liabilities, end of year	$	9,872		$	9,518

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Adjustments to pre-existing provision for losses from changes in estimates for the year ended November 30, 2010 and 2009 include an adjustment for additional repurchase requests that were received beyond the estimated provision that was recorded due to an increase in potential issues identified by certain investors.

Loans for which the Company has the positive intent and ability to hold to maturity consist of mortgage loans carried at lower of cost, net of unamortized discounts or fair value on a nonrecurring basis. Discounts are amortized over the estimated lives of the loans using the interest method.

The Company also provides an allowance for loan losses. The provision recorded and the adequacy of the related allowance is determined by the Company’s management’s continuing evaluation of the loan portfolio in light of past loan loss experience, credit worthiness and nature of underlying collateral, present economic conditions and other factors considered relevant by the Company’s management. Anticipated changes in economic factors, which may influence the level of the allowance, are considered in the evaluation by the Company’s management when the likelihood of the changes can be reasonably determined. While the Company’s management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary as a result of future economic and other conditions that may be beyond management’s control.

Rialto Investments

Loans Receivable—Revenue Recognition

All of the acquired loans for which (1) there was evidence of credit quality deterioration since origination and (2) for which it was deemed probable that the Company would be unable to collect all contractually required principal and interest payments were accounted under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310-30”). For loans accounted for under ASC 310-30, management determined upon acquisition the loan’s value based on extensive due diligence on each of the loans, the underlying properties and the borrowers. The Company determined fair value by discounting the cash flows expected to be collected adjusted for factors that a market participant would consider when determining fair value. Factors considered in the valuation were projected cash flows for the loans, type of loan and related collateral, classification status and current discount rates. Since the estimates are based on projections, all estimates are subjective and can change due to unexpected changes in economic conditions and loan performance.

Under ASC 310-30, loans were pooled together according to common risk characteristics. A pool is then accounted for as a single asset with a single component interest rate and as aggregate expectation of cash flows. The excess of the cash flows expected to be collected from the loans receivable at acquisition over the initial investment for those loans receivable is referred to as the accretable yield and is recognized in interest income over the expected life of the pools primarily using the effective yield method. The difference between contractually required payments at acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. Changes in the expected cash flows of loans receivable from the date of acquisition will either impact the accretable yield or result in a charge to the provision for loan losses in the period in which the changes become probable. Prepayments are treated as a reduction of cash flows expected to be collected and a reduction of contractually required payments such that the nonaccretable difference is not affected. Subsequent significant decreases to the expected cash flows will generally result in a charge to the provision for loan losses, resulting in an increase to the allowance for loan losses, and a reclassification from accretable yield to nonaccretable difference. Subsequent probable and significant increases in cash flows will result in a recovery of any previously recorded allowance for loan losses, to the extent applicable, and a reclassification from nonaccretable difference to accretable yield. Amounts related to the ASC 310-30 loans are estimates and may change as the Company obtains additional information related to the respective loans and the inherent uncertainty associated with estimating the amount and timing of the expected cash flows associated with distressed residential and commercial real estate loans. The timing and amount of expected cash flows and related accretable yield can also be impacted by disposal of loans, loans payoffs or expected foreclosures, which result in removal of the loans from the pools.

Nonaccrual Loans—Revenue Recognition & Impairment

Management classifies certain loans as nonaccrual and discontinues accruing interest income when future collectability of the recorded loan balance is doubtful. When a loan is classified as nonaccrual, unpaid

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accrued interest income recognized is reversed and any subsequent cash receipt is accounted for using either the cost recovery or cash basis method. Loans are generally returned to accrual status when payments are made that bring the loan account current under the terms of the agreement or when the loan becomes well secured and is in the process of collection. A loan is considered impaired when, based on current information and events; the carrying value of the receivable is in excess of its fair value. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loans obtainable market price, or the fair value of the collateral. If the Company determines that the value of the impaired loan is less than the recorded investment in the loan, the Company recognizes impairment through an allowance estimate or a charge-off to the allowance.

Real Estate Owned

Real estate owned (“REO”) represents real estate that the Rialto segment has taken control of in partial or full satisfaction of loans receivable. At the time of acquisition, REO is recorded at fair value less estimated costs to sell, which becomes the property’s new basis. The amount by which the recorded investment in the loan is greater or less than the REO’s fair value (net of estimated cost to sell), is recorded as a gain or loss on foreclosure within Rialto Investments other income, net, in the Company’s consolidated statement of operations. Subsequently, management periodically performs valuations such that REO is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Any subsequent valuation adjustments, operating expenses or income, and gains and losses on disposition of such properties are also recognized in Rialto Investments other income, net.

New Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Improving Disclosures about Fair Value Measurements, (“ASU 2010-06”), which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the rollforward of activity in Level 3 fair value measurements. The Company adopted ASU 2010-06 for its second quarter ending May 31, 2010, except for the Level 3 activity disclosures which will be effective for the Company’s fiscal year beginning December 1, 2011. ASU 2010-06 has not and is not expected to have a material effect on the Company’s consolidated financial statements.

In April 2010, the FASB issued ASU 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset, (“ASU 2010-18”). Under ASU 2010-18, modification of loans accounted for within a pool under ASC 310-30 does not result in removal of such loans from the pool even if the modification would otherwise be considered a troubled debt restructuring. An entity must continue to consider whether the pool of assets in which the modified loan is included is impaired if expected cash flows for the pool change. ASU 2010-18 does not affect the accounting for loans acquired with deteriorated credit quality that are not accounted for within a pool. Loans accounted for individually that were acquired with deteriorated credit quality continue to be subject to the accounting provisions for troubled debt restructuring by creditors. The amended guidance is to be applied prospectively, with early application permitted. ASU 2010-18 is effective for modifications of loans accounted for within a pool that occur on or after September 1, 2010. The adoption of this ASU did not have a material effect on the Company’s consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20, Disclosures About the Credit Quality of Financing Receivables and the Allowance for Credit Losses, (“ASU 2010-20”). ASU 2010-20 enhances current disclosure requirements to assist users of financial statements in assessing an entity’s credit risk exposure and evaluating the adequacy of an entity’s allowance for credit losses. ASU 2010-20 requires entities to disclose the nature of credit risk inherent in their finance receivables, the procedure for analyzing and assessing credit risk, and the changes in both the receivables and the allowance for credit losses by portfolio segment and class. ASU 2010-20 is effective for the Company’s fiscal year beginning December 1, 2010. The Company is evaluating the effect the ASU will have in the disclosures in the Company’s consolidated financial statements.

Reclassifications

Certain prior year amounts in the consolidated financial statements have been reclassified to conform with the 2010 presentation. These reclassifications had no impact on the Company’s results of operations. As a result of the Company’s new reportable segment, Rialto Investments, the Company reclassified certain prior year amounts in the consolidated financial statements to conform with the 2010 presentation.

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2.    Operating and Reporting Segments

The Company’s operating segments are aggregated into reportable segments, based primarily upon similar economic characteristics, geography and product type. The Company’s reportable segments consist of:

(1) Homebuilding East

(2) Homebuilding Central

(3) Homebuilding West

(4) Homebuilding Houston

(5) Financial Services

(6) Rialto Investments

Information about homebuilding activities in which the Company’s homebuilding activities are not economically similar to other states in the same geographic area is grouped under “Homebuilding Other,” which is not considered a reportable segment.

The Rialto segment is a new reportable segment that met the reportable segment criteria set forth in GAAP beginning in the first quarter of 2010. All prior year segment information has been restated to conform with the 2010 presentation. The change had no effect on the Company’s consolidated financial statements, except for certain reclassifications (see Note 1). Rialto focuses on commercial and residential real estate opportunities arising from dislocations in the United States real estate markets and the eventual restructure and recapitalization of those markets.

Evaluation of segment performance is based primarily on operating earnings (loss) before income taxes. Operations of the Company’s homebuilding segments primarily include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly and through the Company’s unconsolidated entities. Operating earnings (loss) for the homebuilding segments consist of revenues generated from the sales of homes and land, equity in earnings (loss) from unconsolidated entities and other income (expense), net, less the cost of homes sold and land sold, selling, general and administrative expenses and other interest expense of the segment. The Company’s reportable homebuilding segments and all other homebuilding operations not required to be reported separately, have operations located in:

East: Florida, Maryland, New Jersey and Virginia

Central: Arizona, Colorado and Texas (1)

West: California and Nevada

Houston: Houston, Texas

Other: Georgia, Illinois, Minnesota, North Carolina and South Carolina

    (1) Texas in the Central reportable segment excludes Houston, Texas, which is its own reportable segment.

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Operations of the Lennar Financial Services segment include primarily mortgage financing, title insurance and closing services for both buyers of the Company’s homes and others. Substantially all of the loans the Lennar Financial Services segment originates are sold within a short period in the secondary mortgage market on a servicing released, non-recourse basis. After the loans are sold, the Company retains potential liability for possible claims by purchasers that it breached certain limited industry-standard representations and warranties in the loan sale agreements. Lennar Financial Services’ operating earnings consist of revenues generated primarily from mortgage financing, title insurance and closing services, less the cost of such services and certain selling, general and administrative expenses incurred by the segment. The Lennar Financial Services segment operates generally in the same states as the Company’s homebuilding operations, as well as in other states.

Operations of the Rialto segment include sourcing, underwriting, pricing, managing and ultimately monetizing real estate assets, as well as providing similar services to others in markets across the country. Rialto operating earnings (loss) consists of revenues generated primarily from accretable interest income associated with the portfolios of real estate loans acquired in partnership with the FDIC and other portfolios of real estate loans and assets acquired, fees for sub-advisory services, other income, net, consisting primarily of gains on sale of REO and gains upon foreclosure of REO, and equity in earnings from unconsolidated entities, less the costs incurred by the segment for managing the portfolios, providing advisory services, underwriting expenses related to both the completed and abandoned transactions, and other general administrative expenses.

Each reportable segment follows the same accounting policies described in Note 1—“Summary of Significant Accounting Policies” to the consolidated financial statements. Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented.

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Financial information relating to the Company’s operations was as follows:

	November 30,
	2010			2009			2008
	(In thousands)
Assets:
Homebuilding East	$	1,524,095			1,469,671			1,588,299
Homebuilding Central		716,595			703,669			774,412
Homebuilding West		2,051,888			1,986,558			2,022,787
Homebuilding Houston		226,749			214,706			267,628
Homebuilding Other		737,486			756,068			849,726
Rialto Investments (1)		1,777,614			9,874			—
Financial Services		608,990			557,550			607,978
Corporate and unallocated		1,144,434			1,616,695			1,314,068
Total assets	$	8,787,851			7,314,791			7,424,898
Lennar Homebuilding investments in unconsolidated entities:
Homebuilding East	$	47,731			54,242			94,897
Homebuilding Central		52,156			96,036			178,618
Homebuilding West		517,429			423,850			451,719
Homebuilding Houston		3,095			20,527			21,820
Homebuilding Other		5,774			4,611			19,698
Total Lennar Homebuilding investments in unconsolidated entities	$	626,185			599,266			766,752
Rialto Investments’ investments in unconsolidated entities	$	84,526			9,874			—
Financial Services goodwill	$	34,046			34,046			34,046
	Years Ended November 30,
	2010			2009			2008
	(In thousands)
Revenues:
Homebuilding East	$	939,450			872,258			1,275,758
Homebuilding Central		357,732			367,183			533,110
Homebuilding West		683,490			826,237			1,440,163
Homebuilding Houston		365,938			434,818			550,853
Homebuilding Other		359,029			333,789			463,154
Financial Services		275,786			285,102			312,379
Rialto Investments		92,597			—			—
Total revenues (2)	$	3,074,022			3,119,387			4,575,417
Operating earnings (loss):
Homebuilding East	$	112,992			(206,253	)		(157,034	)
Homebuilding Central		(25,912	)		(70,640	)		(95,087	)
Homebuilding West (3)		(5,861	)		(331,070	)		(143,696	)
Homebuilding Houston		26,030			16,442			38,806
Homebuilding Other		(7,189	)		(84,772	)		(47,872	)
Financial Services (4)		31,284			35,982			(30,990	)
Rialto Investments		57,307			(2,528	)		—
Total operating earnings (loss)		188,651			(642,839	)		(435,873	)
Corporate and unallocated		(93,926	)		(117,565	)		(129,752	)
Earnings (loss) before income taxes	$	94,725			(760,404	)		(565,625	)

(1) Consists primarily of assets of consolidated VIEs (See Note 8).

(2) Total revenues are net of sales incentives of $356.5 million ($32,800 per home delivered) for the year ended November 30, 2010, $512.0 million ($44,800 per home delivered) for the year ended November 30, 2009 and $746.5 million ($48,700 per home delivered) for the year ended November 30, 2008.

(3) Includes $133.1 million of a pretax financial statement gain on the recapitalization of an unconsolidated entity for the year ended November 30, 2008.

(4) Includes $27.2 million impairment of goodwill for the year ended November 30, 2008.

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Valuation adjustments and write-offs relating to the Company’s operations were as follows:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Valuation adjustments to finished homes, CIP and land on which the Company intends to build homes:
East	$	10,410		73,670		76,791
Central		9,205		13,603		28,142
West		7,139		64,095		75,614
Houston		219		1,116		2,262
Other		17,744		27,755		12,709
Total		44,717		180,239		195,518
Valuation adjustments to land the Company intends to sell or has sold to third parties:
East		120		37,048		23,251
Central		2,056		1,309		12,369
West		1,166		38,679		11,094
Houston		32		674		137
Other (1)		62		17,604		940
Total		3,436		95,314		47,791
Write-offs of option deposits and pre-acquisition costs:
East		2,705		64,131		18,989
Central		—		82		6,024
West		400		13,902		62,447
Houston		—		2,471		745
Other		—		3,786		8,967
Total		3,105		84,372		97,172
Company’s share of valuation adjustments related to assets of unconsolidated entities:
East		229		504		7,241
Central		4,734		6,184		1,732
West (2)		5,498		94,665		22,675
Houston		—		—		—
Other		—		540		597
Total		10,461		101,893		32,245
Valuation adjustments to investments in unconsolidated entities:
East		760		4,981		54,340
Central		—		13,179		11,197
West		975		65,607		90,193
Houston		—		1,317		—
Other		—		3,888		17,060
Total		1,735		88,972		172,790
Write-offs of notes and other receivables:
East		—		2,148		10,200
Central		—		105		—
West		—		7,387		10,222
Houston		—		—		—
Other		1,518		19		4,596
Total		1,518		9,659		25,018
Lennar Financial Services goodwill impairment		—		—		27,176
Total valuation adjustments and write-offs of option deposits and pre-acquisition costs, notes and other receivables and goodwill	$	64,972		560,449		597,710

(1) For the year ended November 30, 2009, valuation adjustments to land the Company intends to sell or has sold to third parties has been reduced by $13.6 million of noncontrolling interest income as a result of $27.2 million of valuation adjustments to inventories of 50%-owned consolidated joint ventures.

(2) For the year ended November 30, 2010, a $15.0 million valuation adjustment related to the assets of an unconsolidated entity was not included because it resulted from a linked transaction where there was also a pre-tax gain of $22.7 million related to a debt extinguishment. The net pre-tax gain of $7.7 million from the transaction was included in Homebuilding equity in loss from unconsolidated entities for the year ended November 30, 2010.

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The Company recorded significantly lower valuation adjustments during the year ended November 30, 2010. However, as expected, after the expiration of the Federal homebuyer tax credit at the end of April 2010, demand trends in many communities in which the Company is selling homes decreased despite the affordability from lower home prices and historically low interest rates. If these trends continue and there is further deterioration in the housing market, it may cause additional pricing pressures and slower absorption. This may potentially lead to additional valuation adjustments in the future. In addition, market conditions may cause the Company to re-evaluate its strategy regarding certain assets that could result in further valuation adjustments and/or additional write-offs of option deposits and pre-acquisition costs due to abandonment of those options contracts.

	Years Ended November 30,
	2010			2009			2008
	(In thousands)
Lennar Homebuilding interest expense:
Homebuilding East	$	50,050			48,713			43,376
Homebuilding Central		19,476			19,488			17,307
Homebuilding West		43,562			46,809			46,522
Homebuilding Houston		10,152			11,902			7,768
Homebuilding Other		20,706			20,537			15,384
Total Lennar Homebuilding interest expense	$	143,946			147,449			130,357
Lennar Financial Services interest income, net	$	1,710			2,839			12,391
Depreciation and amortization:
Homebuilding East	$	4,658			3,676			4,395
Homebuilding Central		2,550			2,073			2,428
Homebuilding West		5,853			7,643			14,644
Homebuilding Houston		951			974			1,104
Homebuilding Other		1,397			1,718			1,678
Lennar Financial Services		3,507			4,269			6,095
Rialto Investments		134			—			—
Corporate and unallocated		16,560			19,653			19,492
Total depreciation and amortization	$	35,610			40,006			49,836
Net additions (disposals) to operating properties and equipment:
Homebuilding East	$	(909	)		230			40
Homebuilding Central		83			150			33
Homebuilding West		4,006			291			85
Homebuilding Houston		35			—			20
Homebuilding Other		(931	)		(2,009	)		(398	)
Lennar Financial Services		1,774			1,711			1,657
Rialto Investments		428			—			—
Corporate and unallocated		576			(702	)		(2,827	)
Total net additions (disposals) to operating properties and equipment	$	5,062			(329	)		(1,390	)
Lennar Homebuilding equity in earnings (loss) from unconsolidated entities:
Homebuilding East	$	(871	)		(5,660	)		(31,422	)
Homebuilding Central		(4,727	)		(8,143	)		(1,310	)
Homebuilding West		(6,113	)		(114,373	)		(25,113	)
Homebuilding Houston		766			(1,801	)		(920	)
Homebuilding Other		(21	)		(940	)		(391	)
Total Lennar Homebuilding equity in loss from unconsolidated entities	$	(10,966	)		(130,917	)		(59,156	)
Rialto Investments equity in earnings from unconsolidated entities	$	15,363			—			—

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3.    Lennar Homebuilding Receivables

	November 30,
	2010			2009
	(In thousands)
Accounts receivable	$	41,324			88,813
Mortgages and notes receivable		40,167			44,111
		81,491			132,924
Allowance for doubtful accounts		(3,072	)		(10,871	)
	$	78,419			122,053

At November 30, 2010, Lennar Homebuilding accounts receivable relates primarily to rebates and other receivables. At November 30, 2009, it also included receivables related to Chinese drywall, which were collected during 2010. The Company performs ongoing credit evaluations of its customers and generally does not require collateral for accounts receivable. Mortgages and notes receivable arising from the sale of land are generally collateralized by the property sold to the buyer. Allowances are maintained for potential credit losses based on historical experience, present economic conditions and other factors considered relevant by the Company.

4.    Lennar Homebuilding Investments in Unconsolidated Entities

Summarized condensed financial information on a combined 100% basis related to Lennar Homebuilding’s unconsolidated entities that are accounted for by the equity method was as follows:

	Years Ended November 30,
Statements of Operations	2010			2009			2008
	(In thousands)
Revenues	$	236,752			339,993			862,728
Costs and expenses		378,997			1,212,866			1,394,601
Net loss of unconsolidated entities (1)	$	(142,245	)		(872,873	)		(531,873	)
The Company’s share of net loss—recognized (2)	$	(10,966	)		(130,917	)		(59,156	)

(1) The net loss of unconsolidated entities for the years ended November 30, 2010 and 2009 was primarily related to valuation adjustments and operating losses recorded by the unconsolidated entities. The Company’s exposure to such losses was significantly lower as a result of its small ownership interest in the respective unconsolidated entities or its previous valuation adjustments recorded to its investments in unconsolidated entities. In addition, for the year ended November 30, 2010, the Company recorded a net pre-tax gain of $7.7 million from a transaction related to one of the Lennar Homebuilding unconsolidated entities.

(2) For the years ended November 30, 2010, 2009 and 2008, the Company’s share of net loss recognized from Lennar Homebuilding unconsolidated entities includes $10.5 million, $101.9 million and $32.2 million, respectively, of the Company’s share of valuation adjustments related to assets of the unconsolidated entities in which the Company has investments.

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Balance Sheets	November 30,
	2010		2009
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	82,573		171,946
Inventories		3,371,435		3,628,491
Other assets		307,244		403,383
	$	3,761,252		4,203,820
Liabilities and equity:
Accounts payable and other liabilities	$	327,824		366,141
Debt		1,284,818		1,588,390
Equity		2,148,610		2,249,289
	$	3,761,252		4,203,820

The Company’s partners generally are unrelated homebuilders, land owners/developers and financial or other strategic partners. The unconsolidated entities follow accounting principles that are in all material respects the same as those used by the Company. The Company shares in the profits and losses of these unconsolidated entities generally in accordance with its ownership interests. In many instances, the Company is appointed as the day-to-day manager under the direction of a management committee that has shared powers amongst the partners of the unconsolidated entities and receives management fees and/or reimbursement of expenses for performing this function. During the years ended November 30, 2010, 2009 and 2008, the Company received management fees and reimbursement of expenses from the unconsolidated entities totaling $21.0 million, $15.3 million and $33.3 million, respectively.

The Company and/or its partners sometimes obtain options or enter into other arrangements under which the Company can purchase portions of the land held by the unconsolidated entities. Option prices are generally negotiated prices that approximate fair value when the Company receives the options. During the years ended November 30, 2010, 2009 and 2008, $86.3 million, $117.8 million and $416.2 million, respectively, of the unconsolidated entities’ revenues were from land sales to the Company. The Company does not include in its Lennar Homebuilding equity in earnings (loss) from unconsolidated entities its pro rata share of unconsolidated entities’ earnings resulting from land sales to its homebuilding divisions. Instead, the Company accounts for those earnings as a reduction of the cost of purchasing the land from the unconsolidated entities. This in effect defers recognition of the Company’s share of the unconsolidated entities’ earnings related to these sales until the Company delivers a home and title passes to a third-party homebuyer.

In 2007, the Company sold a portfolio of land to a strategic land investment venture with Morgan Stanley Real Estate Fund II, L.P., an affiliate of Morgan Stanley & Co., Inc., in which the Company has a 20% ownership interest and 50% voting rights. Due to the Company’s continuing involvement, the transaction did not qualify as a sale by the Company under GAAP; thus, the inventory has remained on the Company’s consolidated balance sheet in consolidated inventory not owned. As of November 30, 2010 and 2009, the portfolio of land (including land development costs) of $424.5 million and $477.9 million, respectively, is reflected as inventory in the summarized condensed financial information related to Lennar Homebuilding’s unconsolidated entities.

The Lennar Homebuilding unconsolidated entities in which the Company has investments usually finance their activities with a combination of partner equity and debt financing. In some instances, the Company and its partners have guaranteed debt of certain unconsolidated entities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The summary of the Company’s net recourse exposure related to the Lennar Homebuilding unconsolidated entities in which the Company has investments was as follows:

	November 30,
	2010			2009
	(In thousands)
Several recourse debt—repayment	$	33,399			42,691
Several recourse debt—maintenance		29,454			75,238
Joint and several recourse debt—repayment		48,406			85,799
Joint and several recourse debt—maintenance		61,591			81,592
Land seller debt and other debt recourse exposure		—			2,420
The Company’s maximum recourse exposure		172,850			287,740
Less: joint and several reimbursement agreements with the Company’s partners		(58,878	)		(93,185	)
The Company’s net recourse exposure	$	113,972			194,555

During the year ended November 30, 2010, the Company reduced its maximum recourse exposure related to indebtedness of Lennar Homebuilding unconsolidated entities by $114.9 million, of which $82.5 million was paid by the Company primarily through capital contributions to unconsolidated entities and $32.4 million related to a reduction in the number of joint ventures in which the Company has investments, the reduction of joint and several recourse debt and the joint ventures selling inventory.

As of November 30, 2010 and 2009, the Company had $10.2 million and $14.1 million, respectively, of obligation guarantees recorded as a liability on its consolidated balance sheets. During the year ended November 30, 2010, the liability was reduced by $11.0 million as a result of the debt extinguishment related to one of the Company’s unconsolidated entities and by $2.1 million due to cash paid related to an obligation guarantee previously recorded. This was partially offset by an accrual of $9.2 million established by the Company to cover claims arising under obligation guarantees. The obligation guarantees are estimated based on current facts and circumstances and any unexpected changes may lead the Company to incur additional liabilities under its obligation guarantees in the future.

Indebtedness of a Lennar Homebuilding unconsolidated entity is secured by its own assets. Some Lennar Homebuilding unconsolidated entities own multiple properties and other assets. There is no cross collateralization of debt to different unconsolidated entities. The Company also does not use its investment in one unconsolidated entity as collateral for the debt in another unconsolidated entity or commingle funds among Lennar Homebuilding’s unconsolidated entities.

In connection with loans to a Lennar Homebuilding unconsolidated entity, the Company and its partners often guarantee to a lender either jointly and severally or on a several basis, any, or all of the following: (I) the completion of the development, in whole or in part, (ii) indemnification of the lender from environmental issues, (iii) indemnification of the lender from “bad boy acts” of the unconsolidated entity (or full recourse liability in the event of unauthorized transfer or bankruptcy) and (iv) that the loan to value and/or loan to cost will not exceed a certain percentage (maintenance or remargining guarantee) or that a percentage of the outstanding loan will be repaid (repayment guarantee).

In connection with loans to a Lennar Homebuilding unconsolidated entity where there is a joint and several guarantee, the Company generally has a reimbursement agreement with its partner. The reimbursement agreement provides that neither party is responsible for more than its proportionate share of the guarantee. However, if the Lennar Homebuilding’s joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, the Company may be liable for more than its proportionate share, up to its maximum recourse exposure, which is the full amount covered by the joint and several guarantee.

If the joint ventures are unable to reduce their debt, where there is recourse to the Company, through the sale of inventory or other means, then the Company and its partners may be required to contribute capital to the joint ventures.

95

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The recourse debt exposure in the previous table represents the Company’s maximum recourse exposure to loss from guarantees and does not take into account the underlying value of the collateral or the other assets of the borrowers that are available to repay the debt or to reimburse the Company for any payments on its guarantees. The Lennar Homebuilding unconsolidated entities that have recourse debt have significant amount of assets and equity. The summarized balance sheets of the Lennar Homebuilding unconsolidated entities with recourse debt were as follows:

	November 30,
	2010		2009
	(In thousands)
Assets	$	990,028		1,324,993
Liabilities		487,606		777,836
Equity		502,422		547,157

In addition, in most instances in which the Company has guaranteed debt of a Lennar Homebuilding unconsolidated entity, the Company’s partners have also guaranteed that debt and are required to contribute their share of the guarantee payments. Some of the Company’s guarantees are repayment guarantees and some are maintenance guarantees. In a repayment guarantee, the Company and its venture partners guarantee repayment of a portion or all of the debt in the event of default before the lender would have to exercise its rights against the collateral. In the event of default, if the Company’s venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, the Company may be liable for more than its proportionate share, up to its maximum recourse exposure, which is the full amount covered by the joint and several guarantee. The maintenance guarantees only apply if the value or the collateral (generally land and improvements) is less than a specified percentage of the loan balance. If the Company is required to make a payment under a maintenance guarantee to bring the value of the collateral above the specified percentage of the loan balance, the payment would constitute a capital contribution or loan to the Lennar Homebuilding unconsolidated entity and increase the Company’s investment in the unconsolidated entity and its share of any funds the unconsolidated entity distributes.

In connection with many of the loans to Lennar Homebuilding unconsolidated entities, the Company and its joint venture partners (or entities related to them) have been required to give guarantees of completion to the lenders. Those completion guarantees may require that the guarantors complete the construction of the improvements for which the financing was obtained. If the construction is to be done in phases, the guarantee generally is limited to completing only the phases as to which construction has already commenced and for which loan proceeds were used.

During the year ended November 30, 2010, there were: (1) payments of $10.0 million under the Company’s maintenance guarantees, (2) at the election of the Company, a loan paydown of $50.3 million, representing both the Company’s and its partner’s share, in return for a 4-year loan extension and the rights to obtain preferred returns and priority distributions at one of the Company’s unconsolidated entities, and (3) a $19.3 million payment to extinguish debt at a discount and buyout the partner of one of the Company’s unconsolidated entities resulting in a net pre-tax gain of $7.7 million. In addition, during the year ended November 30, 2010, there were other loan paydowns of $28.1 million, a portion of which related to amounts paid under the Company’s repayment guarantees. During the year ended November 30, 2009, there were payments of $31.6 million under the Company’s maintenance guarantees and there were other loan repayments of $72.4 million, a portion of which related to amounts paid under the Company’s repayment guarantees. During the year ended November 30, 2010, there were no payments under completion guarantees. During the year ended November 30, 2009, there was a payment of $5.6 million under a completion guarantee related to one joint venture. Payments made to, or on behalf of, the Company’s unconsolidated entities, including payment made under guarantees, are recorded primarily as capital contributions to the Company’s Lennar Homebuilding unconsolidated entities.

As of November 30, 2010, the fair values of the maintenance guarantees, repayment guarantees and completion guarantees were not material. The Company believes that as of November 30, 2010, in the event it becomes legally obligated to perform under a guarantee of the obligation of a Lennar Homebuilding unconsolidated entity due to a triggering event under a guarantee, most of the time the collateral should be sufficient to repay at least a significant portion of the obligation or the Company and its partners would contribute additional capital into the venture. In certain instances, the Company has placed performance letters of credit and surety bonds with municipalities for its joint ventures (see Note 6).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The total debt of the Lennar Homebuilding unconsolidated entities in which the Company has investments was as follows:

	November 30,
	2010			2009
	(Dollars in thousands)
The Company’s net recourse exposure	$	113,972			194,555
Reimbursement agreements from partners		58,878			93,185
The Company’s maximum recourse exposure		172,850			287,740
Non-recourse bank debt and other debt (partner’s share of several recourse)		79,921			140,078
Non-recourse land seller debt or other debt		58,604			47,478
Non-recourse debt with completion guarantees		600,297			608,397
Non-recourse debt without completion guarantees		373,146			504,697
Non-recourse debt to the Company		1,111,968			1,300,650
Total debt	$	1,284,818			1,588,390
The Company’s maximum recourse exposure as a % of total JV debt		13	%		18	%

Subsequent to November 30, 2010, one of Lennar Homebuilding’s unconsolidated entities extended the maturity of its $573.5 million debt without recourse to Lennar until 2018. In exchange for the extension, all the partners agreed to provide a limited several repayment guarantee on the outstanding debt, which will result in a $36.3 million increase to the Company’s maximum recourse exposure related to Lennar Homebuilding unconsolidated entities.

LandSource/Newhall Transactions

In February 2007, the Company’s LandSource Communities Development LLC (“LandSource”) joint venture admitted MW Housing Partners as a new strategic partner. As a result, the Company received a distribution from LandSource of $707.6 million and its ownership in LandSource was reduced to 16%. In June 2008, LandSource and a number of its subsidiaries commenced proceedings under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In November 2008, the Company’s land purchase options with LandSource were terminated, thus, in 2008, the Company recognized a deferred profit of $101.3 million (net of $31.8 million of write-offs of option deposits and pre-acquisition costs and other write-offs) related to the 2007 recapitalization of LandSource.

In July 2009, the United States Bankruptcy Court of the District of Delaware confirmed the plan of reorganization for LandSource. As a result of the bankruptcy proceedings, LandSource was reorganized into a new company called Newhall Land Development, LLC, (“Newhall”). The reorganized company emerged from Chapter 11 free of its previous bank debt. As part of the reorganization plan, in 2009 the Company invested $140 million in exchange for approximately a 15% equity interest in the reorganized Newhall, ownership in several communities that were formerly owned by LandSource, the settlement and release of any claims that might have been asserted against the Company and certain other claims LandSource had against third parties.

5.    Operating Properties and Equipment

	November 30,
	2010			2009
	(In thousands)
Operating properties (1)	$	196,214			145,015
Leasehold improvements		29,107			27,916
Furniture, fixtures and equipment		27,604			32,055
		252,925			204,986
Accumulated depreciation and amortization		(57,860	)		(52,954	)
	$	195,065			152,032

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1) As of November 30, 2010, operating properties includes $44.8 million of operating properties associated with the buy out of a Lennar Homebuilding joint venture during the year ended November 30, 2010, $85.1 million as a result of converting a multi-level residential building to a rental operation and $62.7 million of operating properties associated with the consolidation of joint ventures during the year ended November 30, 2009.

Operating properties and equipment are included in other assets in the consolidated balance sheets.

6.    Lennar Homebuilding Senior Notes and Other Debts Payable

	November 30,
	2010		2009
	(Dollars in thousands)
5.95% senior notes due 2011	$	113,189		244,727
5.95% senior notes due 2013		266,319		347,471
5.50% senior notes due 2014		248,657		248,365
5.60% senior notes due 2015		501,216		501,424
6.50% senior notes due 2016		249,788		249,760
12.25% senior notes due 2017		393,031		392,392
6.95% senior notes due 2018		247,323		—
2.00% convertible senior notes due 2020		276,500		—
2.75% convertible senior notes due 2020		375,875		—
5.125% senior notes due 2010		—		249,955
Mortgage notes on land and other debt		456,256		527,258
	$	3,128,154		2,761,352

In February 2010, the Company terminated its $1.1 billion senior unsecured revolving credit facility (the “Credit Facility”). The Company had no outstanding borrowings under the Credit Facility as it was only being used to issue letters of credit. The Company entered into cash-collateralized letter of credit agreements with two banks with a capacity totaling $225 million. In November 2010, the Company terminated its cash-collateralized letter of credit agreements and simultaneously entered into a $150 million Letter of Credit and Reimbursement Agreement (“LC Agreement”) with certain financial institutions. The LC Agreement may be increased to $200 million, although there are currently no commitments for the additional $50 million. The Company believes it was in compliance with its debt covenants at November 30, 2010.

The Company’s performance letters of credit outstanding were $78.9 million and $97.7 million, respectively, at November 30, 2010 and 2009. The Company’s financial letters of credit outstanding were $195.0 million and $205.4 million, respectively, at November 30, 2010 and 2009. Performance letters of credit are generally posted with regulatory bodies to guarantee the Company’s performance of certain development and construction activities, and financial letters of credit are generally posted in lieu of cash deposits on option contracts, for insurance risks, credit enhancements and as other collateral. Additionally, at November 30, 2010, the Company had outstanding performance and surety bonds related to site improvements at various projects (including certain projects in the Company’s joint ventures) of $684.7 million. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities are completed. As of November 30, 2010, there were approximately $314.7 million, or 46%, of costs to complete related to these site improvements. The Company does not presently anticipate any draws upon these bonds, but if any such draws occur, the Company does not believe they would have a material effect on its financial position, results of operations or cash flows.

In November 2010, the Company issued $446.0 million of 2.75% convertible senior notes due 2020 (the “2.75% Convertible Senior Notes”) at a price of 100% in a private placement. Proceeds from the offering, after payment of expenses, were $436.4 million. The net proceeds are being used for general corporate purposes, including repayments or repurchases of existing senior notes or other indebtedness. The 2.75% Convertible Senior Notes are convertible into cash, shares of Class A common stock or a combination of both, at the Company’s election. However, it is the Company’s intent to settle the face value of the 2.75% Convertible Senior

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Notes in cash. Holders may convert the 2.75% Convertible Senior Notes at the initial conversion rate of 45.1794 shares of common stock per $1,000 principal amount or 20,150,012 Class A common shares if all the 2.75% Convertible Senior Notes are converted, which is equivalent to an initial conversion price of approximately $22.13 per share of Class A common stock, subject to anti-dilution adjustments. The shares are not included in the calculation of diluted earnings per share primarily because it is the Company’s intent to settle the face value of the 2.75% Convertible Senior Notes in cash and the Company’s stock price does not exceed the conversion price.

Holders of the 2.75% Convertible Senior Notes will have the right to convert them, if during any fiscal quarter commencing after the fiscal quarter ended November 30, 2010 (and only during such fiscal quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day. Holders of the 2.75% Convertible Senior Notes will have the right to require the Company to repurchase them for cash equal to 100% of their principal amount, plus accrued but unpaid interest, on December 15, 2015. The Company will have the right to redeem the 2.75% Convertible Senior Notes at any time on or after December 20, 2015 for 100% of their principal amount, plus accrued but unpaid interest. Interest on the 2.75% Convertible Senior Notes is due semi-annually beginning June 15, 2011. Beginning with the period commencing December 20, 2015, under certain circumstances based on the average trading price of the 2.75% Convertible Senior Notes, the Company may be required to pay contingent interest. The 2.75% Convertible Senior Notes are unsecured and unsubordinated, but are currently guaranteed by substantially all of the Company’s wholly-owned subsidiaries.

Certain provisions under ASC Topic 470, Debt, require the issuer of certain convertible debt instruments that may be settled in cash on conversion to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. The Company has applied these provisions related to its 2.75% Convertible Senior Notes. The Company estimated the fair value of the 2.75% Convertible Senior Notes using similar debt instruments at issuance that did not have a conversion feature and allocated the residual fair value to an equity component that represents the estimated fair value of the conversion feature at issuance. The debt discount of the 2.75% Convertible Senior Notes is being amortized over five years and the annual effective interest is 7.1% after giving effect to the amortization of the discount and deferred financing costs. At November 30, 2010, the principal amount of the 2.75% Convertible Senior Notes was $446.0 million, the unamortized discount included in stockholders’ equity was $70.1 million and the net carrying amount of the 2.75% Convertible Senior Notes was $375.9 million. The carrying amount of the equity component of the 2.75% Convertible Senior Notes was $71.2 million at November 30, 2010. During the year ended November 30, 2010, the amount of interest recognized relating to both the contractual interest and amortization of the discount was $1.7 million.

In May 2010, the Company repurchased $289.4 million aggregate principal amount of its senior notes due 2010, 2011 and 2013 through a tender offer, resulting in a pre-tax loss of $10.8 million. Through the tender offer, the Company repurchased $76.4 million principal amount of its 5.125% senior notes due October 2010, $130.8 million principal amount of its 5.95% senior notes due 2011 and $82.3 million principal amount of its 5.95% senior notes due 2013.

In May 2010, the Company issued $250 million of 6.95% senior notes due 2018 (the “6.95% Senior Notes”) at a price of 98.929% in a private placement. Proceeds from the offering, after payment of initial purchaser’s discount and expenses, were $243.9 million. The Company used the net proceeds of the sale of the 6.95% Senior Notes to fund purchases pursuant to its tender offer for its 5.125% senior notes due October 2010, its 5.95% senior notes due 2011 and its 5.95% senior notes due 2013. Interest on the 6.95% Senior Notes is due semi-annually beginning December 1, 2010. The 6.95% Senior Notes are unsecured and unsubordinated, but are currently guaranteed by substantially all of the Company’s wholly owned subsidiaries. Subsequently, most of the privately placed 6.95% Senior Notes were exchanged for substantially identical 6.95% senior notes that had been registered under the Securities Act of 1933. At November 30, 2010, the carrying amount of the 6.95% Senior Notes was $247.3 million.

In May 2010, the Company also issued $276.5 million of 2.00% convertible senior notes due 2020 (the “2.00% Convertible Senior Notes”) at a price of 100% in a private placement. Proceeds from the offering, after payment of expenses, were $271.2 million. The net proceeds were or will be used for general corporate purposes,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

including repayments or repurchases of existing senior notes or other indebtedness. The 2.00% Convertible Senior Notes are convertible into shares of Class A common stock at the initial conversion rate of 36.1827 shares of common stock per $1,000 principal amount of the 2.00% Convertible Senior Notes or 10,004,517 Class A common shares if all the 2.00% Convertible Senior Notes are converted, which is equivalent to an initial conversion price of approximately $27.64 per share of Class A common stock, subject to anti-dilution adjustments. The shares are included in the calculation of diluted earnings per share. Holders of the 2.00% Convertible Senior Notes will have the right to require the Company to repurchase them for cash equal to 100% of their principal amount, plus accrued but unpaid interest, on each of December 1, 2013 and December 1, 2015. The Company will have the right to redeem the 2.00% Convertible Senior Notes at any time on or after December 1, 2013 for 100% of their principal amount, plus accrued but unpaid interest. Interest on the 2.00% Convertible Senior Notes is due semi-annually beginning December 1, 2010. Beginning with the six-month interest period commencing December 1, 2013, under certain circumstances based on the average trading price of the 2.00% Convertible Senior Notes, the Company may be required to pay contingent interest. The 2.00% Convertible Senior Notes are unsecured and unsubordinated, but are currently guaranteed by substantially all of the Company’s wholly-owned subsidiaries. At November 30, 2010, the carrying amount of the 2.00% Convertible Senior Notes was $276.5 million.

In April 2009, the Company sold $400 million of 12.25% senior notes due 2017 (the “12.25% Senior Notes”) at a price of 98.098% in a private placement and were subsequently exchanged for identical 12.25% Senior Notes that had been registered under the Securities Act of 1933. Proceeds from the offering, after payment of initial purchaser’s discount and expenses, were $386.7 million. The Company added the proceeds to its working capital to be used for general corporate purposes, which included the repayment or repurchase of its near-term maturities or of debt of its joint ventures that it has guaranteed. Interest on the 12.25% Senior Notes is due semi-annually. The 12.25% Senior Notes are unsecured and unsubordinated, but are currently guaranteed by substantially all of the Company’s wholly-owned subsidiaries. At November 30, 2010 and 2009, the carrying amount of the 12.25% Senior Notes was $393.0 million and $392.4 million, respectively.

In March 2009, the Company retired its $281 million of 7 ⁵/8% senior notes due March 2009 for 100% of the outstanding principal amount, plus accrued and unpaid interest as of the maturity date.

In April 2006, the Company sold $250 million of 5.95% senior notes due 2011 and $250 million of 6.50% senior notes due 2016 (collectively, the “2006 Senior Notes”) at prices of 99.766% and 99.873%, respectively, in a private placement and were subsequently exchanged for identical 2006 Senior Notes that had been registered under the Securities Act of 1933. Proceeds from the offering of the 2006 Senior Notes, after initial purchaser’s discount and expenses, were $248.7 million and $248.9 million, respectively. The Company added the proceeds to its working capital to be used for general corporate purposes. Interest on the 2006 Senior Notes is due semi-annually. The 2006 Senior Notes are unsecured and unsubordinated, but are currently guaranteed by substantially all of the Company’s wholly-owned subsidiaries. During the years ended November 30, 2010 and 2009, the Company redeemed $131.8 million (including amount redeemed through the tender offer) and $5.0 million, respectively, of the 5.95% senior notes due 2011. At November 30, 2010 and 2009, the carrying amount of the 2006 Senior Notes was $363.0 million and $494.5 million, respectively.

In September 2005, the Company sold $300 million of 5.125% senior notes due October 2010 (the “5.125% Senior Notes”) at a price of 99.905%. During the years ended November 30, 2010 and 2009, the Company redeemed $150.8 million (including amount redeemed through the tender offer) and $50.0 million, respectively, of the 5.125% Senior Notes. In October 2010, the Company retired the remaining $99.2 million of its 5.125% Senior Notes for 100% of the outstanding principal amount plus accrued and unpaid interest as of the maturity date.

In April 2005, the Company sold $300 million of 5.60% Senior Notes due 2015 (the “5.60% Senior Notes”) at a price of 99.771%. Proceeds from the offering, after initial purchaser’s discount and expenses, were $297.5 million. In July 2005, the Company sold $200 million of 5.60% Senior Notes due 2015 at a price of 101.407%. The 5.60% Senior Notes were the same issue as the 5.60% Senior Notes the Company sold in April 2005. Proceeds from the offering, after initial purchaser’s discount and expenses, were $203.9 million. The Company added the proceeds of both offerings to its working capital to be used for general corporate purposes. Interest on the 5.60% Senior Notes is due semi-annually. The 5.60% Senior Notes are unsecured and unsubordinated.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Currently, substantially all of the Company’s wholly-owned subsidiaries are guaranteeing the 5.60% Senior Notes. The 5.60% Senior Notes were subsequently exchanged for identical 5.60% Senior Notes that had been registered under the Securities Act of 1933. At November 30, 2010 and 2009, the carrying amount of the 5.60% Senior Notes sold in April and July 2005 was $501.2 million and $501.4 million, respectively.

In August 2004, the Company sold $250 million of 5.50% senior notes due 2014 (the “5.50% Senior Notes”) at a price of 98.842% in a private placement. Proceeds from the offering, after initial purchaser’s discount and expenses, were $245.5 million. The Company used the proceeds to repay borrowings under its Credit Facility. Interest on the 5.50% Senior Notes is due semi-annually. The 5.50% Senior Notes are unsecured and unsubordinated. Currently, substantially all of the Company’s wholly-owned subsidiaries are guaranteeing the 5.50% Senior Notes. At November 30, 2010 and 2009, the carrying value of the 5.50% Senior Notes was $248.7 million and $248.4 million, respectively.

In February 2003, the Company issued $350 million of 5.95% senior notes due 2013 (the “5.95% Senior Notes”) at a price of 98.287%. Currently, substantially all of the Company’s wholly-owned subsidiaries are guaranteeing the 5.95% Senior Notes. During the year ended November 30, 2010, the Company redeemed $82.3 million (including amount redeemed through the tender offer) of the 5.95% Senior Notes due 2013. At November 30, 2010 and 2009, the carrying amount of the 5.95% Senior Notes was $266.3 million and $347.5 million, respectively.

At November 30, 2010, the Company had mortgage notes on land and other debt due at various dates through 2013 bearing interest at rates up to 10.0% with an average interest rate of 3.7%. At November 30, 2010 and 2009, the carrying amount of the mortgage notes on land and other debt was $456.3 million and $527.3 million, respectively. During the year ended November 30, 2010, the Company retired $160.9 million of mortgage notes on land and other debt, resulting in a pre-tax gain of $19.4 million recorded in Lennar Homebuilding other income (expense), net.

The minimum aggregate principal maturities of senior notes and other debts payable during the five years subsequent to November 30, 2010 and thereafter are as follows:

	Debt Maturities
	(In thousands)
2011	$	206,985
2012		238,346
2013		353,184
2014		279,589
2015		504,599
Thereafter		1,545,451

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7.    Lennar Financial Services Segment

The assets and liabilities related to the Lennar Financial Services segment were as follows:

	November 30,
	2010		2009
	(In thousands)
Assets:
Cash and cash equivalents	$	110,476		126,835
Restricted cash		21,210		25,646
Receivables, net (1)		136,672		123,967
Loans held-for-sale (2)		245,404		182,706
Loans held-for-investment, net		21,768		25,131
Investments held-to-maturity		3,165		2,512
Goodwill		34,046		34,046
Other (3)		36,249		36,707
	$	608,990		557,550
Liabilities:
Notes and other debts payable	$	271,678		217,557
Other (4)		176,541		197,329
	$	448,219		414,886

(1) Receivables, net, primarily relate to loans sold to investors for which the Company had not yet been paid as of November 30, 2010 and 2009, respectively.

(2) Loans held-for-sale relate to unsold loans carried at fair value.

(3) Other assets include mortgage loan commitments carried at fair value of $1.4 million and $4.7 million, respectively, as of November 30, 2010 and 2009. Other assets also include forward contracts carried at fair value of $2.9 million as of November 30, 2010.

(4) Other liabilities include forward contracts carried at fair value of $3.6 million as of November 30, 2009.

At November 30, 2010, the Lennar Financial Services segment has a warehouse repurchase facility with a maximum aggregate commitment of $150 million and an additional uncommitted amount of $50 million that matures in April 2011, and another warehouse repurchase facility with a maximum aggregate commitment of $175 million that matures in July 2011. The maximum aggregate commitment under these facilities totaled $325 million.

The Lennar Financial Services segment uses these facilities to finance its lending activities until the mortgage loans are sold to investors and expects the facilities to be renewed or replaced with other facilities when they mature. Borrowings under the facilities were $271.6 million and $217.5 million, respectively, at November 30, 2010 and 2009, and were collateralized by mortgage loans and receivables on loans sold to investors but not yet paid for with outstanding principal balances of $286.0 million and $266.9 million, respectively, at November 30, 2010 and 2009. The combined effective interest rate on the facilities at November 30, 2010 was 3.9%. If the facilities are not renewed, the borrowings under the lines of credit will be paid off by selling the mortgage loans held-for-sale to investors and by collecting on receivables on loans sold but not yet paid. Without the facilities, the Lennar Financial Services segment would have to use cash from operations and other funding sources to finance its lending activities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8.    Rialto Investment Segment

The assets and liabilities related to the Rialto segment were as follows:

	November 30,
	2010		2009
	(In thousands)
Assets:
Cash and cash equivalents	$	76,412		—
Defeasance cash to retire notes payable		101,309		—
Loans receivable		1,219,314		—
Real estate owned		258,104		—
Investments in unconsolidated entities		84,526		9,874
Investments held-to-maturity		19,537		—
Other		18,412		—
	$	1,777,614		9,874
Liabilities:
Notes payable	$	752,302		—
Other		18,412		—
	$	770,714		—

Rialto’s operating earnings (loss) for the years ended November 30, 2010 and 2009 was as follows:

	Years Ended November 30,
	2010		2009
	(In thousands)
Revenues	$	92,597		—
Costs and expenses		67,904		2,528
Rialto Investments equity in earnings from unconsolidated entities		15,363		—
Rialto Investments other income, net		17,251		—
Operating earnings (loss) (1)	$	57,307		(2,528	)

(1) Operating earnings (loss) for the year ended November 30, 2010 includes $33.2 million of net earnings attributable to noncontrolling interests.

Loans Receivable

In February 2010, the Rialto segment acquired indirectly 40% managing member equity interests in two limited liability companies (“LLCs”), in partnership with the FDIC, for approximately $243 million (net of transaction costs and a $22 million working capital reserve). The LLCs hold performing and non-performing loans formerly owned by 22 failed financial institutions. The two portfolios originally consisted of more than 5,500 distressed residential and commercial real estate loans with an aggregate unpaid principal balance of approximately $3 billion and an initial fair value of approximately $1.2 billion. The FDIC retained a 60% equity interest in the LLCs and provided $626.9 million of notes with 0% interest, which are non-recourse to the Company. In accordance with GAAP, interest has not been imputed because the notes are with, and guaranteed by, a governmental agency. The notes are secured by the loans held by the LLCs. Additionally, if the LLCs exceed expectations and meet certain internal rate of return and distribution thresholds, the Company’s equity interest in the LLCs could be reduced from 40% down to 30%, with a corresponding increase to the FDIC’s equity interest from 60% up to 70%. As of November 30, 2010, the notes payable balance was $626.9 million; however, during the year ended November 30, 2010, $101.3 million of cash collections on loans in excess of expenses were deposited in a defeasance account, established for the repayment of the notes payable, under the agreement with the FDIC. The funds in the defeasance account will be used to retire the notes payable upon their maturity.

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The LLCs met the accounting definition of VIEs and since the Company was determined to be the primary beneficiary, the Company consolidated the LLCs. The Company was determined to be the primary beneficiary because it has the power to direct the activities of the LLCs that most significantly impact the LLCs’ performance through its management and servicer contracts. At November 30, 2010, these consolidated LLCs had total combined assets and liabilities of $1.4 billion and $0.6 billion, respectively.

In September 2010, the Rialto segment completed the acquisitions of over $700 million of distressed real estate assets, in separate transactions, from three financial institutions. The combined portfolio includes approximately 400 loans with a total aggregate unpaid principal balance of over $500 million and over 300 real estate owned (“REO”) properties with an original appraised value of approximately $200 million. The Company paid $310 million for the distressed real estate assets of which, $125 million was financed through a 5-year senior unsecured note provided by one of the selling institutions.

At acquisition, the Rialto segment estimated the cash flows it expected to collect on these loans. In accordance with GAAP, the difference between the contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. This difference is neither accreted into income nor recorded on the Company’s consolidated balance sheets. The excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the pool of loans, using the effective yield method. The following tables display the contractually required principal and interest, cash flows expected to be collected and fair value at acquisition related to the loan portfolios the Rialto segment acquired. The tables also display the nonaccretable difference and the accretable yield at acquisition.

	February 9, 2010
	(In thousands)
FDIC Portfolios
Loans receivable contractually required payments at acquisition	$	3,668,498
Nonaccretable difference		2,088,203
Cash flows expected to be collected		1,580,295
Accretable difference		402,659
Loans receivable carrying amount	$	1,177,636

	September 30, 2010
	(In thousands)
Bank Portfolios
Loans receivable contractually required payments at acquisition	$	523,688
Nonaccretable difference		202,762
Cash flows expected to be collected		320,926
Accretable difference		84,114
Loans receivable carrying amount	$	236,812

The following table displays the outstanding balance and the carrying value of the loans receivable as of:

	November 30, 2010
	(In thousands)
Outstanding balance	$	4,056,625
Carrying value	$	1,219,314

Subsequent to acquisition, the Rialto segment is required to evaluate periodically its estimate of cash flows expected to be collected. These evaluations require the continued use of key assumptions and estimates, similar to the initial estimate of fair value. Subsequent changes in the estimated cash flows expected to be collected may result in changes in the accretable yield and nonaccretable difference or reclassifications from nonaccretable yield to accretable. Increases in the cash flows expected to be collected will generally result in an increase in

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interest income over the remaining life of the pool of loans. Decreases in expected cash flows due to further credit deterioration will generally result in an impairment charge recognized in the Rialto segment provision for loan and losses, resulting in an increase to the allowance for loan losses.

In accordance with ASC 310-30, the Rialto segment’s reassessment of forecasted cash flows did not warrant the recording of a valuation allowance on these loans during the year ended November 30, 2010. At November 30, 2010, there were loans receivable with a carrying value of approximately $253 million for which interest income was not being recognized as they were classified as nonaccrual. No allowance for loan losses was recorded at November 30, 2010 against these loans as the fair value of the underlying collateral was at least equal to the loans’ carrying value.

Disposal of loans which may include sales of loans, receipts of payments in full by the borrower, or foreclosure, result in removal of the loan from accretable yield portfolios.

The activity in the accretable yield for the FDIC portfolios for the year ended November 30, 2010 was as follows:

	Accretable Yield
	(In thousands)
Balance at November 30, 2009	$	—
Additions		402,659
Accretions		(85,754	)
Balance at November 30, 2010	$	316,905

The activity in the accretable yield for the bank portfolios for the year ended November 30, 2010 was as follows:

	Accretable Yield (1)
	(In thousands)
Balance at November 30, 2009	$	—
Additions		84,114
Accretions		(4,708	)
Balance at November 30, 2010	$	79,406

(1) The additions to accretable yield and the accretion of interest income is based on various estimates regarding loan performance. As the Company continues to obtain additional information related to recently acquired loans, the accretable yield may change. Therefore, the amounts of accretable income recorded for the year ended November 30, 2010 are not necessarily indicative of the results to be expected in the future.

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Real Estate Owned

Based on the nature of Rialto’s operations, real estate properties acquired through, or in lieu of loan foreclosure, are commonly classified as held-for-sale. The Rialto segment classifies properties as held-for-sale when certain criteria set forth in ASC Topic 360 are met. When a real estate asset is classified as held-for-sale, the property is carried at the lower of its cost basis or fair value less estimated costs to sell. The Rialto segment had no valuation allowances on real estate held-for-sale as of November 30, 2010. Valuation allowances on real estate held-for-sale are based on updated appraisals of the underlying properties or management’s best estimate of fair value. The following table presents the changes in real estate held-for-sale for the year ended November 30, 2010:

	Real Estate Owned
	(In thousands)
Balance at November 30, 2009	$	—
Additions		270,859
Improvements		1,257
Sales		(14,012	)
Balance at November 30, 2010	$	258,104

For the year ended November 30, 2010, the Company recorded approximately $2.9 million and $18.1 million, respectively, of gains from real estate sales and gains from acquisitions of real estate through foreclosure. The gains associated with real estate operations are recorded in Rialto Investments other income, net.

Investments

In November 2010, the Rialto segment invested in approximately $43 million of non-investment grade commercial mortgage-backed securities (“CMBS”) for $19.4 million, representing a 55% discount to par value. These securities bear interest at a coupon rate of 4% and have a stated and assumed final distribution date of November 2020 and a stated maturity date of October 2057. The Rialto segment has classified these securities as held-to-maturity based on its intent and ability to hold the securities until maturity.

In a CMBS transaction, monthly interest received from all of the pooled loans is paid to the investors, starting with those investors holding the highest rated bonds and progressing in an order of seniority based on the class of security. Based on the aforementioned, the principal and interest repayments of a particular class are dependent upon collections on the underlying mortgages, which are affected by prepayments, extensions and defaults.

In accordance with ASC Topic 320-10, Investments in Debt and Equity Securities, the Rialto segment reviews changes in estimated cash flows periodically, to determine if other-than-temporary impairment has occurred on its investment securities. Based on the Rialto segment’s assessment, no impairment charges were recorded during 2010. Additionally, the carrying value of the investment securities was $19.5 million and approximates their fair value due to the close proximity of the transaction date and the ending balance sheet date.

In addition to the acquisition and management of the FDIC and bank portfolios, an affiliate in the Rialto segment is a sub-advisor to the AllianceBernstein L.P. (“AB”) fund formed under the Federal government’s Public-Private Investment Program (“PPIP”) to purchase real estate related securities from banks and other financial institutions. The sub-advisor receives management fees for sub-advisory services. The Company committed to invest $75 million of the total equity commitments of approximately $1.2 billion made by private investors in this fund, and the U.S. Treasury has committed to a matching amount of approximately $1.2 billion of equity in the fund, as well as agreed to extend up to approximately $2.3 billion of debt financing. During the year ended November 30, 2010, the Company invested $63.8 million in the AB PPIP fund. As of November 30, 2010, the carrying value of the Company’s investment in the AB PPIP fund was $77.3 million.

In November 2010, the Rialto segment completed its first closing of a real estate investment fund (the “Fund”) with initial equity commitments of approximately $300 million (including $75 million committed by the Company). The Fund’s objective during its three-year investment period is to invest in distressed real estate assets and other related investments that fit within the Fund’s investment parameters.

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Additionally, another subsidiary in the Rialto segment also has a $7.3 million, or approximately 5%, investment in a service and infrastructure provider to the residential home loan market (the “Service Provider”), which provides services to the consolidated LLCs.

Summarized condensed financial information on a combined 100% basis related to Rialto’s investments in unconsolidated entities that are accounted for by the equity method as of November 30, 2010 was as follows:

	November 30,
Balance Sheets	2010		2009 (1)
	(In thousands)
Assets:
Cash and cash equivalents	$	42,793		2,229
Investments		4,341,226		—
Other assets		181,600		179,985
	$	4,565,619		182,214
Liabilities and equity:
Accounts payable and other liabilities	$	110,921		58,209
Partner loans		137,820		135,570
Debt due to the U.S. Treasury		1,955,000		—
Equity		2,361,878		(11,565	)
	$	4,565,619		182,214

	Years Ended November 30,
Statements of Operations	2010		2009 (1)
	(In thousands)
Revenues	$	357,330		58,464
Costs and expenses		209,103		89,570
Other gains		311,468		—
Net earnings (loss) of unconsolidated entities	$	459,695		(31,106	)
Rialto Investments’ share of net earnings recognized	$	15,363		—

(1) Amounts included as of and for the year ended November 30, 2009 relate only to the Service Provider because the Company did not invest in the AB PPIP fund until December 2009.

9.    Income Taxes

The benefit (provision) for income taxes consisted of the following:

	Years Ended November 30,
	2010		2009			2008
	(In thousands)
Current:
Federal	$	13,286		327,131			249,157
State		12,448		(12,786	)		(24,206	)
		25,734		314,345			224,951
Deferred:
Federal		—		—			(646,261	)
State		—		—			(126,247	)
		—		—			(772,508	)
	$	25,734		314,345			(547,557	)

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to the net deferred tax asset are as follows:

	November 30,
	2010			2009
	(In thousands)
Deferred tax assets:
Inventory valuation adjustments	$	131,508			175,166
Reserves and accruals		109,357			114,002
Net operating loss carryforward		401,529			330,160
Capitalized expenses		42,388			41,598
Investments in unconsolidated entities		5,819			29,685
Other		32,519			38,765
Total deferred tax assets		723,120			729,376
Valuation allowance		(609,463	)		(647,385	)
Total deferred tax assets after valuation allowance		113,657			81,991
Deferred tax liabilities:
Capitalized expenses		45,425			35,531
Convertible debt basis difference		26,331			—
Rialto investments		12,815			—
Prepaid expenses		6,214			15,977
Other		22,872			30,483
Total deferred tax liabilities		113,657			81,991
Net deferred tax assets	$	—		$	—

As a result of the valuation allowance against the Company’s net deferred tax assets, at November 30, 2010 and 2009, the Lennar Homebuilding operations, the Lennar Financial Services segment and Rialto segment did not have net deferred tax assets.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more-likely-than-not realization threshold criterion. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with loss carryforwards not expiring unused and tax planning alternatives.

Based upon an evaluation of all available evidence, the Company recorded a valuation allowance against its deferred tax assets of $730.8 million during the year ended November 30, 2008, and increased it by $269.6 million during the year ended November 30, 2009. In addition, for the year ended November 30, 2009, the Company recorded a reversal of its deferred tax asset valuation allowance of $351.8 million, primarily due to a change in tax legislation, which allowed the Company to carry back its fiscal year 2009 tax loss to recover previously paid income taxes. During the year ended November 30, 2010, the Company recorded a reversal of its deferred tax asset valuation allowance of $37.9 million primarily due to the recording of a deferred tax liability from the issuance of 2.75% Convertible Senior Notes and the net earnings generated during the year. The reversal of the deferred tax asset valuation allowance related to the issuance of the 2.75% Convertible Senior Notes was recorded as an adjustment to additional paid-in capital. At November 30, 2010 and 2009, the Company’s deferred tax asset valuation allowance was $609.5 million and $647.4 million, respectively. In future periods, the allowance could be reduced based on sufficient evidence indicating that it is more likely than not that a portion or all of our deferred tax assets will be realized.

At November 30, 2010, the Company had tax effected federal and state net operating loss carryforwards totaling $401.5 million. Federal net operating loss carryforwards may be carried forward up to 20 years to offset future taxable income and begin to expire in 2025. State net operating losses may be carried forward from 5 to 20 years, depending on the tax jurisdiction, with losses expiring between 2012 and 2031.

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A reconciliation of the statutory rate and the effective tax rate follows:

	Percentage of Pretax Income (Loss)
	2010			2009			2008
Statutory rate		35.00	%		35.00	%		35.00	%
State income taxes, net of federal income tax benefit		2.43			2.32			3.09
Internal Revenue Code Section 199 impact		—			—			(0.29	)
Other		0.18			(0.33	)		(1.25	)
Nondeductible compensation		4.79			(0.30	)		(0.35	)
Tax reserves and interest expense		(50.91	)		(4.97	)		(3.56	)
Deferred tax asset valuation reversal (allowance)		(28.50	)		11.25			(130.15	)
Effective rate		(37.01	)%		42.97	%		(97.51	)%

The following table summarizes the changes in gross unrecognized tax benefits for the years ended November 30, 2010, 2009 and 2008:

	Years Ended November 30,
	2010			2009			2008
	(In thousands)
Gross unrecognized tax benefits, beginning of year	$	77,211			100,168			88,560
Decreases due to settlements with taxing authorities		(31,167	)		(57,022	)		(2,605	)
Increases of prior year items		—			36,061			14,213
Decreases due to statute expirations		—			(1,996	)		—
Gross unrecognized tax benefits, end of year	$	46,044			77,211			100,168

If the Company were to recognize the $46.0 million of gross unrecognized tax benefits, $25.0 million would affect the Company’s effective tax rate. The Company expects the total amount of unrecognized tax benefits to decrease by $26.5 million within twelve months as a result of settlements with various taxing authorities and the expiration of certain statutes of limitations.

At November 30, 2010 and 2009, the Company had $28.2 million and $33.6 million, respectively, accrued for interest and penalties, of which $2.7 million and $3.9 million, respectively, were recorded during the years ended November 30, 2010 and 2009. During the year ended November 30, 2010, the accrual for interest was reduced by $8.1 million as a result of settlements with various taxing authorities.

The IRS is currently examining the Company’s federal income tax returns for fiscal years 2005 through 2009, and certain state taxing authorities are examining various fiscal years. The final outcome of these examinations is not yet determinable. The statute of limitations for the Company’s major tax jurisdictions remains open for examination for fiscal year 2003 and subsequent years.

10.    Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

Effective December 1, 2009, the Company adopted certain provisions under ASC 260. Under these provisions, all outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.

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For the years ended November 30, 2009 and 2008, the nonvested shares were excluded from the calculation of the denominator for diluted loss per share because including them would be anti-dilutive due to the Company’s net loss during those periods. The adoption of these provisions did not have a material impact to the Company’s basic and diluted loss per share.

Basic and diluted earnings (loss) per share were calculated as follows:

	Years Ended November 30,
	2010		2009			2008
	(In thousands, except per share amounts)
Numerator:
Net earnings (loss) attributable to Lennar	$	95,261		(417,147	)		(1,109,085	)
Less: distributed earnings allocated to nonvested shares		310		197			1,124
Less: undistributed earnings allocated to nonvested shares		735		—			—
Numerator for basic earnings (loss) per share		94,216		(417,344	)		(1,110,209	)
Plus: interest on 2.00% Convertible Senior Notes, net of tax		1,994		—			—
Plus: undistributed earnings allocated to convertible shares		735		—			—
Less: undistributed earnings reallocated to convertible shares		734		—			—
Numerator for diluted earnings (loss) per share	$	96,211		(417,344	)		(1,110,209	)
Denominator:
Denominator for basic earnings (loss) per share – weighted average common shares outstanding		182,960		170,537			158,395
Effect of dilutive securities:
Shared based payments		161		—			—
2.00% Convertible Senior Notes		5,736		—			—
Denominator for diluted earnings (loss) per share – weighted average common shares outstanding		188,857		170,537			158,395
Basic earnings (loss) per share	$	0.51		(2.45	)		(7.01	)
Diluted earnings (loss) per share	$	0.51		(2.45	)		(7.01	)

Options to purchase 4.0 million shares, 7.5 million shares and 7.4 million shares, respectively, in total of Class A and Class B common stock were outstanding and anti-dilutive for the years ended November 30, 2010, 2009 and 2008.

11.    Comprehensive Income (Loss)

Comprehensive income (loss) attributable to Lennar represents changes in stockholders’ equity from non-owner sources. The components of comprehensive income (loss) attributable to Lennar were as follows:

	Years Ended November 30,
	2010		2009			2008
	(In thousands)
Net earnings (loss) attributable to Lennar	$	95,261		(417,147	)		(1,109,085	)
Unrealized gain on Company’s portion of unconsolidated entity’s interest rate swap liability, net of tax (37%)		—		—			2,061
Comprehensive income (loss) attributable to Lennar	$	95,261		(417,147	)		(1,107,024	)

There was no accumulated other comprehensive income (loss) at November 30, 2010 and 2009.

12.    Capital Stock

Preferred Stock

The Company is authorized to issue 500,000 shares of preferred stock with a par value of $10 per share and 100 million shares of participating preferred stock with a par value of $0.10 per share. No shares of preferred stock or participating preferred stock have been issued as of November 30, 2010.

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Common Stock

During both the years ended November 30, 2010 and 2009, the Company’s Class A and Class B common stockholders received a per share annual dividend of $0.16. In October 2008, the Company’s Board of Directors voted to decrease the annual dividend rate with regard to the Company’s Class A and Class B common stock to $0.16 per share per year (payable quarterly) from $0.64 per share per year (payable quarterly). During the year ended November 30, 2008, Class A and Class B common stockholders received per share annual dividends of $0.52.

The only significant difference between the Class A common stock and Class B common stock is that Class A common stock entitles holders to one vote per share and the Class B common stock entitles holders to ten votes per share.

As of November 30, 2010, Stuart A. Miller, the Company’s President, Chief Executive Officer and a Director, directly owned, or controlled through family-owned entities, shares of Class A and Class B common stock, which represented approximately 46% voting power of the Company’s stock.

The Company has a stock repurchase program which permits the purchase of up to 20 million shares of its outstanding common stock. During the years ended November 30, 2010, 2009 and 2008, there were no share repurchases of common stock under the stock repurchase program. As of November 30, 2010, 6.2 million shares of common stock can be repurchased in the future under the program.

During the years ended November 30, 2010 and November 30, 2009, treasury stock increased by 0.1 million Class A common shares and 0.3 million Class A common shares, respectively, due to activity related to the Company’s equity compensation plan and forfeitures of restricted stock.

In April 2009, the Company entered into distribution agreements with J.P Morgan Securities, Inc., Citigroup Global Markets Inc., Merril Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., relating to an offering of its Class A common stock into the market from time to time for an aggregate of up to $275 million. As of November 30, 2009, the Company had sold a total of 21.0 million shares of its Class A common stock under the equity offering for gross proceeds of $225.5 million, or an average of $10.76 per share. After compensation to the distributors of $4.5 million, the Company received net proceeds of $221.0 million. The Company used the proceeds from the offering for general corporate purposes. There was no activity related to these distribution agreements during 2010.

Restrictions on Payment of Dividends

There are no restrictions on the payment of dividends on common stock by the Company. There are no agreements which restrict the payment of dividends by subsidiaries of the Company other than to maintain the financial ratios and net worth requirements under the Lennar Financial Services segment’s warehouse lines of credit, which restrict the payment of dividends from the Company’s mortgage subsidiaries following the occurrence and during the continuance of an event of default thereunder and limit dividends to 50% of net income in the absence of an event of default.

401(k) Plan

Under the Company’s 401(k) Plan (the “Plan”), contributions made by associates can be invested in a variety of mutual funds or proprietary funds provided by the Plan trustee. The Company may also make contributions for the benefit of associates. The Company records as compensation expense its contribution to the Plan. This amount was $4.5 million in 2010, $5.2 million in 2009 and $7.6 million in 2008.

13.    Share-Based Payments

The Company has share-based awards outstanding under three different plans which provide for the granting of stock options and stock appreciation rights and awards of restricted common stock (“nonvested shares”) to key officers, associates and directors. These awards are primarily issued in the form of new shares. The exercise prices of stock options and stock appreciation rights may not be less than the market value of the

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common stock on the date of the grant. Exercises are permitted in installments determined when options are granted. Each stock option and stock appreciation right will expire on a date determined at the time of the grant, but not more than ten years after the date of the grant.

Cash flows resulting from tax benefits related to tax deductions in excess of the compensation expense recognized for those options (excess tax benefits) are classified as financing cash flows. For the year ended November 30, 2010, there was an immaterial amount of excess tax benefits from share-based awards. For the years ended November 30, 2009 and 2008, the Company did not have any excess tax benefits from shared-based awards.

Compensation expense related to the Company’s share-based awards was as follows:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Stock options	$	5,985		10,291		12,432
Nonvested shares		22,090		20,101		17,439
Total compensation expense for share-based awards	$	28,075		30,392		29,871

Cash received from stock options exercised during the years ended November 30, 2010, 2009 and 2008 was $2.0 million, $0.3 million, and $0.2 million, respectively. The tax deductions related to stock options exercised during the year ended November 30, 2010 were $0.2 million. There were no material tax deductions related to stock options exercised during the years ended November 30, 2009 and 2008.

The fair value of each of the Company’s stock option awards is estimated on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The fair value of the Company’s stock option awards, which are subject to graded vesting, is expensed on a straight-line basis over the vesting life of the stock options. Expected volatility is based on historical volatility of the Company’s stock over the most recent period equal to the expected life of the award. The risk-free rate for periods within the contractual life of the stock option award is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award granted. The Company uses historical data to estimate stock option exercises and forfeitures within its valuation model. The expected life of stock option awards granted is derived from historical exercise experience under the Company’s share-based payment plans and represents the period of time that stock option awards granted are expected to be outstanding.

The fair value of these options was determined at the date of the grant using the Black-Scholes option-pricing model. The significant weighted average assumptions for the years ended November 30, 2010, 2009 and 2008 were as follows:

	2010	2009	2008
Dividend yield	0.9% - 1.1%	1.7% - 1.8%	3.2% - 4.7%
Volatility rate	80% - 112%	73% - 121%	43% - 60%
Risk-free interest rate	0.2% - 0.6%	0.7% - 2.8%	1.9% - 3.5%
Expected option life (years)	1.5	2.0 - 5.0	2.0 - 5.0

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A summary of the Company’s stock option activity for the year ended November 30, 2010 was as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value (In thousands)
Outstanding at November 30, 2009		6,395,105		$	29.37
Grants		20,000		$	17.83
Forfeited or expired		(974,139	)	$	52.15
Exercises		(174,756	)	$	11.26
Outstanding at November 30, 2010		5,266,210		$	25.72		2.0 years	$	6,272
Vested and expected to vest in the future at November 30, 2010		4,095,639		$	23.87		2.0 years	$	5,170
Exercisable at November 30, 2010		3,298,410		$	31.35		1.6 years	$	3,236
Available for grant at November 30, 2010		1,733,876

The weighted average fair value of options granted during the years ended November 30, 2010, 2009 and 2008 was $8.66, $4.74 and $3.85, respectively. The total intrinsic value of options exercised during the year ended November 30, 2010 was $0.6 million. The total intrinsic value of options exercised during the years ended November 30, 2009 and 2008 was not material.

The fair value of nonvested shares is determined based on the trading price of the Company’s common stock on the grant date. The weighted average fair value of nonvested shares granted during the years ended November 30, 2010, 2009 and 2008 was $15.21, $12.63 and $15.11, respectively. A summary of the Company’s nonvested shares activity for the year ended November 30, 2010 was as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested restricted shares at November 30, 2009		2,349,485		$	13.27
Grants		1,688,058		$	15.21
Vested		(1,317,896	)	$	14.64
Forfeited		(10,750	)	$	19.38
Nonvested restricted shares at November 30, 2010		2,708,897		$	13.79

At November 30, 2010, there was $40.9 million of unrecognized compensation expense related to unvested share-based awards granted under the Company’s share-based payment plans, of which $6.3 million relates to stock options and $34.6 million relates to nonvested shares. The unrecognized expense related to nonvested shares is expected to be recognized over a weighted-average period of 3.2 years. During the years ended November 30, 2010, 2009 and 2008, 1.3 million nonvested shares, 1.2 million nonvested shares and 0.4 million nonvested shares, respectively, vested. For the years ended November 30, 2010 and 2009, there was no tax provision related to nonvested share activity because the Company has recorded a full valuation allowance against its deferred tax assets. The tax provision related to nonvested share activity during the year ended November 30, 2008 was $6.1 million.

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14.    Financial Instruments

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at November 30, 2010 and 2009, using available market information and what the Company believes to be appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The table excludes cash and cash equivalents, restricted cash, defeasance cash to retire notes payable, receivables, net, income tax receivables and accounts payable, which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments.

	November 30,
	2010				2009
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
ASSETS
Rialto Investments:
Loans receivable	$	1,219,314		1,411,731		—		—
Investments—held-to-maturity	$	19,537		19,537		—		—
Lennar Financial Services:
Loans held-for-investment, net	$	21,768		23,083		25,131		26,818
Investments—held-to-maturity	$	3,165		3,177		2,512		2,529
LIABILITIES
Lennar Homebuilding:
Senior notes and other debts payable	$	3,128,154		3,153,106		2,761,352		2,754,737
Rialto Investments:
Notes payable	$	752,302		719,703		—		—
Lennar Financial Services:
Notes and other debts payable	$	271,678		271,678		217,557		217,557

The following methods and assumptions are used by the Company in estimating fair values:

Lennar Homebuilding—For senior notes and other debts payable, the fair value of fixed-rate borrowings is based on quoted market prices. The Company’s variable-rate borrowings are tied to market indices and approximate fair value due to the short maturities associated with the majority of the instruments.

Rialto Investments—The fair value for loans receivable is based on discounted cash flows as of November 30, 2010 or the fair value of the collateral. The fair value for investments held-to-maturity approximated the carrying value because the investments were acquired right before November 30, 2010. For notes payable, the fair value of zero percent notes provided by the FDIC was calculated based on a 5-year treasury yield as of November 30, 2010 and the fair value of other notes payable was calculated based on discounted cash flows using the Company’s weighted average borrowing rate.

Lennar Financial Services—The fair values above are based on quoted market prices, if available. The fair values for instruments that do not have quoted market prices are estimated by the Company on the basis of discounted cash flows or other financial information.

Fair Value Measurements

GAAP provides a framework for measuring fair value, expands disclosures about fair value measurements and establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:

Level 1	Fair value determined based on quoted prices in active markets for identical assets.
Level 2	Fair value determined using significant other observable inputs.
Level 3	Fair value determined using significant unobservable inputs.

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The Company’s financial instruments measured at fair value at November 30, 2010 on a recurring basis are all within the Lennar Financial Services segment and are summarized below:

Financial Instruments	Fair Value Hierarchy		Fair Value at November 30, 2010
	(Dollars in thousands)
Loans held-for-sale (1)		Level 2	$	245,404
Mortgage loan commitments		Level 2	$	1,449
Forward contracts		Level 2	$	2,905

(1) The aggregate fair value of loans held-for-sale of $245.4 million exceeds its aggregate principal balance of $240.8 million by $4.6 million.

The estimated fair values of the Company’s financial instruments have been determined by using available market information and what the Company believes to be appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies might have a material effect on the estimated fair value amounts. The following methods and assumptions are used by the Company in estimating fair values:

Loans held-for-sale—Fair value is based on independent quoted market prices, where available, or the prices for other mortgage whole loans with similar characteristics. Management believes carrying loans held-for-sale at fair value improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivatives instruments used to economically hedge them without having to apply complex hedge accounting provisions. In addition, the Company recognizes the fair value of its rights to service a mortgage loan as revenue upon entering into an interest rate lock loan commitment with a borrower, in accordance with ASC Topic 815-10-S99. The fair value of these servicing rights is included in the Lennar Financial Services’ loans held-for-sale as of November 30, 2010 and 2009. Fair value of the servicing rights is determined based on value in the servicing sales contracts.

Mortgage loan commitments—Fair value of commitments to originate loans is based upon the difference between the current value of similar loans and the price at which the Lennar Financial Services segment has committed to originate the loans. The fair value of commitments to sell loan contracts is the estimated amount that the Lennar Financial Services segment would receive or pay to terminate the commitments at the reporting date based on market prices for similar financial instruments.

Forward contracts—Fair value is based on quoted market prices for similar financial instruments.

Gains and losses of financial instruments measured at fair value from initial measurement and subsequent changes in fair value are recognized in the Lennar Financial Services segment’s earnings (loss). The changes in fair values that are included in earnings (loss) are shown, by financial instrument and financial statement line item, below:

	Years Ended November 30,
	2010			2009
		(In thousands)
Changes in fair value included in Lennar Financial Services revenues:
Loans held-for-sale	$	(2,607	)		2,264
Mortgage loan commitments	$	(3,251	)		318
Forward contracts	$	6,463			2,903

Interest income on loans held-for-sale measured at fair value is calculated based on the interest rate of the loan and recorded in interest income in the Lennar Financial Services’ statement of operations.

The Lennar Financial Services segment uses mandatory mortgage-backed securities (“MBS”) forward commitments, option contracts and investor commitments to hedge its mortgage-related interest rate exposure. These instruments involve, to varying degrees, elements of credit and interest rate risk. Credit risk associated with MBS forward commitments, option contracts and loan sales transactions is managed by limiting the Company’s counterparties to investment banks, federally regulated bank affiliates and other investors meeting

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the Company’s credit standards. The segment’s risk, in the event of default by the purchaser, is the difference between the contract price and fair value of the MBS forward commitments and option contracts. At November 30, 2010, the segment had open commitments amounting to $270.8 million to sell MBS with varying settlement dates through February 2011.

The Company’s assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs during the year ended November 30, 2010 and Rialto Investments real estate owned assets acquired through foreclosure. The assets measured at fair value on a nonrecurring basis are summarized below:

Non-financial Assets	Fair Value Hierarchy		Fair Value			Total Gains (Losses) (1)
			(Dollars in thousands)
Lennar Homebuilding:
Finished homes and construction in progress (2)		Level 3	$	88,049			(41,057	)
Land and land under development (3)		Level 3	$	10,807			(5,369	)
Investments in unconsolidated entities (4)		Level 3	$	(1,383	)		(1,735	)
Rialto Investments:
Real estate owned (5)		Level 3	$	204,049			18,089

(1) Represents total losses due to valuation adjustments and write-offs, and total gains from acquisitions of real estate through foreclosure recorded during the year ended November 30, 2010.

(2) Finished homes and construction in progress with an aggregate carrying value of $129.1 million were written down to their fair value of $88.0 million, resulting in valuation adjustments of $41.1 million, which were included in Lennar Homebuilding costs and expenses in the Company’s statement of operations for the year ended November 30, 2010.

(3) Land under development with an aggregate carrying value of $16.2 million were written down to their fair value of $10.8 million, resulting in valuation adjustments of $5.4 million, which were included in Lennar Homebuilding costs and expenses in the Company’s statement of operations for the year ended November 30, 2010.

(4) Lennar Homebuilding investments in unconsolidated entities with an aggregate carrying value of $0.4 million were written down to their fair value of ($1.4) million, which represents the Company’s obligation for guarantees related to debt of certain unconsolidated entities recorded as a liability during the year ended November 30, 2010. The valuation charges were included in other income (expense), net in the Company’s statement of operations for the year ended November 30, 2010.

(5) Real estate owned assets are initially recorded at fair value less estimated costs to sell at the time of acquisition. Upon acquisition of the real estate through foreclosure, the underlying loans had a carrying value of $186.0 million. The fair value of the real estate owned assets is based upon the appraised value at the time of foreclosure or management’s best estimate of fair value. The gains upon acquisition of REO were $18.1 million and are included within the Rialto Investments other income, net in the Company’s statement of operations for the year ended November 30, 2010.

See Note 1 for a detailed description of the Company’s process for identifying and recording valuation adjustments related to Lennar Homebuilding inventory and Lennar Homebuilding investments in unconsolidated entities.

15.    Consolidation of Variable Interest Entities

GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIEs’ economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s variable interest in VIEs may be in the form of (1) equity ownership, (2) contracts to purchase assets, (3) management and development agreements between the Company and a VIE, (4) loans provided by the Company to a VIE or other partner and/or (5) guarantees provided by members to banks and

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other third parties. The Company examines specific criteria and uses its judgment when determining if the Company is the primary beneficiary of a VIE. Factors considered in determining whether the Company is the primary beneficiary include risk and reward sharing, experience and financial condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality between the Company and the other partner(s) and contracts to purchase assets from VIEs.

Generally, all major decision making in the Company’s joint ventures is shared between all partners. In particular, business plans and budgets are generally required to be unanimously approved by all partners. Usually, management and other fees earned by the Company are nominal and believed to be at market and there is no significant economic disproportionality between the Company and other partners. Generally, the Company purchases less than a majority of the joint venture’s assets and the purchase prices under the Company’s option contracts are believed to be at market.

Generally, Lennar Homebuilding unconsolidated entities become VIEs and consolidate when the other partner(s) lack the intent and financial wherewithal to remain in the entity. As a result, the Company continues to fund operations and debt paydowns through partner loans or substituted capital contributions.

The Company evaluated all joint venture agreements as of November 30, 2010. Based on the Company’s evaluation, it consolidated entities within its Lennar Homebuilding segment that at November 30, 2010 had total combined assets and liabilities of $49.9 million and $9.4 million, respectively. In addition, the Company consolidated the LLCs in partnership with the FDIC in the Company’s Rialto segment that at November 30, 2010 had total combined assets and liabilities of $1.4 billion and $0.6 billion, respectively. The Company was determined to be the primary beneficiary because it has the power to direct the activities of the LLCs that most significantly impact the LLCs’ economic performance through its management and servicer contracts. During the year ended November 30, 2010, there were no VIEs that deconsolidated other than the $75.5 million of option contracts that deconsolidated as a result of the adoption of ASC 810.

At November 30, 2010 and November 30, 2009, the Company’s recorded investments in Lennar Homebuilding unconsolidated entities were $626.2 million and $599.3 million, respectively, and the Rialto Investments segment’s investments in unconsolidated entities as of November 30, 2010 and November 30, 2009 were $84.5 million and $9.9 million, respectively.

Consolidated VIEs

As of November 30, 2010, the carrying amount of the VIEs’ assets and non-recourse liabilities that consolidated were $2,300.2 million and $963.3 million, respectively. Those assets are owned by, and those liabilities are obligations of, the VIEs, not the Company.

A VIE’s assets can only be used to settle obligations of that VIE. The VIEs are not guarantors of Company’s senior notes and other debts payable. In addition, the assets held by a VIE usually are collateral for that VIE’s debt. The Company and other partners do not generally have an obligation to make capital contributions to a VIE unless the Company and/or the other partner(s) have entered into debt guarantees with a VIE’s banks. Other than debt guarantee agreements with a VIE’s banks, there are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to a VIE. While the Company has option contracts to purchase land from certain of its VIEs, the Company is not required to purchase the assets and could walk away from the contracts.

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Unconsolidated VIEs

At November 30, 2010 and November 30, 2009, the Company’s recorded investments in VIEs that are unconsolidated and its estimated maximum exposure to loss were as follows:

November 30, 2010	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss
	(In thousands)
Lennar Homebuilding (1)	$	144,809		174,967
Rialto Investments (2)		104,063		117,631
Total	$	248,872		292,598

November 30, 2009	Investments in Unconsolidated VIEs		Lennar’s Maximum Exposure to Loss
	(In thousands)
Lennar Homebuilding (1)	$	84,352		84,352
Rialto Investments (2)		9,874		9,874
Total	$	94,226		94,226

(1) At November 30, 2010, the maximum exposure to loss of Lennar Homebuilding’s investments in unconsolidated VIEs is limited to its investments in the unconsolidated VIEs in addition to $30.0 million of recourse debt of one of the unconsolidated VIEs. At November 30, 2009, the maximum exposure to loss of Lennar Homebuilding’s investments in unconsolidated VIEs is limited to its investments in the unconsolidated VIEs.

(2) For Rialto’s investments in unconsolidated VIEs, the Company made a $75 million commitment to fund capital in the AB PPIP fund. As of November 30, 2010, the Company had contributed $63.8 million of the $75 million commitment and it cannot walk away from its remaining commitment to fund capital. Therefore, as of November 30, 2010, the maximum exposure to loss for Rialto’s unconsolidated VIEs was higher than the carrying amount of its investments. In addition, investments in unconsolidated VIEs and Lennar’s maximum exposure to loss include $19.5 million related to Rialto’s investments held-to-maturity. At November 30, 2009, the maximum recourse exposure to loss of Rialto’s investments in unconsolidated VIEs was limited to its investments in the unconsolidated entities.

While these entities are VIEs, the Company has determined that the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance is generally shared. While the Company generally manages the day-to-day operations of the VIEs, the VIEs have an executive committee made up of representatives from each partner. The members of the executive committee have equal vote and major decisions require unanimous consent and approval from all members. The Company does not have the unilateral ability to exercise participating voting rights without partner consent. Furthermore, the Company’s economic interest is not significantly disproportionate to the point where it would indicate that the Company has the power to direct these activities.

The Company and other partners do not generally have an obligation to make capital contributions to the VIEs, except for the Company’s $11.2 million remaining commitment to the AB PPIP fund and $30.0 million of recourse debt of one of the Lennar Homebuilding unconsolidated VIEs. There are no liquidity arrangements or agreements to fund capital or purchase assets that could require the Company to provide financial support to the VIEs. While the Company has option contracts to purchase land from certain of its unconsolidated VIEs, the Company is not required to purchase the assets and could walk away from the contracts.

Option Contracts

The Company has access to land through option contracts, which generally enables it to control portions of properties owned by third parties (including land funds) and unconsolidated entities until the Company has determined whether to exercise the option.

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A majority of the Company’s option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land. The Company’s option contracts sometimes include price adjustment provisions, which adjust the purchase price of the land to its approximate fair value at the time of acquisition, or are based on the fair value of the land at the time of takedown.

The Company’s investments in option contracts are recorded at cost unless those investments are determined to be impaired, in which case the Company’s investments are written down to fair value. The Company reviews option contracts for indicators of impairment during each reporting period. The most significant indicator of impairment is a decline in the fair value of the optioned property such that the purchase and development of the optioned property would no longer meet the Company’s targeted return on investment with appropriate consideration given to the length of time available to exercise the option. Such declines could be caused by a variety of factors including increased competition, decreases in demand or changes in local regulations that adversely impact the cost of development. Changes in any of these factors would cause the Company to re-evaluate the likelihood of exercising its land options.

Some option contracts contain a predetermined take-down schedule for the optioned land parcels. However, in almost all instances, the Company is not required to purchase land in accordance with those take-down schedules. In substantially all instances, the Company has the right and ability to not exercise its option and forfeit its deposit without further penalty, other than termination of the option and loss of any unapplied portion of its deposit and pre-acquisition costs. Therefore, in substantially all instances, the Company does not consider the take-down price to be a firm contractual obligation.

When the Company does not intend to exercise an option, it writes off any unapplied deposit and pre-acquisition costs associated with the option contract. For the years ended November 30, 2010, 2009 and 2008, the Company wrote-off $3.1 million, $84.4 million and $97.2 million, respectively, of option deposits and pre-acquisition costs related to land under option that it does not intend to purchase.

The Company evaluates all option contracts for land to determine whether they are VIEs and, if so, whether the Company is the primary beneficiary of certain of these option contracts. Although the Company does not have legal title to the optioned land, if the Company is deemed to be the primary beneficiary, it is required to consolidate the land under option at the purchase price of the optioned land. During the year ended November 30, 2010, the effect of consolidation of these option contracts was a net increase of $19.8 million to consolidated inventory not owned with a corresponding increase to liabilities related to consolidated inventory not owned in the accompanying consolidated balance sheet as of November 30, 2010. To reflect the purchase price of the inventory consolidated, the Company reclassified the related option deposits from land under development to consolidated inventory not owned in the accompanying consolidated balance sheet as of November 30, 2010. The liabilities related to consolidated inventory not owned primarily represent the difference between the option exercise prices for the optioned land and the Company’s cash deposits. However, consolidated inventory not owned decreased due to (1) the Company exercising its options to acquire land under certain contracts previously consolidated and (2) the deconsolidation of certain option contracts totaling $75.5 million related to the adoption of certain new provisions under ASC 810, resulting in a net decrease in consolidated inventory not owned of $139.2 million for the year ended November 30, 2010.

The Company’s exposure to loss related to its option contracts with third parties and unconsolidated entities consisted of its non-refundable option deposits and pre-acquisition costs totaling $157.4 million and $127.4 million, respectively, at November 30, 2010 and 2009. Additionally, the Company had posted $48.9 million and $58.2 million, respectively, of letters of credit in lieu of cash deposits under certain option contracts as of November 30, 2010 and 2009.

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16.    Commitments and Contingent Liabilities

The Company is party to various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s consolidated financial statements.

The Company is subject to the usual obligations associated with entering into contracts (including option contracts) for the purchase, development and sale of real estate, which it does in the routine conduct of its business. Option contracts generally enable the Company to control portions of properties owned by third parties (including land funds) and unconsolidated entities until the Company determines whether to exercise the option. The use of option contracts allows the Company to reduce the financial risks associated with long-term land holdings. At November 30, 2010, the Company had $157.4 million of non-refundable option deposits and pre-acquisition costs related to certain of these homesites, which were included in inventories in the consolidated balance sheet.

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. Future minimum payments under the non-cancelable leases in effect at November 30, 2010 are as follows:

	Lease Payments
	(In thousands)
2011	$	35,031
2012		24,133
2013		16,597
2014		13,392
2015		10,620
Thereafter		15,481

Rental expense for the years ended November 30, 2010, 2009 and 2008 was $40.9 million, $67.9 million and $108.9 million, respectively.

Rental expense includes the following termination costs related to the abandonment of leases as a result of the Company’s efforts to consolidate its operations and reduce costs in the following financial statement line items:

	Years Ended November 30,
	2010		2009		2008
	(In thousands)
Selling general and administrative expenses	$	—		6,170		18,830
Corporate, general and administrative expenses		—		1,786		2,401
Lennar Financial Services costs and expenses		—		850		6,498
Total termination costs related to abandonment of leases	$	—		8,806		27,729

The Company is committed, under various letters of credit, to perform certain development and construction activities and provide certain guarantees in the normal course of business. Outstanding letters of credit under these arrangements totaled $273.9 million at November 30, 2010. The Company also had outstanding performance and surety bonds related to site improvements at various projects (including certain projects in the Company’s joint ventures) of $684.7 million. Although significant development and construction activities have been completed related to these site improvements, these bonds are generally not released until all development and construction activities are completed. As of November 30, 2010, there were approximately $314.7 million, or 46%, of costs to complete related to these site improvements. The Company does not presently anticipate any draws upon these bonds that would have a material effect on its consolidated financial statements.

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17.    Supplemental Financial Information

The indentures governing the principal amounts of the Company’s 5.95% senior notes due 2011, 5.95% senior notes due 2013, 5.50% senior notes due 2014, 5.60% senior notes due 2015, 6.50% senior notes due 2016, 12.25% senior notes due 2017, 6.95% senior notes due 2018, 2.00% convertible senior notes due 2020 and 2.75% convertible senior notes due 2020 require that, if any of the Company’s subsidiaries directly or indirectly guarantee at least $75 million principal amount of debt of Lennar Corporation, those subsidiaries must also guarantee Lennar Corporation’s obligations with regard to its senior notes. Until February 2010, the Company had a Credit Facility that required substantially all of the Company’s subsidiaries guarantee Lennar Corporation’s obligations under the Credit Facility, and therefore, those subsidiaries also guaranteed the Company’s obligations with regard to its senior notes. The Company terminated the Credit Facility and therefore at November 30, 2010, there were no guarantors of Lennar Corporation’s obligations with regard to its senior notes. The entities referred to as “guarantors” in the following tables are subsidiaries that would have been guarantors if the Credit Facility were still in effect. Supplemental information for the guarantors is presented as follows:

Consolidating Balance Sheet

November 30, 2010

	Lennar Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
	(In thousands)
ASSETS
Lennar Homebuilding:
Cash and cash equivalents, restricted cash, receivables, net and income tax receivables	$	1,079,107			177,674		40,863			—			1,297,644
Inventories		—			3,547,152		622,456			—			4,169,608
Investments in unconsolidated entities		—			587,385		38,800			—			626,185
Other assets		48,776			99,486		159,548			—			307,810
Investments in subsidiaries		3,333,769			811,317		—			(4,145,086	)		—
		4,461,652			5,223,014		861,667			(4,145,086	)		6,401,247
Rialto Investments		91,270			335,148		1,351,196			—			1,777,614
Lennar Financial Services		—			149,413		459,577			—			608,990
Total assets	$	4,552,922			5,707,575		2,672,440			(4,145,086	)		8,787,851
LIABILITIES AND EQUITY
Lennar Homebuilding:
Accounts payable and other liabilities	$	298,985			479,617		83,546			—			862,148
Liabilities related to consolidated inventory not owned		—			384,233		—			—			384,233
Senior notes and other debts payable		2,671,898			201,248		255,008			—			3,128,154
Intercompany		(1,037,694	)		1,128,731		(91,037	)		—			—
		1,933,189			2,193,829		247,517			—			4,374,535
Rialto Investments		10,784			128,136		631,794			—			770,714
Lennar Financial Services		—			51,841		396,378			—			448,219
Total liabilities		1,943,973			2,373,806		1,275,689			—			5,593,468
Stockholders’ equity		2,608,949			3,333,769		811,317			(4,145,086	)		2,608,949
Noncontrolling interests		—			—		585,434			—			585,434
Total equity		2,608,949			3,333,769		1,396,751			(4,145,086	)		3,194,383
Total liabilities and equity	$	4,552,922			5,707,575		2,672,440			(4,145,086	)		8,787,851

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Consolidating Balance Sheet

November 30, 2009

	Lennar Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
	(In thousands)
ASSETS
Lennar Homebuilding:
Cash and cash equivalents, restricted cash, receivables, net and income tax receivables	$	1,564,529		198,524		33,256			—			1,796,309
Inventories		—		3,493,784		594,205			—			4,087,989
Investments in unconsolidated entities		—		563,984		35,282			—			599,266
Other assets		44,232		63,040		156,531			—			263,803
Investments in subsidiaries		3,389,625		522,148		—			(3,911,773	)		—
		4,998,386		4,841,480		819,274			(3,911,773	)		6,747,367
Rialto Investments		9,874		—		—			—			9,874
Lennar Financial Services		—		153,545		404,005			—			557,550
Total assets	$	5,008,260		4,995,025		1,223,279			(3,911,773	)		7,314,791
LIABILITIES AND EQUITY
Lennar Homebuilding:
Accounts payable and other liabilities	$	246,501		702,091		83,588			—			1,032,180
Liabilities related to consolidated inventory not owned		—		518,359		—			—			518,359
Senior notes and other debts payable		2,234,093		223,545		303,714			—			2,761,352
Intercompany		84,187		102,454		(186,641	)		—			—
		2,564,781		1,546,449		200,661			—			4,311,891
Rialto Investments		—		—		—			—			—
Lennar Financial Services		—		58,951		355,935			—			414,886
Total liabilities		2,564,781		1,605,400		556,596			—			4,726,777
Stockholders’ equity		2,443,479		3,389,625		522,148			(3,911,773	)		2,443,479
Noncontrolling interests		—		—		144,535			—			144,535
Total equity		2,443,479		3,389,625		666,683			(3,911,773	)		2,588,014
Total liabilities and equity	$	5,008,260		4,995,025		1,223,279			(3,911,773	)		7,314,791

122

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations

Year Ended November 30, 2010

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(In thousands)
Revenues:
Lennar Homebuilding	$	—			2,657,189			48,450			—			2,705,639
Lennar Financial Services		—			154,607			180,283			(59,104	)		275,786
Rialto Investments		1,901			4,942			85,754			—			92,597
Total revenues		1,901			2,816,738			314,487			(59,104	)		3,074,022
Costs and expenses:
Lennar Homebuilding		—			2,467,117			75,247			959			2,543,323
Lennar Financial Services		—			151,812			148,325			(55,635	)		244,502
Rialto Investments		24,717			1,839			41,348			—			67,904
Corporate general and administrative		88,795			—			—			5,131			93,926
Total costs and expenses		113,512			2,620,768			264,920			(49,545	)		2,949,655
Lennar Homebuilding equity in loss from unconsolidated entities		—			(10,724	)		(242	)		—			(10,966	)
Lennar Homebuilding other income, net		38,194			19,096			—			(38,155	)		19,135
Other interest expense		(47,714	)		(70,425	)		—			47,714			(70,425	)
Rialto Investments equity in earnings from unconsolidated entities		15,363			—			—			—			15,363
Rialto Investments other income (expense), net		—			(22	)		17,273			—			17,251
Earnings (loss) before income taxes		(105,768	)		133,895			66,598			—			94,725
Benefit (provision) for income taxes		67,368			(34,838	)		(6,796	)		—			25,734
Equity in earnings from subsidiaries		133,661			34,604			—			(168,265	)		—
Net earnings (including net earnings attributable to noncontrolling interests)		95,261			133,661			59,802			(168,265	)		120,459
Less: Net earnings attributable to noncontrolling interests		—			—			25,198			—			25,198
Net earnings attributable to Lennar	$	95,261			133,661			34,604			(168,265	)		95,261

123

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations

Year Ended November 30, 2009

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(In thousands)
Revenues:
Lennar Homebuilding	$	—			2,792,314			41,971			—			2,834,285
Lennar Financial Services		—			162,768			179,941			(57,607	)		285,102
Rialto Investments		—			—			—			—			—
Total revenues		—			2,955,082			221,912			(57,607	)		3,119,387
Costs and expenses:
Lennar Homebuilding		—			3,132,257			96,921			(18,792	)		3,210,386
Lennar Financial Services		—			150,704			129,729			(31,313	)		249,120
Rialto Investments		2,528			—			—			—			2,528
Corporate general and administrative		111,032			—			—			6,533			117,565
Total costs and expenses		113,560			3,282,961			226,650			(43,572	)		3,579,599
Lennar Homebuilding equity in loss from unconsolidated entities		—			(130,674	)		(243	)		—			(130,917	)
Lennar Homebuilding other income (expense), net		33,732			(98,478	)		—			(33,679	)		(98,425	)
Other interest expense		(47,714	)		(70,850	)		—			47,714			(70,850	)
Loss before income taxes		(127,542	)		(627,881	)		(4,981	)		—			(760,404	)
Benefit (provision) for income taxes		52,138			269,800			(7,593	)		—			314,345
Equity in earnings (loss) from subsidiaries		(341,743	)		16,338			—			325,405			—
Net loss (including net loss attributable to noncontrolling interests)		(417,147	)		(341,743	)		(12,574	)		325,405			(446,059	)
Less: Net loss attributable to noncontrolling interests		—			—			(28,912	)		—			(28,912	)
Net earnings (loss) attributable to Lennar	$	(417,147	)		(341,743	)		16,338			325,405			(417,147	)

124

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Operations

Year Ended November 30, 2008

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(In thousands)
Revenues:
Lennar Homebuilding	$	—			4,262,154			288			596			4,263,038
Lennar Financial Services		—			6,426			379,624			(73,671	)		312,379
Rialto Investments		—			—			—			—			—
Total revenues		—			4,268,580			379,912			(73,075	)		4,575,417
Costs and expenses:
Lennar Homebuilding		—			4,549,804			2,458			(10,381	)		4,541,881
Lennar Financial Services		—			3,359			391,854			(51,844	)		343,369
Rialto Investments		—			—			—			—			—
Corporate general and administrative		129,752			—			—			—			129,752
Total costs and expenses		129,752			4,553,163			394,312			(62,225	)		5,015,002
Lennar Homebuilding equity in loss from unconsolidated entities		—			(59,156	)		—			—			(59,156	)
Lennar Homebuilding other income (expense), net		35,341			(172,387	)		—			(35,341	)		(172,387	)
Other interest expense		(46,191	)		(27,594	)		—			46,191			(27,594	)
Gain on recapitalization of unconsolidated entity		—			133,097			—			—			133,097
Loss before income taxes		(140,602	)		(410,623	)		(14,400	)		—			(565,625	)
(Provision) benefit for income taxes		(150,494	)		(400,398	)		3,335			—			(547,557	)
Equity in loss from subsidiaries		(817,989	)		(6,968	)		—			824,957			—
Net loss (including net loss attributable to noncontrolling interests)		(1,109,085	)		(817,989	)		(11,065	)		824,957			(1,113,182	)
Less: Net loss attributable to noncontrolling interests		—			—			(4,097	)		—			(4,097	)
Net loss attributable to Lennar	$	(1,109,085	)		(817,989	)		(6,968	)		824,957			(1,109,085	)

125

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows

Year Ended November 30, 2010

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(Dollars in thousands)
Cash flows from operating activities:
Net earnings (including net earnings attributable to noncontrolling interests)	$	95,261			133,661			59,802			(168,265	)		120,459
Adjustments to reconcile net earnings (including net earnings attributable to noncontrolling interests) to net cash provided by (used in) operating activities		424,475			(338,204	)		(100,767	)		168,265			153,769
Net cash provided by (used in) operating activities		519,736			(204,543	)		(40,965	)		—			274,228
Cash flows from investing activities:
Investments in and contributions to Lennar Homebuilding unconsolidated entities, net		—			(176,493	)		(3,380	)		—			(179,873	)
Investments in and contributions to Rialto Investments consolidated and unconsolidated entities, net		(329,369	)		—			93,660			—			(235,709	)
Acquisitions of Rialto Investments portfolios of distressed real estate assets		—			(184,699	)		—			—			(184,699	)
Increase in Rialto Investments defeasance cash to retire notes payable		—			—			(101,309	)		—			(101,309	)
Other		(1,003	)		(16,861	)		46,083			—			28,219
Net cash provided by (used in) investing activities		(330,372	)		(378,053	)		35,054			—			(673,371	)
Cash flows from financing activities:
Net repayments (borrowings) of Lennar Financial Services debt		—			(26	)		54,147			—			54,121
Net proceeds from convertible and senior notes		951,408			—			—			—			951,408
Redemption and partial redemption of senior notes		(474,654	)		—			—			—			(474,654	)
Net repayments on other borrowings		—			(80,076	)		(55,753	)		—			(135,829	)
Exercise of land option contracts from an unconsolidated land investment venture		—			(39,301	)		—			—			(39,301	)
Net receipts related to noncontrolling interests		—			—			9,240			—			9,240
Common stock:
Issuances		2,238			—			—			—			2,238
Repurchases		(1,806	)		—			—			—			(1,806	)
Dividends		(29,577	)		—			—			—			(29,577	)
Intercompany		(788,601	)		726,901			61,700			—			—
Net cash provided by (used in) financing activities		(340,992	)		607,498			69,334			—			335,840
Net increase (decrease) in cash and cash equivalents		(151,628	)		24,902			63,423			—			(63,303	)
Cash and cash equivalents at beginning of year		1,223,169			154,313			79,956			—			1,457,438
Cash and cash equivalents at end of year	$	1,071,541			179,215			143,379			—			1,394,135

126

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows

Year Ended November 30, 2009

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(Dollars in thousands)
Cash flows from operating activities:
Net loss (including net loss attributable to noncontrolling interests)	$	(417,147	)		(341,743	)		(12,574	)		325,405			(446,059	)
Adjustments to reconcile net loss (including net loss attributable to noncontrolling interests) to net cash provided by (used in) operating activities		(203,812	)		1,449,961			(53,842	)		(325,405	)		866,902
Net cash provided by (used in) operating activities		(620,959	)		1,108,218			(66,416	)		—			420,843
Cash flows from investing activities:
Investments in and contributions to Lennar Homebuilding unconsolidated entities, net		—			(234,169	)		(57,832	)		—			(292,001	)
Investments in and contributions to Rialto Investments unconsolidated entities		(9,874	)		—			—			—			(9,874	)
Other		726			20,048			5,981			—			26,755
Net cash used in investing activities		(9,148	)		(214,121	)		(51,851	)		—			(275,120	)
Cash flows from financing activities:
Net repayments of Lennar Financial Services debt		—			(84	)		(8,142	)		—			(8,226	)
Net proceeds from senior notes		386,892			—			—			—			386,892
Redemption and partial redemption of senior notes		(335,393	)		—			—			—			(335,393	)
Net repayments on other borrowings		—			(16,715	)		(74,768	)		—			(91,483	)
Exercise of land option contracts from an unconsolidated land investment venture		—			(33,656	)		—			—			(33,656	)
Net payments related to noncontrolling interests		—			—			(2,124	)		—			(2,124	)
Common stock:
Issuances		221,437			—			—			—			221,437
Repurchases		(1,566	)		—			—			—			(1,566	)
Dividends		(27,588	)		—			—			—			(27,588	)
Intercompany		601,900			(814,766	)		212,866			—			—
Net cash provided by (used in) financing activities		845,682			(865,221	)		127,832			—			108,293
Net increase in cash and cash equivalents		215,575			28,876			9,565			—			254,016
Cash and cash equivalents at beginning of year		1,007,594			125,437			70,391			—			1,203,422
Cash and cash equivalents at end of year	$	1,223,169			154,313			79,956			—			1,457,438

127

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidating Statement of Cash Flows

Year Ended November 30, 2008

	Lennar Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
	(Dollars in thousands)
Cash flows from operating activities:
Net loss (including net loss attributable to noncontrolling interests)	$	(1,109,085	)		(817,989	)		(11,065	)		824,957			(1,113,182	)
Adjustments to reconcile net loss (including net loss attributable to noncontrolling interests) to net cash provided by operating activities		1,291,030			1,459,469			288,474			(824,957	)		2,214,016
Net cash provided by operating activities		181,945			641,480			277,409			—			1,100,834
Cash flows from investing activities:
Investments in and contributions to Lennar Homebuilding unconsolidated entities, net		—			(315,907	)		—			—			(315,907	)
Other		(423	)		1,857			48,770			—			50,204
Net cash provided by (used in) investing activities		(423	)		(314,050	)		48,770			—			(265,703	)
Cash flows from financing activities:
Net repayments of Lennar Financial Services debt		—			—			(315,654	)		—			(315,654	)
Partial redemption of senior notes		(322	)		—			—			—			(322	)
Net repayments on other borrowings		—			(61,981	)		(66,526	)		—			(128,507	)
Exercise of land option contracts from an unconsolidated land investment venture		—			(48,434	)		—			—			(48,434	)
Net receipts related to noncontrolling interests		—			—			151,035			—			151,035
Common stock:
Issuances		224			—			—			—			224
Repurchases		(1,758	)		—			—			—			(1,758	)
Dividends		(83,487	)		—			—			—			(83,487	)
Intercompany		414,031			(292,787	)		(121,244	)		—			—
Net cash provided by (used in) financing activities		328,688			(403,202	)		(352,389	)		—			(426,903	)
Net increase (decrease) in cash and cash equivalents		510,210			(75,772	)		(26,210	)		—			408,228
Cash and cash equivalents at beginning of year		497,384			139,733			158,077			—			795,194
Cash and cash equivalents at end of year	$	1,007,594			63,961			131,867			—			1,203,422

128

LENNAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18.    Quarterly Data (unaudited)

	First			Second			Third			Fourth
	(In thousands, except per share amounts)
2010
Revenues	$	574,442			814,481			824,975			860,124
Gross profit from sales of homes	$	98,376			143,411			147,419			128,715
Earnings (loss) before income taxes	$	(19,045	)		35,554			39,435			38,781
Net earnings (loss) attributable to Lennar	$	(6,523	)		39,719			30,035			32,030
Earnings (loss) per share:
Basic	$	(0.04	)		0.21			0.16			0.17
Diluted	$	(0.04	)		0.21			0.16			0.17
2009
Revenues	$	593,063			891,853			720,730			913,741
Gross profit from sales of homes	$	34,182			76,092			49,496			92,230
Loss before income taxes	$	(155,815	)		(130,158	)		(171,644	)		(302,787	)
Net earnings (loss) attributable to Lennar (1)	$	(155,929	)		(125,185	)		(171,605	)		35,572
Earnings (loss) per share:
Basic	$	(0.98	)		(0.76	)		(0.97	)		0.19
Diluted	$	(0.98	)		(0.76	)		(0.97	)		0.19

(1) Net earnings attributable to Lennar during the fourth quarter of 2009 include a reversal of the Company’s deferred tax asset valuation allowance of $351.8 million.

Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with per share amounts for the year.

129

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer participated in an evaluation by our management of the effectiveness of our disclosure controls and procedures as of the end of our fiscal quarter that ended on November 30, 2010. Based on their participation in that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of November 30, 2010 to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed in our reports filed or furnished under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

Our CEO and CFO also participated in an evaluation by our management of any changes in our internal control over financial reporting that occurred during the quarter ended November 30, 2010. That evaluation did not identify any changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting except for new internal controls over financial reporting that were designed and implemented related to the Company’s Rialto Investments segment during the quarter ended November 30, 2010

Management’s Annual Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm obtained from Deloitte & Touche LLP relating to the effectiveness of Lennar Corporation’s internal control over financial reporting are included elsewhere in this document.

Item 9B.    Other Information.

Not applicable.

130

PART III

Item 10.    Directors, Executive Officers and Corporate Governance.

The information required by this item for executive officers is set forth under the heading “Executive Officers of Lennar Corporation” in Part I. The other information called for by this item is incorporated by reference to our definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than March 30, 2011 (120 days after the end of our fiscal year).

Item 11.    Executive Compensation.

The information required by this item is incorporated by reference to our definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than March 30, 2011 (120 days after the end of our fiscal year).

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated by reference to our definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than March 30, 2011 (120 days after the end of our fiscal year), except for the information required by Item 201(d) of Regulation S-K, which is provided below.

The following table summarizes our equity compensation plans as of November 30, 2010:

Plan category	Number of shares to be issued upon exercise of outstanding options, warrants and rights (a)(1)		Weighted- average exercise price of outstanding options, warrants and rights (b)		Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) (c)(2)
Equity compensation plans approved by stockholders		5,266,210	$	25.72		1,733,876
Equity compensation plans not approved by stockholders		—		—		—
Total		5,266,210	$	25.72		1,733,876

(1) This amount includes approximately 22,700 shares of Class B common stock that may be issued under our equity compensation plans.

(2) Both Class A and Class B common stock may be issued.

Item 13.    Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated by reference to our definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than March 30, 2011 (120 days after the end of our fiscal year).

Item 14.    Principal Accounting Fees and Services.

The information required by this item is incorporated by reference to our definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than March 30, 2011 (120 days after the end of our fiscal year).

131

PART IV

Item 15.    Exhibits and Financial Statement Schedules.

(a) Documents filed as part of this Report.

1. The following financial statements are contained in Item 8:

Financial Statements	Page in this Report
Report of Independent Registered Public Accounting Firm		69
Consolidated Balance Sheets as of November 30, 2010 and 2009		70
Consolidated Statements of Operations for the Years Ended November 30, 2010, 2009 and 2008		72
Consolidated Statements of Equity for the Years Ended November 30, 2010, 2009 and 2008		73
Consolidated Statements of Cash Flows for the Years Ended November 30, 2010, 2009 and 2008		75
Notes to Consolidated Financial Statements		77

2. The following financial statement schedule is included in this Report:

Financial Statement Schedule	Page in this Report
Report of Independent Registered Public Accounting Firm		136
Schedule II—Valuation and Qualifying Accounts		137

Information required by other schedules has either been incorporated in the consolidated financial statements and accompanying notes or is not applicable to us.

3. The following exhibits are filed with this Report or incorporated by reference:

3.1	Amended and Restated Certificate of Incorporation, dated April 28, 1998—Incorporated by reference to Exhibit 3(a) of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2004.
3.2	Certificate of Amendment to Certificate of Incorporation, dated April 9, 1999—Incorporated by reference to Exhibit 3(a) of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 1999.
3.3	Certificate of Amendment to Certificate of Incorporation, dated April 8, 2003—Incorporated by reference to Annex IV of the Company’s Proxy Statement on Schedule 14A dated March 10, 2003.
3.4	Certificate of Amendment to Certificate of Incorporation, dated April 8, 2008—Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, dated April 8, 2008.
3.5	Amendment to Section 3.3 of the Bylaws of the Company, dated April 8, 2008—Incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K, dated April 8, 2008.
4.1	Indenture, dated as of December 31, 1997, between Lennar and Bank One Trust Company, N.A., as trustee—Incorporated by reference to Exhibit 4 of the Company’s Registration Statement on Form S-3, Registration No. 333-45527, filed with the Commission on February 3, 1998.
4.2	Sixth Supplemental Indenture, dated February 5, 2003, between Lennar and Bank One Trust Company, N.A., as trustee (relating to 5.950% Senior Notes due 2013)—Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, dated January 31, 2003.
4.3	Indenture, dated August 12, 2004, between Lennar and J.P. Morgan Trust Company, N.A., as trustee (relating to Lennar’s 5.50% Senior Notes due 2014)—Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4, Registration No. 333-121130, filed with the Commission on December 10, 2004.

132

4.4	Indenture, dated April 28, 2005, between Lennar and J.P. Morgan Trust Company, N.A., as trustee (relating to Lennar’s 5.60% Senior Notes due 2015)—Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4, Registration No. 333-127839, filed with the Commission on August 25, 2005.
4.5	Indenture, dated September 15, 2005, between Lennar and J.P. Morgan Trust Company, N.A., as trustee (relating to Lennar’s 5.125% Senior Notes due 2010)—Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4, Registration No. 333-130923, filed with the Commission on January 9, 2006.
4.6	Indenture, dated April 26, 2006, between Lennar and J.P. Morgan Trust Company, N.A., as trustee (relating to Lennar’s 5.95% Senior Notes due 2011)—Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated April 26, 2006.
4.7	Indenture, dated April 26, 2006, between Lennar and J.P. Morgan Trust Company, N.A., as trustee (relating to Lennar’s 6.50% Senior Notes due 2016)—Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated April 26, 2006.
4.8	Indenture, dated May 4, 2010, between Lennar and The Bank of New York Mellon, as trustee (relating to Lennar’s 6.95% Senior Notes due 2018)— Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-4, Registration No. 333-167622, filed with the Commission on June 18, 2010.
4.9	Indenture, dated May 4, 2010, between Lennar and The Bank of New York Mellon, as trustee (relating to Lennar’s 2.00% Convertible Senior Notes due 2020)
4.10	Indenture, dated November 10, 2010, between Lennar and The Bank of New York Mellon, as trustee (relating to Lennar’s 2.75% Convertible Senior Notes due 2020)
10.1*	Lennar Corporation 2000 Stock Option and Restricted Stock Plan—Incorporated by reference to Exhibit 10 of the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2001.
10.2*	Lennar Corporation 2003 Stock Option and Restricted Stock Plan—Incorporated by reference to Annex VI of the Company’s Proxy Statement on Schedule 14A dated March 10, 2003.
10.3*	Lennar Corporation 2007 Equity Incentive Plan—Incorporated by reference to Exhibit A of the Company’s Proxy Statement on Schedule 14A dated February 28, 2007.
10.4*	Lennar Corporation 2007 Incentive Compensation Plan—Incorporated by reference to Exhibit B of the Company’s Proxy Statement on Schedule 14A dated February 28, 2007.
10.5*	Lennar Corporation Employee Stock Ownership Plan and Trust—Incorporated by reference to the Company’s Registration Statement on Form S-8, Registration No. 2-89104.
10.6*	Amendment dated December 13, 1989 to Lennar Corporation Employee Stock Ownership Plan—Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 1990.
10.7*	Lennar Corporation Employee Stock Ownership/401(k) Trust Agreement dated December 13, 1989—Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 1990.
10.8*	Amendment dated April 18, 1990 to Lennar Corporation Employee Stock Ownership/401(k) Plan—Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 1990.
10.9*	Lennar Corporation Nonqualified Deferred Compensation Plan—Incorporated by reference to Exhibit 10 of the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2002.
10.10	Credit Agreement dated July 21, 2006 among Lennar, the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent—Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated July 21, 2006.
10.11	First Amendment to Credit Agreement dated August 21, 2007 among Lennar, the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent—Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 21, 2007.

133

10.12	Second Amendment to Credit Agreement dated January 23, 2008 among Lennar, the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent—Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, dated January 23, 2008.
10.13*	Aircraft Time-Sharing Agreement, dated August 17, 2005, between U.S. Home Corporation and Stuart Miller—Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated August 17, 2005.
10.14*	Amendment No. 1 to Aircraft Time-Sharing Agreement, dated September 1, 2005, between U.S. Home Corporation and Stuart Miller—Incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2005.
10.15	Master Issuing and Paying Agency Agreement, dated March 29, 2006, between Lennar Corporation and JPMorgan Chase Bank, N.A.—Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated March 29, 2006.
10.16	Membership Interest Purchase Agreement, dated as of November 30, 2007, by and among Lennar, Lennar Homes of California, Inc., the Sellers named in the agreement and MS Rialto Residential Holdings, LLC.—Incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2007.
10.17	Third Amendment to Credit Agreement, dated as of November 7, 2008 among Lennar, the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent—Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated November 13, 2008.
10.18	Indenture, dated April 30, 2009, between Lennar and The Bank of New York Mellon, as trustee (relating to Lennar’s 12.25% Senior Notes due 2017)—Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K, dated April 30, 2009.
10.19	Distribution Agreement, dated April 20, 2009, between Lennar and J.P. Morgan Securities, Inc., as agent (relating to sales by the Company of its Class A common stock)—Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K, dated April 20, 2009.
10.20	Distribution Agreement, dated April 20, 2009, between Lennar and Citigroup Capital Markets Inc., as agent (relating to sales by the Company of its Class A common stock)—Incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K, dated April 20, 2009.
10.21	Distribution Agreement, dated April 20, 2009, between Lennar and Merrill Lynch, Pierce, Fenner & Smith Incorporated., as agent (relating to sales by the Company of its Class A common stock)—Incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 8-K, dated April 20, 2009.
10.22*	Aircraft Time-Sharing Agreement, dated January 26, 2010, between U.S. Home Corporation and Richard Beckwitt.
21	List of Subsidiaries.
23	Consent of Independent Registered Public Accounting Firm.
31.1	Rule 13a-14a/15d-14(a) Certification of Stuart A. Miller.
31.2	Rule 13a-14a/15d-14(a) Certification of Bruce E. Gross.
32	Section 1350 Certifications of Stuart A. Miller and Bruce E. Gross.
101	The following financial statements from Lennar Corporation Annual Report on Form 10-K for the year ended November 30, 2010, filed on January 31, 2011, formatted in XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text (1).

* Management contract or compensatory plan or arrangement.

(1) In accordance with Rule 406T of Regulation S-T, the XBRL related to information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

134

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

LENNAR CORPORATION

/s/                     STUART A. MILLER

Stuart A. Miller

President, Chief Executive Officer and Director

Date: January 28, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Principal Executive Officer:
Stuart A. Miller	/s/	STUART A. MILLER
President, Chief Executive Officer and Director	Date:	January 28, 2011
Principal Financial Officer:
Bruce E. Gross	/s/	BRUCE E. GROSS
Vice President and Chief Financial Officer	Date:	January 28, 2011
Principal Accounting Officer:
David M. Collins	/s/	DAVID M. COLLINS
Controller	Date:	January 28, 2011
Directors:
Irving Bolotin	/s/	IRVING BOLOTIN
	Date:	January 28, 2011
Steven L. Gerard	/s/	STEVEN L. GERARD
	Date:	January 28, 2011
Theron I. (“Tig”) Gilliam, Jr.	/s/	THERON I. (“TIG”) GILLIAM, JR.
	Date:	January 28, 2011
Sherrill W. Hudson	/s/	SHERRILL W. HUDSON
	Date:	January 28, 2011
R. Kirk Landon	/s/	R. KIRK LANDON
	Date:	January 28, 2011
Sidney Lapidus	/s/	SIDNEY LAPIDUS
	Date:	January 28, 2011
Donna Shalala	/s/	DONNA SHALALA
	Date:	January 28, 2011
Jeffrey Sonnenfeld	/s/	JEFFREY SONNENFELD
	Date:	January 28, 2011

135

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Lennar Corporation

We have audited the consolidated financial statements of Lennar Corporation and subsidiaries (the “Company”) as of November 30, 2010 and 2009, and for each of the three years in the period ended November 30, 2010, and have issued our report thereon dated January 31, 2011 (which report expresses an unqualified opinion and includes an explanatory paragraph related to retrospective adjustments for the adoption of certain accounting standards related to the presentation of noncontrolling interests and the disclosure guidance applicable to variable interest entities and the adoption of other provisions of the amended consolidation guidance applicable to variable interest entities which resulted in the deconsolidation of certain option contracts) and the Company’s internal control over financial reporting as of November 30, 2010, and have issued our report thereon dated January 31, 2011; such consolidated financial statements and reports are included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Certified Public Accountants

Miami, Florida

January 31, 2011

136

LENNAR CORPORATION AND SUBSIDIARIES

Schedule II—Valuation and Qualifying Accounts

Years Ended November 30, 2010, 2009 and 2008

Description	Beginning balance		Additions					Deductions			Ending balance
			Charged to costs and expenses		Charged (credited) to other accounts
	(In thousands)
Year ended November 30, 2010
Allowances deducted from assets to which they apply:
Allowances for doubtful accounts and notes and other receivables	$	11,710		1,525		(85	)		(9,454	)		3,696
Allowance for loan losses	$	7,444		1,328		170			(1,365	)		7,577
Allowance against net deferred tax assets	$	647,385		4,806		(26,331	)		(16,397	)		609,463
Year ended November 30, 2009
Allowances deducted from assets to which they apply:
Allowances for doubtful accounts and notes and other receivables	$	33,952		28,105		(14	)		(50,333	)		11,710
Allowance for loan losses	$	20,384		4,107		(5,384	)		(11,663	)		7,444
Allowance against net deferred tax assets	$	730,836		269,568		—			(353,019	)		647,385
Year ended November 30, 2008
Allowances deducted from assets to which they apply:
Allowances for doubtful accounts and notes and other receivables	$	18,750		17,584		—			(2,382	)		33,952
Allowance for loan losses	$	11,145		14,696		—			(5,457	)		20,384
Allowance against net deferred tax assets	$	—		730,836		—			—			730,836

137

EX-4.9

Exhibit 4.9

LENNAR CORPORATION

as Issuer,

the GUARANTORS

party hereto

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

INDENTURE

Dated as of May 4, 2010

2.00% Convertible Senior Notes due 2020

CROSS REFERENCE TABLE

TIA Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
7.8; 7.10; 12.2
N.A.
311(a)	7.11
7.11
N.A.
312(a)	2.5
11.3
11.3
313(a)	7.6
(b)(1)	N.A.
(b)(2)	7.6
7.6; 12.2
7.6
314(a)	4.2; 4.4; 13.2
N.A.
(c)(1)	7.2; 13.4
(c)(2)	7.2; 13.4
(c)(3)	N.A.
N.A.
11.5
N.A.
315(a)	7.1(b)
7.5; 12.2
7.1(a)
6.5; 7.1(c)
6.12
316(last sentence)	2.5
(a)(1)(A)	6.5
(a)(1)(B)	6.4
(a)(2)	N.A.
6.7
9.4
317(a)(1)	6.8
(a)(2)	6.9
2.4
318(a)	13.1
12.1

N.A. means Not Applicable.

(i)

Note:   This cross-reference table shall not, for any purpose, be deemed to be a part of the Indenture.

(ii)

TABLE OF CONTENTS

ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.1	Definitions	1
Section 1.2	Incorporation by Reference of TIA	12
Section 1.3	Rules of Construction	13
Section 1.4	References to Interest	13
ARTICLE II. THE NOTES		14
Section 2.1	Form and Dating	14
Section 2.2	Execution and Authentication; Aggregate Principal Amount	14
Section 2.3	Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent	15
Section 2.4	Paying Agent to Hold Assets in Trust	16
Section 2.5	Holder Lists	17
Section 2.6	Transfer and Exchange	17
Section 2.7	Replacement Notes	18
Section 2.8	Outstanding Notes	18
Section 2.9	Treasury Notes	18
Section 2.10	Temporary Notes	18
Section 2.11	Cancellation	19
Section 2.12	Interest and Defaulted Amounts	19
Section 2.13	CUSIP Number	20
Section 2.14	Deposit of Monies	21
Section 2.15	Restrictive Legends	21
Section 2.16	Book-Entry Provisions for Global Notes	21
Section 2.17	Special Transfer Provisions	23
ARTICLE III. REDEMPTION AND REPURCHASE		24
Section 3.1	Right of Redemption and Repurchase.	24
Section 3.2	No Redemption Prior to December 1, 2013	24
Section 3.3	Optional Redemption	24
Section 3.4	Redemption Date; Payment of Accrued and Unpaid Interest	24
Section 3.5	Notice of Redemption	25
Section 3.6	Notices to Trustee	26
Section 3.7	Selection of Notes to Be Redeemed	26
Section 3.8	Effect of Notice of Redemption	26
Section 3.9	Payment of Redemption Price	27
Section 3.10	Notes Redeemed in Part	27
Section 3.11	Purchase of Notes at Option of the Holder	27
Section 3.12	Repurchase at Option of Holder Upon a Fundamental Change	30
Section 3.13	Payment of Option Purchase Price or Fundamental Change Repurchase Price	33
Section 3.14	Repurchases Following Acceleration of the Notes	34
Section 3.15	Covenant to Comply with Applicable Laws Upon Repurchases	35

(iii)

ARTICLE IV. COVENANTS		35
Section 4.1	Payment of Notes	35
Section 4.2	Rule 144A Information Requirement and Annual Reports	35
Section 4.3	Corporate Existence	36
Section 4.4	Compliance Certificate	36
Section 4.5	Further Instruments and Acts	36
Section 4.6	Furnishing Guarantees	36
ARTICLE V. SUCCESSOR CORPORATION		37
Section 5.1	Company May Consolidate, etc., Only on Certain Terms	37
Section 5.2	Successor Corporation Substituted	37
ARTICLE VI. DEFAULTS AND REMEDIES		38
Section 6.1	Events of Default	38
Section 6.2	Acceleration of Maturity; Rescission and Annulment	39
Section 6.3	Other Remedies	40
Section 6.4	Waiver of Existing Defaults	41
Section 6.5	Control by Majority	41
Section 6.6	Payments of Notes on Default; Suit Therefor	41
Section 6.7	Limitation on Suits	41
Section 6.8	Collection Suit by Trustee	42
Section 6.9	Trustee May File Proofs of Claim	42
Section 6.10	Restoration of Positions	43
Section 6.11	Priorities	43
Section 6.12	Undertaking for Costs	43
Section 6.13	Reporting Event of Default	44
Section 6.14	Restricted Transfer Default	45
Section 6.15	Stay, Extension or Usury Laws	46
Section 6.16	Liability of Stockholders, Officers, Directors and Incorporators	46
ARTICLE VII. TRUSTEE		46
Section 7.1	Duties of Trustee	46
Section 7.2	Rights of Trustee	48
Section 7.3	Individual Rights of Trustee	49
Section 7.4	Trustee’s Disclaimer	49
Section 7.5	Notice of Defaults	49
Section 7.6	Reports by Trustee	49
Section 7.7	Compensation and Indemnity	49
Section 7.8	Replacement of Trustee	50
Section 7.9	Successor Trustee by Merger, etc.	51
Section 7.10	Eligibility; Disqualification	51
Section 7.11	Preferential Collection of Claims	51
ARTICLE VIII. DISCHARGE OF INDENTURE		52
Section 8.1	Termination of the Company’s Obligations	52

(iv)

Section 8.2	Application of Trust Money	52
Section 8.3	Officers’ Certificate; Opinion of Counsel	52
Section 8.4	Reinstatement	53
ARTICLE IX. MODIFICATION OF THE INDENTURE		53
Section 9.1	Without Consent of Holders	53
Section 9.2	With Consent of Holders	54
Section 9.3	Form of Amendment	55
Section 9.4	Compliance with Trust Indenture Act	55
Section 9.5	Revocation and Effect of Consents	55
Section 9.6	Notation on or Exchange of Notes	55
Section 9.7	Trustee to Sign Amendments, etc.	55
ARTICLE X. GUARANTEE OF NOTES		56
Section 10.1	Unconditional Guarantee	56
Section 10.2	Limitations on Guarantees; Release or Suspension of Particular Guarantors’ Obligations	57
Section 10.3	Execution and Delivery of Guarantee	57
Section 10.4	Release of a Guarantor due to Extraordinary Events	57
Section 10.5	Waiver of Subrogation	58
Section 10.6	No Set-Off	58
Section 10.7	Obligations Absolute	58
Section 10.8	Obligations Continuing	59
Section 10.9	Obligations Not Reduced	59
Section 10.10	Obligations Reinstate	59
Section 10.11	Obligations Not Affected	59
Section 10.12	Waiver	60
Section 10.13	No Obligation to Take Action Against the Company	60
Section 10.14	Dealing with the Company and Others	61
Section 10.15	Default and Enforcement	61
Section 10.16	Amendment, etc.	61
Section 10.17	Acknowledgment	61
Section 10.18	Costs and Expenses	61
Section 10.19	No Merger or Waiver; Cumulative Remedies	61
Section 10.20	Survival of Obligations	62
Section 10.21	Guarantee in Addition to Other Obligations	62
Section 10.22	Severability	62
Section 10.23	Successors and Assigns	62
Section 10.24	Acknowledgement under TIA	62
ARTICLE XI. CONVERSION		62
Section 11.1	General	62
Section 11.2	Conversion Procedure and Payment Upon Conversion	63
Section 11.3	Taxes On Conversion	65
Section 11.4	Company to Provide Stock	65
Section 11.5	Conversion Rate Adjustments	65

(v)

Section 11.6	No Adjustment	73
Section 11.7	Notice of Adjustment	74
Section 11.8	Adjustment of Prices	74
Section 11.9	Effect of Reclassifications, Consolidations, Mergers, Binding Share Exchanges or Sales on Conversion	74
Section 11.10	Trustee’s Disclaimer	77
Section 11.11	Rights Distributions Pursuant to Stockholders’ Rights Plans	77
Section 11.12	Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection With Make-Whole Fundamental Changes	77
Section 11.13	Exchange In Lieu of Conversion	80
Section 11.14	Notice to Holders Prior to Certain Actions	81
Section 11.15	Calculation of Adjustments	81
Section 11.16	Conversion Responsibilities of Trustee and Conversion Agent	82
ARTICLE XII.		82
CONTINGENT INTEREST AND TAX TREATMENT		82
Section 12.1	Contingent Interest	82
Section 12.2	Tax Treatment	83
Section 12.3	Comparable Yield And Projected Payment Schedule	83
ARTICLE XIII. MISCELLANEOUS		84
Section 13.1	TIA Controls	84
Section 13.2	Notices	84
Section 13.3	Communications by Holders with Other Holders	85
Section 13.4	Certificate and Opinion as to Conditions Precedent	85
Section 13.5	Statements Required in Certificate or Opinion	86
Section 13.6	Rules by Trustee, Paying Agent, Registrar	86
Section 13.7	Legal Holidays	86
Section 13.8	Governing Law	86
Section 13.9	No Adverse Interpretation of Other Agreements	87
Section 13.10	No Personal Liability	87
Section 13.11	Successors	87
Section 13.12	Duplicate Originals	87
Section 13.13	Severability	87
Section 13.14	Calculations	87
Section 13.15	Waivers of Jury Trial	88
Section 13.16	Force Majeure	88

Exhibit A	Form of Note	A-1
Exhibit B	Global Note Legend	B-1
Exhibit C	Restricted Common Stock Legend	C-1
Exhibit D	Guarantee	D-1
Schedule I	Guarantors	I-1
Schedule II	Projected Payment Schedule	II-1

(vi)

INDENTURE, dated as of May 4, 2010, among LENNAR CORPORATION, a Delaware corporation (the “Company”), each of the Guarantors party hereto and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee (the “Trustee”).

The Company has duly authorized the creation of an issue of its 2.00% Convertible Senior Notes due 2020, initially in an aggregate principal amount not to exceed $276,500,000 (as increased by an amount equal to the aggregate principal amount of any additional Notes purchased by the Initial Purchasers pursuant to the exercise of their option to purchase additional Notes as set forth in the Purchase Agreement) and, to provide therefor, the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Notes (as defined), when duly issued and executed by the Company, and authenticated and delivered hereunder, the valid obligations of the Company, and to make this Indenture a legal, valid and binding agreement of the Company, have been done.

Each party hereto agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined) of the Company’s 2.00% Convertible Senior Notes due 2020.

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

Definitions.

“Additional Interest” has the meaning provided in Section 6.13(a).

“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.

“Agent” means any Registrar, Paying Agent, Conversion Agent or co-Registrar.

“Agent Members” has the meaning provided in Section 2.16.

“Form of Assignment” means the “Form of Assignment” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

“Authenticating Agent” has the meaning provided in Section 2.2.

“Bankruptcy Law” has the meaning provided in Section 6.1.

“Bid Solicitation Agent” means any other Person (other than the Company or any of its Affiliates) as may be appointed, from time to time, by the Company pursuant to Section 2.3 to solicit bids for the Contingent Interest Trading Price of the Notes in accordance with Section 12.1.

- 1 -

“Board of Directors” means the Board of Directors of the Company.

“Board Resolution” means a resolution by the Board of Directors or Executive Committee of the Company certified by its Secretary or an Assistant Secretary as being duly adopted and in full force and effect.

“Business Day” means any day other than a Saturday, a Sunday or a day that is a legal holiday or a day on which commercial banks are authorized or required by law, regulation or executive order to close in the City of New York.

“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, and options, rights or warrants to purchase such capital stock or other equity interests, whether now outstanding or issued after the date hereof.

“Change of Control” means the occurrence of any of the following:

(a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of the Subsidiaries, taken as a whole, to any person, other than the Company or one of the Subsidiaries;

(b) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s outstanding Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares, other than any transaction where:

(i) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and either (A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction, or (B) the shares of the Company’s Voting Stock outstanding immediately prior to such transaction are converted into or exchanged for, a majority of the Voting Stock of such holding company immediately after giving effect to such transaction; or

(ii) both (A) Stuart Miller, together with members of his immediate family, directly or indirectly, becomes the beneficial owner of more than 50%, but less than 66  ²/3%, of the Company’s outstanding Voting Stock (measured by voting power rather than number of shares) and (B) immediately after such transaction or transactions, the Class A Common Stock is listed for trading on the New York Stock Exchange or The Nasdaq Global Market (and the Notes continue to be convertible solely into such Class A Common Stock);

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(c) the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the Company, or any recapitalization, reclassification, or change of the Company’s Voting Stock occurs, in any such case where any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property (other than any such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction);

(d) the first day on which a majority of the members of the Board of Directors are not Continuing Directors; or

(e) the adoption by the Company’s stockholders of a plan relating to the Company’s liquidation or dissolution.

Notwithstanding the foregoing, if a transaction or transactions described in clause (a) or (c) above occurs, a “change of control” will not be deemed to have occurred pursuant to such clause if 90% or more of the consideration in the transaction or transactions received by holders of the Class A Common Stock consists of shares of common stock traded or to be traded immediately following such transaction or transactions on a U.S. national securities exchange, and such consideration (of which 90% or more is such listed common stock) becomes Reference Property into which the Notes are convertible pursuant to Section 11.9(a).

The term “person,” as used in this definition of Change of Control, has the meaning given to it in Section 13(d)(3) of the Exchange Act.

“Class A Common Stock” shall mean the Company’s Class A common stock, par value $0.10 per share, subject to Section 11.9(a).

“Class A Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Class A Common Stock have the right to receive any cash, securities or other property or in which Class A 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 holders of Class A Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or a duly authorized committee thereof, statute, contract or otherwise).

“Class B Common Stock” shall mean the Company’s Class B common stock, par value $0.10 per share.

“Clause A Distribution” has the meaning provided in Section 11.5(c).

“Clause B Distribution” has the meaning provided in Section 11.5(c).

“Clause C Distribution” has the meaning provided in Section 11.5(c).

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“Consolidated Net Tangible Assets” means, with respect to any date of determination, the total amount of assets which would be included on a consolidated balance sheet of the Company and the Restricted Subsidiaries under GAAP (less applicable reserves and other properly deductible items) after deducting therefrom:

(a) all short-term liabilities, i.e., liabilities payable by their terms less than one year from the date of determination and not renewable or extendable at the option of the obligor for a period ending more than one year after such date, and liabilities in respect of retiree benefits other than pensions for which the Restricted Subsidiaries are required to accrue pursuant to Statement of Financial Accounting Standards No. 106;

(b) investments in Subsidiaries that are not Restricted Subsidiaries; and

(c) all assets reflected on the Company’s balance sheet as the carrying value of goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of debt and other intangible assets.

“Contingent Interest” has the meaning provided in Section 12.1(a).

“Contingent Interest Measurement Period” has the meaning provided in Section 12.1(a).

“Contingent Interest Period” has the meaning provided in Section 12.1(a).

“Contingent Interest Trading Price” means, for any Trading Day, the average of the secondary market bid quotations per $1,000 principal amount of the Notes obtained by the Bid Solicitation Agent for $5.0 million aggregate principal amount of Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers the Company selects; provided that if (a) three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids will be used, and (b) only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid will be used; provided, further, that if no such bids can reasonably be obtained by the Bid Solicitation Agent, then the Contingent Interest Trading Price of the Notes on such Trading Day shall be equal to the product of (i) the Conversion Rate and (ii) the Last Reported Sales Price for the five Trading Days ending on such Trading Day.

“Continuing Director” means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the date the Notes were initially issued, or (b) was nominated for election, elected or appointed to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Company’s Board of Directors at the time of the member’s nomination, election or appointment (either by a specific vote or by approval of the Company’s proxy statement in which that member was named as a nominee for election as a director, without objection to the nomination).

“Conversion Agent” has the meaning provided in Section 2.3.

“Conversion Consideration” has the meaning provided in Section 11.2(a)(i).

“Conversion Date” has the meaning provided in Section 11.2(b).

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“Conversion Notice” means a notice substantially in the form of the “Form of Conversion Notice” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

“Conversion Price” means, as of any date, the dollar amount derived by dividing one thousand dollars ($1,000) by the Conversion Rate in effect on such date.

“Conversion Rate” has the meaning provided in Section 11.1(a).

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 10161 Centurion Parkway North, Jacksonville, Florida 32256 Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Custodian” has the meaning provided in Section 6.1.

“Default” means any event which, upon the giving of notice or passage of time, or both, would be an Event of Default.

“Defaulted Amounts” has the meaning provided in Section 2.12(c).

“Defaulted Interest” has the meaning provided in Section 2.12(d).

“Defaulted Interest Payment Date” has the meaning provided in Section 2.12(d).

“Delivery Date” has the meaning provided in Section 11.12(j).

“Depositary” means The Depository Trust Company, its nominees and successors.

“Distributed Property” shall have the meaning specified in Section 11.5(c).

“$” means the lawful currency of the United States.

“Effective Date” has the meaning provided in Section 11.12(b).

“Event of Default” has the meaning provided in Section 6.1.

“Ex-Dividend Date” means the first date on which the shares of Class A Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from us or, if applicable, from the seller of Class A Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

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

“Exchange Consideration” has the meaning provided in Section 11.13(a).

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“Financial Institution” has the meaning provided in Section 11.13(a).

“Fiscal Year” means the period commencing on December 1 of a year and ending on the next November 30 or such other period (not to exceed 12 months or 53 weeks) as the Company may from time to time adopt as its fiscal year.

“Fundamental Change” means the occurrence at any time after the notes are originally issued of a Change of Control or a Termination of Trading (other than a temporary Termination of Trading) in the Class A Common Stock.

“Fundamental Change Notice” has the meaning provided in Section 3.12(b).

“Fundamental Change Offer” has the meaning provided in Section 3.12(a).

“Fundamental Change Repurchase Date” has the meaning provided in Section 3.12(a).

“Fundamental Change Repurchase Price” means, with respect to a Note to be purchased by the Company on a Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change in accordance with Section 3.13, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to, but excluding, such Fundamental Change Repurchase Date, except as otherwise provided in Section 3.12(a).

“Fundamental Change Repurchase Right” has the meaning provided in Section 3.12(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 on the date hereof.

“Global Note” has the meaning provided in Section 2.1.

“Guarantee” has the meaning provided in Section 10.1.

“Guarantor” means (a) initially, each of the Guarantors named on the signature pages of this Indenture, and (b) each of the Company’s Subsidiaries that in the future executes a Guarantee in substantially the form of Exhibit D hereto in which such Subsidiary agrees to be bound by the terms hereof as Guarantor, in each case, subject to release or suspension as provided in Article X.

“Holder” means a Person in whose name a Note is registered on the Register.

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“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 the Company or any Subsidiary’s reimbursement obligations and other liabilities (contingent or otherwise) with respect to letters of credit, bank guarantees or bankers’ acceptances;

(c) all obligations and liabilities (contingent or otherwise) in respect of the Company or any Subsidiary’s leases required, in conformity with GAAP, to be accounted for as capital lease obligations on the balance sheet of the Company;

(d) all the Company or any Subsidiary’s obligations (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 the Company or such Subsidiary’s obligations or liabilities (contingent or otherwise) 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 such 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” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.

“Initial Purchasers” means Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Deutsche Bank Securities Inc., and UBS Securities, LLC.

“Interest Payment Date” means each June 1 and December 1 of each year, beginning on December 1, 2010.

“Interest Record Date,” with respect to any Interest Payment Date, shall mean the May 15 or November 15 (whether or not such day is a Business Day) immediately preceding the June 1 or December 1 Interest Payment Date, respectively.

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“Last Reported Sales Price” means, on any date, 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 such date as reported in composite transactions for the principal U.S. securities exchange on which the Class A Common Stock is traded; provided, however, that if the Class A Common Stock is not listed for trading on a U.S. national or regional securities exchange on such date, the “Last Reported Sale Price” shall be the last quoted bid price for the Class A Common Stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization; provided, however, that if the Class A Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for the Class A Common Stock on such date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

“Lien” means any mortgage, pledge, lien, encumbrance, charge or security interest of any kind.

“Make-Whole Applicable Increase” has the meaning provided in Section 11.12(b).

“Make-Whole Fundamental Change” means any Change of Control described under clause (a), (b) or (c) of the definition thereof, but without giving effect to sub-clause (i) under clause (a) thereof and the parenthesis at the end of clause (c) thereof, pursuant to which 10% or more of the consideration for the Class A Common Stock in such Change of Control consists of consideration other than Class A Common Stock that is traded or scheduled to be traded immediately following such transaction on a U.S. national securities exchange.

“Maturity Date” means December 1, 2020.

“Merger Common Stock” has the meaning provided in Section 11.9(e).

“Merger Event” has the meaning provided in Section 11.9(a).

“Merger Valuation Percentage” has the meaning provided in Section 11.9(f).

“Merger Valuation Period” has the meaning provided in Section 11.9(f).

“Net Worth” of any Person means the total consolidated stockholders’ equity of the Person determined in accordance with GAAP.

“Non-Recourse Indebtedness” means any Indebtedness of the Company or any Restricted Subsidiary for which the holder of such Indebtedness has no recourse, directly or indirectly, to the Company or such Restricted Subsidiary for the principal of, premium, if any, and interest on such Indebtedness, and for which the Company or such Restricted Subsidiary is not, directly or indirectly, obligated or otherwise liable for the principal of, premium, if any, and interest on such Indebtedness, except pursuant to mortgages, deeds of trust or other security interests or other recourse, obligations or liabilities, in respect of specific land or other real property interests of the Company or such Restricted Subsidiary securing such Indebtedness; provided, however, that recourse, obligations or liabilities solely for indemnities, breaches of warranties or representations contained in such mortgages, deeds of trust or grants of security interests in respect of Indebtedness will not prevent that Indebtedness from being classified as Non-Recourse Indebtedness.

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“Notes” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

“Notice of Default” has the meaning provided in Section 6.1.

“Obligations” means all obligations for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing the Notes.

“Officer” means the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive Vice President or Vice President, the Treasurer, the Secretary, the Controller or any Assistant Secretary of a Person.

“Officers’ Certificate” when used with respect to the Company means a certificate signed by two Officers. Each such certificate will comply with Section 314 of the TIA and include the statements described in Section 13.5.

“Optional Redemption” has the meaning provided in Section 3.3.

“Opinion of Counsel” means a written opinion acceptable to the Trustee from legal counsel. That counsel may be an employee of or counsel to the Company.

“Option Purchase Date” has the meaning provided in Section 3.11(a).

“Option Purchase Price” means, with respect to a Note to be purchased by the Company on an Option Purchase Date pursuant to a Purchase at Holder’s Option in accordance with Section 3.11, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to , but excluding, such Option Purchase Date, except as otherwise provided in Section 3.11(a).

“Option Purchase Notice” has the meaning provided in Section 3.11(b).

“Paying Agent” has the meaning provided in Section 2.3.

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

“Physical Notes” has the meaning provided in Section 2.1.

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.7 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.

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“Property” of any Person means all types of real, personal, tangible, intangible or mixed property owned by such Person, whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP.

“Purchase Agreement” means that certain Purchase Agreement, dated as of April 27, 2010, among the Company and the Initial Purchasers.

“Purchase Notice” means a notice substantially in the form of the “Purchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.

“Purchase at Holder’s Option” has the meaning provided in Section 3.1(a);

“Qualified Institutional Buyer” or “QIB” shall have the meaning specified in Rule 144A.

“Redemption Date” has the meaning provided in Section 3.3.

“Redemption Price” means, with respect to a Note to be redeemed on a Redemption Date by the Company in accordance with Article III, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to, but excluding, such Redemption Date, except as otherwise provided in Section 3.4.

“Reference Dividend Amount” has the meaning provided in Section 11.5(d).

“Reference Property” and “unit of Reference Property” has the meaning provided in Section 11.9(a).

“Register” has the meaning provided in Section 2.3.

“Registrar” has the meaning provided in Section 2.3.

“Reporting Event of Default” has the meaning provided in Section 6.13(a).

“Reporting Event of Default Election Notice” has the meaning provided in Section 6.13(a).

“Repurchase Upon Fundamental Change” has the meaning provided in Section 3.1(a);

“Resale Restriction Termination Date” has the meaning provided in Section 2.15(a).

“Restricted Common Stock Legend” means the private placement legend set forth in Exhibit C hereto.

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“Restricted Note Legend” means the private placement legend set forth on the face of the Form of Note attached hereto as Exhibit A.

“Restricted Securities” has the meaning provided in Section 2.17(a).

“Restricted Subsidiary” means (a) all existing wholly-owned Subsidiaries, other than finance company subsidiaries and any foreign Subsidiaries, and (b) all future wholly-owned Subsidiaries that become Guarantors, in each case, until such time as such Subsidiary is released in accordance with the terms of this Indenture.

“Restricted Transfer Default” has the meaning provided in Section 6.14(a).

“Restricted Transfer Default Interest” has the meaning provided in Section 6.14.

“Restricted Transfer Triggering Date” has the meaning provided in Section 6.14(a).

“Rule 144A” means Rule 144A under the Securities Act.

“SEC” means the Securities and Exchange Commission.

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

“Significant Subsidiary” means any Subsidiary (a) whose revenues exceed 10% of the Total Consolidated Revenues of the Company, in each case for the most recent Fiscal Year, or (b) whose Net Worth exceeds 10% of the Company’s Total Consolidated Stockholders’ Equity, in each case as of the end of the most recent Fiscal Year.

“State” means any state of the United States or the District of Columbia.

“Stock Price” has the meaning provided in Section 11.12(b).

“Subsidiary” means (a) 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 or by the Company and one or more Subsidiaries or (b) a partnership, of which the Company or any Subsidiary is the sole general partner.

“Termination of Trading” means, at any time, that the Class A Common Stock (or other common stock into which the notes are then convertible) is not then listed for trading on a U.S. national securities exchange.

“Trigger Event” has the meaning provided in Section 11.5(c).

“Total Consolidated Revenues” means, with respect to any date of determination, the Company’s total consolidated revenues as shown on its most recent consolidated statement of operations that is contained or incorporated in the latest annual report on Form 10-K (or equivalent report) or quarterly report on Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not more than 181 days prior to the date of determination, in the case of the consolidated statement of operations contained or incorporated in an annual report on Form 10-K, or 135 days prior to the date of determination, in the case of the consolidated condensed statement of operations contained in a quarterly report on Form 10-Q

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“Total Consolidated Stockholders’ Equity” means, with respect to any date of determination, the Company’s total consolidated stockholders’ equity as shown on its most recent consolidated balance sheet that is contained or incorporated in the latest annual report on Form 10-K (or equivalent report) or quarterly report on Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not more than 181 days prior to the date of determination, in the case of the consolidated balance sheet contained or incorporated in an annual report on Form 10-K, or 135 days prior to the date of determination, in the case of the consolidated condensed balance sheet contained in a quarterly report on Form 10-Q.

“Trading Day” means a day during which trading in the Class A Common Stock generally occurs on the New York Stock Exchange or, if the Class A Common Stock is not listed on the New York Stock Exchange, then a day during which trading in the Class A Common Stock generally occurs on the principal other U.S. national or regional securities exchange on which the Class A Common Stock is then listed or, if the Class A Common Stock is not then listed on a U.S. national or regional securities exchange, then on the principal other market on which the Class A Common Stock is then traded or quoted. If the Class A Common Stock (or other security for which a Last Sale Price or Contingent Interest Trading Price must be determined) is not so list or traded, “Trading Day” means a “Business Day.”

“Trustee” means the Person named as such in this Indenture and, subject to the provisions of Article VII of this Indenture, any successor to that Person.

“TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date of this Indenture, except as otherwise provided in Section 9.3.

“Trust Officer” means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, senior associate, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“United States” means the United States of America.

“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of that person that is at the time entitled to vote generally in the election of the board of directors of that person.

Incorporation by Reference of TIA. Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in, and made a part of, this Indenture. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

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“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Company or any other obligor on the Notes.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them therein.

Rules of Construction. Unless the context otherwise requires:

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

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

(c) “or” is not exclusive;

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

(d) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

(e) any reference to a statute, law or regulation means that statute, law or regulation as amended and in effect from time to time and includes any successor statute, law or regulation; provided, however, that any reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to the relevant case.

References to Interest.

Any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include:

(a) any Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 6.13(a);

(b) any Contingent Interest if, in such context, Contingent Interest is, was or would be payable pursuant to Section 12.1;

(c) any Defaulted Interest if, in such context, Defaulted Interest is, was or would be payable pursuant to Section 2.12(d); and

(d) any Restricted Transfer Default Interest if, in such context, Restricted Transfer Default Interest is, was or would be payable pursuant to Section 6.14(a).

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ARTICLE II.

THE NOTES

Form and Dating. The Notes and the Trustee’s certificate of authentication relating thereto shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or depositary rule or usage. The Company and the Trustee shall approve the form of the Notes and any notation, legend or endorsement on them. Each Note shall be dated the date of its issuance and authentication and shall show the date of its authentication. The Notes shall be designated as the “2.00% Convertible Senior Notes due 2020.”

The terms and provisions contained in the Notes annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Notes in registered form, substantially in the form set forth in Exhibit A (each, a “Global Note”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided and shall bear the legend set forth in Exhibit B. The aggregate principal amount of a Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect repurchases, redemptions, conversions, transfers or exchanges as hereinafter provided. Payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

Notes issued in exchange for interests in a Global Note pursuant to Section 2.16 may be issued and Notes offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued in the form of permanent certificated Notes in registered form in substantially the form set forth in Exhibit A (the “Physical Notes”).

Execution and Authentication; Aggregate Principal Amount. An Officer of the Company (duly authorized by all requisite corporate actions) shall sign and attest to the Notes for the Company by manual or facsimile signature.

If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office or position at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

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

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The Trustee shall authenticate all Notes upon a written order of the Company in the form of an Officers’ Certificate of the Company. Each such written order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, whether the Notes are to be issued as Physical Notes or Global Notes or such other information as the Trustee may reasonably request.

The Trustee may appoint an authenticating agent (the “Authenticating Agent”) reasonably acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent. An Authenticating Agent has the same rights as an Agent to deal with the Company or with any Affiliate of the Company.

The Notes shall be issuable in fully registered form only, without coupons, in denominations of $1,000 and any integral multiple thereof. Subject to applicable law, the aggregate principal amount of the Notes which may be authenticated and delivered on the date hereof shall not exceed $276,500,000 (as increased by an amount equal to the aggregate principal amount of any additional Notes purchased by the Initial Purchasers following the date hereof pursuant to the exercise of their option to purchase additional Notes as set forth in the Purchase Agreement), except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant to Section 2.6, Section 2.7, Section 3.10, Section 3.13(d), Section 9.6 and Section 11.2.

Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent. The Company shall maintain an office or agency (which shall be located in the United States) where (a) Notes may be presented or surrendered for registration of transfer or for exchange (“Registrar”), (b) Notes may be presented or surrendered for payment (“Paying Agent”), (c) Notes may be presented or surrendered for conversion (“Conversion Agent”), and (d) notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes (“Register”) and of their transfer and exchange. The Company may have one or more co-Registrars and one or more additional paying agents or conversion agents reasonably acceptable to the Trustee. The Conversion Agent shall, on a Holder’s behalf, give notice to the Company to convert Notes into shares of Class A Common Stock. The term “Paying Agent” includes any additional Paying Agent. The term “Conversion Agent” includes any additional Conversion Agent. The Company may act as its own Paying Agent or Conversion Agent. If the Company elects to act as its own Paying Agent or Conversion Agent, the Company will notify the Trustee of its election and will hold for the benefit of the Holders all Class A Common Stock or assets for the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on, or amounts due upon conversion of, the Notes.

The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which agreement shall incorporate the provisions of the TIA and implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any such Agent. If the Company shall fail to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such and any such presentations, surrenders, notices and demands shall be made or served at the Corporate Trust Office or the office or agency of the Trustee in the City of Jacksonville, State of Florida.

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The Company initially appoints the Trustee as Registrar, Paying Agent, Conversion Agent and Custodian for service of demands and notices in connection with the Notes and the Corporate Trust Office and the office or agency of the Trustee in the City of Jacksonville, State of Florida, shall be considered as one such office or agency of the Company for each of the aforesaid purposes. Any of the Registrar, the Paying Agent, the Conversion Agent or any other agent may resign upon 30 days’ notice to the Company.

The Company shall appoint a Bid Solicitation Agent before the commencement of the first Contingent Interest Measurement Period. The Company may, from time to time, appoint a new Bid Solicitation. However, neither the Company nor any Affiliate of the Company may act as Bid Solicitation Agent hereunder.

Paying Agent to Hold Assets in Trust.

(a) The Company shall require each Paying Agent and Conversion Agent other than the Trustee to agree in writing that such Paying Agent or Conversion Agent shall hold in trust for the benefit of the Holders or the Trustee all Class A Common Stock or assets held by such Agent for conversion of, or the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on, the Notes (whether such Class A Common Stock or assets have been distributed to it by the Company or any other obligor on the Notes), and the Company, the Conversion Agent and the Paying Agent shall notify the Trustee of any Default by the Company (or any other obligor on the Notes) in making any such payment. The Company at any time may cause an Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon such distribution to the Trustee, the Paying Agent shall have no further liability for such assets.

(b) If the Company shall act as its own Paying Agent or Conversion Agent, it will, on or before each due date of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, or on or before each Conversion Date in respect of, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest, or a number of shares of Class A Common Stock, so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, or delivery of Class A Common Stock, the Notes when the same shall become due and payable.

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(c) Any money and shares of the Class A Common Stock deposited with the Trustee or any Paying Agent or Conversion Agent, or then held by the Company, in trust for the payment of principal (including the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or accrued and unpaid interest on, or upon conversion of, the Notes and remaining unclaimed for two years after such principal or interest, or amounts due upon conversion, has become due and payable shall be paid to the Company on request of the Company contained in an Officers’ Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent or Conversion Agent with respect to such trust money and shares of Class A Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent or Conversion Agent, before being required to make any such repayment, may publish (in no event later than five days after the Company requests repayment) in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, or mail to each registered Holder, a notice stating that such money and shares of the Class A Common Stock remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money and shares of Class A Common Stock then remaining will be repaid or delivered to the Company.

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 the Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish or cause the Registrar to furnish to the Trustee five (5) Business Days before each Interest Record Date and at such other times as the Trustee may request in writing a list as of such date and in such form as the Trustee may reasonably require of the names and addresses of the Holders, which list may be conclusively relied upon by the Trustee, and the Company shall otherwise comply with TIA Section 312(a).

Transfer and Exchange. Subject to Sections 2.16 and 2.17, when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, that the Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Notes at the Registrar’s or co-Registrar’s request. No service charge shall be made for any registration of transfer or exchange, but the Company and the Trustee may require payment to cover any transfer tax, fee or similar governmental charge payable in connection therewith where required by law (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers pursuant to Section 2.10, Article III or Article XI) or permitted pursuant to Section 11.3.

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The Registrar or co-Registrar shall not be required to register the transfer of or exchange of (i) any Notes (except the unredeemed portion of the Notes being redeemed in part) or a portion of any Note, selected for redemption in accordance with Article III, (ii) any Notes, or a portion of any Note, surrendered for repurchase in accordance with Article III, and (iii) any Notes, or a portion of any Note, surrendered for conversion in accordance with Article XI.

Any Holder of a beneficial interest in a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Notes that do not involve the issuance of a Physical Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry system.

Replacement Notes. If a mutilated Note is surrendered to the Trustee or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, such Holder must provide an indemnity bond or other indemnity of reasonable tenor, sufficient in the reasonable judgment of the Company and the Trustee, to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. Every replacement Note shall constitute an additional obligation of the Company.

Outstanding Notes. Notes outstanding at any time are all the Notes that have been authenticated by the Trustee except those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to the provisions of Section 2.9, a Note does not cease to be outstanding because the Company or any of its Affiliates holds the Note.

If a Note is replaced pursuant to Section 2.7 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.7.

Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver, consent or notice, Notes owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee has been informed in writing by the Company to be so owned shall be so considered. The Company shall notify the Trustee, in writing, when either it or, to its knowledge, any of its Affiliates repurchases or otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise acquired and such other information as the Trustee may reasonably request and the Trustee shall be entitled to rely thereon.

Temporary Notes. Until typewritten or printed Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon receipt of a written order of the Company in the form of an Officers’ Certificate. The Officers’ Certificate shall specify the amount of temporary Notes to be authenticated and the date on which the temporary Notes are to be authenticated. Temporary Notes shall be substantially in the form of typewritten or printed Notes but may have variations that the Company considers appropriate for temporary Notes and so indicates in the Officers’ Certificate. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate, upon receipt of a written order of the Company pursuant to Section 2.2, typewritten or printed Notes in exchange for temporary Notes.

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Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange, payment, repurchase, redemption or conversion. The Trustee, or at the direction of the Trustee, the Registrar, the Paying Agent or the Conversion Agent, and no one else, shall cancel and, at the written direction of the Company, shall dispose, in its customary manner, of all Notes surrendered for transfer, exchange, payment, repurchase, redemption, conversion or cancellation. Subject to Section 2.7, the Company may not issue new Notes to replace Notes that it has paid or delivered to the Trustee for cancellation. If the Company shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11.

Interest and Defaulted Amounts.

(a) Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Note attached as Exhibit A hereto or from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid, from May 4, 2010. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months.

(b) The Person in whose name any Note (or its Predecessor Note) is registered on the Register at the close of business on any Interest Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. Interest shall be payable at the office or agency of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office. The Company shall pay interest (i) on any Physical Notes (A) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Register and (B) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to the Holders of these Notes or upon application by a Holder to the Registrar not later than the relevant Interest Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

(c) The Company shall (i) pay interest on overdue principal on any Note (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and (ii) to the extent lawful, pay interest on overdue installments of interest (without regard to any applicable grace periods) (any such overdue principal and interest, “Defaulted Amounts”). Interest shall accrue on any Defaulted Amounts at the rate of interest borne by the Notes, plus one percent from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company. Such interest on Defaulted Amounts shall be computed on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed.

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(d) The Company shall pay interest on any Defaulted Amounts plus (to the extent lawful) any interest payable on such interest (such interest, the “Defaulted Interest”), to the Persons who are Holders on a subsequent special record date, which special record date shall be the fifteenth day next preceding the date fixed by the Company for the payment of the Defaulted Interest or the next succeeding Business Day if such date is not a Business Day. 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 (a “Defaulted Interest Payment Date”), 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 provided in this Section 2.12; provided, however, that in no event shall the Company deposit monies proposed to be paid in respect of Defaulted Interest later than 11:00 a.m. New York City time on the proposed Defaulted Interest Payment Date. At least 15 days before the subsequent special record date, the Company shall mail (or cause to be mailed) to each Holder, as of a recent date selected by the Company, with a copy to the Trustee at least 20 days prior to such special record date, a notice that states the subsequent special record date, the Defaulted Interest Payment Date and the Defaulted Interest, and interest payable on such Defaulted Interest, if any, to be paid. Notwithstanding the foregoing, any interest which is paid prior to the expiration of the 30-day period set forth in Section 6.1(a) shall be paid to Holders as of the regular Interest Record Date for the Interest Payment Date for which interest has not been paid. Notwithstanding the foregoing, the Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange.

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

Any Notes that are, when issued, Restricted Securities shall be issued with a restricted CUSIP number. Until such time as the Company notifies the Trustee to remove the restrictive legend specified in Section 2.15(a) from the Notes, the restricted CUSIP shall be the CUSIP number for the Notes. At such time as the Company notifies the Trustee to remove the restrictive legend specified in Section 2.15(a) from the Notes, such legend shall for all purposes of this Indenture and the Notes (including this Section 2.13) be deemed removed from any Global Note and an unrestricted CUSIP number for the Notes shall be deemed to be the CUSIP number for the Notes.

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Deposit of Monies. Prior to 11:00 a.m. New York City time on each Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date, the Company shall have deposited with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.4), in immediately available funds, money sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date as the case may be.

Restrictive Legends.

(a) Each Global Note and Physical Note that constitutes a Restricted Security (and all securities issued in exchange therefor or upon substitution thereof, other than Class A Common Stock, if any, issued upon conversion thereof as to which clause (b) of this Section 2.15 shall apply) shall, until the date that is one year (or such shorter period of time as permitted by Rule 144 under the Securities Act or any successor provision thereto) after the later of the last date of original issuance of the Notes and the last date on which the Company or any of its Affiliates was the owner of any Note (such date, the “Resale Restriction Termination Date”), bear a legend in substantially the form of the Restricted Note Legend (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee).

(b) Any stock certificate representing Class A Common Stock issued upon conversion of the Notes shall, until the Resale Restriction Termination Date, bear a legend in substantially the form of the Restricted Common Stock Legend (unless the Note or such Class A Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Class A Common Stock has been issued upon conversion of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock).

Book-Entry Provisions for Global Notes.

(c) The Global Notes initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear the global note legend as set forth in Exhibit B.

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(d) Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Notes, and the Depositary may be treated by the Company, the Trustee and any Agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any Agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

(e) Notwithstanding any other provisions of this Indenture, a Global Note may not be transferred, except as a whole by the Depositary to a nominee of the Depositary, or by a nominee of the Depositary to the Depositary or another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Interests of beneficial owners in a Global Note may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depositary and the provisions of Section 2.17. In addition, Physical Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Note if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Notes or the Depositary ceases to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Company within 90 days of such notice, (ii) the Company decides to discontinue use of the system of book-entry transfer through the Depositary (or any successor depositary), or (iii) an Event of Default has occurred and is continuing.

(f) In connection with any transfer or exchange of a portion of the beneficial interest in a Global Note to beneficial owners pursuant to paragraph (c) of this Section 2.16, the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Company shall execute and the Trustee shall authenticate and deliver, one or more Physical Notes of like tenor and amount.

(g) In connection with the transfer of an entire Global Note to beneficial owners pursuant to paragraph (c) of this Section 2.16, such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Note, an equal aggregate principal amount of Physical Notes of authorized denominations.

(h) Any Physical Note constituting a Restricted Security delivered in exchange for an interest in a Global Note pursuant to paragraph (c) of this Section 2.16 shall, to the extent required pursuant to Section 2.15(a), bear the Restricted Note Legend.

(i) The Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

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Special Transfer Provisions.

(j) Each Global Note and Physical Note that bears or is required under Section 2.15(a) to bear the Restricted Note Legend (together with any Common Stock issued upon conversion of the Notes and required to bear the Restricted Common Stock Legend under Section 2.15(b), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.17 and the Restricted Note Legend or Restricted Common Stock Legend, as the case may be, unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.

(k) No transfer of any Note prior to the Resale Restriction Termination Date will be registered by the Registrar unless the applicable box on the Assignment Form has been checked.

(l) Any Note (or security issued in exchange or substitution therefor) as to which the restrictions on transfer in this Section 2.17 shall have expired in accordance with their terms may, upon surrender of such Note for exchange to the Registrar in accordance with the provisions of this Section 2.17, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by Section 2.15(a). The Company shall promptly notify the Trustee upon the occurrence of the Resale Restriction Termination Date and promptly after any registration statement with respect to the Notes or any Class A Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

(m) Any Class A Common Stock as to which such restrictions on transfer in this Section 2.17 shall have expired in accordance with their terms may, upon surrender of the certificates representing such shares of Class A Common Stock for exchange in accordance with the procedures of the transfer agent for the Class A Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Class A Common Stock, which shall not bear the restrictive legend required by Section 2.15(b).

(n) By its acceptance of any Note bearing the Restricted Note Legend, each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Restricted Note Legend and agrees that it will transfer such Note only as provided in this Indenture.

(o) The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.16 or this Section 2.17. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time during the Registrar’s normal business hours upon the giving of reasonable written notice to the Registrar.

(p) Any Note or Class A Common Stock issued upon the conversion or exchange of a Note that is repurchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate.

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(q) In connection with the purchase by the Company or any Affiliate thereof of any Note or Class A Common Stock issued upon the conversion or exchange of a Note, or any beneficial interest therein by the Company or any Affiliate thereof, the Company shall file with the Trustee and Registrar a written notice identifying the transaction as such for the purposes hereof.

(r) As used in this Section 2.17, the term “transfer” encompasses any pledge, transfer or other disposition whatsoever of any Restricted Security.

ARTICLE III.

REDEMPTION AND REPURCHASE

Section 3.1 Right of Redemption and Repurchase.

(a) A redemption or repurchase of the Notes by the Company, as permitted by any provision of this Indenture, shall be made:

(i) with respect to a redemption at the Company’s option, in accordance with paragraph 6 of the Notes and with Section 3.3;

(ii) with respect to a repurchase at the Holder’s option, in accordance with paragraph 7 of the Notes and Section 3.11 (a “Purchase at Holder’s Option”); and

(iii) with respect to any repurchase upon a Fundamental Change, in accordance with paragraph 8 of the Notes and Section 3.12 (a “Repurchase Upon Fundamental Change”),

in each case, in accordance with the applicable provisions of this Article III.

(b) The Company will comply with all federal and state securities laws in connection with any offer to sell or solicitations of offers to buy Notes pursuant to this Article III.

No Redemption Prior to December 1, 2013.

The Notes are not subject to redemption at the Company’s option at any time prior to December 1, 2013.

Optional Redemption.

The Company shall have the right, at the Company’s option, at any time, and from time to time, on a date fixed by the Company (each, a “Redemption Date”) occurring on or after December 1, 2013, to redeem (an “Optional Redemption”) all or any part of the Notes at a price payable in cash equal to the Redemption Price. Notwithstanding the foregoing, the Company shall not redeem the Notes at a time when it has failed to pay any interest on the Notes when due and such failure is continuing.

Redemption Date; Payment of Accrued and Unpaid Interest.

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Notwithstanding anything in this Indenture or the Notes to the contrary: (A) in no event shall any Redemption Date be a day that is not a Business Day; and (B) if the Redemption Date with respect to a Note is after an Interest Record Date and prior to the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note to, but excluding, such Interest Payment Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Redemption Price for such Note shall not include such accrued and unpaid interest and the Redemption Price shall be equal to 100% of the principal amount of the Notes to be redeemed.

Notice of Redemption.

(c) At least thirty-five (35) days but not more than sixty (60) days before a Redemption Date, the Company shall mail, or cause to be mailed, a notice of redemption to the Trustee, the Paying Agent and each Holder whose Notes are to be redeemed at the address of such Holder in the Register.

(d) The notice shall identify the Notes and the aggregate principal amount thereof to be redeemed pursuant to the redemption and shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the Conversion Rate and the Conversion Price;

(iv) the names and addresses of the Paying Agent and the Conversion Agent;

(v) the procedures a Holder must follow to convert its Notes, that Holders who want to convert Notes must satisfy the requirements of Article XI;

(vi) the paragraph of the Notes pursuant to which the Notes are to be redeemed;

(vii) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price therefor;

(viii) the CUSIP number or numbers, as the case may be, of the Notes to be redeemed; and

(ix) in case any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender of such Note, a new Note in principal amount equal to the unredeemed portion thereof shall be issued.

(e) At the Company’s request, upon reasonable prior notice, the Trustee shall mail the notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the form and content of such notice shall be prepared by the Company.

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(f) A notice of redemption shall be irrevocable.

Notices to Trustee.

If the Company elects to redeem Notes pursuant to Section 3.3, it shall notify the Trustee of the Redemption Date, the applicable provision of this Indenture pursuant to which the redemption is to be made and the aggregate principal amount of Notes to be redeemed, which notice shall be provided to the Trustee by the Company at least fifteen (15) days prior to the mailing, in accordance with Section 3.5, of the notice of redemption (unless a shorter notice period shall be satisfactory to the Trustee).

Selection of Notes to Be Redeemed.

If the Company has elected to redeem less than all the Notes pursuant to Section 3.3, the Trustee shall, within five (5) Business Days after receiving the notice specified in Section 3.6, select the Notes to be redeemed by lot, on a pro rata basis or in accordance with any other method the Trustee considers fair and appropriate, provided such method is not prohibited by the rules of any stock exchange or quotation association on which the Notes or the Common Stock may then be traded or quoted. The Trustee shall make such selection from Notes then outstanding and not already to be redeemed by virtue of having been previously called for redemption. Notes and portions of them the Trustee selects for redemption shall be in amounts of $1,000 principal amount or integral multiples of $1,000 principal amount. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and the principal amount thereof to be redeemed.

The Registrar need not register the transfer of or exchange any Notes that have been selected for Redemption, except the unredeemed portion of the Notes being redeemed in part.

Effect of Notice of Redemption.

Once notice of redemption is mailed, Notes called for redemption become due and payable on the applicable Redemption Date and at the place or places stated in the notice of redemption, and, on and after such Redemption Date (unless there shall be a Default in the payment of such consideration), except as otherwise provided herein, such Notes shall cease to bear interest, and all rights of the Holders with respect to such Notes shall terminate, other than the right to receive such consideration upon surrender of such Notes to the Paying Agent (except that, if the Redemption Date is after an Interest Record Date and before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

Notwithstanding anything in this Indenture or the Notes to the contrary, there shall be no redemption of any Notes if the principal amount of the Notes has been accelerated pursuant to Section 6.2 and such acceleration shall not have been rescinded on or before the applicable Redemption Date. The Paying Agent will promptly return to the respective Holders thereof any Notes tendered to it for redemption during the continuance of such an acceleration.

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Payment of Redemption Price.

(g) Subject to receipt of funds by the Paying Agent as provided in Section 2.14, payment for the Notes to be redeemed shall be made promptly after the later of (i) the Redemption Date for such Notes, and (ii) the time such Note (together with all necessary endorsements) is surrendered or transferred, by book-entry, to the Trustee or the Paying Agent by the Holder thereof in the manner required by Section 3.8 (except that, if the Redemption Date is after an Interest Record Date and before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent). The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose.

(h) If, by 11:00 A.M., New York City time on the applicable Redemption Date, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be redeemed on such Redemption Date, then (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Redemption Price and previously accrued but unpaid interest upon delivery of the Notes).

(i) If any Note shall not be fully and duly paid in accordance herewith upon redemption, the consideration payable on the applicable Redemption Date shall bear interest pursuant to Section 2.12 and such Note shall continue to be convertible pursuant to Article XI.

Notes Redeemed in Part.

Any Note to be submitted for redemption only in part shall be delivered pursuant to Section 3.8 (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 its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Note, without service charge to the Holder, a new Note or Notes, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Note not submitted for redemption.

If the Trustee selects a portion of a Holder’s Notes for partial redemption pursuant to Section 3.7 and the Holder converts a portion of its Notes, the converted portion will be deemed to be from the portion selected for redemption.

Purchase of Notes at Option of the Holder.

(j) At the option of the Holder thereof, Notes (or portions thereof that are integral multiples of $1,000 in principal amount) shall be purchased by the Company on each of December 1, 2013 and December 1, 2015 (each, an “Option Purchase Date”), at a purchase price, payable in cash, equal to the Option Purchase Price for such Notes, upon:

(i) delivery to the Trustee or any Paying Agent, by such Holder, at any time from the opening of business on the date that is twenty (20) Business Days prior to the applicable Option Purchase Date until the close of business on the Business Day immediately preceding the applicable Option Purchase Date, of a Purchase Notice, in the form set forth in the Notes or any other form of written notice substantially similar thereto, in each case, duly completed and signed, with appropriate signature guarantee, stating:

(A) the certificate number(s) of the Notes which the Holder will deliver to be purchased, if such Notes are Physical Notes;

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(B) the portion of the principal amount of Notes to be purchased, which must be $1,000 or an integral multiple thereof; and

(C) that such principal amount of Notes are to be purchased by the Company as of the applicable Option Purchase Date pursuant to the terms and conditions specified in paragraph 8 of the Notes and this Section 3.11; and

(ii) delivery or book-entry transfer to the Trustee or a Paying Agent, at any time after delivery of such Purchase Notice, of such Notes (together with all necessary endorsements), such delivery or transfer being a condition to receipt by the Holder of the Option Purchase Price therefor (except that, if the Option Purchase Date is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

If such Notes are held in book-entry form through the Depositary, the Purchase Notice, and each withdrawal of any Purchase Notice, shall comply with applicable procedures of the Depositary.

Upon such delivery of Notes to the Company (if it is acting as its own Paying Agent) or such Paying Agent, such Holder shall be entitled to receive from the Company or such Paying Agent, as the case may be, a nontransferable receipt of deposit evidencing such delivery.

Notwithstanding anything in this Indenture, or the Notes to the contrary, any Holder that has delivered the Purchase Notice contemplated by this Section 3.11(a) to the Trustee or any Paying Agent shall have the right to withdraw such Purchase Notice by delivery, at any time prior to the close of business on the Business Day immediately preceding the applicable Option Purchase Date, of a written notice of withdrawal to the Trustee or any Paying Agent, which notice shall contain the information specified in Section 3.11(b)(vii).

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

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Notwithstanding anything in this Indenture or the Notes to the contrary, if the Option Purchase Date with respect to a Note to be purchased by the Company pursuant to a Purchase at Holder’s Option is after an Interest Record Date and on or before the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note to, but excluding, such Option Purchase Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Option Purchase Price for such Note shall not include such accrued and unpaid interest and the Option Purchase Price shall be equal to 100% of the outstanding principal amount of the Notes to be purchased.

(k) The Company shall give notice (the “Option Purchase Notice”), on or before the twentieth (20th) Business Day prior to each Option Purchase Date to the Trustee, each Paying Agent, each Holder at its address shown on the Register, and each beneficial owner as required by applicable law. Each Option Purchase Notice shall include the form of Purchase Notice to be completed by a Holder and shall state:

(i) that Holders have the right to require the Company to purchase all or any portion of their Notes pursuant to this Section 3.11 and the last date on which a Holder may exercise such right;

(ii) the Option Purchase Price;

(iii) the Conversion Rate and the Conversion Price;

(iv) the names and addresses of the Trustee, each Paying Agent and the Conversion Agent;

(v) that Notes with respect to which a Purchase Notice is given by a Holder may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this Section 3.11;

(vi) the procedures the Holder must follow to exercise rights under this Section 3.11 and a brief description of those rights;

(vii) that a Holder will be entitled to withdraw its election in the Purchase Notice if the Trustee or any Paying Agent receives, at any time prior to the close of business on the Business Day immediately preceding the applicable Option Purchase Date, a letter or telegram, telex or facsimile transmission (receipt of which is confirmed and promptly followed by a letter) setting forth (I) the name of such Holder, (II) a statement that such Holder is withdrawing its election to have Notes purchased by the Company on such Option Purchase Date pursuant to a Purchase at Holder’s Option, (III) the certificate number(s) of such Notes to be so withdrawn, if such Notes are Physical Notes, (IV) the principal amount of the Notes of such Holder to be so withdrawn, which amount must be $1,000 or an integral multiple thereof and (V) the principal amount, if any, of the Notes of such Holder that remain subject to the Purchase Notice delivered by such Holder in accordance with this Section 3.11, which amount must be $1,000 or an integral multiple thereof; and

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(viii) the CUSIP number or numbers, as the case may be, of the Notes.

At the Company’s request, upon reasonable prior notice, the Trustee shall mail such Option Purchase Notice in the Company’s name and at the Company’s expense; provided, however, that the form and content of such Option Purchase Notice shall be prepared by the Company.

No failure of the Company to give an Option Purchase Notice shall limit any Holder’s right to exercise its rights to require the Company to purchase such Holder’s Notes pursuant to a Purchase at Holder’s Option.

(l) Notes with respect to which a Purchase Notice has been duly delivered in accordance with this Section 3.11 may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this Section 3.11 or if there shall be a Default in the payment of the consideration payable as herein provided upon a Purchase at Holder’s Option.

Repurchase at Option of Holder Upon a Fundamental Change.

(m) In the event any Fundamental Change shall occur, unless the Company has exercised its right to redeem all outstanding Notes by delivering a notice of redemption pursuant to Section 3.5, the Company shall make an offer (a “Fundamental Change Offer”) to each Holder to repurchase all or any part (equal to integral multiples of $1,000 in principal amount) of such Holder’s Notes, unless (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for a Fundamental Change Offer by the Company pursuant to this Section 3.12, and (ii) such third party purchases all Notes properly tendered and not withdrawn under its offer. In a Fundamental Change Offer, the Company shall offer to repurchase Notes on a date selected by the Company (the “Fundamental Change Repurchase Date”), which Fundamental Change Repurchase Date shall be no later than thirty five (35) calendar days, nor earlier than twenty (20) calendar days, after the date the Fundamental Change Notice (as defined below) is mailed in accordance with Section 3.12(b), other than as required by law, at a price, payable in cash, equal to the Fundamental Change Repurchase Price for such Notes, and Holders shall have the right (the “Fundamental Change Repurchase Right”) to require the Company to purchase their Notes upon:

(i) delivery to the Trustee or any Paying Agent, by such Holder, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, of a Purchase Notice, in the form set forth in the Notes or any other form of written notice substantially similar thereto, in each case, duly completed and signed, with appropriate signature guarantee, stating:

(A) the certificate number(s) of the Notes which the Holder will deliver to be purchased, if such Notes are in Physical Notes;

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(B) the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and

(C) that such principal amount of Notes are to be purchased as of the applicable Fundamental Change Repurchase Date pursuant to the terms and conditions specified in this Section 3.12; and

(ii) delivery or book-entry transfer to the Trustee or a Paying Agent, at any time after delivery of such Purchase Notice, of such Notes (together with all necessary endorsements), such delivery or transfer being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor (except that, if the Fundamental Change Repurchase Date is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

If such Notes are held in book-entry form through the Depositary, the Purchase Notice, and each withdrawal of any Purchase Notice, shall comply with applicable procedures of the Depositary.

Upon such delivery of Notes to the Company (if it is acting as its own Paying Agent) or such Paying Agent, such Holder shall be entitled to receive from the Company or such Paying Agent, as the case may be, a nontransferable receipt of deposit evidencing such delivery.

Notwithstanding anything in this Indenture or the Notes to the contrary, any Holder that has delivered the Purchase Notice contemplated by this Section 3.12(a) to the Trustee or any Paying Agent shall have the right to withdraw such Purchase Notice by delivery, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, of a written notice of withdrawal to the Trustee or any Paying Agent, which notice shall contain the information specified in Section 3.12(b)(viii).

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

Notwithstanding anything in this Indenture or the Notes to the contrary, if the Fundamental Change Repurchase Date with respect to a Note to be purchased by the Company pursuant to a Fundamental Change Offer is after an Interest Record Date and on or before the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note to, but excluding, such Fundamental Change Repurchase Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Fundamental Change Repurchase Price for such Note shall not include such accrued and unpaid interest and the Fundamental Change Repurchase Price shall be equal to 100% of the outstanding principal amount of the Notes to be repurchased.

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(n) Within twenty (20) calendar days after the occurrence of a Fundamental Change (or, at the Company’s option, prior to the occurrence of a Fundamental Change, but after public announcement of the transaction or condition that constitutes or may constitute a Fundamental Change), the Company shall mail, or cause to be mailed, to each Holder of the Notes, at its address shown on the Register, and to beneficial owners as required by applicable law, a notice (the “Fundamental Change Notice”) of the occurrence of such Fundamental Change and offering to repurchase the Notes on the Repurchase Date specified in the Fundamental Change Notice. The Company shall deliver a copy of the Fundamental Change Notice to the Trustee. Each Fundamental Change Notice shall state:

(i) the events causing the Fundamental Change;

(ii) the date of such Fundamental Change;

(iii) the Fundamental Change Repurchase Date;

(iv) the last date by which the Fundamental Change Repurchase Right must be exercised;

(v) the Fundamental Change Repurchase Price;

(vi) the names and addresses of the Paying Agent and the Conversion Agent;

(vii) a description of the procedures which a Holder must follow to exercise the Fundamental Change Repurchase Right;

(viii) that a Holder will be entitled to withdraw its election in the Purchase Notice if the Trustee or any Paying Agent receives, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, a letter or telegram, telex or facsimile transmission (receipt of which is confirmed and promptly followed by a letter) setting forth (I) the name of such Holder, (II) a statement that such Holder is withdrawing its election to have Notes purchased by the Company on such Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change, (III) the certificate number(s) of such Notes to be so withdrawn, if such Notes are Physical Notes, (IV) the principal amount of the Notes of such Holder to be so withdrawn, which amount must be $1,000 or an integral multiple thereof and (V) the principal amount, if any, of the Notes of such Holder that remain subject to the Purchase Notice delivered by such Holder in accordance with this Section 3.12, which amount must be $1,000 or an integral multiple thereof;

(ix) the Conversion Rate and any adjustments to the Conversion Rate that will result from such Fundamental Change;

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(x) that Notes with respect to which a Purchase Notice is given by a Holder may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this Section 3.12;

(xi) the CUSIP number or numbers, as the case may be, of the Notes; and

(xii) if provided prior to the date of the consummation of the Fundamental Change, that the Fundamental Change Notice is conditioned on the Fundamental Change occurring prior to the applicable Fundamental Change Date.

At the Company’s request, upon reasonable prior notice, the Trustee shall mail such Fundamental Change Notice in the Company’s name and at the Company’s expense; provided, however, that the form and content of such Fundamental Change Notice shall be prepared by the Company.

No failure of the Company to give a Fundamental Change Notice shall limit any Holder’s right to exercise a Fundamental Change Repurchase Right.

(o) Notes with respect to which a Purchase Notice has been duly delivered in accordance with this Section 3.12 may be converted pursuant to Article XI, if such Purchase Notice has been withdrawn in accordance with this Section 3.12.

Payment of Option Purchase Price or Fundamental Change Repurchase Price.

(p) Subject to the provisions of Section 3.11 and Section 3.12, the Company shall pay, or cause to be paid, the Option Purchase Price or the Fundamental Change Repurchase Price, as the case may be, with respect to each Note to be repurchased to the Holder thereof as promptly as practicable, but in no event later than the later of the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be, and the time such Note (together with all necessary endorsements) is surrendered or transferred, by book-entry, is surrendered to the Paying Agent (except that, if the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be, is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender or transfer such Notes to the Paying Agent).

(q) Subject to receipt of funds by the Paying Agent as provided by Section 2.14, payment for the Notes surrendered for repurchased (and not withdrawn prior to the close of business on the Business Day immediately preceding the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be) shall be made promptly after the later of (i) the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, for such Notes (provided that the Holder has satisfied the conditions in Sections 3.11(a) or Section 3.12(a), as the case may be), and (ii) the time such Note (together with all necessary endorsements) is surrendered or transferred, by book-entry, to the Trustee or the Paying Agent by the Holder thereof in the manner required by Section 3.13(a) (except that, if the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, is after an Interest

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Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender or transfer such Notes to the Trustee or the Paying Agent). The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose.

(r) If, by 11:00 A.M., New York City time on the applicable Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Option Purchase Date, then (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Option Purchase Price or Fundamental Change Repurchase Price, as the case may be, and previously accrued but unpaid interest upon delivery of the Notes).

(s) Any Note which is to be submitted for repurchase pursuant to Section 3.11 or Section 3.12 only in part shall be delivered pursuant to Section 3.11 or Section 3.12, as the case may be (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 its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Note not duly submitted for Repurchase Upon Fundamental Change.

(t) If any Note shall not be fully and duly paid in accordance herewith upon repurchase, the consideration payable on the applicable Optional Purchase Date or Fundamental Change Repurchase Date, as the case may be, shall bear interest pursuant to Section 2.12 and such Note shall continue to be convertible pursuant to Article XI.

Repurchases Following Acceleration of the Notes.

Notwithstanding anything in this Indenture or the Notes to the contrary, there shall be no purchase of any Notes pursuant to Section 3.11 or Section 3.12 if the principal amount of the Notes has been accelerated pursuant to Section 6.2 and such acceleration shall not have been rescinded on or before the applicable Option Purchase Date or Fundamental Change Repurchase Date, as the case may be (except in the case of an acceleration resulting from a default by the Company in the payment of the Option Purchase Price or Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Notes tendered to it for repurchase pursuant to Section 3.11 or 3.12, as the case may be, during the continuance of such an acceleration (except in the case of an acceleration resulting from a default by the Company in the payment of the Option Purchase Price or Fundamental Change Repurchase Price with respect to such Notes) and shall cancel any instructions for a book-entry transfer of the Notes in compliance with the procedures of the Depositary, in which case, upon such return or cancellation, as the case may be, the Purchase Notice or Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

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Covenant to Comply with Applicable Laws Upon Repurchases.

Notwithstanding anything in this Indenture or the Notes to the contrary, in connection with any repurchase offer, the Company shall comply with all applicable tender offer rules under the Exchange Act, including Rule 13e-4, Rule 14e-1 and Regulation 14E thereunder, and with any other tender offer rules under the Exchange Act, and will file a Schedule TO or any other schedules required under the Exchange Act or any other applicable laws.

ARTICLE IV.

COVENANTS

Payment of Notes. The Company will promptly pay or cause to be paid the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on each of the Notes at the places and time and in the manner provided in the Notes and this Indenture. An installment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium or interest will be considered paid on the date it is due if the Trustee or Paying Agent holds on that date in accordance with this Indenture money designated for and sufficient to pay the installment then due.

The Company will pay or cause to be paid interest on overdue principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) pursuant to Section 2.12; it will also pay interest on overdue installments of interest pursuant to Section 2.12, to the extent lawful.

Rule 144A Information Requirement and Annual Reports.

(a) The Company shall deliver to the Trustee copies of the Company’s annual and quarterly reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act within fifteen (15) days after the Company is required to file such annual and quarterly reports, information, documents and other reports with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Documents that are filed by the Company with the SEC via EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee as of the time such documents are filed with EDGAR. The Company shall comply with the other provisions of Trust Indenture Act § 314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). For the avoidance of doubt, the Company shall not be required to deliver to the Trustee any material for which the Company has sought and received confidential treatment by the SEC.

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(b) In addition, if at any time the Company is not required to file with the SEC the annual and quarterly reports, information, documents and other reports described in clause (a) of this Section 4.2, the Company shall furnish to the Holders, holders of the Class A Common Stock issuable upon conversion of the Notes, and to beneficial owners and prospective investors in such Notes or shares, upon their request, the information, if any, required under Rule 144A(d)(4) under the Securities Act until such time as these securities are no longer “restricted securities” within the meaning of Rule 144 under the Securities Act. The Company shall take such further action as any Holder or beneficial owner of such Notes or such Class A Common Stock may reasonably request to the extent required from time to time to enable such Holder or beneficial owner to sell such Notes or shares of Class A Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time (assuming that no Affiliate of the Company has held any beneficial interest in such Notes or shares have).

Corporate Existence. Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company will not be required to preserve any such right or franchise if the Board of Directors determines that the preservation of the right or franchise is no longer desirable in the conduct of the business of the Company and that its loss will not be disadvantageous in any material respect to the Holders.

Compliance Certificate. The Company will deliver to the Trustee within 120 days after the end of each Fiscal Year of the Company an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any failure by the Company to comply with all conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof. The Company shall promptly deliver to the Trustee, and in any event within twenty (20) days after the Company becomes aware of the occurrence of any Event of Default or Default, an Officers’ Certificate describing the Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also will comply with TIA Section 314(a)(4). For the purposes of this provision of the Indenture, compliance is determined without regard to any grace period or requirement of notice under the Indenture.

Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Furnishing Guarantees. The Company shall cause any wholly-owned Subsidiary formed or acquired after the date hereof (other than its finance company Subsidiaries and any foreign Subsidiaries), that guarantees any Indebtedness of the Company or any other Subsidiary (other than guarantees by Subsidiaries of U.S. Home Corporation solely of U.S. Home Corporation’s obligations as a guarantor under any existing or future senior credit facility of the Company), to become a Guarantor by causing, as promptly as practicable, but in any event not later than the date on which such Subsidiary becomes a guarantor of any other Indebtedness of

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the Company or any Subsidiary, such Subsidiary to execute and deliver to the Trustee a Guarantee in substantially the form of Exhibit D hereto and the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the 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.

ARTICLE V.

SUCCESSOR CORPORATION

Company May Consolidate, etc., Only on Certain Terms. The Company will not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

(1) the corporation formed by the consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety, if not the Company, will be a corporation organized and existing under the laws of the United States of America, or any State thereof or the District of Columbia, and expressly assumes, by one or more supplemental indentures, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on all the Notes and the performance of every covenant of this Indenture to be performed or observed by the Company;

(2) immediately after giving effect to the transaction, no Event of Default and no Default will have occurred and be continuing; and

(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the consolidation, merger, conveyance, transfer or lease and the supplemental indenture (or the supplemental indentures together) comply with this Article and that all the conditions precedent relating to the transaction set forth in this Section have been fulfilled.

Successor Corporation Substituted. Upon any event described in Section 5.1, the successor corporation will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if it had been named herein as the party of the first part, except in connection with a lease transaction of the Company’s properties and assets, substantially as an entirety, the predecessor corporation will be relieved of all obligations and covenants under this Indenture.

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ARTICLE VI.

DEFAULTS AND REMEDIES

Events of Default.

An “Event of Default” occurs if:

(a) there is a default by the Company in the payment when due of interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on the Notes, which default continues for a period of 30 days past the applicable due date;

(b) there is a failure to deliver the Make-Whole Applicable Increase upon a Make-Whole Fundamental Change as described in Section 11.12, which failure continues for a period of ten (10) Business Days past the applicable delivery date;

(c) there is a default by the Company in the payment when due of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) due with respect to the Notes, upon required repurchase, upon optional redemption, upon declaration of acceleration, or otherwise;

(d) the Company fails to timely provide a Fundamental Change Notice, as required by the provisions of this Indenture;

(e) there is a default by the Company with respect to its obligation to deliver the shares due upon conversion of the Notes, together with cash in lieu of any fractional shares, in accordance with Section 11.2, and such default continues for a period of ten (10) Business Days past the applicable settlement date;

(f) the Company fails to comply with its obligation to repurchase the Notes at the option of a Holder upon a Fundamental Change pursuant or on an Optional Purchase Date, in each case in accordance with Article III;

(g) there is a default by the Company or any Restricted Subsidiary with respect to its obligation to pay Indebtedness for borrowed money (other than any Non-Recourse Indebtedness owed to the Company or any Restricted Subsidiary), which default shall have resulted in the acceleration of, or be a failure to pay at final maturity, Indebtedness aggregating more than $50 million;

(h) there is a failure by the Company to perform any other covenant or warranty of the Company herein, which continues for 30 days after written notice is provided in accordance with the requirements set forth below in this Section 6.1;

(i) final judgments or orders are rendered against the Company or any Restricted Subsidiary which require the payment by the Company or any Restricted Subsidiary of an amount (to the extent not covered by insurance) in excess of $50 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;

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(j) the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary), pursuant to any Bankruptcy Law applicable to the Company or such Significant Subsidiary (or such group): (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case against it; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors; or

(k) a court of competent jurisdiction enters an order or decree under any applicable Bankruptcy Law: (A) for relief in an involuntary case against the Company or any Significant Subsidiary (or any group of Subsidiaries that taken as a whole, would constitute a Significant Subsidiary); (B) appointing a Custodian of the Company or any such Significant Subsidiary (or any such group) or for any substantial part of its respective property; or (C) ordering the winding up or liquidation of the Company or any such Significant Subsidiary (or any such group); and the order or decree remains unstayed and in effect for 90 days.

Each of the occurrences described in clauses (a) through (k) of this Section 6.1 will constitute an Event of Default whatever the reason for the occurrence and whether it is voluntary or involuntary or is 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.

A Default under clause (h) of this Section 6.1 is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes with regard to which the Company has failed to comply with a covenant or agreement notify the Company and the Trustee, of the Default and the Company does not cure the Default within 30 days after the giving of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.”

The term “Bankruptcy Law” means Title 11 of the United States Code or any similar United States Federal or State law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

The Company will deliver to the Trustee, within 20 days after it occurs, written notice in the form of an Officers’ Certificate of any event of which the Company is aware which with the giving of notice and the lapse of time would become an Event of Default under clause (h), its status and what action the Company is taking or proposes to take with respect to it.

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% in aggregate principal amount of the Notes then outstanding by notice to the Company and the Trustee, may declare the outstanding principal of the Notes and any accrued and unpaid interest through the date of such declaration on all of the Notes to be immediately due and payable. Upon such a declaration, such outstanding principal amount and accrued and unpaid interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any), if any, shall be due and payable immediately. If an Event of Default specified in Section 6.1(j) or (k) occurs and is continuing, the outstanding principal amount 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

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amount 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 any acceleration and its consequences or waive any past default if the rescission or waiver would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived, except a Default relating to the nonpayment of the outstanding principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on, any Note, or a failure to convert any Notes pursuant to Section 11.2, a Default arising from the failure of the Company to redeem or repurchase any Notes pursuant to Sections 3.3, 3.11 and 3.12, or a Default in respect of any covenant that cannot be amended without the consent of each Holder affected. No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto.

In case the Trustee shall have proceeded to enforce any right under this 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.

The Trustee shall, within 90 days after a Trust Officer has knowledge of the occurrence of a Default or any 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 such Trust Officer, 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 (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest 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.

Other Remedies. If an Event of Default as to the Notes occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on the Notes or to enforce the performance of any provision under this Indenture.

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

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Waiver of Existing Defaults. The Holders of a majority in aggregate principal amount of the Notes then outstanding, on behalf of the Holders of all the Notes, by notice to the Trustee may consent to the waiver of any past Default with regard to the Notes and its consequences except (i) a default in the payment of interest or premium, if any, on, or the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price) of, Notes, (ii) a failure to redeem or repurchase any Notes as required under this Indenture or (iii) a default in respect of a covenant or a provision that under Section 9.2 cannot be modified or amended without the consent of the Holders of all Notes then outstanding. The defaults described in clauses (i) and (iii) in the previous sentence may be waived with the consent of the Holders of all Notes then outstanding. When a Default or Event of Default is waived, it is deemed cured and not continuing, but no waiver will extend to any subsequent or other Default or impair any consequent right. Without limiting the provisions of Section 7.7, the Trustee shall be compensated by the Company for all costs and expenses incurred by it in connection with any action taken by it pursuant to this Section 6.4.

Control by Majority. The Holders of a majority in principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee with regard to the Notes or of exercising any trust or power conferred on the Trustee with regard to the Notes. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.1, that the Trustee determines is unduly prejudicial to the rights of other Holders or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action as a result of a direction given under this Section, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking that action.

Payments of Notes on Default; Suit Therefor. The Company covenants that upon the occurrence of an Event of Default described in Section 6.1(a) or (b), then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Holders, the whole amount that will then have become due and payable on all such Notes for the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, accrued and unpaid interest, if any (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) to the extent that payment of such interest is enforceable under applicable law on the overdue installments of interest at the rate borne by the Notes and the consideration due upon conversion of the Notes, if any; and, in addition, such further amount as will be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith. Until such demand by the Trustee, the Company may pay the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of and premium, if any, and interest on the Notes to the registered Holders, whether or not the Notes are overdue.

Limitation on Suits. Subject to Article VII relating to the duties of the Trustee, if an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. A Holder may not pursue any remedy with respect to this Indenture unless:

(a) the Holder gives to the Trustee written notice stating that an Event of Default is continuing;

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

(c) such Holder or Holders offer to the Trustee indemnity or security reasonably satisfactory to the Trustee against any costs, loss, liability or expense;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity, and the Event of Default has not been waived; and

(e) the Trustee has received no inconsistent direction from the Holders of a majority in principal amount of the Notes then outstanding during such 60-day period.

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

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or deliver, as the case may be, on or after such respective dates against the Company shall not be impaired or affected without the consent of such Holder.

Collection Suit by Trustee. If an Event of Default in payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, or interest, if any, specified in clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, and interest remaining unpaid (together with interest on that unpaid interest to the extent lawful) and the amounts provided for in Section 7.7.

Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7.

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Restoration of Positions. If a judicial proceeding by the Trustee or a Holder to enforce any right or remedy under this Indenture is dismissed or decided favorably to the Company, except as otherwise provided in the judicial proceeding, the Company, the Trustee and the Holders will be restored to the positions they would have been in if the judicial proceeding had not been instituted.

Priorities. If the Trustee collects any money pursuant to this Article VI with respect to the Notes, it will pay out the money or property in the following order:

FIRST: to the Trustee for amounts due under Section 7.7;

SECOND: to the Holders for amounts due and unpaid on the Notes for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium and interest, respectively; and

THIRD: to the Company.

The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before the record date, the Company will mail to each Holder and the Trustee a notice that states the record date, the payment date and the amount to be paid.

Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of in aggregate more than 10% in principal amount of the Notes then outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on any Note held by that Holder on or after the due date provided in the Note or to any suit for the enforcement of the right to convert any Note pursuant to Article XI of this Indenture.

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Reporting Event of Default.

(a) Notwithstanding anything in this Indenture or the Notes to contrary, if:

(i) an Event of Default occurs pursuant to clause (h) of Section 6.1 solely as a result of the Company’s failure to comply with Section 4.2 (such Event of Default, a “Reporting Event of Default”); and

(ii) on or before the close of business on the date on which such Reporting Event of Default first occurs, the Company notifies, in writing, each Holder and the Trustee and Paying Agent that it elects the provisions of this Section 6.13 to apply with respect to such Reporting Event of Default (such notice, the “Reporting Event of Default Election Notice”),

then:

(A) the sole remedy for such Reporting Event of Default during the period consisting of the one hundred and eighty (180) calendar days after the date such Reporting Event of Default occurs shall consist exclusively of the payment of additional interest (“Additional Interest”) on each Note at a rate of 0.50% per annum on the principal amount of each Note;

(B) such Additional Interest shall be payable in arrears on each Interest Payment Date in the same manner as regular interest on the Notes;

(C) such Additional Interest shall accrue interest from, and including, the date of such Reporting Event of Default first occurs to, but excluding, the 180^th day thereafter or, if earlier, the date on which such Reporting Event of Default shall have been cured or waived; and

(D) on the 180^th day following the date such Reporting Event of Default first occurs, the Notes shall be subject to acceleration as provided in Section 6.2 if such Reporting Event of Default is not cured or waived prior to such date.

(b) In the event that the Company does not elect to pay Additional Interest following a Reporting Event of Default in accordance with this Section 6.13, the Notes shall be subject to acceleration as provided in Section 6.2.

(c) The provisions of this Section 6.13 shall not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default. The provisions of this Section 6.13 shall not be applicable in the event that the failure to comply with reporting obligations that gives rise to an Event of Default also gives rise to a default under, and results in the acceleration of, other indebtedness for borrowed money of the Company or any Subsidiary (other than Indebtedness that is non-recourse to the Company or any Subsidiary), in which case the Event of Default shall be subject to the remedies that are otherwise applicable as provided herein.

(d) The Additional Interest that is payable in accordance with this Section 6.13 shall be in addition to, and not in lieu of, any Restricted Transfer Default Interest that may be payable pursuant to Section 6.14.

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Restricted Transfer Default.

(e) If either:

(i) at any time during the six-month period beginning on, and including, the date that is six months after the last date on which any of the Notes are originally issued, (a) the Company fails to file timely any document or report that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods under SEC rules and other than current reports on Form 8-K), or (b) the Notes are not otherwise freely tradable by Holders other than the Affiliates of the Company (as a result of restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes); or

(ii) at any time after the first anniversary of the last date on which any of the Notes are originally issued, the restrictive legend on a Holder’s Notes specified in Section 2.15 is not removed in response to a prior request from the Holder, or the Notes are not otherwise freely tradable by Holders other than Affiliates of the Company (without restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes)

(each event referred to in clause (i) or (ii) being a “Restricted Transfer Default”), and the Company has not cured any such Restricted Transfer Default within 14 calendar days following the occurrence of such Restricted Transfer Default (that date being the “Restricted Transfer Triggering Date”), then the Company shall pay additional interest (“Restricted Transfer Default Interest”) on the Notes until the Restricted Transfer Default is cured. Restricted Transfer Default Interest on the Notes shall accrue with respect to the first 90-day period (or portion thereof) following the Restricted Transfer Triggering Date at the rate of 0.25% per annum of the principal amount of the Notes outstanding for each day during such period during which such Restricted Transfer Default is continuing, which rate shall increase by an additional 0.25% per annum of the principal amount of the Notes for each subsequent 90-day period (or portion thereof) until all Restricted Transfer Defaults have been cured, up to a maximum of 0.50% per annum of the principal amount of the Notes. Restricted Transfer Default Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes. Following the cure of all Restricted Transfer Defaults, the accrual of Restricted Transfer Default Interest arising from Restricted Transfer Defaults shall cease.

(f) If, and for so long as, the restrictive legend on a Holder’s Notes specified in Section 2.15 is not removed in response to a prior request from the Holder, or the Notes are not otherwise freely tradable by Holders other than Affiliates of the Company (without restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes), the Company may elect to designate an effective shelf registration statement for the resale of the Notes or any shares of the Class A Common Stock issuable upon conversion of the Notes. Restricted Transfer Default Interest will not accrue for any day on which such registration statement remains effective and usable by Holders for the resale of the Notes or any Class A Common Stock issuable upon conversion of the Notes. Any such registration will be effected on terms that are customary with regard to convertible notes that are offered in reliance upon Rule 144A under the Securities Act.

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(g) If Restricted Transfer Default Interest is payable by the Company pursuant to Section 6.14(a), the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (i) the amount of such Restricted Transfer Default Interest that is payable and (ii) the date on which such Restricted Transfer Default Interest is payable. Unless and until a Trust Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Restricted Transfer Default Interest is payable. If the Company has paid Restricted Transfer Default Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such payment.

(h) The Restricted Transfer Default Interest that is payable in accordance with this Section 6.14 shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Company’s election pursuant to Section 6.13.

Stay, Extension or Usury Laws. The Company agrees (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, any stay or extension law or any usury or other law, wherever enacted, now or at any subsequent time in force, which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, and/or interest on any of the Notes as contemplated in this Indenture, or which may affect the covenants or performance of this Indenture, and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and agrees that it will not hinder, delay or impede the execution of any power granted to the Trustee in this Indenture, but (to the extent that it may lawfully do so) will suffer and permit the execution of any such power as though no such law had been enacted.

Liability of Stockholders, Officers, Directors and Incorporators. No stockholder, officer, director, employee, incorporator or partner of the Company, as such, past, present or future, of the Company, or any of its successor corporations, will have any personal liability in respect of the Company’s obligations under this Indenture or any Notes by reason of his or its status as such stockholder, officer, director, employee, incorporator or partner; provided, however, that nothing in this Indenture or in the Notes will prevent recourse to and enforcement of the liability of any stockholder or subscriber to Capital Stock in respect of shares of Capital Stock which have not been fully paid up.

ARTICLE VII.

TRUSTEE

Duties of Trustee.

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

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

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations will be read into this Indenture against the Trustee; and

(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed in them, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture in the absence of bad faith on the Trustee’s part; provided, however, that in the case of any such certificate or opinion which by any provision hereof is specifically required to be furnished to the Trustee, then the Trustee will examine the certificates and opinions to determine whether or not they substantially conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculation or other facts stated therein).

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

(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.1;

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

(iii) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction of the Holders of not less than a majority in principal amount of the Notes then outstanding pursuant to Section 6.5; and

(iv) the Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under this Indenture or in the exercise of any of its rights or powers, if it has reasonable grounds to believe repayment of the funds or adequate indemnity against the risk or liability is not reasonably assured to it.

(d) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of this Section 7.1 and to the provisions of the TIA.

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

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

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Rights of Trustee.

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

(h) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and an Opinion of Counsel. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such an Officers’ Certificate or Opinion of Counsel.

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

(j) The Trustee will not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, except conduct which constitutes willful misconduct, negligence or bad faith.

(k) The Trustee may consult with counsel of its selection, and the Trustee will not be liable for any action it takes or omits in reliance on, and in accordance with, advice of such counsel or any Opinion of Counsel.

(l) The Trustee will not be required to investigate any facts or matters stated in any document, but if it decides to investigate any matters or facts, the Trustee or its agents or attorneys will be entitled to examine the books, records and premises of the Company at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(m) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

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

(o) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

(p) The Trustee shall not be deemed to have notice of any Default or Event of Default except any Default or Event of Default occurring pursuant to clause (a) or (b) of Section 6.1 if, at the time of the occurrence of such Default or Event of Default, the Trustee is the Paying Agent, unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by a Trust Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

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(q) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

(r) Any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent, co-Registrar, co-Paying Agent or co-Conversion Agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.

Trustee’s Disclaimer. The Trustee (i) is not responsible for and makes no representation as to the validity or adequacy of this Indenture, (ii) will not be accountable for the Company’s use of the proceeds from the Notes, and (iii) will not be responsible for any statement of the Company in this Indenture, other than the Trustee’s certificate of authentication, or in any document used in the sale of the Notes, other than statements, if any, provided in writing by the Trustee for use in such a document.

Notice of Defaults. The Trustee will give to the Holders notice of any Default with regard to the Notes known to the Trustee, within 90 days after it occurs; provided that, except in the case of a Default in the payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or premium, if any, or interest on any Note, the Trustee will be protected in withholding notice of the Default if and so long as a committee of its Trust Officers in good faith determines that the withholding of the notice is in the interests of the Holders.

Reports by Trustee. Within 60 days after each November 30 beginning with the November 30 following the date of this Indenture, the Trustee will mail to each Holder, at the name and address which appears on the registration books of the Company, and to each Holder who has, within the two years preceding the mailing, filed that person’s name and address with the Trustee for that purpose and each Holder whose name and address have been furnished to the Trustee pursuant to Section 2.5, a brief report dated as of that November 30 which complies with TIA Section 313(a). The Trustee also will comply with TIA Section 313(b).

Compensation and Indemnity. The Company will pay to the Trustee from time to time reasonable compensation for its services as the Company and Trustee shall from time to time agree in writing. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or disbursements and advances made by it, including costs of collection, in addition to the compensation for its services. Those expenses will include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Company will indemnify the Trustee against any and all loss, claim, damage, liability or expense (including reasonable attorneys’ fees) incurred by it in connection with the administration of the trust created by this Indenture and the performance of its duties under this Indenture. The Trustee will notify the Company

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promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company of its obligations under this Section. The Company will defend the claim and the Trustee may have separate counsel and the Company will pay the fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. The Company need not reimburse any expense or indemnify against any loss, expense or liability incurred by the Trustee to the extent it is due to the Trustee’s own willful misconduct, negligence or bad faith.

To secure the Company’s obligation to make payments to the Trustee under this Section 7.7, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, other than money or property held in trust to pay principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest on, the Notes.

When the Trustee incurs expenses or renders services after an Event of Default specified in clause (j) or (k) of Section 6.1 occurs, the expenses and the compensation for the services of the Trustee are intended to constitute expenses of administration under any Bankruptcy Law.

For purposes of this Section 7.7, “Trustee” will include any predecessor Trustee, but the willful misconduct, negligence or bad faith of any Trustee will not affect the rights of any other Trustee under this Section 7.7.

The provisions of this Section 7.7 shall survive the termination of this Indenture.

Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Holders of a majority in aggregate principal amount of the Notes then outstanding may remove the Trustee by so notifying the Trustee and the Company and may appoint a successor Trustee. The Company may remove the Trustee if:

(s) the Trustee fails to comply with Section 7.10;

(t) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

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

(v) the Trustee becomes incapable of acting.

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

No removal or appointment of a Trustee will be valid if that removal or appointment would conflict with any law applicable to the Company.

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A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee will, subject to the lien provided for in Section 7.7, transfer all property held by it as a Trustee to the successor Trustee, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee will mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the expense of the Company), the Company or the Holders of a majority in aggregate principal amount of the Notes then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.7 will continue for the benefit of the retiring Trustee.

Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another Person, the resulting, surviving or transferee Person will, without any further act, be the successor Trustee.

If at the time a successor by merger, conversion or consolidation to the Trustee succeeds to the trusts created by this Indenture any of the Notes have been authenticated but not delivered, the successor to the Trustee may adopt the certificate of authentication of the predecessor Trustee, and deliver the Notes which were authenticated by the predecessor Trustee; and if at that time any of the Notes have not been authenticated, the successor to the Trustee may authenticate those Notes either in the name of the predecessor or in its own name as the successor to the Trustee; and in either case the certificates of authentication will have the full force provided in this Indenture for certificates of authentication.

Eligibility; Disqualification. The Trustee will at all times satisfy the requirements of TIA Section 310(a). The Trustee will at all times have a combined capital and surplus of at least $50 million as set forth in its most recently published annual report of condition, which will be deemed for this paragraph to be its combined capital and surplus. The Trustee will comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9).

Preferential Collection of Claims. The Trustee will comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed will be subject to TIA Section 311(a) to the extent indicated.

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ARTICLE VIII.

DISCHARGE OF INDENTURE

Termination of the Company’s Obligations. When (1) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated (other 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, whether on the Maturity Date or any Redemption Date, Fundamental Repurchase Date, Option Repurchase Date or Conversion Date, and the Company shall deposit with the Trustee, in trust, monies (and, if applicable in accordance with Article XI with respect to such Notes that have become due upon conversion, shares of Class A Common Stock) sufficient to pay at the Maturity Date, Redemption Date, Fundamental Repurchase Date, Option Repurchase Date or Conversion Date, as applicable, cash and (in the case of conversion) shares of the Class A Common Stock sufficient to pay all of the outstanding Notes and paying all other sums which will become due with regard to all Notes theretofore authenticated (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) and not theretofore canceled or delivered to the Trustee for cancellation, or the date on which the consideration due upon conversion is, in accordance with Article XI, due, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect with respect to the Notes (except as to (i) remaining rights of registration of transfer, substitution and exchange of Notes, (ii) rights hereunder of Holders to receive payments of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and interest 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 under this 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 8.3 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to the Notes; 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 this Indenture or the Notes.

Application of Trust Money. Subject to Section 8.4, the Trustee will hold in trust money deposited with it pursuant to Section 8.1. It will apply the deposited money through the Paying Agent and in accordance with this Indenture to the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on the Notes with regard to which the money were deposited.

Officers’ Certificate; Opinion of Counsel. Upon any application or demand by the Company to the Trustee to take any action under Section 8.1, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the 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.

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Each such Officers’ Certificate and Opinion of Counsel provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant pursuant to the previous paragraph shall comply with the provisions of Section 13.5.

Reinstatement. If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 8.2 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture shall be revived and reinstated with respect to the Notes as though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.2; provided, however, that if the Company makes any payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest on, any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX.

MODIFICATION OF THE INDENTURE

Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Notes without notice to or consent of any Holder:

(a) to cure any ambiguity, defect or inconsistency that does not adversely affect the rights of any Holder;

(b) to make any change that does not adversely affect the rights of any Holder;

(c) to provide for the assumption by a successor corporation of our obligations under the Indenture;

(d) to add guarantees, or to secure the obligations of the Company, with respect to the Notes;

(e) to add to the covenants of the Company in this Indenture for the benefit of Holders;

(f) to conform, as necessary, the Indenture and the form or terms of the Notes to the description thereof contained under the caption “Description of the Notes” in the preliminary offering memorandum of the Notes dated April 27, 2010, as supplemented by the related pricing term sheet dated April 27, 2010;

(g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes; or

(h) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary for this Indenture to comply with any requirement of the SEC in connection with qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted.

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With Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Notes without notice to any Holder but with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. The Holders of a majority in principal amount of the Notes then outstanding may waive compliance by the Company with any provision of this Indenture or the Notes without notice to any Holder. However, without the consent of the Holder so affected, no amendment, supplement or waiver, including a waiver pursuant to Section 6.4, may:

(i) extend the Maturity Date of any Note;

(j) reduce the rate or extend the time for payment of interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on any Note;

(k) reduce any principal amount of any Note, the Redemption Price, the Option Purchase Price or Fundamental Change Repurchase Price, or change the time at which or circumstances under which the Notes may or shall be repurchased or redeemed;

(l) impair the right of any Holder to receive payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and interest on, such Holder’s Notes on or after the due dates therefore or to institute suit for the enforcement of any payment of any Note;

(m) change the currency in which any Note is payable;

(n) adversely affect the repurchase option of a Holder or the conversion rights of any Note under Article XI, or reduce the number of shares of the Class A Common Stock or any other property receivable upon conversion of any Note in accordance with Article XI;

(o) modify the redemption provisions of this Indenture in a manner adverse to the Holders;

(p) modify the provisions of this Indenture with respect to amendments, modifications or waivers (including waiver of a Default or an Event of Default), except to increase the percentage required for an amendment, modification or waiver or to provide for the consent of each affected Holder;

(q) reduce the percentage of Notes required to consent to an amendment, supplement or waiver;

(r) make any change in Section 6.4 or 6.8 or the second sentence of this Section; or

(s) release any Guarantor except as provided in Article X hereof.

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Notwithstanding anything to the contrary in this Indenture, without the consent of Holders of all of the Notes then outstanding, no amendment, supplement or waiver, including a waiver pursuant to Section 6.4, may reduce the percentage of Notes required to consent to an amendment, supplement or waiver.

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

Form of Amendment. After an amendment under this Article IX becomes effective, the Company will mail to the Holders a notice briefly describing the amendment. The failure to give such notice to all Holders, or any defect in a notice, will not impair or affect the validity of an amendment under this Section.

Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes will comply with the TIA as then in effect.

Revocation and Effect of Consents. A consent to an amendment, supplement or waiver by a Holder will bind the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to the Holder’s Note or portion of a Note. For a revocation to be effective, the Trustee must receive notice of the revocation before the date the amendment, supplement or waiver becomes effective. After an amendment, supplement or waiver becomes effective in accordance with its terms, it will bind every Holder of every Note.

Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of the Notes, the Trustee may require the Holder of a Note to deliver the Holder’s Note to the Trustee, who will place an appropriate notation about the amendment, supplement or waiver on the Note and will return it to the Holder. Alternatively, the Company may, in exchange for the Note, issue, and the Trustee will authenticate, a new Note that reflects the amendment, supplement or waiver.

Trustee to Sign Amendments, etc. The Trustee will sign any amendment, supplement or waiver authorized pursuant to Article II or this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does adversely affect those rights, liabilities or immunities, the Trustee may but need not sign it. The Company may not sign an amendment or supplement until the amendment or supplement is approved by an appropriate Board Resolution.

In signing such amendment the Trustee shall receive indemnity reasonably satisfactory to it and shall receive, and shall be fully protected in relying upon, in addition to the documents required by Section 13.4, an Officers’ Certificate and an Opinion of Counsel each stating that such amendment is authorized or permitted by this Indenture and the TIA.

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ARTICLE X.

GUARANTEE OF NOTES

Unconditional Guarantee. Each Guarantor, if any, hereby jointly and severally, unconditionally and irrevocably guarantees (such guarantee to be referred to herein as a “Guarantee”) to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, that: (a) all amounts due with respect to the Notes shall be duly and punctually paid in full when due, whether upon conversion, at maturity, by acceleration or otherwise, and interest on the overdue principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Company or the Guarantors to the Holders or the Trustee hereunder or thereunder and all other obligations shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Company to the Holders under this Indenture or under the Notes, for whatever reason, each Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under each Guarantee, and shall entitle the Holders of Notes to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the obligations of the Company.

Each of the Guarantors hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, any release of any other Guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not a Guarantee is affixed to any particular Note, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each of the Guarantors hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and each Guarantee. Each Guarantee is a guarantee of payment and not of collection. Each Guarantor further agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (a) subject to this Article X, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of each Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of each Guarantee.

No stockholder, officer, director, employee or incorporator, past, present or future, of any Guarantor, as such, shall have any personal liability under any Guarantee by reason of his, her or its status as such stockholder, officer, director, employee or incorporator.

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Each Guarantor that makes a payment or distribution under its Guarantee shall be entitled to a contribution from each other Guarantor in an amount pro rata, based on the net assets of each Guarantor, determined in accordance with GAAP.

Limitations on Guarantees; Release or Suspension of Particular Guarantors’ Obligations. The obligations of each Guarantor under its Guarantee will be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

If any Guarantor is released from its guarantee of the outstanding Indebtedness of the Company or any other Subsidiary, such Guarantor shall be automatically released from its obligations as Guarantor, and from and after such date, such Guarantor shall cease to constitute a Guarantor and a Restricted Subsidiary.

The obligations of a Guarantor will be automatically suspended, and such Guarantor shall not constitute a guarantor and shall not have any obligations with regard to the Notes, during any period when the principal amount of the Company’s obligations and any Restricted Subsidiary’s obligations as a guarantor of the Company’s obligations, in each case other than the Notes and other Indebtedness containing provisions similar to this, that the Guarantor is guaranteeing total less than $75 million.

Execution and Delivery of Guarantee. To further evidence the Guarantee set forth in Section 10.1, each Guarantor hereby agrees to execute and deliver to the Trustee a Guarantee in substantially the form of Exhibit D hereto. Such Guarantee shall be executed on behalf of each Guarantor by either manual or facsimile signature of an officer or agent of each Guarantor, each of whom, in each case, shall have been duly authorized to so execute by all requisite corporate action. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any Note or Notes.

If an officer or agent of a Guarantor whose signature is on this Indenture or a Guarantee no longer holds that office at the time the Trustee authenticates a Note to which such Guarantee relates or at any time thereafter, such Guarantor’s Guarantee of such Note shall be valid nevertheless.

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

Release of a Guarantor due to Extraordinary Events. If no Default exists or would exist under this Indenture, upon the sale or disposition of all or substantially all of the assets of a Guarantor, or all of the Capital Stock of a Guarantor (including by consolidation, merger, issuance or otherwise), by the Company or a Subsidiary of the Company, or upon the consolidation or merger of a Guarantor with or into any Person (in each case, other than to the

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Company or an Affiliate of the Company or a Subsidiary), or if any Guarantor is dissolved or liquidated, such Guarantor and each Subsidiary of such Guarantor that is also a Guarantor, or the Person acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor), shall be deemed automatically and unconditionally released and discharged from all of its obligations under this Article X without any further action required on the part of the Trustee or any Holder.

The Trustee shall execute any documents reasonably requested by the Company or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Guarantee of the Notes under this Article X.

Nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.

Waiver of Subrogation. Until this Indenture is discharged and all of the Notes are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company’s obligations under the Notes or this Indenture and such Guarantor’s obligations under its Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of Notes under the Notes, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and applied to the obligations in favor of the Trustee or the Holders, as the case may be, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.5 is knowingly made in contemplation of such benefits.

No Set-Off. Each payment to be made by a Guarantor hereunder in respect of the Obligations shall be payable in the currency or currencies in which such Obligations are denominated, and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Obligations Absolute. The obligations of each Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by each Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof.

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Obligations Continuing. The obligations of each Guarantor hereunder shall be continuing and shall remain in full force and effect until all the obligations have been paid and satisfied in full. Each Guarantor agrees with the Trustee that it will from time to time deliver to the Trustee suitable acknowledgments of its continued liability hereunder and under any other instrument or instruments in such form as counsel to the Trustee may advise and as will prevent any action brought against it in respect of any default hereunder being barred by any statute of limitations now or hereafter in force and, in the event of the failure of a Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and agent of such Guarantor to make, execute and deliver such written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Guarantor hereunder.

Obligations Not Reduced. Except as otherwise provided in Sections 10.2 and 10.4, the obligations of each Guarantor hereunder shall not be satisfied, reduced or discharged except solely by the payment of such principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, interest, fees and other monies or amounts as may at any time prior to discharge of this Indenture pursuant to Article VIII be or become owing or payable under or by virtue of or otherwise in connection with the Notes or this Indenture.

Obligations Reinstate. The obligations of each Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of any Guarantor hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of a Guarantor) is rescinded or reclaimed from the Trustee or any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Company or any Guarantor or otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such Indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein.

Obligations Not Affected. Except as otherwise provided in Sections 10.2 and 10.4, the obligations of each Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by any Guarantor or any of the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against any Guarantor hereunder or might operate to release or otherwise exonerate any Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including, without limitation:

(a) any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other Person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding up or other proceeding involving or affecting the Company or any other Person;

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(b) any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Company or any other Person under this Indenture, the Notes or any other document or instrument;

(c) any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Notes, or to give notice thereof to a Guarantor;

(d) the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other Person or their respective assets or the release or discharge of any such right or remedy;

(e) the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;

(f) any change in the time, manner or place of payment of, or in any other term of, any of the Notes, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Notes or this Indenture, including, without limitation, any increase or decrease in any amount due with respect to any of the Notes;

(g) any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or a Guarantor;

(h) any merger or amalgamation of the Company or a Guarantor with any Person or Persons;

(i) the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Obligations or the obligations of a Guarantor under its Guarantee; and

(j) any other circumstance (other than by complete, irrevocable payment) that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Notes or of a Guarantor in respect of its Guarantee hereunder.

Waiver. Without in any way limiting the provisions of Section 10.1 hereof, each Guarantor hereby waives notice of acceptance hereof, notice of any liability of any Guarantor hereunder, notice or proof of reliance by the Holders upon the obligations of any Guarantor hereunder, and diligence, presentment, demand for payment on the Company, protest, notice of dishonor or non-payment of any of the Obligations, or other notice or formalities to the Company or any Guarantor of any kind whatsoever.

No Obligation to Take Action Against the Company. Neither the Trustee nor any other Person shall have any obligation to enforce or exhaust any rights or remedies or to take any other steps under any security for the Obligations or against the Company or any other Person or any Property of the Company or any other Person before the Trustee is entitled to demand payment and performance by any or all Guarantors of their liabilities and obligations under their Guarantees or under this Indenture.

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Dealing with the Company and Others. The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Guarantor hereunder and without the consent of or notice to any Guarantor, may:

(k) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;

(l) take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;

(m) release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by this Indenture or the Notes;

(n) accept compromises or arrangements from the Company;

(o) apply all monies at any time received from the Company or from any security upon such part of the Obligations as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and

(p) otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.

Default and Enforcement. If any Guarantor fails to pay in accordance with Section 10.1 hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of the Guarantee of any such Guarantor and such Guarantor’s obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from such Guarantor the obligations.

Amendment, etc. No amendment, modification or waiver of any provision of this Indenture relating to any Guarantor or consent to any departure by any Guarantor or any other Person from any such provision will in any event be effective or affect the obligation of any other Guarantor unless it is signed by such Guarantor and the Trustee.

Acknowledgment. Each Guarantor hereby acknowledges communication of the terms of this Indenture and the Notes and consents to and approves of the same.

Costs and Expenses. Each Guarantor shall pay on demand by the Trustee any and all costs, fees and expenses (including, without limitation, legal fees) incurred by the Trustee, its agents, advisors and counsel or any of the Holders in enforcing any of their rights under any Guarantee.

No Merger or Waiver; Cumulative Remedies. No Guarantee shall operate by way of merger of any of the obligations of a Guarantor under any other agreement, including, without limitation, this Indenture. No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under the Notes or the Guarantees, shall operate as a waiver thereof; nor shall any single or partial exercise of any right,

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remedy, power or privilege hereunder or under this Indenture or the Notes or the Guarantees preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges in the Guarantee and under this Indenture, the Notes and any other document or instrument between a Guarantor and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Survival of Obligations. Without prejudice to the survival of any of the other obligations of each Guarantor hereunder, the obligations of each Guarantor under Section 10.1 shall survive until the indefeasible payment in full of the Obligations and shall be enforceable against such Guarantor without regard to and without giving effect to any defense, right of offset or counterclaim available to or which may be asserted by the Company or any Guarantor.

Guarantee in Addition to Other Obligations. The obligations of each Guarantor under its Guarantee and this Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them.

Severability. Any provision of this Article X which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Indenture and this Article X.

Successors and Assigns. Each Guarantee shall be binding upon and inure to the benefit of each Guarantor and the Trustee and the Holders and their respective successors and permitted assigns, except that no Guarantor may assign any of its obligations hereunder or thereunder.

Acknowledgement under TIA. Each Guarantor acknowledges that, by virtue of its Guarantee, it is becoming an “obligor” on indenture securities under the TIA.

ARTICLE XI.

CONVERSION

General.

(a) Subject to the provisions of Article III and this Article XI, the Notes shall be convertible, in integral multiples of $1,000 principal amount into shares of Class A Common Stock in accordance with this Article XI at any time prior to the close of business on the Trading Day immediately preceding the Maturity Date at an initial conversion rate of 36.1827 shares of Class A Common Stock (the “Conversion Rate”) per $1,000 principal amount of Notes. The Conversion Rate shall be subject to adjustment in accordance with Sections 11.5 through 11.12.

(b) A Holder may convert a portion of the principal amount of a Note if such portion is $1,000 principal amount or an integral multiple of $1,000 principal amount. Provisions of this Indenture that apply to conversion of all of a Note also apply to conversion of a portion of such Note.

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Conversion Procedure and Payment Upon Conversion.

(c) If a Note is tendered for conversion in accordance with this Article XI, then:

(i) the Company shall deliver, or cause to be delivered, to the Holder of such Note a number of shares of Class A Common Stock equal to the product of the principal amount of such Note (expressed in thousands) and the Conversion Rate in effect on the Conversion Date of such conversion; provided, however, that if such product is not a whole number, then the Company will pay a cash amount in lieu of issuing any fractional share, which cash amount shall be based on the Last Reported Sales Price per share of Class A Common Stock on the Trading Day immediately preceding such Conversion Date (such number of shares and such cash amount, together, the “Conversion Consideration”);

(ii) except as provided in Section 11.9 or Section 11.12(j), the Conversion Consideration due upon such conversion shall be delivered by the Company on the third (3rd) Trading Day following the Conversion Date of such conversion;

(iii) the Person in whose name the shares of Class A Common Stock constituting the Conversion Consideration due upon such conversion shall be treated as a stockholder of record of such shares as of the close of business on the Conversion Date of such conversion, and either stock certificates shall be delivered, or a book-entry transfer through the Depositary shall be made, to such Person for such shares of Class A Common Stock; and

(iv) on and after the Conversion Date for such conversion, all rights of the Holder(s) of such Note with respect to such Note shall terminate, other than the right to receive the Conversion Consideration due upon such conversion in accordance with this Indenture.

(d) To convert a Note that is a Physical Note, a Holder must do each of the following:

(i) complete and manually sign the Conversion Notice on the back of the Note, or a facsimile of the Conversion Notice, and deliver such Conversion Notice to the Conversion Agent;

(ii) surrender the Note to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) pay all transfer or similar taxes, if any, as required by Section 11.3; and

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(v) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in clause (c) of this Section 11.2.

If a Holder’s interest in a Note is a beneficial interest in a Global Note, in order to convert the Holder must comply with the last three requirements listed above for conversions of Physical Notes and comply with the Depositary’s procedures for converting a beneficial interest in a Global Note.

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 above in this clause (b) with respect to such Note. From and after the Conversion Date, such Note shall cease to be outstanding, and interest, if any, shall cease to accrue on such Note unless there shall be a Default in the payment or delivery of the Conversion Consideration payable hereunder upon such conversion; provided, however, that an exchange in lieu of conversion in accordance with Section 11.13 shall not be deemed to be a conversion for purposes of this paragraph.

A Holder may obtain copies of the required form of Conversion Notice from the Conversion Agent.

(e) Upon conversion of a Note in accordance with this Article XI, the Holder of such Note shall not be entitled to receive, on account of such conversion, any separate cash payment for accrued and unpaid interest, except as provided in the immediately following sentence. The Company’s delivery of the Conversion Consideration due upon any conversion of a Note will be deemed to satisfy in full the Company’s obligation to pay (i) the principal amount of such Note, and (ii) accrued and unpaid interest to, but excluding, the Conversion Date of such conversion. As a result, accrued and unpaid interest to, but excluding, such Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. If a Holder surrenders a Note for conversion after the close of business on an Interest Record Date and prior to the opening of business on the immediately following Interest Payment Date, then, notwithstanding such conversion, the interest payable with respect to such Note on such Interest Payment Date shall be paid on such Interest Payment Date to the Holder of record of such Note at the close of business on such Interest Record Date; provided, however, that such Note, when surrendered for conversion, must be accompanied by payment to the Conversion Agent on behalf of the Company of an amount equal to the interest payable on such Interest Payment Date on the portion of such Note to be so converted, except that no such payment is required (i) if the Company shall have specified a Redemption Date or Fundamental Change Repurchase Date that is after such Interest Record Date and on or prior to such Interest Payment Date, (ii) if the Conversion Date for such conversion is after the Interest Record Date that immediately precedes the Maturity Date, or (iii) to the extent of any Defaulted Interest, if any Defaulted Interest exist as of the Conversion Date (it being understood that nothing in this Section 11.2(c) shall affect the Company’s obligations under Section 4.1).

(f) If a Holder converts more than one Note at the same time, the number of full shares of Class A Common Stock issuable, if any, upon such conversion shall be based on the total principal amount of all Notes converted.

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(g) Upon surrender of a Note that is converted in part, the Trustee shall authenticate for the Holder a new Note equal in principal amount to the unconverted portion of the Note surrendered.

(h) If the last day on which a Note may be converted is not a Business Day, then the Note may be surrendered to that Conversion Agent on the next succeeding day that is a Business Day.

Taxes On Conversion. If a Holder converts its Note, the Company shall pay any documentary, stamp or similar issue or transfer tax or duty due on the issue, if any, of shares of Class A Common Stock upon such conversion, unless the tax is due because such Holder requests any such shares to be issued in a name other than such Holder’s name, in which case such Holder shall pay such tax. Nothing herein shall preclude any tax withholding required by law or regulation.

Company to Provide Stock. The Company shall at all times reserve out of its authorized but unissued Class A Common Stock or Class A Common Stock held in its treasury enough shares of Class A Common Stock to permit the conversion, in accordance herewith, of all of the Notes into shares of Class A Common Stock.

All shares of Class A Common Stock which may be issued upon conversion of the Notes shall be validly issued, fully paid and non-assessable and shall be free of preemptive or similar rights and free of any lien or adverse claim.

The Company shall comply with all securities laws regulating the offer and delivery of shares of Class A Common Stock upon conversion of Notes.

Conversion Rate Adjustments. The Conversion Rate shall be subject to adjustment from time to time only as set forth below; provided, however, that the Company shall not make any adjustments to the Conversion Rate if Holders participate (as a result of holding the Notes, and at the same time as the holders of the Class A Common Stock participate) in any of the transactions described below as if such Holders held a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to the event that otherwise would result in a Conversion Rate adjustment, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder, without having to convert their notes.

(i) If the Company issues shares of Class A Common Stock as a dividend or distribution on shares of Class A Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

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where,

CR(0) = the Conversion Rate in effect immediately prior to the close of business on the Class A Record Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be;

CR’ = the new Conversion Rate in effect immediately after the close of business on the Class A Record Date for such dividend or distribution, or immediately after the open of business on the effective date of such share split or share combination, as the case may be;

OS(0) = the number of shares of the Class A Common Stock outstanding immediately prior to the close of business on the Class A Record Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be; and

OS’ = the number of shares of the Class A Common Stock outstanding immediately after the close of business on the Class A Record Date for such dividend or distribution, or immediately after the effective date of such share split or share combination, as the case may be, after giving effect to such dividend or distribution.

Any adjustment made pursuant to this Section 11.5(a) shall become effective immediately after (x) the close of business on the Class A Record Date for such dividend or distribution or (y) the open of business on the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in Section 11.5(a) is declared but not so paid or made, the new Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(j) If the Company distributes to all or substantially all holders of Class A Common Stock any rights or warrants entitling them to purchase, for a period of not more than 45 days after the declaration date for the distribution, shares of Class A Common Stock at a price per share less than the average of the Last Reported Sale Prices of Class A Common Stock for the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the declaration date for such distribution, the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to their expiration):

where,

CR(0) = the Conversion Rate in effect immediately prior to the close of business on the Class A Record Date for such distribution;

CR’ = the new Conversion Rate in effect immediately after the close of business on the Class A Record Date for such distribution;

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OS(0) = the number of shares of the Class A Common Stock outstanding immediately prior to the close of business on the Class A Record Date for such distribution;

X = the total number of shares of the Class A Common Stock issuable pursuant to such rights or warrants; and

Y = the number of shares of the Class A Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period ending on, and including the Trading Day immediately preceding the Declaration Date for such distribution.

To the extent such rights or warrants are not exercised prior to their expiration or termination, 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 the delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, then the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if the date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. For the purposes of this Section 11.5(b) in determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of the Class A Common Stock at less than the Last Reported Sale Price per share of the Class A Common Stock on the Trading Day immediately preceding the declaration date of such distribution, and in determining the aggregate exercise price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable upon exercise thereof, with the value of such consideration, if other than cash, as shall be determined in good faith by the Board of Directors.

Any increase made under this Section 11.5 (b) will be made successively whenever any such rights or warrants are distributed and shall become effectively immediately after the close of business on the Class A Record Date. If any right or warrant described in this Section 11.5(b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of the Class A common stock actually delivered. If such rights or warrants are not so distributed, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to distribute such rights or warrants, to the Conversion Rate that would then be in effect if the Class A Record Date for the distribution had not occurred.

(k) If the Company distributes shares of capital stock, evidences of the Company’s indebtedness or other assets or property or rights, options or warrants to acquire the Company’s capital stock or other securities, to all or substantially all holders of Class A Common Stock, excluding:

(i) dividends, distributions, rights or warrants as to which such an adjustment was effected pursuant to Section 11.5(b);

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(ii) dividends or distributions paid exclusively in cash as to which such an adjustment was effected pursuant to Section 11.5(d) below; and

(iii) spin-offs to which the provisions set forth below in this Section 11.5(c) shall apply,

(any of such shares of Capital Stock, evidences of indebtedness or other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate will be adjusted based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the close of business on the Class A Record Date for such distribution;

CR’ = the new Conversion Rate in effect immediately after the close of business on the Class A Record Date for such distribution;

SP(0) = the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period ending on, and including the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined in good faith by the Board of Directors) of the shares of capital stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of the Class A Common Stock on the Ex-Dividend Date for such distribution.

If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 11.5(c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP(0)” (as defined above), in lieu of the foregoing increase, each Holder shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Class A Common Stock receive the Distributed Property, the amount of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Class A Record Date for the distribution.

Such adjustment shall become effective immediately after the Class A Record Date for the applicable distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

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With respect to an adjustment pursuant to this Section 11.5(c) where there has been a payment of a dividend or other distribution on the Class A Common Stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit that are, or when issued, will be, traded on a U.S. national securities exchange, referred to as a “spin-off,” the conversion Rate will be increased based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the tenth Trading Day immediately following, and including, the effective date of the spin-off;

CR’ = the new Conversion Rate in effect immediately after the tenth Trading Day immediately following, and including, the effective date of the spin-off;

FMV(0) = the average of the Last Reported Sale Prices of the capital stock or similar equity interest distributed to holders of the Class A Common Stock applicable to one share of the Class A Common Stock over the first ten consecutive Trading Day period immediately following, and including, the effective date of the spin-off; and

MP(0) = the average of the Last Reported Sale Prices of the Class A Common Stock over the first ten consecutive Trading Day period immediately following, and including, the effective date of the spin-off.

Such adjustment to the conversion rate pursuant to this Section 11.5(c) shall become effective immediately after the tenth Trading Day immediately following, and including, the effective date of the spin-off; provided that, for purposes of determining the Conversion Rate in respect of any conversion during the ten Trading Days following the effective date of any spin-off, references within the portion of this Section 11.5(c) related to “spinoffs” to ten trading days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the effective date of such spin-off and the relevant Conversion Date.

For purposes of this Section 11.5(c) (and subject in all respect to Section 11.11), rights, options or warrants distributed by the Company to all holders of its Class A Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Class A Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Class A Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Class A Common Stock, shall be deemed not to have been distributed for purposes of this Section 11.5(c) (and no adjustment to the Conversion Rate under this Section 11.5(c) will be required) until the occurrence of the

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earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 11.5(c). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Class A Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 11.5(c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Class A Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Class A Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 11.5(a), Section 11.5(b) and this Section 11.5(c), any dividend or distribution to which this Section 11.5(c) is applicable that also includes one or both of:

(A) a dividend or distribution of shares of Class A Common Stock to which Section 11.5(a) is applicable (the “Clause A Distribution”); or

(B) a dividend or distribution of rights, options or warrants to which Section 11.5(b) is applicable (the “Clause B Distribution”),

then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 11.5(c) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 11.5(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 11.5(a) and Section 11.5(b) with respect thereto shall then be made, except that, if determined by the Company (I) the “Class A Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Class A Record Date of the Clause C Distribution and (II) any shares of Class A Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Class A Record Date or effective date” within the meaning of Section 11.5(a) or “outstanding immediately prior to the open of business on such Class A Record Date” within the meaning of Section 11.5(b).

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(l) If any cash dividend or distribution is made to all or substantially all holders of the Class A Common Stock (excluding any regular quarterly cash dividend on the Class A Common Stock to the extent that the aggregate amount of such regular quarterly cash dividend per share of the Class A Common Stock does not exceed $0.04 for the relevant quarterly period) ($0.04 being the “Reference Dividend Amount”), the Conversion Rate will be adjusted based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the close of business on the Class A Record Date for such dividend or distribution;

CR’ = the new Conversion Rate in effect immediately after the close of business on the record date for such dividend or distribution;

SP(0) = the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

C = the amount in cash per share the Company distributes to holders of Class A Common Stock that exceeds the Reference Dividend Amount.

Such an adjustment to the conversion rate made pursuant to this Section 11.5(d) shall become effective immediately after the close of business on the Class A Record Date for the applicable dividend or distribution. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP(0)” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Class A Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate on the Class A Record Date for such cash dividend or distribution. If any dividend or distribution described in this Section 11.5(d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

The Reference Dividend Amount shall be subject to adjustment in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment shall be made to the Reference Dividend Amount for any adjustment to the Conversion Rate pursuant to this Section 11.5(d).

Notwithstanding the foregoing, if an adjustment is required to be made under this Section 11.5(d) as a result of a distribution that is not a regular quarterly dividend, the Reference Dividend Amount will be deemed to be zero.

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(m) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for Class A Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Class A Common Stock exceeds the Last Reported Sale Price of the Class A Common Stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate will be increased based on the following formula:

where,

CR(0) = the Conversion Rate in effect at the close of business on the last Trading Day of the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires;

CR’ = the new Conversion Rate in effect immediately after the close of business on the last Trading Day of the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires;

AC = the aggregate value of all cash and any other consideration (as determined in good faith by our board of directors) paid or payable for shares purchased in such tender or exchange offer;

OS(0) = the number of shares of the Class A Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer);

OS’ = the number of shares of the Class A Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); and

SP’ = the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires.

The adjustment to the Conversion Rate pursuant to this Section 11.5(e) shall become effective immediately after the close of business on the tenth Trading Day next succeeding the Conversion Date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Rate in respect of any conversion during the ten Trading Days following, and including, the Conversion Date that any tender or exchange offer expires, references within this Section 11.5(e) to ten Trading Days shall be deemed replaced with such lesser number of trading Days as have elapsed between the date such tender or exchange offer expires and the relevant Conversion Date. If the Company or one of its Subsidiaries is obligated to purchase Class A Common Stock pursuant to any such tender or exchange offer but are permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made.

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(n) Notwithstanding anything in this Section 11.5 to the contrary, if any dividend or distribution subject to Section 11.5(a), Section 11.5(c) or Section 11.5(d) is declared but not so paid or made, then the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(o) In addition to the foregoing adjustments in subsections (a), (b), (c), (d) and (e) above, the Company may, subject to any applicable stock exchange listing requirements, increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. Any such determination by the Board of Directors shall be conclusive. The Company may, in its sole discretion, increase the Conversion Rate as the Board of Directors deems advisable to avoid or diminish any income tax to holders of Class A Common Stock resulting from any dividend or distribution of Capital Stock (or rights to acquire Capital Stock) or from any event treated as such for tax purposes. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall mail to the Holder of each Note at its last address appearing on the Register a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(p) The Company shall not effect a share split or share combination of the Class B Common Stock, or make any dividend, distribution, payment on liquidation or other payment, whether in cash or shares or otherwise, to holders of Class B Common Stock, unless the Company effects an equivalent share split or share combination of the Class A Common Stock or makes an equivalent dividend, distribution, payment on liquidation or other payment to holders of Class A Common Stock, as the case may be, except that in the case of dividends or other distributions payable in Capital Stock of the Company other than the preferred stock of the Company, par value $10.00 per share, the Board of Directors may determine that the stock distributed with respect to the Class A Common Stock will be additional shares of the Class A Common Stock and the stock distributed with respect to the Class B Common Stock will be additional shares of Class B Common Stock.

No Adjustment.

(a) No adjustment to the Conversion Rate shall be made except as specifically set forth in this Article XI.

(b) No adjustment in the Conversion Rate pursuant to this Article XI shall be required unless the adjustment would require a change of at least one percent (1.0%) in the Conversion Rate. However, any adjustments which are not required to be made because they would have required an increase or decrease of less than one percent (1.0%) shall be carried forward and be made on the first to occur of (i) any subsequent adjustment, (ii) the first day of the next calendar year and (iii) any conversion of the Notes.

(c) Except as expressly provided in this Article XI, the Company shall not adjust the Conversion Rate for the issuance of shares of Class A Common Stock or any securities convertible into or exchangeable for shares of Class A Common Stock or the right to purchase shares of Class A Common Stock or such convertible or exchangeable securities; provided, however, that if the application of the Conversion Rate adjustment provisions of Section 11.5 would result in a decrease in the Conversion Rate, then no adjustment to the Conversion Rate shall be made (other than as a result of a share combination).

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(d) Without limiting the foregoing, the Conversion Rate will not be adjusted:

(i) upon the issuance of any shares of Class A Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Class A Common Stock under any plan;

(ii) upon the issuance of any shares of Class A Common Stock or options or rights to purchase shares of Class A Common Stock pursuant to any present or future employee, director or consultant benefit plan or program or employee stock purchase plan of or assumed by the Company or any of its Subsidiaries;

(iii) upon the issuance of any shares of Class A Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding clause and outstanding as of the date the Notes were first issued;

(iv) solely for a change in the par value of the Class A Common Stock; or

(v) for accrued and unpaid interest.

Notice of Adjustment. Whenever the Conversion Rate is adjusted, the Company shall mail, but with at least fifteen (15) calendar days notice if an adjustment to the Conversion Rate, to Holders at the addresses appearing on the Registrar’s books a notice of the adjustment and file with the Trustee an Officers’ Certificate briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence of the correctness of such adjustment.

Adjustment of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices or Stock Price over a span of multiple days (including the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Board of Directors shall make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Interest Record Date of the event occurs, at any time during the period when the Last Reported Sale Prices or Stock Prices are to be calculated.

Effect of Reclassifications, Consolidations, Mergers, Binding Share Exchanges or Sales on Conversion.

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(a) In the event of:

(i) any recapitalization, reclassification or change of the Class A Common Stock;

(ii) a consolidation, merger, binding share exchange or combination involving the Company;

(iii) a sale, lease or conveyance to another Person or entity of all or substantially all of the Company’s assets; or

(iv) any statutory share exchange,

in each case, in which the holders of Class A Common Stock would be entitled to receive stock, other securities, other property or assets (including cash or any combination thereof) for their Class A Common Stock (any such event, a “Merger Event”), then, at and after the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Merger Event and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture pursuant to Section 9.1(c) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Merger Event, the Conversion Consideration due pursuant to Section 11.2(a)(i) had such transaction not occurred shall instead be payable in such Reference Property such that (A) the number of shares of Class A Common Stock otherwise deliverable upon conversion of the Notes in accordance with Section 11.2(a)(i) shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Class A Common Stock would have been entitled to receive in such Merger Event, and (B) the Last Reported Sales Price per share of Class A Common Stock shall, for these purposes, be calculated based on the value of a unit of Reference Property that a holder of one (1) share of Common Stock would have been entitled to receive in such transaction.

(b) The supplemental indenture referred to in clause (a) of this Section 11.9 shall provide for adjustments of the Conversion Rate which shall be as nearly equivalent as may be practicable to the adjustments of the Conversion Rate provided for in this Article XI. The foregoing, however, shall not in any way affect the right a Holder of a Note may otherwise have, pursuant to Section 11.12, to receive rights or warrants upon conversion of a Note. If the Reference Property includes shares of stock or other securities and property of a Person other than the successor or purchasing Person, as the case may be, in such transaction, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors in good faith shall reasonably determine necessary by reason of the foregoing.

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(c) The provisions of this Section 11.9 shall similarly apply to successive consolidations, mergers, binding share exchanges, sales, transfers, leases, conveyances or dispositions.

(d) In the event the Company shall execute a supplemental indenture pursuant to this Section 11.9, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of Reference Property receivable by Holders of the Notes upon the conversion of their Notes after such transaction and any adjustments to the Conversion Rate to be made on account of such Transaction.

(e) In connection with any Merger Event, the Reference Dividend Amount shall be subject to adjustment as described in clause (A), clause (B) or clause (C) below, as the case may be.

(A) In the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to Section 11.9(a) above and excluding any dissenters’ appraisal rights) is composed entirely of shares of common stock (the “Merger Common Stock”), the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to (x) the Reference Dividend Amount immediately prior to the effective time of such Merger Event, divided by (y) the number of shares of Merger Common Stock that a holder of one share of Common Stock would receive in such Merger Event (such quotient rounded down to nearest cent).

(B) In the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to Section 11.9(a) above and excluding any dissenters’ appraisal rights) is composed in part of shares of Merger Common Stock, the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to (x) the Reference Dividend Amount immediately prior to the effective time of such Merger Event, multiplied by (y) the Merger Valuation Percentage for such Merger Event (such quotient rounded down to nearest cent).

(C) For the avoidance of doubt, in the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to subsection (a) above and excluding any dissenters’ appraisal rights) is composed entirely of consideration other than shares of common stock, the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to zero.

(f) For purposes of clause (e) of this Section 11.9, the following terms shall have the following meanings:

(i) The “Merger Valuation Percentage” for any Merger Event shall be equal to (x) the arithmetic average of the Last Reported Sale Prices of one share of such Merger Common Stock over the relevant Merger Valuation Period (determined as if references to “Common Stock” in the definition of “Last Reported Sale Price” were references to the “Merger Common Stock” for such Merger Event), divided by (y) the arithmetic average of the Last Reported Sale Prices of one share of Common Stock over the relevant Merger Valuation Period.

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(ii) The “Merger Valuation Period” for any Merger Event means the five consecutive Trading Day period immediately preceding, but excluding, the effective date for such Merger Event.

Trustee’s Disclaimer. The Trustee has no duty to determine when an adjustment under this Article XI should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of the correctness of any such adjustment, and shall be protected in relying upon, the Officers’ Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 13.5 hereof. The Trustee shall not be accountable for and makes no representation as to the validity or value of any securities or assets issued or delivered upon conversion of Notes, and the Trustee shall not be responsible for the failure by the Company to comply with any provisions of this Article XI. The Trustee has no duty to determine whether a supplemental indenture under Section 11.9 need be entered into or whether any provisions of any supplemental indenture are correct. Each Conversion Agent (other than the Company or an Affiliate of the Company) shall have the same protection under this Section 11.10 as the Trustee.

Rights Distributions Pursuant to Stockholders’ Rights Plans. Upon conversion of any Note or a portion thereof, the Company shall make provisions for the Holder thereof, to the extent such Holder is to receive any shares of Common Stock upon such conversion, to receive, in addition to, and concurrently with the delivery of, the Conversion Consideration otherwise payable hereunder upon such conversion, the rights described in any stockholder’s rights plan the Company may have in effect at such time, unless such rights have separated from the Class A Common Stock at the time of such conversion, in which case the Conversion Rate shall be adjusted upon such separation in accordance with Section 11.5(c). A further adjustment shall occur as described in Section 11.5(c) above if such rights become exercisable to purchase different securities, evidences of indebtedness, or assets, subject to readjustment in the event of the expiration, termination or redemption of such right.

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

(q) Notwithstanding anything in this Indenture or the Notes to the contrary, if the anticipated effective date of a Make-Whole Fundamental Change occurs prior to December 1, 2013, then the Conversion Rate applicable to each Note to be converted shall, if the applicable Conversion Notice therefor is received by the Conversion Agent at any time from, and including, the Trading Day following the effective date of such Make-Whole Fundamental Change to, and including, the thirty-fifth (35th) Trading Day immediately following the effective date of such Make-Whole Fundamental Change (or, if such Make-Whole Fundamental Change constitutes a Fundamental Change, until the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date), be increased to an amount equal to the Conversion Rate that would, but for this Section 11.12, otherwise apply to such Note pursuant to this Article XI, plus an amount equal to the Make-Whole Applicable Increase.

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For avoidance of doubt, the Conversion Consideration due upon a conversion of a Note to which this Section 11.12 applies shall be determined in accordance with Section 11.2(a)(i), based on the Conversion Rate as adjusted pursuant to this Section 11.12 (and any other applicable provisions of this Indenture), and paid in accordance with Section 11.2(a)(ii).

(r) As used herein, “Make-Whole Applicable Increase” shall mean, with respect to a Make-Whole Fundamental Change, the number of additional shares of Class A Common Stock to be added to the Conversion Rate per $1,000 principal amount of Notes, set forth in the table below, which corresponds to the date such Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed paid) per share of the Class A Common Stock in such Make-Whole Fundamental Change. If the holders of the Class A Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (c) of the definition of Change of Control, the Stock Price shall be the cash amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Class A Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change. The Board of Directors shall make appropriate adjustments to the Stock Price, 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 of the event occurs, during such five consecutive Trading Day period.

(s) The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The Make-Whole Applicable Increase set forth in the table below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 11.5.

(t) The following table sets forth the Make-Whole Applicable Increase to be received per $1,000 principal amount of Notes pursuant to this Section 11.12 for each Stock Price and Effective Date set forth below:

	Stock Price
Effective Date	$20.10		$22.50		$25.00		$27.50		$30.00		$32.50		$35.00		$37.50		$40.00		$42.50		$45.00		$50.00		$70.00
May 4, 2010		13.5685		10.7314		8.1291		6.2013		4.7604		3.6729		2.8464		2.2144		1.7318		1.3613		1.0789		0.7007		0.2959
December 1, 2010		13.5685		10.5463		7.8758		5.9129		4.4591		3.3739		2.5598		1.9475		1.4858		1.1396		0.8805		0.5484		0.2387
December 1, 2011		13.5685		10.0770		7.2595		5.2294		3.7615		2.6984		1.9294		1.3751		0.9780		0.6967		0.5013		0.2868		0.1483
December 1, 2012		13.5685		9.2652		6.1964		4.0677		2.6106		1.6326		0.9878		0.5745		0.3202		0.1749		0.1070		0.0880		0.0499
December 1, 2013		13.5685		8.2617		3.8173		0.1809		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000

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(u) The exact Stock Prices and Effective Dates may not be set forth in the table above, in which case:

(i) If the Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the Make-Whole Applicable Increase will be determined by straight-line interpolation between the Make-Whole Applicable Increase set forth for the higher and lower Stock Price amounts and the earlier and later Effective Dates, as applicable, based on a 365-day year.

(ii) If the Stock Price is in excess of $70.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), the Make-Whole Applicable Increase will be zero and the Conversion Rate will not be increased pursuant to this Section 11.12.

(iii) If the Stock Price is less than $20.10 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), the Make-Whole Applicable Increase will be zero and the Conversion Rate will not be increased pursuant to this Section 11.12.

(v) Notwithstanding the foregoing, in no event will the total number of shares of Class A Common Stock upon conversion exceed 49.7512 per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate.

(w) At least thirty (30) calendar days before the anticipated effective date of each proposed Make-Whole Fundamental Change, the Company shall mail to each Holder written notice of the anticipated effective date of such proposed Make-Whole Fundamental Change. Each such notice shall also state that, in connection with such Make-Whole Fundamental Change, if consummated, the Company shall increase, in accordance herewith, the Conversion Rate applicable to Notes entitled as provided herein to such increase (along with a description of how such increase shall be calculated and the time periods during which Notes must be surrendered in order to be entitled to such increase). No later than the third (3rd) Business Day after the Effective Date of each Make-Whole Fundamental Change, the Company shall mail to Holders written notice of such Effective Date and the Make-Whole Applicable Increase applicable to such Make-Whole Fundamental Change.

(x) For avoidance of doubt, the provisions of this Section 11.12 shall not affect or diminish the Company’s obligations, if any, pursuant to Article IV with respect to a Make-Whole Fundamental Change.

(y) Nothing in this Section 11.12 shall prevent an adjustment to the Conversion Rate pursuant to Section 11.5 in respect of a Make-Whole Fundamental Change.

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(z) Upon effectiveness of certain Make-Whole Fundamental Changes, the Notes will be convertible into Reference Property pursuant to Section 11.9. If the Company is required to increase the Conversion Rate by the Make-Whole Applicable Increase as a result of a Make-Whole Fundamental Change, Notes surrendered for conversion shall be settled as follows:

(i) If the date (the “Delivery Date”) on which the Company is otherwise required to deliver shares of Class A Common Stock upon conversion is prior to the Effective Date of such Make-Whole Fundamental Change, the Company shall settle such conversion by delivering the number of shares of Class A Common Stock based on the Conversion Rate, without regard to the Make-Whole Applicable Increase to be added to the Conversion Rate pursuant to this Section 11.12, on such Delivery Date. In addition, as soon as practicable following the Effective Date of such Make-Whole Fundamental Change, the Company shall deliver the increase in such amount of Class A Common Stock or of Reference Property deliverable in lieu of shares of Class A Common Stock as if the Conversion Rate had been increased by the Make-Whole Applicable Increase on the relevant Conversion Date (or, if applicable, during the related conversion reference period and based upon the related conversion value); or

(ii) If the Delivery Date related to Notes surrendered for conversion is on or following the Effective Date of such Make-Whole Fundamental Change, the Company shall settle such conversion based on the Conversion Rate as increased by the Make-Whole Applicable Increase to be added to the Conversion Rate pursuant to this Section 11.12 on such Delivery Date.

Exchange In Lieu of Conversion.

(aa) Notwithstanding anything in this Indenture or the Notes to the contrary, if a Holder surrenders any Note for conversion, the Company may, but is not obligated to, direct the Conversion Agent to surrender, on or prior to the second (2nd) Trading Day following the Conversion Date of such conversion, such Note to a financial institution designated by the Company (which may not be an Affiliate of the Company; provided that, for purposes of this Section 11.13, an “Affiliate” shall include any Person with direct or indirect ownership of ten percent (10%) or more of the equity of the Company or the power to directly or indirectly vote more than ten percent (10%) of the securities having ordinary voting power for the election of directors of the Company) (a “Financial Institution”) for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, such Financial Institution must agree to deliver, in exchange for such Notes, the Conversion Consideration due upon such conversion as prescribed by Section 11.2(a)(i) (the “Exchange Consideration”). By the close of business on the second (2nd) Trading Day immediately following such Conversion Date, the Company shall notify such Holder, the Trustee and the Conversion Agent that the Company has directed such Financial Institution to make an exchange in lieu of such conversion.

(bb) In order to accept such Note surrendered for conversion, the Financial Institution must agree to deliver, in exchange for such Note, the Exchange Consideration.

(cc) If such Financial Institution so accepts any such Note to be converted, then it shall deliver the Exchange Consideration in accordance with the Company’s instructions, and the Company shall deliver or cause to be delivered such Exchange Consideration to the applicable Holder, in each case within the time frames prescribed by Section 11.2(a)(ii). Each Note so exchanged by such Financial Institution shall remain outstanding.

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(dd) If such Financial Institution agrees to accept such Note for exchange but does not timely deliver the Exchange Consideration, or if such Financial Institution does not accept such Note for exchange, then the Company shall deliver, as promptly as practicable thereafter, the applicable Conversion Consideration as if the Company had not made an exchange election.

(ee) The Company shall not provide to the Financial Institution, directly or indirectly, any of such Exchange Consideration to be delivered by the Financial Institution in exchange for such Note.

(ff) In no event shall the Company’s designation of a Financial Institution pursuant to this Section 11.13 require such Financial Institution to accept any Notes for exchange. The Company shall not pay any consideration to, or otherwise enter into any agreement or arrangement with, a Financial Institution for or with respect to such designation pursuant to this Section 11.13.

Notice to Holders Prior to Certain Actions.

(gg) In case of any:

(i) action by the Company or one of its Subsidiaries that would require an adjustment in the Conversion Rate pursuant to Section 11.5 or Section 11.11; or

(ii) Merger Event; or

(iii) voluntary or involuntary dissolution, liquidation or winding-up of the Company or any of its Subsidiaries;

then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be mailed to each Holder at its address appearing on the Note Register, as promptly as possible but in any event at least 20 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Company or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Company or one of its Subsidiaries, or (ii) the date on which such Merger Event, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Merger Event, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company or one of its Subsidiaries, Merger Event, dissolution, liquidation or winding-up.

Calculation of Adjustments. All calculations and other determinations under this Article XI shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000^th) of a share.

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Section 11.2 Conversion Responsibilities of Trustee and Conversion Agent. The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment to the Conversion Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed herein or in any supplemental indenture in making the same, or whether a supplemental indenture need be entered into, or to perform any calculations hereunder. Neither the Trustee nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Class A Common Stock, or of any other securities or property or cash, that may at any time be issued or delivered upon the conversion of any Note; and it or they do not make any representation with respect thereto. Neither the Trustee, subject to the provisions of Section 7.1, nor any Conversion Agent shall be responsible for any failure of the Company to make or calculate any cash payment or to issue, transfer or deliver any shares of Class A Common Stock or share certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion; and the Trustee and any Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article XI.

ARTICLE XII.

CONTINGENT INTEREST AND TAX TREATMENT

Contingent Interest.

(a) The Company will pay additional interest (“Contingent Interest”) to Holders for each subsequent six-month period from, and including, June 1 to, and including, November 30 and from, and including, December 1 to, and including, May 31 (each, a “Contingent Interest Period”) commencing with the period beginning on December 1, 2013 and ending on May 31, 2014, if the Contingent Interest Trading Price of the Notes for the five-consecutive-Trading-Day period ending on the second Trading Day immediately preceding the first day of the applicable Contingent Interest Period (each, a “Contingent Interest Measurement Period”) equals or exceeds 120% of the principal amount of the Notes.

(b) The rate of Contingent Interest payable in respect of any such Contingent Interest Period will be equal to 0.50% per annum of the Contingent Interest Trading Price of the Notes during the Contingent Interest Measurement Period triggering the Contingent Interest payment under Section 12.1(a). Contingent Interest, if any, will accrue from the first day of any relevant Contingent Interest Period and be payable on the Interest Payment Date at the end of such Contingent Interest Period to Holders on the Interest Record Date relating to such Interest Payment Date. Contingent Interest, if any, shall be payable in addition to, and not in lieu of, regular interest in respect of the Notes (which shall continue to accrue at the stated rate of 2.00% per annum without regard to whether Contingent Interest is also payable) and any Additional Interest and Restricted Transfer Default Interest payable in respect of the Notes.

(c) Upon determination that Holders will be entitled to receive Contingent Interest which may become payable during a relevant Contingent Interest Period, the Company shall notify the Trustee and the Holders of the Notes upon such determination on or prior to the start of such Contingent Interest Period.

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(d) Notwithstanding anything to the contrary contained herein, amounts of Contingent Interest deposited with the Paying Agent shall be net of 30% of any Contingent Interest payments to be made to non-U.S. holders, which shall be withheld for U.S. federal income tax purposes, subject to reduction in such withholding rate by an applicable treaty or upon the receipt of a Form W-8ECI from a non-U.S. holder claiming that the payments are effectively connected with the conduct of a United States trade or business.

Tax Treatment. The Company hereby agrees and each Holder and any beneficial holder of a Note by its purchase of a Note hereby agrees (in the absence of administrative or judicial determination to the contrary):

(e) to treat the Notes as indebtedness of the Company for all U.S. federal income tax purposes;

(f) to treat the Notes as debt instruments that are subject to Treasury Regulation section 1.1275-4(b);

(g) to be bound by the Company’s application of Treasury Regulation section 1.1275-4(b), including the Company’s determination of the comparable yield and the projected payment schedule; and

(h) to treat the delivery of Class A Common Stock (or cash delivered in lieu of a fractional share) to a Holder of a Note upon conversion of such Note, as a contingent payment (in an amount equal to the sum of the fair market value of such Class A Common Stock and any cash received (as determined in good faith by the Board of Directors of the Company)) under Treasury Regulation section 1.1275-4(b).

Comparable Yield And Projected Payment Schedule.

(i) Solely for purposes of applying Treasury Regulation section 1.1275-4 to the Notes:

(i) for U.S. federal income tax purposes, the Company shall accrue interest with respect to outstanding Notes as original issue discount according to the “noncontingent bond method,” as set forth in Treasury Regulation section 1.1275-4(b), using a comparable yield of 7.5%, compounded semiannually, and the projected payment schedule as determined by the Company; and

(ii) the Company shall file with the Trustee promptly following the end of each calendar year (A) a written notice specifying the amount of original issue discount for U.S. federal income tax purposes accrued on outstanding Notes as of the end of such year and (B) such other specific information relating to such original issue discount that the Company determines to 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.

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(j) Set forth in Schedule II hereto is the projected payment schedule with respect to the Notes that includes the actual interest payments on the Notes and estimates of the amount and timing of Contingent Interest payments and a payment upon maturity of the Notes taking into account the fair market value of the Class A Common Stock that might be issued upon a conversion of the Notes.

ARTICLE XIII.

MISCELLANEOUS

TIA Controls.

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control; provided, however, that this Section 13.1 shall not of itself require that this Indenture or the Trustee be qualified under the TIA or constitute any admission or acknowledgment by any party hereto that any such qualification is required prior to the time this Indenture and the Trustee are required by the TIA to be so qualified.

Notices.

Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by facsimile, by telecopier or overnight courier guaranteeing next-day delivery or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Company or the Guarantors:

Lennar Corporation

700 N.W. 107th Avenue

Miami, Florida 33172

Attention: General Counsel

with a copy to:

K&L Gates LLP

599 Lexington Avenue

New York, NY 10022

Attention: David W. Bernstein

if to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway North

Jacksonville, FL 32256

Attention: Corporate Trust Administration

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Each of the Company and the Trustee by written notice to the other may designate additional or different addresses for notices to such Person. Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so delivered if hand delivered; when answered back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

Any notice or communication mailed to a Holder shall be mailed by first class mail, certified or registered return receipt requested, or by overnight courier guaranteeing next day delivery to its address as it appears on the registration books of the Registrar; provided that notices given to Holders holding Notes in book-entry form may be given through the facilities of the Depositary or any successor depository. Any notice or communication shall be mailed to any Person as described in TIA Section 313(c), to the extent required by the TIA.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If a party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Communications by Holders with Other Holders.

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

Certificate and Opinion as to Conditions Precedent.

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

(a) an Officers’ Certificate, in form and substance satisfactory to the Trustee, stating that, in the opinion of the signers, all conditions precedent to be performed, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent to be performed, if any, provided for in this Indenture relating to the proposed action have been complied with (which counsel, as to factual matters, may rely on an Officers’ Certificate).

Section 13.5 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, other than the Officers’ Certificate required by Section 4.4, shall include:

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

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

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

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

Rules by Trustee, Paying Agent, Registrar.

The Trustee may make reasonable rules in accordance with the Trustee’s customary practices for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

Legal Holidays.

If any Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date, Fundamental Change Repurchase Date, settlement date or other date on which payment is due falls on a day other than a Business Day, such payment shall be made on the next succeeding Business Day with the same force and effect as if made on the date that the relevant payment was due, and no interest shall accrue for the intervening period.

Governing Law.

- 86 -

THIS INDENTURE AND THE NOTES, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THE INDENTURE OR THE NOTES, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES THAT WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION. Each of the parties hereto agrees to submit to the jurisdiction of the courts of the State of New York sitting in the County of New York, or of the United States of America for the Southern District of New York in any action or proceeding arising out of or relating to this Indenture.

No Adverse Interpretation of Other Agreements.

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

No Personal Liability.

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

Successors. All agreements of the Company in this Indenture and the Notes shall bind their successors and permitted assigns. All agreements of the Trustee in this Indenture shall bind its successors and permitted assigns.

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

Severability. In case any one or more of the provisions in this Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

Calculations. Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under this Indenture. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock, accrued interest payable on the Notes (including Contingent Interest and Additional Interest, if any) and the Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders. Upon request from the Trustee, the Company shall provide a schedule of its calculations to the Trustee, and the Trustee is entitled to rely upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder upon the request of such Holder at the sole cost and expense of the Company.

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Waivers of Jury Trial. EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

[Signature page follows]

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

LENNAR CORPORATION
By:	/s/ Mark Sustana
	Name: Mark Sustana
	Title: Secretary and General Counsel

Authorized signatory for each of the Guarantors listed on Schedule I hereto
By:	/s/ Mark Sustana
	Name: Mark Sustana
	Title: Secretary and General Counsel

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Craig Kaye
	Name: Craig Kaye
	Title: Senior Associate

[Signature Page To Indenture]

EXHIBIT A

[FORM OF NOTE]

[INCLUDE THE FOLLOWING LEGEND IF A RESTRICTED SECURITY]

THE OFFER AND SALE OF THIS SECURITY AND ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR THERE TO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH LENNAR CORPORATION OR ANY AFFILIATE OF LENNAR CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO LENNAR CORPORATION OR ANY PARENT OR SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF LENNAR CORPORATION AND THE TRUSTEE FOR THIS SECURITY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

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THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $[1,000] PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS [MAY 4, 2010] AND THE COMPARABLE YIELD IS [7.5%], COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: LENNAR CORPORATION, 700 N.W. 107^TH AVENUE, MIAMI, FLORIDA 33172, ATTENTION: GENERAL COUNSEL.

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CUSIP No.: [            ]

LENNAR CORPORATION

2.00% CONVERTIBLE SENIOR NOTES DUE 2020

No. [            ] Initially $[            ]

Interest Rate:	2.00% per annum.
Interest Payment Dates:	June 1 and December 1, commencing December 1, 2010.
Interest Record Dates:	May 15 and November 15 preceding June 1 or December 1, respectively (whether or not such day is a Business Day).

Lennar Corporation, a Delaware corporation (the “Company,” which term includes any successor entities), for value received, promises to pay to [CEDE & CO.][            ] or registered assigns, on December 1, 2020, the principal sum as set forth in the “Schedule of Exchanges of Notes” attached hereto, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[            ] in aggregate at any time (or $[            ] if the Initial Purchasers exercise their option to purchase additional Notes in full as set forth in the Purchase Agreement)[, in accordance with the rules and procedures of the Depositary], together with interest thereon as hereinafter provided.

THIS NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS NOTE, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF).

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control.

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

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IN WITNESS WHEREOF, Lennar Corporation has caused this instrument to be signed manually or by facsimile by its duly authorized officer.

LENNAR CORPORATION
By:
	Name:
	Title:

Dated:                     

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:
	Name:
	Title:

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(REVERSE OF SECURITY)

2.00% Convertible Senior Note due 2020

Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Indenture relating to the Notes, dated as of May 4, 2010 (as amended from time to time, the “Indenture”), by and among Lennar Corporation, a Delaware corporation (the “Company”), the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended, supplemented or otherwise modified from time to time.

1. INTEREST

The Company promises to pay interest on the principal amount of this Note at the rate per annum set forth above. Interest on this Note will accrue from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid, from May 4, 2010, to, but excluding, the next Interest Payment Date set forth above until December 1, 2020. The Company shall pay interest semi-annually in arrears on each Interest Payment Date set forth above, commencing as of the Interest Payment Date referred to above, to Holders of record at the close of business on the applicable Interest Record Date set forth above. Interest will be computed on the basis of a 360-day year of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed.

Contingent Interest will be payable on this Note as set forth in Section 12.1 of the Indenture during each six-month period from, and including, June 1 to, and including, November 30 and from, and including, December 1 to, and including, May 31, commencing with the period beginning on December 1, 2013 and ending on May 31, 2014, in each case, if the Contingent Interest Trading Price of the Notes for the five-consecutive-Trading-Day period ending on the second Trading Day immediately preceding the first day of the applicable Contingent Interest Period equals or exceeds 120% of the principal amount of the Notes.

Additional Interest will be payable on this Note as set forth in Section 6.13(a) of the Indenture, and Restricted Transfer Default Interest will be payable on this Note as set forth in Section 6.14(a) of the Indenture.

Defaulted Interest will be payable on any Defaulted Amounts at the rate of interest borne by the Notes, plus one percent per annum, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company in accordance with the Indenture.

Any reference to interest on, or in respect of, this Note herein or in the Indenture shall be deemed to include (a) any Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 6.13(a) of the Indenture, (b) any Contingent Interest if, in such context, Contingent Interest is, was or would be payable pursuant to Section 12.1 of the Indenture, (c) any Defaulted Interest if, in such context, Defaulted Interest is, was or would be payable pursuant to Section 2.12(d) of the Indenture, and (d) any Restricted Transfer

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Default Interest if, in such context, Restricted Transfer Default Interest is, was or would be payable pursuant to Section 6.14(a) of the Indenture. Any express mention of Additional Interest, Defaulted Interest, Restricted Transfer Default Interest or Contingent Interest in any provision of this Note or the Indenture shall not be construed as excluding Additional Interest, Defaulted Interest, Restricted Transfer Default Interest or Contingent Interest, as the case may be, in those provisions hereof or thereof where such express mention is not made.

2. METHOD OF PAYMENT

Subject to the terms and conditions of the Indenture, the Company shall (a) pay interest on the Notes as set forth above, and (b) make all payments and deliveries in respect of the Redemption Price, Option Purchase Price, Fundamental Change Repurchase Price and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. As provided in and subject to the provisions of the Indenture, the Company shall pay any amounts due in respect of the Notes (other than Notes that are Global Notes) at the office or agency designated by the company for that purpose as described under paragraph 4 below.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of and accrued and unpaid interest on this Note at the place, at the respective times, at the rate and in the lawful money herein prescribed.

3. MATURITY

The Notes will mature on December 1, 2020, unless earlier converted, redeemed or repurchased.

4. PAYING AGENT, CONVERSION AGENT, AND REGISTRAR

Initially, the Trustee will act as Paying Agent, Registrar and Conversion Agent, and its agency in the City of Jacksonville, State of Florida, as a place where Notes may be presented for payment, conversion or for registration of transfer. The Company may change any Paying Agent, Registrar or Conversion Agent without notice.

5. INDENTURE

The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act in effect at the date of the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. The Securities are general unsecured senior obligations of the Company. Terms used herein without definition and which are defined in the Indenture have the meanings assigned to them in the Indenture.

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6. OPTIONAL REDEMPTION

Subject to the terms and conditions of the Indenture, the Company shall have the right, at the Company’s option, at any time, and from time to time, on a Redemption Date occurring on or after December 1, 2013, to redeem (an “Optional Redemption”) all or any part of the Notes at a price payable in cash equal to the Redemption Price.

7. PURCHASE BY THE COMPANY AT THE HOLDER’S OPTION

Subject to the terms and conditions of the Indenture, the Company shall be required to purchase Notes (or portions thereof that are integral multiples of $1,000 in principal amount), at the option of the Holder thereof, on each of December 1, 2013 and December 1, 2015 (each, an “Option Purchase Date”) at the Option Purchase Price, payable in cash, upon the due delivery, in accordance with the Indenture, of a Purchase Notice containing the information set forth in the Indenture, and upon delivery of such Notes to the Trustee or the Paying Agent as set forth in the Indenture.

8. REPURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

Subject to the terms and conditions of the Indenture, in the event of a Fundamental Change, each Holder of the Notes shall have the right, at the Holder’s option, to require the Company, upon the Holder’s satisfaction of certain conditions set forth in the Indenture, to repurchase all or any part (equal to integral multiples of $1,000 in principal amount) of such Holder’s Notes on a date selected by the Company in accordance with the terms of the Indenture (the “Fundamental Change Repurchase Date”), which Fundamental Change Repurchase Date shall be no later than thirty five (35) calendar days, nor earlier than twenty (20) calendar days, after the date the Fundamental Change Notice is mailed to Holders in accordance with the Indenture, at a price, payable in cash, equal to the Fundamental Change Repurchase Price for such Notes.

9. CONVERSION

Subject to the terms and conditions of the Indenture, the Notes are convertible (in integral multiples of $1,000 principal amount) into shares of Class A Common Stock in accordance with in Article XI of the Indenture at any time prior to the close of business on the Trading Day immediately preceding the Maturity Date.

The initial Conversion Rate is 36.1827 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment in accordance with the provisions of the Indenture. The Company will pay cash in lieu of any fractional share. Each conversion of a Security will be settled in accordance with the Indenture.

To convert a Note that is a Physical Note, a Holder must (i) complete and manually sign the Conversion Notice on the back of the Note, or a facsimile of the Conversion Notice, and deliver such Conversion Notice to the Conversion Agent, (ii) surrender the Note to

A-7

the Conversion Agent, (iii) if required, furnish appropriate endorsements and transfer documents, (iv) pay all transfer or similar taxes, if any, as required by Section 11.3 of the Indenture, and (v) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 11.2(c) of the Indenture; provided, however, that if such Note is represented by a Global Note, then in order to convert, the Holder must comply with the requirements (iii), (iv) and (v) and comply with the Depositary’s procedures for converting a beneficial interest in a Global Note.

If a Holder surrenders a Note for conversion after the close of business on an Interest Record Date and prior to the opening of business on the immediately following Interest Payment Date, then, notwithstanding such conversion, the interest payable with respect to such Note on such Interest Payment Date shall be paid on such Interest Payment Date to the Holder of record of such Note at the close of business on such Interest Record Date; provided, however, that such Note, when surrendered for conversion, must be accompanied by payment to the Conversion Agent on behalf of the Company of an amount equal to the interest payable on such Interest Payment Date on the portion of such Note to be so converted, except that no such payment is required (i) if the Company shall have specified a Redemption Date or Fundamental Change Repurchase Date that is after such Interest Record Date and on or prior to such Interest Payment Date, (ii) if the Conversion Date for such conversion is after the Interest Record Date that immediately precedes the Maturity Date, or (iii) to the extent of any Defaulted Interest, if any Defaulted Interest exist as of the Conversion Date (it being understood that nothing in this paragraph shall affect the Company’s obligations under Section 4.1 of the Indenture).

10. GUARANTEE

This Note will be entitled to the benefits of certain Guarantees, if any, made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

11. DENOMINATIONS; TRANSFER; EXCHANGE

The Notes are in fully registered form, without coupons, in denominations of $1,000 principal amount and integral multiples thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge shall be made for any registration of transfer or exchange, but the Company and the Trustee may require payment to cover any transfer tax, fee or similar governmental charge payable in connection therewith where required by law (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers pursuant to Section 2.10, Article III or Article XI of the Indenture) or permitted pursuant to Section 11.3 of the Indenture. The Company is not required to effect any transfer or exchange of Notes in certain situations, as set forth in the Indenture.

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12. PERSONS DEEMED OWNERS

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

13. DEFAULTS AND REMEDIES

The Notes may become immediately due and payable in full after the occurrence of an Event of Default if certain conditions are satisfied, as provided in the Indenture.

14. TRUSTEE DEALINGS WITH THE COMPANY

The Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for, the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee.

15. NO RECOURSE AGAINST OTHERS

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

16. RANKING

The Notes shall be direct, unsecured obligations of the Company and shall rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company. The Guarantees shall be direct, unsecured obligations of the Guarantors and shall rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Guarantors.

17. AUTHENTICATION

This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent in accordance with the Indenture.

18. 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).

A-9

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

Lennar Corporation

700 N.W. 107^th Avenue

Miami, Florida 33172

Attn: General Counsel

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SCHEDULE A

SCHEDULE OF EXCHANGES OF NOTES

LENNAR CORPORATION

2.00% CONVERTIBLE SENIOR NOTES DUE 2020

The initial principal amount of this Global Note is [            ] DOLLARS ($[            ]). The following increases or decreases in this Global Note have been made:

Date of Exchange Amount of
decrease in
Principal Amount
of this Global  Note Amount of
increase in
Principal Amount
of this Global Note Principal Amount
of this Global Note
following such
decrease or
increase Signature of
authorized
signatory of
Trustee or
Custodian

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ATTACHMENT 1

ASSIGNMENT FORM

If you, the Holder, want to assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to:

______________________________________

______________________________________

______________________________________

(Print or type name, address and zip code and social security or tax ID number of assignee)

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

Dated:
	Signed:
		(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:

Signature must be guaranteed by an “eligible guarantor institution,” that is, a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934.

In connection with any transfer of this Note occurring prior to the Resale Restriction Termination Date (as defined in the Indenture governing such Note), the undersigned confirms that such Note is being transferred:

[Check One]

(1)	¨	to the Company or a Subsidiary thereof; or
(2)	¨	pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)	¨	pursuant to a registration statement that has been declared effective under the Securities Act; or
(4)	¨	pursuant to another available exemption from the registration requirements of the Securities Act.

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Unless one of the items is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if item (4) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions, certifications and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.17 of the Indenture shall have been satisfied.

Dated:	Signed:
		(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:

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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	NOTICE: To be executed by an executive officer

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ATTACHMENT 2

FORM OF PURCHASE NOTICE

Certificate No. of Note:                         

If you want to elect to have this Note purchased by the Company pursuant to Section 3.11 of the Indenture, check the box: ¨

If you want to elect to have this Note purchased by the Company pursuant to Section 3.12 of the Indenture, check the box: ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Sections 3.11 or 3.12 of the Indenture, as applicable, state the principal amount to be so purchased by the Company:

$ ________________________

(in an integral multiple of $1,000)

Date:	Signature(s):
	(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
	(All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

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ATTACHMENT 3

FORM OF CONVERSION NOTICE

To convert this Note in accordance with the Indenture, check the box:  ¨

To convert only part of this Note, state the principal amount to be converted (must be in multiples of $1,000):

$__________________

If you want the stock certificate representing the shares of Class A Common Stock issuable upon conversion made out in another person’s name, fill in the form below:

(Insert other person’s soc. sec. or tax I.D. no.)

(Print or type other person’s name, address and zip code)

Date:		Signature(s):
			(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
	(All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

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EXHIBIT B

GLOBAL NOTE LEGEND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS 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 DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. REPRESENTATIVE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

B-1

EXHIBIT C

RESTRICTED COMMON STOCK LEGEND

THE OFFER AND SALE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR THERE TO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH LENNAR CORPORATION OR ANY AFFILIATE OF LENNAR CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO LENNAR CORPORATION OR ANY PARENT OR SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF LENNAR CORPORATION AND THE TRUSTEE FOR THIS SECURITY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

C-1

EXHIBIT D

GUARANTEE

For value received, the undersigned each hereby unconditionally guarantees, as principal obligor and not only as a surety, to the Holders of the 2.00% Convertible Senior Notes due 2020 (the “Notes”) of Lennar Corporation, a Delaware corporation (the “Company”), the cash payments in United States Dollars of any amounts due with respect to the Notes in the amounts and at the times when due and interest on all overdue amounts, to the extent lawful, and the payment or performance of all other obligations of the Company under the Indenture (as defined below) or the Notes, to the Holders and the Trustee (as defined below), all in accordance with and subject to the terms and limitations of the Notes, Article X of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Article X of the Indenture and its terms shall be evidenced therein. The validity and enforceability of this Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture, dated as of May 4, 2010, among the Company, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended or supplemented (the “Indenture”), governing the Company’s issuance of the Notes.

The obligations of each of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates.

THIS GUARANTEE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS GUARANTEE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES THAT WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION. Each of the Guarantors hereto agrees to submit to the jurisdiction of the courts of the State of New York sitting in the County of New York, or of the United States of America for the Southern District of New York in any action or proceeding arising out of or relating to this Guarantee.

This Guarantee is subject to release upon the terms set forth in the Indenture.

The undersigned acknowledges that this Guarantee is subject to the TIA and each of the undersigned agrees to discharge its duties under the TIA.

D-1

IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly executed.

Dated:
	[GUARANTOR],     as Guarantor
	By:
		Name:
		Title:

D-2

SCHEDULE I

GUARANTORS

Aquaterra Utilities, Inc.	Asbury Woods, LLC
Astoria Options, LLC	Avalon Sienna III L.L.C.
Aylon, LLC	Bay Colony Expansion 369, Ltd.
Bay River Colony Development, Ltd.	BB Investment Holdings, LLC
BCI Properties, LLC	BPH I, LLC
Bramalea California, Inc.	Builders LP, Inc.
C & C Ranch, LLC	Cambria, LLC
Camelot Ventures, LLC	Cary Woods, LLC
Cedar Lakes II, LLC	Cherrytree I LLC
Cherrytree II LLC	CL Ventures, LLC
Colonial Heritage LLC	Columbia Station L.L.C.
Concord Station, LLP	Coto de Caza, Ltd.
Coventry L.L.C.	Creekside Crossing, L.L.C.
Darcy-Joliet, LLC	DBJ Holdings, LLC
Enclave Land, LLC	Evergreen Village LLC
F&R QVI Home Investments USA, LLC	Fox-Maple Associates, LLC
Friendswood Development Company, LLC	Garco Investments, LLC
Greystone Construction, Inc.	Greystone Homes of Nevada, Inc.
Greystone Homes, Inc.	Greystone Nevada, LLC
Greywall Club L.L.C.	Haverton L.L.C.
Heathcote Commons LLC	Home Buyer’s Advantage Realty, Inc.
Homecraft Corporation	HTC Golf Club, LLC

I-1

Independence L.L.C.	Lakelands at Easton, L.L.C.
Legends Club, LLC	Legends Golf Club, LLC
Len Paradise, LLC	Lencraft, LLC
LENH I, LLC	Lennar Aircraft I, LLC
Lennar Arizona Construction, Inc.	Lennar Arizona, Inc.
Lennar Associates Management Holding Company	Lennar Associates Management, LLC
Lennar Buffington Colorado Crossing, L.P.	Lennar Buffington Zachary Scott, L.P.
Lennar Carolinas, LLC	Lennar Central Park, LLC
Lennar Central Region Sweep, Inc.	Lennar Chicago, Inc.
Lennar Cobra, LLC	Lennar Colorado, LLC
Lennar Communities Development, Inc.	Lennar Communities Nevada, LLC
Lennar Communities of Chicago L.L.C.	Lennar Communities, Inc.
Lennar Construction, Inc.	Lennar Coto Holdings, LLC
Lennar Developers, Inc.	Lennar Family of Builders GP, Inc.
Lennar Family of Builders Limited Partnership	Lennar Financial Services, LLC
Lennar Fresno, Inc.	Lennar Georgia, Inc.
Lennar Gulf Coast, LLC	Lennar Hingham Holdings, LLC
Lennar Hingham JV, LLC	Lennar Homes Holding, LLC
Lennar Homes of Arizona, Inc.	Lennar Homes of California, Inc.
Lennar Homes of Texas Land and Construction, Ltd.	Lennar Homes of Texas Sales and Marketing, Ltd.
Lennar Homes, LLC	Lennar Illinois Trading Company, LLC
Lennar Imperial Holdings Limited Partnership	Lennar Land Partners Sub II, Inc.
Lennar Land Partners Sub, Inc.	Lennar Layton, LLC
Lennar Mare Island, LLC	Lennar Marina A Funding, LLC

I-2

Lennar Massachusetts Properties, Inc.	Lennar Nevada, Inc.
Lennar New Jersey Properties, Inc.	Lennar New York, LLC
Lennar Northeast Properties LLC	Lennar Northeast Properties, Inc.
Lennar Pacific Properties Management, Inc.	Lennar Pacific Properties, Inc.
Lennar Pacific, Inc.	Lennar PI Acquisition, LLC
Lennar PI Property Acquisition, LLC	Lennar PIS Management Company, LLC
Lennar Placentia TOD Properties, LLC	Lennar PNW, Inc.
Lennar Port Imperial South, LLC	Lennar Realty, Inc.
Lennar Reflections, LLC	Lennar Renaissance, Inc.
Lennar Reno, LLC	Lennar Riverside West Urban Renewal Company, L.L.C.
Lennar Riverside West, LLC	Lennar Sacramento, Inc.
Lennar Sales Corp.	Lennar San Jose Holdings, Inc.
Lennar Southland I, Inc.	Lennar Southwest Holding Corp.
Lennar Texas Holding Company	Lennar Trading Company, LP
Lennar Ventures, LLC	Lennar West Valley, LLC
Lennar.com Inc.	LFS Holding Company, LLC
LH Eastwind, LLC	LHI Renaissance, LLC
LLPII HCC Holdings, LLC	LNC at Meadowbrook, LLC
LNC at Ravenna, LLC	LNC Communities I, Inc.
LNC Communities II, LLC	LNC Communities III, Inc.
LNC Communities IV, LLC	LNC Communities IX, LLC
LNC Communities V, LLC	LNC Communities VI, LLC
LNC Communities VII, LLC	LNC Communities VIII, LLC
LNC Northeast Mortgage, Inc.	LNC Pennsylvania Realty, Inc.

I-3

Long Beach Development, LLC	Lori Gardens Associates II, LLC
Lori Gardens Associates III, LLC	Lorton Station, LLC
Madrona Village L.L.C.	Madrona Village Mews L.L.C.
Mid-County Utilities, Inc.	Mission Viejo 12S Venture, LP
Mission Viejo Holdings, Inc.	Montgomery Crossings, LLC
Northbridge L.L.C.	Northeastern Properties LP, Inc.
Palm Gardens At Doral Clubhouse, LLC	Palm Gardens at Doral, LLC
Palm Vista Preserve, LLC	Perris Green Valley Associates, a California limited partnership
PG Properties Holding, LLC	Pioneer Meadows Development, LLC
Pioneer Meadows Investments, LLC	POMAC, LLC
Prestonfield L.L.C.	Raintree Village II L.L.C.
Raintree Village, L.L.C.	Rivenhome Corporation
Rutenberg Homes of Texas, Inc.	Rutenberg Homes, Inc. (Florida)
Rye Hill Company, LLC	S. Florida Construction II, LLC
S. Florida Construction III, LLC	S. Florida Construction, LLC
San Lucia, LLC	Savell Gulley Development, LLC
Scarsdale, LTD.	Seminole/70th, LLC
Siena at Old Orchard, LLC	Sonoma L.L.C.
Spanish Springs Development, LLC	Stoney Corporation
Stoneybrook Golf Club, Inc.	Strategic Cable Technologies, L.P.
Strategic Holdings, Inc. d/b/a Lennar Communications Ventures (LCV)	Strategic Technologies Communications of California, Inc.
Strategic Technologies, LLC	Summerfield Venture L.L.C.
Summerwood, LLC	Suppliers for Housing Group, LLC
Temecula Valley, LLC	The Courts of Indian Creek L.L.C.

I-4

The LNC Northeast Group, Inc.	The Preserve at Coconut Creek, LLC
Trade Services Investments, Inc.	U.S. Home Corporation
U.S. Home of Arizona Construction Co.	U.S. Home Realty, Inc.
U.S.H. Los Prados, Inc.	U.S.H. Realty, Inc.
USH - Flag, LLC	USH (West Lake), Inc.
USH Equity Corporation	USH Millennium Ventures Corp.
USH Woodbridge, Inc.	UST Lennar GP PIS 10, LLC
UST Lennar GP PIS 7, LLC	WCP, LLC
West Chocolate Bayou Development, LLC	West Van Buren L.L.C.
Westchase, Inc.

I-5

SCHEDULE II

PROJECTED PAYMENT SCHEDULE

May be obtained upon written request.

II-1

EX-4.10

Exhibit 4.10

LENNAR CORPORATION

as Issuer,

the GUARANTORS

party hereto

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

INDENTURE

Dated as of November 10, 2010

2.75% Convertible Senior Notes due 2020

CROSS REFERENCE TABLE

TIA Section	Indenture Section
310(a)(1)		7.10
(a)(2)		7.10
(a)(3)		N.A.
(a)(4)		N.A.
(a)(5)		7.10
7.8; 7.10; 12.2
N.A.
311(a)		7.11
7.11
N.A.
312(a)		2.5
11.3
11.3
313(a)		7.6
(b)(1)		N.A.
(b)(2)		7.6
7.6; 12.2
7.6
314(a)		4.2; 4.4; 13.2
N.A.
(c)(1)		7.2; 13.4
(c)(2)		7.2; 13.4
(c)(3)		N.A.
N.A.
11.5
N.A.
315(a)		7.1	(b)
7.5; 12.2
7.1(a)
6.5; 7.1(c)
6.12
316(last sentence)		2.5
(a)(1)(A)		6.5
(a)(1)(B)		6.4
(a)(2)		N.A.
6.7
9.4
317(a)(1)		6.8
(a)(2)		6.9
2.4
318(a)		13.1
12.1

N.A. means Not Applicable.

(i)

Note:   This cross-reference table shall not, for any purpose, be deemed to be a part of the Indenture.

(ii)

TABLE OF CONTENTS

ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE		1
Section 1.1	Definitions	1
Section 1.2	Incorporation by Reference of TIA	15
Section 1.3	Rules of Construction	15
Section 1.4	References to Interest	15
ARTICLE II. THE NOTES		16
Section 2.1	Form and Dating	16
Section 2.2	Execution and Authentication; Aggregate Principal Amount	16
Section 2.3	Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent	17
Section 2.4	Paying Agent to Hold Assets in Trust	18
Section 2.5	Holder Lists	19
Section 2.6	Transfer and Exchange	19
Section 2.7	Replacement Notes	20
Section 2.8	Outstanding Notes	20
Section 2.9	Treasury Notes	20
Section 2.10	Temporary Notes	21
Section 2.11	Cancellation	21
Section 2.12	Interest and Defaulted Amounts	21
Section 2.13	CUSIP Number	22
Section 2.14	Deposit of Monies	23
Section 2.15	Restrictive Legends	23
Section 2.16	Book-Entry Provisions for Global Notes	23
Section 2.17	Special Transfer Provisions	25
ARTICLE III. REDEMPTION AND REPURCHASE		26
Section 3.1	Right of Redemption and Repurchase	26
Section 3.2	No Redemption Prior to December 20, 2015	26
Section 3.3	Optional Redemption	26
Section 3.4	Redemption Date; Payment of Accrued and Unpaid Interest	27
Section 3.5	Notice of Redemption	27
Section 3.6	Notices to Trustee	28
Section 3.7	Selection of Notes to Be Redeemed	28
Section 3.8	Effect of Notice of Redemption	28
Section 3.9	Payment of Redemption Price	29
Section 3.10	Notes Redeemed in Part	29
Section 3.11	Purchase of Notes at Option of the Holder	30
Section 3.12	Repurchase at Option of Holder Upon a Fundamental Change	32
Section 3.13	Payment of Option Purchase Price or Fundamental Change Repurchase Price	35
Section 3.14	Repurchases Following Acceleration of the Notes	36
Section 3.15	Covenant to Comply with Applicable Laws Upon Repurchases	37

(iii)

ARTICLE IV. COVENANTS		37
Section 4.1	Payment of Notes	37
Section 4.2	Rule 144A Information Requirement and Annual Reports	37
Section 4.3	Corporate Existence	38
Section 4.4	Compliance Certificate	38
Section 4.5	Further Instruments and Acts	38
Section 4.6	Furnishing Guarantees	38
ARTICLE V. SUCCESSOR CORPORATION		39
Section 5.1	Company May Consolidate, etc., Only on Certain Terms	39
Section 5.2	Successor Corporation Substituted	39
ARTICLE VI. DEFAULTS AND REMEDIES		40
Section 6.1	Events of Default	40
Section 6.2	Acceleration of Maturity; Rescission and Annulment	41
Section 6.3	Other Remedies	42
Section 6.4	Waiver of Existing Defaults	42
Section 6.5	Control by Majority	43
Section 6.6	Payments of Notes on Default; Suit Therefor	43
Section 6.7	Limitation on Suits	43
Section 6.8	Collection Suit by Trustee	44
Section 6.9	Trustee May File Proofs of Claim	44
Section 6.10	Restoration of Positions	45
Section 6.11	Priorities	45
Section 6.12	Undertaking for Costs	45
Section 6.13	Reporting Event of Default	45
Section 6.14	Restricted Transfer Default	47
Section 6.15	Stay, Extension or Usury Laws	48
Section 6.16	Liability of Stockholders, Officers, Directors and Incorporators	48
ARTICLE VII. TRUSTEE		48
Section 7.1	Duties of Trustee	48
Section 7.2	Rights of Trustee	49
Section 7.3	Individual Rights of Trustee	51
Section 7.4	Trustee’s Disclaimer	51
Section 7.5	Notice of Defaults	51
Section 7.6	Reports by Trustee	51
Section 7.7	Compensation and Indemnity	51
Section 7.8	Replacement of Trustee	52
Section 7.9	Successor Trustee by Merger, etc.	53
Section 7.10	Eligibility; Disqualification	53
Section 7.11	Preferential Collection of Claims	53
ARTICLE VIII. DISCHARGE OF INDENTURE		53
Section 8.1	Termination of the Company’s Obligations	53
Section 8.2	Officers’ Certificate; Opinion of Counsel	54

(iv)

ARTICLE IX. MODIFICATION OF THE INDENTURE		54
Section 9.1	Without Consent of Holders	54
Section 9.2	With Consent of Holders	55
Section 9.3	Form of Amendment	56
Section 9.4	Compliance with Trust Indenture Act	56
Section 9.5	Revocation and Effect of Consents	56
Section 9.6	Notation on or Exchange of Notes	56
Section 9.7	Trustee to Sign Amendments, etc.	56
ARTICLE X. GUARANTEE OF NOTES		57
Section 10.1	Unconditional Guarantee	57
Section 10.2	Limitations on Guarantees; Release or Suspension of Particular Guarantors’ Obligations	58
Section 10.3	Execution and Delivery of Guarantee	58
Section 10.4	Release of a Guarantor due to Extraordinary Events	59
Section 10.5	Waiver of Subrogation	59
Section 10.6	No Set-Off	60
Section 10.7	Obligations Absolute	60
Section 10.8	Obligations Continuing	60
Section 10.9	Obligations Not Reduced	60
Section 10.10	Obligations Reinstate	60
Section 10.11	Obligations Not Affected	61
Section 10.12	Waiver	62
Section 10.13	No Obligation to Take Action Against the Company	62
Section 10.14	Dealing with the Company and Others	62
Section 10.15	Default and Enforcement	62
Section 10.16	Amendment, etc.	63
Section 10.17	Acknowledgment	63
Section 10.18	Costs and Expenses	63
Section 10.19	No Merger or Waiver; Cumulative Remedies	63
Section 10.20	Survival of Obligations	63
Section 10.21	Guarantee in Addition to Other Obligations	63
Section 10.22	Severability	63
Section 10.23	Successors and Assigns	63
Section 10.24	Acknowledgement under TIA	64
ARTICLE XI. CONVERSION		64
Section 11.1	General	64
Section 11.2	Conversion Privilege	64
Section 11.3	Conversion Procedure and Payment upon Conversion	66
Section 11.4	Taxes On Conversion	71
Section 11.5	Company to Provide Stock	71
Section 11.6	Conversion Rate Adjustments	71
Section 11.7	No Adjustment	80
Section 11.8	Notice of Adjustment	81
Section 11.9	Adjustment of Prices	81

(v)

Section 11.10	Effect of Reclassifications, Consolidations, Mergers, Binding Share Exchanges or Sales on Conversion	81
Section 11.11	Trustee’s Disclaimer	83
Section 11.12	Rights Distributions Pursuant to Stockholders’ Rights Plans	84
Section 11.13	Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection With Make-Whole Fundamental Changes	84
Section 11.14	Exchange In Lieu of Conversion	87
Section 11.15	Notice to Holders Prior to Certain Actions	88
Section 11.16	Calculation of Adjustments	89
Section 11.17	Conversion Responsibilities of Trustee and Conversion Agent	89
ARTICLE XII.		89
CONTINGENT INTEREST AND TAX TREATMENT		89
Section 12.1	Contingent Interest	89
Section 12.2	Tax Treatment	90
Section 12.3	Comparable Yield And Projected Payment Schedule	90
ARTICLE XIII. MISCELLANEOUS		91
Section 13.1	TIA Controls	91
Section 13.2	Notices	91
Section 13.3	Communications by Holders with Other Holders	92
Section 13.4	Certificate and Opinion as to Conditions Precedent	93
Section 13.5	Statements Required in Certificate or Opinion	93
Section 13.6	Rules by Trustee, Paying Agent, Registrar	93
Section 13.7	Legal Holidays	93
Section 13.8	Governing Law	94
Section 13.9	No Adverse Interpretation of Other Agreements	94
Section 13.10	No Personal Liability	94
Section 13.11	Successors	94
Section 13.12	Duplicate Originals	94
Section 13.13	Severability	94
Section 13.14	Calculations	94
Section 13.15	Waivers of Jury Trial	95
Section 13.16	Force Majeure	95

Exhibit A	Form of Note	A-1
Exhibit B	Global Note Legend	B-1
Exhibit C	Restricted Common Stock Legend	C-1
Exhibit D	Guarantee	D-1
Schedule I	Guarantors	I-1
Schedule II	Projected Payment Schedule	II-1

(vi)

INDENTURE, dated as of November 10, 2010, among LENNAR CORPORATION, a Delaware corporation (the “Company”), each of the Guarantors party hereto and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee (the “Trustee”).

The Company has duly authorized the creation of an issue of its 2.75% Convertible Senior Notes due 2020, initially in an aggregate principal amount not to exceed $435,000,000 (as increased by an amount equal to the aggregate principal amount of any additional Notes purchased by the Initial Purchasers pursuant to the exercise of their option to purchase additional Notes as set forth in the Purchase Agreement) and, to provide therefor, the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Notes (as defined), when duly issued and executed by the Company, and authenticated and delivered hereunder, the valid obligations of the Company, and to make this Indenture a legal, valid and binding agreement of the Company, have been done.

Each party hereto agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined) of the Company’s 2.75% Convertible Senior Notes due 2020.

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

Definitions.

“Additional Interest” has the meaning provided in ARTICLE VI(q).

“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.

“Agent” means any Registrar, Paying Agent, Conversion Agent or co-Registrar.

“Agent Members” has the meaning provided in 0.

“Form of Assignment” means the “Form of Assignment” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

“Authenticating Agent” has the meaning provided in 0.

“Bankruptcy Law” has the meaning provided in 0.

“Bid Solicitation Agent” means any other Person (other than the Company or any of its Affiliates) as may be appointed, from time to time, by the Company pursuant to 0 to solicit bids for the Contingent Interest Trading Price of the Notes in accordance with 0.

- 1 -

“Board of Directors” means the Board of Directors of the Company.

“Board Resolution” means a resolution by the Board of Directors or Executive Committee of the Company certified by its Secretary or an Assistant Secretary as being duly adopted and in full force and effect.

“Business Day” means any day other than a Saturday, a Sunday or a day that is a legal holiday or a day on which commercial banks are authorized or required by law, regulation or executive order to close in the City of New York.

“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, and options, rights or warrants to purchase such capital stock or other equity interests, whether now outstanding or issued after the date hereof.

“Cash Settlement” has the meaning provided in Section 11.2(b).

“Change of Control” means the occurrence of any of the following:

(a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of the Subsidiaries, taken as a whole, to any person, other than the Company or one of the Subsidiaries;

(b) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s outstanding Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares, other than any transaction where:

(i) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and either (A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction, or (B) the shares of the Company’s Voting Stock outstanding immediately prior to such transaction are converted into or exchanged for, a majority of the Voting Stock of such holding company immediately after giving effect to such transaction; or

(ii) both (A) Stuart Miller, together with members of his immediate family, directly or indirectly, becomes the beneficial owner of more than 50%, but less than 66  ²/3%, of the Company’s outstanding Voting Stock (measured by voting power rather than number of shares) and (B) immediately after such transaction or transactions, the Class A Common Stock is listed for trading on the New York Stock Exchange or The Nasdaq Global Market (and the Notes continue to be convertible solely into such Class A Common Stock);

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(c) the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the Company, or any recapitalization, reclassification, or change of the Company’s Voting Stock occurs, in any such case where any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property (other than any such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction);

(d) the first day on which a majority of the members of the Board of Directors are not Continuing Directors; or

(e) the adoption by the Company’s stockholders of a plan relating to the Company’s liquidation or dissolution.

Notwithstanding the foregoing, if a transaction or transactions described in clause (a) or (c) above occurs, a “change of control” will not be deemed to have occurred pursuant to such clause if 90% or more of the consideration in the transaction or transactions received by holders of the Class A Common Stock consists of shares of common stock traded or to be traded immediately following such transaction or transactions on a U.S. national securities exchange, and such consideration (of which 90% or more is such listed common stock) becomes Reference Property into which the Notes are convertible pursuant to Section 11.2(w).

The term “person,” as used in this definition of Change of Control, has the meaning given to it in Section 13(d)(3) of the Exchange Act.

“Class A Common Stock” shall mean the Company’s Class A common stock, par value $0.10 per share, subject to Section 11.2(w).

“Class B Common Stock” shall mean the Company’s Class B common stock, par value $0.10 per share.

“Clause A Distribution” has the meaning provided in Section 11.2(k).

“Clause B Distribution” has the meaning provided in Section 11.2(k).

“Clause C Distribution” has the meaning provided in Section 11.2(k).

“Combination Settlement” has the meaning provided in Section 11.2(b).

“Consolidated Net Tangible Assets” means, with respect to any date of determination, the total amount of assets which would be included on a consolidated balance sheet of the Company and the Restricted Subsidiaries under GAAP (less applicable reserves and other properly deductible items) after deducting therefrom:

(a) all short-term liabilities, i.e., liabilities payable by their terms less than one year from the date of determination and not renewable or extendable at the option of the obligor for a period ending more than one year after such date, and liabilities in respect of retiree benefits other than pensions for which the Restricted Subsidiaries are required to accrue pursuant to Statement of Financial Accounting Standards No. 106;

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(b) investments in Subsidiaries that are not Restricted Subsidiaries; and

(c) all assets reflected on the Company’s balance sheet as the carrying value of goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of debt and other intangible assets.

“Contingent Interest” has the meaning provided in ARTICLE XII(a).

“Contingent Interest Measurement Period” has the meaning provided in ARTICLE XII(a).

“Contingent Interest Period” has the meaning provided in ARTICLE XII(a).

“Contingent Interest Trading Price” means, for any Trading Day, the average of the secondary market bid quotations per $1,000 principal amount of the Notes obtained by the Bid Solicitation Agent for $5.0 million aggregate principal amount of Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers the Company selects; provided that if (a) three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids will be used, and (b) only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid will be used; provided, further, that if no such bids can reasonably be obtained by the Bid Solicitation Agent, then the Contingent Interest Trading Price of the Notes on such Trading Day shall be equal to the product of (i) the Conversion Rate and (ii) the Last Reported Sale Price for the five Trading Days ending on such Trading Day.

“Continuing Director” means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the date the Notes were initially issued, or (b) was nominated for election, elected or appointed to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Company’s Board of Directors at the time of the member’s nomination, election or appointment (either by a specific vote or by approval of the Company’s proxy statement in which that member was named as a nominee for election as a director, without objection to the nomination).

“Conversion Agent” has the meaning provided in 0.

“Conversion Consideration” has the meaning provided in Section 11.2(b)(i).

“Conversion Date” has the meaning provided in Section 11.2(c).

“Conversion Notice” means a notice substantially in the form of the “Form of Conversion Notice” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

“Conversion Obligation” has the meaning provided in ARTICLE XI(i).

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“Conversion Price” means, as of any date, the dollar amount derived by dividing one thousand dollars ($1,000) by the Conversion Rate in effect on such date.

“Conversion Rate” has the meaning provided in ARTICLE XI(i).

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 10161 Centurion Parkway North, Jacksonville, Florida 32256 Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Custodian” has the meaning provided in 0.

“Daily Conversion Value” means, for each of the 20 consecutive Trading Days during the Observation Period, 5% of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP of the Class A Common Stock on such Trading Day.

“Daily Measurement Value” means the Specified Dollar Amount (if any), divided by 20.

“Daily Settlement Amount,” for each of the 20 consecutive Trading Days during the Observation Period, shall consist of:

(a) cash equal to the lesser of (i) the Daily Measurement Value and (ii) the Daily Conversion Value; and

(b) if the Daily Conversion Value exceeds the Daily Measurement Value, a number of shares of Class A Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.

“Daily VWAP” means, for each of the 20 consecutive Trading Days during the applicable Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “LEN.N <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open 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 Class A Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

“Default” means any event which, upon the giving of notice or passage of time, or both, would be an Event of Default.

“Defaulted Amounts” has the meaning provided in ARTICLE II(f).

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“Defaulted Interest” has the meaning provided in ARTICLE II(g).

“Defaulted Interest Payment Date” has the meaning provided in ARTICLE II(g).

“Delivery Date” has the meaning provided in Section 11.2(mm).

“Depositary” means The Depository Trust Company, its nominees and successors.

“Distributed Property” has the meaning provided in Section 11.2(k).

“$” means the lawful currency of the United States.

“Effective Date” has the meaning provided in Section 11.2(dd).

“Event of Default” has the meaning provided in 0.

“Ex-Dividend Date” means the first date on which the shares of Class A Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from us or, if applicable, from the seller of Class A Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

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

“Exchange Consideration” has the meaning provided in Section 11.2(nn).

“Financial Institution” has the meaning provided in Section 11.2(nn).

“Fiscal Year” means the period commencing on December 1 of a year and ending on the next November 30 or such other period (not to exceed 12 months or 53 weeks) as the Company may from time to time adopt as its fiscal year.

“Fundamental Change” means the occurrence at any time after the notes are originally issued of a Change of Control or a Termination of Trading (other than a temporary Termination of Trading) in the Class A Common Stock.

“Fundamental Change Notice” has the meaning provided in Section 3.1(o).

“Fundamental Change Offer” has the meaning provided in Section 3.1(n).

“Fundamental Change Repurchase Date” has the meaning provided in Section 3.1(n).

“Fundamental Change Repurchase Price” means, with respect to a Note to be purchased by the Company on a Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change in accordance with 0, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to, but excluding, such Fundamental Change Repurchase Date, except as otherwise provided in Section 3.1(n).

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“Fundamental Change Repurchase Right” has the meaning provided in Section 3.1(n).

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

“Global Note” has the meaning provided in 0.

“Guarantee” has the meaning provided in ARTICLE X(a).

“Guarantor” means (a) initially, each of the Guarantors named on the signature pages of this Indenture, and (b) each of the Company’s Subsidiaries that in the future executes a Guarantee in substantially the form of Exhibit D hereto in which such Subsidiary agrees to be bound by the terms hereof as Guarantor, in each case, subject to release or suspension as provided in Article X.

“Holder” means a Person in whose name a Note is registered on the Register.

“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 the Company or any Subsidiary’s reimbursement obligations and other liabilities (contingent or otherwise) with respect to letters of credit, bank guarantees or bankers’ acceptances;

(c) all obligations and liabilities (contingent or otherwise) in respect of the Company or any Subsidiary’s leases required, in conformity with GAAP, to be accounted for as capital lease obligations on the balance sheet of the Company;

(d) all the Company or any Subsidiary’s obligations (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;

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(e) all direct or indirect guaranties or similar agreements by the Company or any Subsidiary in respect of, and the Company or such Subsidiary’s obligations or liabilities (contingent or otherwise) 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 such 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” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.

“Initial Purchasers” means J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC.

“Interest Payment Date” means each June 15 and December 15 of each year, beginning on June 15, 2011.

“Interest Record Date,” with respect to any Interest Payment Date, shall mean the June 1 or December 1 (whether or not such day is a Business Day) immediately preceding the June 15 or December 15 Interest Payment Date, respectively.

“Last Reported Sale Price” means, on any date, 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 such date as reported in composite transactions for the principal U.S. securities exchange on which the Class A Common Stock is traded; provided, however, that if the Class A Common Stock is not listed for trading on a U.S. national or regional securities exchange on such date, the “Last Reported Sale Price” shall be the last quoted bid price for the Class A Common Stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization; provided, however, that if the Class A Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for the Class A Common Stock on such date from each of three nationally recognized independent investment banking firms selected by the Company for this purpose. Any such determination will be conclusive absent manifest error.

“Lien” means any mortgage, pledge, lien, encumbrance, charge or security interest of any kind.

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“Make-Whole Applicable Increase” has the meaning provided in Section 11.2(dd).

“Make-Whole Fundamental Change” means any Change of Control described under clause (a), (b) or (c) of the definition thereof, but without giving effect to sub-clause (i) under clause (b) thereof and the parenthesis at the end of clause (c) thereof, pursuant to which 10% or more of the consideration for the Class A Common Stock in such Change of Control consists of consideration other than common stock that is traded or scheduled to be traded immediately following such transaction on a U.S. national securities exchange.

“Market Disruption Event” means (a) a failure by the primary United States national or regional securities exchange or market on which the Class A Common Stock is listed or admitted for trading 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 Scheduled Trading Day for the Class A Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Class A Common Stock or in any options, contracts or future contracts relating to the Class A Common Stock.

“Maturity Date” means December 15, 2020.

“Measurement Period” has the meaning provided in Section 11.2(a)(i).

“Merger Common Stock” has the meaning provided in Section 11.2(aa).

“Merger Event” has the meaning provided in Section 11.2(w).

“Merger Valuation Percentage” has the meaning provided in Section 11.2(bb).

“Merger Valuation Period” has the meaning provided in Section 11.2(bb).

“Net Worth” of any Person means the total consolidated stockholders’ equity of the Person determined in accordance with GAAP.

“Non-Recourse Indebtedness” means any Indebtedness of the Company or any Restricted Subsidiary for which the holder of such Indebtedness has no recourse, directly or indirectly, to the Company or such Restricted Subsidiary for the principal of, premium, if any, and interest on such Indebtedness, and for which the Company or such Restricted Subsidiary is not, directly or indirectly, obligated or otherwise liable for the principal of, premium, if any, and interest on such Indebtedness, except pursuant to mortgages, deeds of trust or other security interests or other recourse, obligations or liabilities, in respect of specific land or other real property interests of the Company or such Restricted Subsidiary securing such Indebtedness; provided, however, that recourse, obligations or liabilities solely for indemnities, breaches of warranties or representations contained in such mortgages, deeds of trust or grants of security interests in respect of Indebtedness will not prevent that Indebtedness from being classified as Non-Recourse Indebtedness.

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“Notes” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

“Notice of Default” has the meaning provided in 0.

“Notice of Redemption” has the meaning provided in 0.

“Obligations” means all obligations for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing the Notes.

“Observation Period” with respect to any Note surrendered for conversion means: (i) subject to clause (ii), if the relevant Conversion Date occurs prior to September 15, 2020, the 20 consecutive Trading Day period beginning on, and including, the second Trading Day after such Conversion Date; (ii) if the relevant Conversion Date occurs on or after the date of the Company’s issuance of a Notice of Redemption with respect to the Notes pursuant to 0 and prior to the relevant Redemption Date, the 20 consecutive Trading Days beginning on, and including, the 22nd Scheduled Trading Day immediately preceding such Redemption Date; and (iii) if the relevant Conversion Date occurs on or after September 15, 2020, the 20 consecutive Trading Days beginning on, and including, the 22nd Scheduled Trading Day immediately preceding the Maturity Date.

“Officer” means the Chairman of the Board, any Vice Chairman of the Board, the President, any Executive Vice President or Vice President, the Treasurer, the Secretary, the Controller or any Assistant Secretary of a Person.

“Officers’ Certificate” when used with respect to the Company means a certificate signed by two Officers. Each such certificate will comply with Section 314 of the TIA and include the statements described in Section 13.2.

“Optional Redemption” has the meaning provided in 0.

“Opinion of Counsel” means a written opinion acceptable to the Trustee from legal counsel. That counsel may be an employee of or counsel to the Company.

“Option Purchase Date” has the meaning provided in Section 3.1(k).

“Option Purchase Price” means, with respect to a Note to be purchased by the Company on the Option Purchase Date pursuant to a Purchase at Holder’s Option in accordance with 0, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to, but excluding, the Option Purchase Date, except as otherwise provided in Section 3.1(k).

“Option Purchase Notice” has the meaning provided in Section 3.1(l).

“Paying Agent” has the meaning provided in 0.

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

“Physical Notes” has the meaning provided in 0.

“Physical Settlement” has the meaning provided in Section 11.2(b).

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under 0 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.

“Property” of any Person means all types of real, personal, tangible, intangible or mixed property owned by such Person, whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP.

“Purchase Agreement” means that certain Purchase Agreement, dated as of November 5, 2010, among the Company and the Initial Purchasers.

“Purchase Notice” means a notice substantially in the form of the “Purchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.

“Purchase at Holder’s Option” has the meaning provided in Section 3.1(a);

“Qualified Institutional Buyer” or “QIB” has the meaning provided in Rule 144A.

“Redemption Date” has the meaning provided in 0.

“Redemption Price” means, with respect to a Note to be redeemed on a Redemption Date by the Company in accordance with Article III, one hundred percent (100%) of the outstanding principal amount of such Note, plus accrued and unpaid interest on such Note, if any, to, but excluding, such Redemption Date, except as otherwise provided in 0.

“Reference Dividend Amount” has the meaning provided in Section 11.2(l).

“Reference Property” and “unit of Reference Property” has the meaning provided in Section 11.2(w).

“Register” has the meaning provided in 0.

“Registrar” has the meaning provided in 0.

“Reporting Event of Default” has the meaning provided in ARTICLE VI(q).

“Reporting Event of Default Election Notice” has the meaning provided in ARTICLE VI(q).

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“Repurchase Upon Fundamental Change” has the meaning provided in Section 3.1;

“Resale Restriction Termination Date” has the meaning provided in ARTICLE II(h).

“Restricted Common Stock Legend” means the private placement legend set forth in Exhibit C hereto.

“Restricted Note Legend” means the private placement legend set forth on the face of the Form of Note attached hereto as Exhibit A.

“Restricted Securities” has the meaning provided in ARTICLE II(q).

“Restricted Subsidiary” means (a) all existing wholly-owned Subsidiaries, other than finance company subsidiaries and any foreign Subsidiaries, and (b) all future wholly-owned Subsidiaries that become Guarantors, in each case, until such time as such Subsidiary is released in accordance with the terms of this Indenture.

“Restricted Transfer Default” has the meaning provided in ARTICLE VI(u).

“Restricted Transfer Default Interest” has the meaning provided in ARTICLE VI(u).

“Restricted Transfer Triggering Date” has the meaning provided in ARTICLE VI(u).

“Rule 144A” means Rule 144A under the Securities Act.

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal United States national securities exchange or market on which the Class A Common Stock is listed or admitted for trading. If the Class A Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

“SEC” means the Securities and Exchange Commission.

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

“Settlement Amount” has the meaning specified in Section 11.2(b)(i)(D).

“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to have been elected) by the Company.

“Settlement Notice” has the meaning specified in Section 11.2(b)(i)(C).

“Significant Subsidiary” means any Subsidiary (a) whose revenues exceed 10% of the Total Consolidated Revenues of the Company, in each case for the most recent Fiscal Year, or (b) whose Net Worth exceeds 10% of the Company’s Total Consolidated Stockholders’ Equity, in each case as of the end of the most recent Fiscal Year.

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“Specified Dollar Amount” means the maximum cash amount per $1,000 principal amount of Notes to be received upon conversion as specified in the Settlement Notice related to any converted Notes.

“spin-off” has the meaning provided in Section 11.2(k).

“State” means any state of the United States or the District of Columbia.

“Stock Price” has the meaning provided in Section 11.2(dd).

“Subsidiary” means (a) 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 or by the Company and one or more Subsidiaries or (b) a partnership, of which the Company or any Subsidiary is the sole general partner.

“Termination of Trading” means, at any time, that the Class A Common Stock (or other common stock into which the notes are then convertible) is not then listed for trading on a U.S. national securities exchange.

“Total Consolidated Revenues” means, with respect to any date of determination, the Company’s total consolidated revenues as shown on its most recent consolidated statement of operations that is contained or incorporated in the latest annual report on Form 10-K (or equivalent report) or quarterly report on Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not more than 181 days prior to the date of determination, in the case of the consolidated statement of operations contained or incorporated in an annual report on Form 10-K, or 135 days prior to the date of determination, in the case of the consolidated condensed statement of operations contained in a quarterly report on Form 10-Q

“Total Consolidated Stockholders’ Equity” means, with respect to any date of determination, the Company’s total consolidated stockholders’ equity as shown on its most recent consolidated balance sheet that is contained or incorporated in the latest annual report on Form 10-K (or equivalent report) or quarterly report on Form 10-Q (or equivalent report) filed with the SEC, and is as of a date not more than 181 days prior to the date of determination, in the case of the consolidated balance sheet contained or incorporated in an annual report on Form 10-K, or 135 days prior to the date of determination, in the case of the consolidated condensed balance sheet contained in a quarterly report on Form 10-Q.

“Trading Day” means a day during which trading in the Class A Common Stock generally occurs on The New York Stock Exchange or, if the Class A Common Stock is not listed on The New York Stock Exchange, then a day during which trading in the Class A Common Stock generally occurs on the principal other U.S. national or regional securities exchange on which the Class A Common Stock is then listed or, if the Class A Common Stock is not then listed on a U.S. national or regional securities exchange, then on the principal other market on which the Class A Common Stock is then traded or quoted. If the Class A Common Stock (or other security for which a Last Sale Price, Trading Price or Contingent Interest Trading

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Price must be determined) is not so listed or traded, “Trading Day” means a “Business Day”; and provided, further, that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on which (x) there is no Market Disruption Event and (y) trading in the Class A Common Stock generally occurs on The New York Stock Exchange or, if the Class A Common Stock is not then listed on The New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Class A Common Stock is then listed or, if the Class A Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Class A Common Stock (or other security for which a Daily VWAP must be determined) is then listed or admitted for trading, except that if the Class A Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.

“Trading Price” of the Notes on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of the Notes obtained by the Bid Solicitation Agent for $5.0 million aggregate principal amount of Notes at approximately 3:30 p.m., New York City time, on the determination date from three independent nationally recognized securities dealers the Company selects; provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used; provided further that if no such bids can reasonably be obtained by the Bid Solicitation Agent, then the Trading Price of the Notes on any date of determination shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the applicable Conversion Rate.

“Trigger Event” has the meaning provided in Section 11.2(k).

“Trustee” means the Person named as such in this Indenture and, subject to the provisions of Article VII of this Indenture, any successor to that Person.

“TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date of this Indenture, except as otherwise provided in 0.

“Trust Officer” means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, senior associate, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“United States” means the United States of America.

“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of that person that is at the time entitled to vote generally in the election of the board of directors of that person.

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Incorporation by Reference of TIA. Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in, and made a part of, this Indenture. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Company or any other obligor on the Notes.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them therein.

Rules of Construction. Unless the context otherwise requires:

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

(c) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP as of any date of determination;

(d) “or” is not exclusive;

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

(f) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

(g) any reference to a statute, law or regulation means that statute, law or regulation as amended and in effect from time to time and includes any successor statute, law or regulation; provided, however, that any reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to the relevant case.

References to Interest.

Any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include:

(h) any Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of ARTICLE VI(q);

(i) any Contingent Interest if, in such context, Contingent Interest is, was or would be payable pursuant to 0;

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(j) any Defaulted Interest if, in such context, Defaulted Interest is, was or would be payable pursuant to ARTICLE II(g); and

(k) any Restricted Transfer Default Interest if, in such context, Restricted Transfer Default Interest is, was or would be payable pursuant to ARTICLE VI(u).

ARTICLE II.

THE NOTES

Form and Dating. The Notes and the Trustee’s certificate of authentication relating thereto shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or depositary rule or usage. The Company and the Trustee shall approve the form of the Notes and any notation, legend or endorsement on them. Each Note shall be dated the date of its issuance and authentication and shall show the date of its authentication. The Notes shall be designated as the “2.75% Convertible Senior Notes due 2020.”

The terms and provisions contained in the Notes annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Notes in registered form, substantially in the form set forth in Exhibit A (each, a “Global Note”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided and shall bear the legend set forth in Exhibit B. The aggregate principal amount of a Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect repurchases, redemptions, conversions, transfers or exchanges as hereinafter provided. Payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

Notes issued in exchange for interests in a Global Note pursuant to 0 may be issued and Notes offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued in the form of permanent certificated Notes in registered form in substantially the form set forth in Exhibit A (the “Physical Notes”).

Execution and Authentication; Aggregate Principal Amount. An Officer of the Company (duly authorized by all requisite corporate actions) shall sign and attest to the Notes for the Company by manual or facsimile signature.

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If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office or position at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

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

The Trustee shall authenticate all Notes upon a written order of the Company in the form of an Officers’ Certificate of the Company. Each such written order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, whether the Notes are to be issued as Physical Notes or Global Notes or such other information as the Trustee may reasonably request.

The Trustee may appoint an authenticating agent (the “Authenticating Agent”) reasonably acceptable to the Company to authenticate Notes. Unless otherwise provided in the appointment, an Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent. An Authenticating Agent has the same rights as an Agent to deal with the Company or with any Affiliate of the Company.

The Notes shall be issuable in fully registered form only, without coupons, in denominations of $1,000 and any integral multiple thereof. Subject to applicable law, the aggregate principal amount of the Notes which may be authenticated and delivered on the date hereof shall not exceed $435,000,000 (as increased by an amount equal to the aggregate principal amount of any additional Notes purchased by the Initial Purchasers following the date hereof pursuant to the exercise of their option to purchase additional Notes as set forth in the Purchase Agreement), except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant to 0, 0, 0, Section 3.1(t), 0 or 0.

Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent. The Company shall maintain an office or agency (which shall be located in the United States) where (a) Notes may be presented or surrendered for registration of transfer or for exchange (“Registrar”), (b) Notes may be presented or surrendered for payment (“Paying Agent”), (c) Notes may be presented or surrendered for conversion (“Conversion Agent”), and (d) notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes (“Register”) and of their transfer and exchange. The Company may have one or more co-Registrars and one or more additional paying agents or conversion agents reasonably acceptable to the Trustee. The term “Paying Agent” includes any additional Paying Agent. The term “Conversion Agent” includes any additional Conversion Agent. The Company may act as its own Paying Agent or Conversion Agent. If the Company elects to act as its own Paying Agent or Conversion Agent, the Company will notify the Trustee of its election and will hold for the benefit of the Holders all Class A Common Stock or assets for the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on, or amounts due upon conversion of, the Notes.

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The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which agreement shall incorporate the provisions of the TIA and implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any such Agent. If the Company shall fail to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such and any such presentations, surrenders, notices and demands shall be made or served at the Corporate Trust Office or the office or agency of the Trustee in the City of Jacksonville, State of Florida.

The Company initially appoints the Trustee as Registrar, Paying Agent, Conversion Agent and Custodian for service of demands and notices in connection with the Notes and the Corporate Trust Office and the office or agency of the Trustee in the City of Jacksonville, State of Florida, shall be considered as one such office or agency of the Company for each of the aforesaid purposes. Any of the Registrar, the Paying Agent, the Conversion Agent or any other agent may resign upon 30 days’ notice to the Company.

The Company shall appoint a Bid Solicitation Agent before the commencement of the first Contingent Interest Measurement Period. The Company may, from time to time, appoint a new Bid Solicitation Agent. However, neither the Company nor any Affiliate of the Company may act as Bid Solicitation Agent hereunder.

Paying Agent to Hold Assets in Trust.

(a) The Company shall require each Paying Agent and Conversion Agent other than the Trustee to agree in writing that such Paying Agent or Conversion Agent shall hold in trust for the benefit of the Holders or the Trustee all Class A Common Stock or assets held by such Agent for conversion of, or the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on, the Notes (whether such Class A Common Stock or assets have been distributed to it by the Company or any other obligor on the Notes), and the Company, the Conversion Agent and the Paying Agent shall notify the Trustee of any Default by the Company (or any other obligor on the Notes) in making any such payment. The Company at any time may cause an Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon such distribution to the Trustee, the Paying Agent shall have no further liability for such assets.

(b) If the Company shall act as its own Paying Agent or Conversion Agent, it will, on or before each due date of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, or on or before each Conversion Date in respect of, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest, or an amount of cash and/or a number of shares of Class A Common Stock, as the case may be, so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, or delivery of cash and/or Class A Common Stock, with respect to the Notes when the same shall become due and payable.

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(c) Any money and shares of the Class A Common Stock deposited with the Trustee or any Paying Agent or Conversion Agent, or then held by the Company, in trust for the payment of principal (including the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or accrued and unpaid interest on, or upon conversion of, the Notes and remaining unclaimed for two years after such principal or interest, or amounts due upon conversion, has become due and payable shall be paid to the Company on request of the Company contained in an Officers’ Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent or Conversion Agent with respect to such trust money and shares of Class A Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent or Conversion Agent, before being required to make any such repayment, may publish (in no event later than five days after the Company requests repayment) in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, or mail to each registered Holder, a notice stating that such money and shares of the Class A Common Stock remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money and shares of Class A Common Stock then remaining will be repaid or delivered to the Company.

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 the Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish or cause the Registrar to furnish to the Trustee five (5) Business Days before each Interest Record Date and at such other times as the Trustee may request in writing a list as of such date and in such form as the Trustee may reasonably require of the names and addresses of the Holders, which list may be conclusively relied upon by the Trustee, and the Company shall otherwise comply with TIA Section 312(a).

Transfer and Exchange. Subject to Sections 0 and 0, when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, that the Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Notes at the Registrar’s or co-Registrar’s request. No service charge shall be made for any registration of transfer or exchange, but the Company and the Trustee may require payment to cover any transfer tax, fee or similar governmental charge payable in connection therewith where required by law (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers pursuant to 0, Article III or Article XI) or permitted pursuant to 0.

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The Registrar or co-Registrar shall not be required to register the transfer of or exchange of (i) any Notes (except the unredeemed portion of the Notes being redeemed in part) or a portion of any Note, selected for redemption in accordance with Article III, (ii) any Notes, or a portion of any Note, surrendered for repurchase in accordance with Article III, and (iii) any Notes, or a portion of any Note, surrendered for conversion in accordance with Article XI.

Any Holder of a beneficial interest in a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Notes that do not involve the issuance of a Physical Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry system.

Replacement Notes. If a mutilated Note is surrendered to the Trustee or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, such Holder must provide an indemnity bond or other indemnity of reasonable tenor, sufficient in the reasonable judgment of the Company and the Trustee, to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. Every replacement Note shall constitute an additional obligation of the Company.

Outstanding Notes. Notes outstanding at any time are all the Notes that have been authenticated by the Trustee except those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to the provisions of 0, a Note does not cease to be outstanding because the Company or any of its Affiliates holds the Note.

If a Note is replaced pursuant to 0 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to 0.

Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver, consent or notice, Notes owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee has been informed in writing by the Company to be so owned shall be so considered. The Company shall notify the Trustee, in writing, when either it or, to its knowledge, any of its Affiliates repurchases or otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise acquired and such other information as the Trustee may reasonably request and the Trustee shall be entitled to rely thereon.

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Temporary Notes. Until typewritten or printed Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon receipt of a written order of the Company in the form of an Officers’ Certificate. The Officers’ Certificate shall specify the amount of temporary Notes to be authenticated and the date on which the temporary Notes are to be authenticated. Temporary Notes shall be substantially in the form of typewritten or printed Notes but may have variations that the Company considers appropriate for temporary Notes and so indicates in the Officers’ Certificate. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate, upon receipt of a written order of the Company pursuant to 0, typewritten or printed Notes in exchange for temporary Notes.

Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange, payment, repurchase, redemption or conversion. The Trustee, or at the direction of the Trustee, the Registrar, the Paying Agent or the Conversion Agent, and no one else, shall cancel and, at the written direction of the Company, shall dispose, in its customary manner, of all Notes surrendered for transfer, exchange, payment, repurchase, redemption, conversion or cancellation. Subject to 0, the Company may not issue new Notes to replace Notes that it has paid or delivered to the Trustee for cancellation. If the Company shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this 0.

Interest and Defaulted Amounts.

(d) Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Note attached as Exhibit A hereto or from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid, from November 10, 2010. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months.

(e) The Person in whose name any Note (or its Predecessor Note) is registered on the Register at the close of business on any Interest Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. Interest shall be payable at the office or agency of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office. The Company shall pay interest (i) on any Physical Notes (A) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Register and (B) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to the Holders of these Notes or upon application by a Holder to the Registrar not later than the relevant Interest Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

(f) The Company shall (i) pay interest on overdue principal on any Note (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and (ii) to the extent lawful, pay interest on overdue installments of interest (without regard to any applicable grace periods) (any such overdue

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principal and interest, “Defaulted Amounts”). Interest shall accrue on any Defaulted Amounts at the rate of interest borne by the Notes, plus one percent from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company. Such interest on Defaulted Amounts shall be computed on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed.

(g) The Company shall pay interest on any Defaulted Amounts plus (to the extent lawful) any interest payable on such interest (such interest, the “Defaulted Interest”), to the Persons who are Holders on a subsequent special record date, which special record date shall be the fifteenth day next preceding the date fixed by the Company for the payment of the Defaulted Interest or the next succeeding Business Day if such date is not a Business Day. 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 (a “Defaulted Interest Payment Date”), 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 provided in this 0; provided, however, that in no event shall the Company deposit monies proposed to be paid in respect of Defaulted Interest later than 11:00 a.m. New York City time on the proposed Defaulted Interest Payment Date. At least 15 days before the subsequent special record date, the Company shall mail (or cause to be mailed) to each Holder, as of a recent date selected by the Company, with a copy to the Trustee at least 20 days prior to such special record date, a notice that states the subsequent special record date, the Defaulted Interest Payment Date and the Defaulted Interest, and interest payable on such Defaulted Interest, if any, to be paid. Notwithstanding the foregoing, any interest which is paid prior to the expiration of the 30-day period set forth in ARTICLE VI(a) shall be paid to Holders as of the regular Interest Record Date for the Interest Payment Date for which interest has not been paid. Notwithstanding the foregoing, the Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange.

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

Any Notes that are, when issued, Restricted Securities shall be issued with a restricted CUSIP number. Until such time as the Company notifies the Trustee to remove the restrictive legend specified in (h) from the Notes, the restricted CUSIP shall be the CUSIP number for the Notes. At such time as the Company notifies the Trustee to remove the restrictive legend specified in (h) from the Notes, such legend shall for all purposes of this Indenture and the Notes (including this 0) be deemed removed from any Global Note and an unrestricted CUSIP number for the Notes shall be deemed to be the CUSIP number for the Notes.

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Deposit of Monies. Prior to 11:00 a.m. New York City time on each Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date, the Company shall have deposited with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in 0), in immediately available funds, money sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase Date as the case may be.

Restrictive Legends.

(h) Each Global Note and Physical Note that constitutes a Restricted Security (and all securities issued in exchange therefor or upon substitution thereof, other than Class A Common Stock, if any, issued upon conversion thereof as to which clause (b) of this 0 shall apply) shall, until the date that is one year (or such shorter period of time as permitted by Rule 144 under the Securities Act or any successor provision thereto) after the later of the last date of original issuance of the Notes and the last date on which the Company or any of its Affiliates was the owner of any Note (such date, the “Resale Restriction Termination Date”), bear a legend in substantially the form of the Restricted Note Legend (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee).

(i) Any stock certificate representing Class A Common Stock issued upon conversion of the Notes shall, until the Resale Restriction Termination Date, bear a legend in substantially the form of the Restricted Common Stock Legend (unless the Note or such Class A Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Class A Common Stock has been issued upon conversion of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Class A Common Stock).

Book-Entry Provisions for Global Notes.

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(j) The Global Notes initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear the global note legend as set forth in Exhibit B.

(k) Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Notes, and the Depositary may be treated by the Company, the Trustee and any Agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any Agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

(l) Notwithstanding any other provisions of this Indenture, a Global Note may not be transferred, except as a whole by the Depositary to a nominee of the Depositary, or by a nominee of the Depositary to the Depositary or another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Interests of beneficial owners in a Global Note may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depositary and the provisions of 0. In addition, Physical Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Note if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Notes or the Depositary ceases to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Company within 90 days of such notice, (ii) the Company decides to discontinue use of the system of book-entry transfer through the Depositary (or any successor depositary), or (iii) an Event of Default has occurred and is continuing.

(m) In connection with any transfer or exchange of a portion of the beneficial interest in a Global Note to beneficial owners pursuant to paragraph (c) of this 0, the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Company shall execute and the Trustee shall authenticate and deliver, one or more Physical Notes of like tenor and amount.

(n) In connection with the transfer of an entire Global Note to beneficial owners pursuant to paragraph (c) of this 0, such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Note, an equal aggregate principal amount of Physical Notes of authorized denominations.

(o) Any Physical Note constituting a Restricted Security delivered in exchange for an interest in a Global Note pursuant to paragraph (c) of this 0 shall, to the extent required pursuant to (h), bear the Restricted Note Legend.

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(p) The Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

Special Transfer Provisions.

(q) Each Global Note and Physical Note that bears or is required under (h) to bear the Restricted Note Legend (together with any Class A Common Stock issued upon conversion of the Notes and required to bear the Restricted Common Stock Legend under (i), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this 0 and the Restricted Note Legend or Restricted Common Stock Legend, as the case may be, unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.

(r) No transfer of any Note prior to the Resale Restriction Termination Date will be registered by the Registrar unless the applicable box on the Assignment Form has been checked.

(s) Any Note (or security issued in exchange or substitution therefor) as to which the restrictions on transfer in this 0 shall have expired in accordance with their terms may, upon surrender of such Note for exchange to the Registrar in accordance with the provisions of this 0, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by (h). The Company shall promptly notify the Trustee upon the occurrence of the Resale Restriction Termination Date and promptly after any registration statement with respect to the Notes or any Class A Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

(t) Any Class A Common Stock as to which such restrictions on transfer in this 0 shall have expired in accordance with their terms may, upon surrender of the certificates representing such shares of Class A Common Stock for exchange in accordance with the procedures of the transfer agent for the Class A Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Class A Common Stock, which shall not bear the restrictive legend required by (i).

(u) By its acceptance of any Note bearing the Restricted Note Legend, each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Restricted Note Legend and agrees that it will transfer such Note only as provided in this Indenture.

(v) The Registrar shall retain copies of all letters, notices and other written communications received pursuant to 0 or this 0. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time during the Registrar’s normal business hours upon the giving of reasonable written notice to the Registrar.

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(w) Any Note or Class A Common Stock issued upon the conversion or exchange of a Note that is repurchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate.

(x) In connection with the purchase by the Company or any Affiliate thereof of any Note or Class A Common Stock issued upon the conversion or exchange of a Note, or any beneficial interest therein by the Company or any Affiliate thereof, the Company shall file with the Trustee and Registrar a written notice identifying the transaction as such for the purposes hereof.

(y) As used in this 0, the term “transfer” encompasses any pledge, transfer or other disposition whatsoever of any Restricted Security.

ARTICLE III.

REDEMPTION AND REPURCHASE

Section 3.1 Right of Redemption and Repurchase.

(a) A redemption or repurchase of the Notes by the Company, as permitted by any provision of this Indenture, shall be made:

(i) with respect to a redemption at the Company’s option, in accordance with paragraph 6 of the Notes and with 0;

(ii) with respect to a repurchase at the Holder’s option, in accordance with paragraph 7 of the Notes and 0 (a “Purchase at Holder’s Option”); and

(iii) with respect to any repurchase upon a Fundamental Change, in accordance with paragraph 8 of the Notes and 0 (a “Repurchase Upon Fundamental Change”),

in each case, in accordance with the applicable provisions of this Article III.

(b) The Company will comply with all federal and state securities laws in connection with any offer to sell or solicitations of offers to buy Notes pursuant to this Article III.

(c) Nothing herein shall preclude any tax withholding required by law or regulation with respect to any contingent interest paid by the Company.

No Redemption Prior to December 20, 2015.

The Notes are not subject to redemption at the Company’s option at any time prior to December 20, 2015.

Optional Redemption.

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The Company shall have the right, at the Company’s option, at any time, and from time to time, on a date fixed by the Company (each, a “Redemption Date”) occurring on or after December 20, 2015, to redeem (an “Optional Redemption”) all or any part of the Notes at a price payable in cash equal to the Redemption Price. Notwithstanding the foregoing, the Company shall not redeem the Notes at a time when it has failed to pay any interest on the Notes when due and such failure is continuing.

Redemption Date; Payment of Accrued and Unpaid Interest.

Notwithstanding anything in this Indenture or the Notes to the contrary: (A) in no event shall any Redemption Date be a day that is not a Business Day; and (B) if the Redemption Date with respect to a Note is after an Interest Record Date and prior to the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note to, but excluding, such Interest Payment Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Redemption Price for such Note shall not include such accrued and unpaid interest and the Redemption Price shall be equal to 100% of the principal amount of the Notes to be redeemed.

Notice of Redemption.

(d) At least thirty-five (35) days but not more than sixty (60) days before a Redemption Date, the Company shall mail, or cause to be mailed, a notice of redemption (“Notice of Redemption”) to the Trustee, the Paying Agent and each Holder whose Notes are to be redeemed at the address of such Holder in the Register.

(e) The Notice of Redemption shall identify the Notes and the aggregate principal amount thereof to be redeemed pursuant to the redemption and shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the Conversion Rate and the Conversion Price;

(iv) the names and addresses of the Paying Agent and the Conversion Agent;

(v) the procedures a Holder must follow to convert its Notes, that Holders who want to convert Notes must satisfy the requirements of Article XI;

(vi) the paragraph of the Notes pursuant to which the Notes are to be redeemed;

(vii) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price therefor;

(viii) the CUSIP number or numbers, as the case may be, of the Notes to be redeemed; and

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(ix) in case any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender of such Note, a new Note in principal amount equal to the unredeemed portion thereof shall be issued.

(f) At the Company’s request, upon reasonable prior notice, the Trustee shall mail the Notice of Redemption in the Company’s name and at the Company’s expense; provided, however, that the form and content of such notice shall be prepared by the Company.

(g) A Notice of Redemption shall be irrevocable.

Notices to Trustee.

If the Company elects to redeem Notes pursuant to 0, it shall notify the Trustee of the Redemption Date, the applicable provision of this Indenture pursuant to which the redemption is to be made and the aggregate principal amount of Notes to be redeemed, which notice shall be provided to the Trustee by the Company at least fifteen (15) days prior to the mailing, in accordance with 0, of the Notice of Redemption (unless a shorter notice period shall be satisfactory to the Trustee).

Selection of Notes to Be Redeemed.

If the Company has elected to redeem less than all the Notes pursuant to 0, the Trustee shall, within five (5) Business Days after receiving the notice specified in 0, select the Notes to be redeemed by lot, on a pro rata basis or in accordance with any other method the Trustee considers fair and appropriate, provided such method is not prohibited by the rules of any stock exchange or quotation association on which the Notes or the Class A Common Stock may then be traded or quoted. The Trustee shall make such selection from Notes then outstanding and not already to be redeemed by virtue of having been previously called for redemption. Notes and portions of them the Trustee selects for redemption shall be in amounts of $1,000 principal amount or integral multiples of $1,000 principal amount. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and the principal amount thereof to be redeemed.

The Registrar need not register the transfer of or exchange any Notes that have been selected for Redemption, except the unredeemed portion of the Notes being redeemed in part.

Effect of Notice of Redemption.

Once Notice of Redemption is mailed, Notes called for redemption become due and payable on the applicable Redemption Date and at the place or places stated in the Notice of Redemption, and, on and after such Redemption Date (unless there shall be a Default in the payment of such consideration), except as otherwise provided herein, such Notes shall cease to bear interest, and all rights of the Holders with respect to such Notes shall terminate, other than the right to receive such consideration upon surrender of such Notes to the Paying Agent (except that, if the Redemption Date is after an Interest Record Date and before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

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Notwithstanding anything in this Indenture or the Notes to the contrary, there shall be no redemption of any Notes if the principal amount of the Notes has been accelerated pursuant to 0 and such acceleration shall not have been rescinded on or before the applicable Redemption Date. The Paying Agent will promptly return to the respective Holders thereof any Notes tendered to it for redemption during the continuance of such an acceleration.

Payment of Redemption Price.

(h) Subject to receipt of funds by the Paying Agent as provided in 0, payment for the Notes to be redeemed shall be made promptly after the later of (i) the Redemption Date for such Notes, and (ii) the time such Note (together with all necessary endorsements) is surrendered or transferred, by book-entry, to the Trustee or the Paying Agent by the Holder thereof in the manner required by 0 (except that, if the Redemption Date is after an Interest Record Date and before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent). The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose.

(i) If, by 11:00 A.M., New York City time on the applicable Redemption Date, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be redeemed on such Redemption Date, then (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Redemption Price and previously accrued but unpaid interest upon delivery of the Notes).

(j) If any Note shall not be fully and duly paid in accordance herewith upon redemption, the consideration payable on the applicable Redemption Date shall bear interest pursuant to 0 and such Note shall continue to be convertible pursuant to Article XI.

Notes Redeemed in Part.

Any Note to be submitted for redemption only in part shall be delivered pursuant to 0 (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 its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Note, without service charge to the Holder, a new Note or Notes, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Note not submitted for redemption.

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If the Trustee selects a portion of a Holder’s Notes for partial redemption pursuant to 0 and the Holder converts a portion of its Notes, the converted portion will be deemed to be from the portion selected for redemption.

Purchase of Notes at Option of the Holder.

(k) At the option of the Holder thereof, Notes (or portions thereof that are integral multiples of $1,000 in principal amount) shall be purchased by the Company on December 15, 2015 (the “Option Purchase Date”), at a purchase price, payable in cash, equal to the Option Purchase Price for such Notes, upon:

(i) delivery to the Trustee or any Paying Agent, by such Holder, at any time from the opening of business on the date that is twenty (20) Business Days prior to the Option Purchase Date until the close of business on the Business Day immediately preceding the Option Purchase Date, of a Purchase Notice, in the form set forth in the Notes or any other form of written notice substantially similar thereto, in each case, duly completed and signed, with appropriate signature guarantee, stating:

(A) the certificate number(s) of the Notes which the Holder will deliver to be purchased, if such Notes are Physical Notes;

(B) the portion of the principal amount of Notes to be purchased, which must be $1,000 or an integral multiple thereof; and

(C) that such principal amount of Notes are to be purchased by the Company as of the Option Purchase Date pursuant to the terms and conditions specified in paragraph 7 of the Notes and this 0; and

(ii) delivery or book-entry transfer to the Trustee or a Paying Agent, at any time after delivery of such Purchase Notice, of such Notes (together with all necessary endorsements), such delivery or transfer being a condition to receipt by the Holder of the Option Purchase Price therefor (except that, if the Option Purchase Date is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

If such Notes are held in book-entry form through the Depositary, the Purchase Notice, and each withdrawal of any Purchase Notice, shall comply with applicable procedures of the Depositary.

Upon such delivery of Notes to the Company (if it is acting as its own Paying Agent) or such Paying Agent, such Holder shall be entitled to receive from the Company or such Paying Agent, as the case may be, a nontransferable receipt of deposit evidencing such delivery.

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Notwithstanding anything in this Indenture, or the Notes to the contrary, any Holder that has delivered the Purchase Notice contemplated by this Section 3.1(k) to the Trustee or any Paying Agent shall have the right to withdraw such Purchase Notice by delivery, at any time prior to the close of business on the Business Day immediately preceding the Option Purchase Date, of a written notice of withdrawal to the Trustee or any Paying Agent, which notice shall contain the information specified in Section 3.1(l)(vii).

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

Notwithstanding anything in this Indenture or the Notes to the contrary, if the Option Purchase Date with respect to a Note to be purchased by the Company pursuant to a Purchase at Holder’s Option is after an Interest Record Date and on or before the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note to, but excluding, such Option Purchase Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Option Purchase Price for such Note shall not include such accrued and unpaid interest and the Option Purchase Price shall be equal to 100% of the outstanding principal amount of the Notes to be purchased.

(l) The Company shall give notice (the “Option Purchase Notice”), on or before the twentieth (20^th) Business Day prior to the Option Purchase Date to the Trustee, each Paying Agent, each Holder at its address shown on the Register, and each beneficial owner as required by applicable law. The Option Purchase Notice shall include the form of Purchase Notice to be completed by a Holder and shall state:

(i) that Holders have the right to require the Company to purchase all or any portion of their Notes pursuant to this 0 and the last date on which a Holder may exercise such right;

(ii) the Option Purchase Price;

(iii) the Conversion Rate and the Conversion Price;

(iv) the names and addresses of the Trustee, each Paying Agent and the Conversion Agent;

(v) that Notes with respect to which a Purchase Notice is given by a Holder may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this 0;

(vi) the procedures the Holder must follow to exercise rights under this 0 and a brief description of those rights;

(vii) that a Holder will be entitled to withdraw its election in the Purchase Notice if the Trustee or any Paying Agent receives, at any time prior to the close of business on the Business Day immediately preceding the Option Purchase Date, a letter or telegram, telex or facsimile transmission (receipt of

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which is confirmed and promptly followed by a letter) setting forth (I) the name of such Holder, (II) a statement that such Holder is withdrawing its election to have Notes purchased by the Company on the Option Purchase Date pursuant to a Purchase at Holder’s Option, (III) the certificate number(s) of such Notes to be so withdrawn, if such Notes are Physical Notes, (IV) the principal amount of the Notes of such Holder to be so withdrawn, which amount must be $1,000 or an integral multiple thereof and (V) the principal amount, if any, of the Notes of such Holder that remain subject to the Purchase Notice delivered by such Holder in accordance with this 0, which amount must be $1,000 or an integral multiple thereof; and

(viii) the CUSIP number or numbers, as the case may be, of the Notes.

At the Company’s request, upon reasonable prior notice, the Trustee shall mail such Option Purchase Notice in the Company’s name and at the Company’s expense; provided, however, that the form and content of such Option Purchase Notice shall be prepared by the Company.

No failure of the Company to give the Option Purchase Notice shall limit any Holder’s right to exercise its rights to require the Company to purchase such Holder’s Notes pursuant to a Purchase at Holder’s Option.

(m) Notes with respect to which a Purchase Notice has been duly delivered in accordance with this 0 may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this 0 or if there shall be a Default in the payment of the consideration payable as herein provided upon a Purchase at Holder’s Option.

Repurchase at Option of Holder Upon a Fundamental Change.

(n) In the event any Fundamental Change shall occur, unless the Company has exercised its right to redeem all outstanding Notes by delivering a Notice of Redemption pursuant to 0, the Company shall make an offer (a “Fundamental Change Offer”) to each Holder to repurchase all or any part (equal to integral multiples of $1,000 in principal amount) of such Holder’s Notes, unless (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for a Fundamental Change Offer by the Company pursuant to this 0, and (ii) such third party purchases all Notes properly tendered and not withdrawn under its offer. In a Fundamental Change Offer, the Company shall offer to repurchase Notes on a date selected by the Company (the “Fundamental Change Repurchase Date”), which Fundamental Change Repurchase Date shall be no later than thirty five (35) calendar days, nor earlier than twenty (20) calendar days, after the date the Fundamental Change Notice (as defined below) is mailed in accordance with Section 3.1(o), other than as required by law, at a price, payable in cash, equal to the Fundamental Change Repurchase Price for such Notes, and Holders shall have the right (the “Fundamental Change Repurchase Right”) to require the Company to purchase their Notes upon:

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(iii) delivery to the Trustee or any Paying Agent, by such Holder, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, of a Purchase Notice, in the form set forth in the Notes or any other form of written notice substantially similar thereto, in each case, duly completed and signed, with appropriate signature guarantee, stating:

(A) the certificate number(s) of the Notes which the Holder will deliver to be purchased, if such Notes are in Physical Notes;

(B) the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and

(C) that such principal amount of Notes are to be purchased as of the applicable Fundamental Change Repurchase Date pursuant to the terms and conditions specified in this 0; and

(iv) delivery or book-entry transfer to the Trustee or a Paying Agent, at any time after delivery of such Purchase Notice, of such Notes (together with all necessary endorsements), such delivery or transfer being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor (except that, if the Fundamental Change Repurchase Date is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender such Notes to the Paying Agent).

If such Notes are held in book-entry form through the Depositary, the Purchase Notice, and each withdrawal of any Purchase Notice, shall comply with applicable procedures of the Depositary.

Upon such delivery of Notes to the Company (if it is acting as its own Paying Agent) or such Paying Agent, such Holder shall be entitled to receive from the Company or such Paying Agent, as the case may be, a nontransferable receipt of deposit evidencing such delivery.

Notwithstanding anything in this Indenture or the Notes to the contrary, any Holder that has delivered the Purchase Notice contemplated by this Section 3.1(n) to the Trustee or any Paying Agent shall have the right to withdraw such Purchase Notice by delivery, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, of a written notice of withdrawal to the Trustee or any Paying Agent, which notice shall contain the information specified in Section 3.1(o)(viii).

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

Notwithstanding anything in this Indenture or the Notes to the contrary, if the Fundamental Change Repurchase Date with respect to a Note to be purchased by the Company pursuant to a Fundamental Change Offer is after an Interest Record Date and on or before the immediately following Interest Payment Date, then (i) accrued and unpaid interest on such Note

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to, but excluding, such Fundamental Change Repurchase Date shall be paid, on such Interest Payment Date, to the Holder of record of such Note at the close of business on such Interest Record Date and (ii) the Fundamental Change Repurchase Price for such Note shall not include such accrued and unpaid interest and the Fundamental Change Repurchase Price shall be equal to 100% of the outstanding principal amount of the Notes to be repurchased.

(o) Within twenty (20) calendar days after the occurrence of a Fundamental Change (or, at the Company’s option, prior to the occurrence of a Fundamental Change, but after public announcement of the transaction or condition that constitutes or may constitute a Fundamental Change), the Company shall mail, or cause to be mailed, to each Holder of the Notes, at its address shown on the Register, and to beneficial owners as required by applicable law, a notice (the “Fundamental Change Notice”) of the occurrence of such Fundamental Change and offering to repurchase the Notes on the Repurchase Date specified in the Fundamental Change Notice. The Company shall deliver a copy of the Fundamental Change Notice to the Trustee. Each Fundamental Change Notice shall state:

(i) the events causing the Fundamental Change;

(ii) the date of such Fundamental Change;

(iii) the Fundamental Change Repurchase Date;

(iv) the last date by which the Fundamental Change Repurchase Right must be exercised;

(v) the Fundamental Change Repurchase Price;

(vi) the names and addresses of the Paying Agent and the Conversion Agent;

(vii) a description of the procedures which a Holder must follow to exercise the Fundamental Change Repurchase Right;

(viii) that a Holder will be entitled to withdraw its election in the Purchase Notice if the Trustee or any Paying Agent receives, at any time prior to the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date, a letter or telegram, telex or facsimile transmission (receipt of which is confirmed and promptly followed by a letter) setting forth (I) the name of such Holder, (II) a statement that such Holder is withdrawing its election to have Notes purchased by the Company on such Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change, (III) the certificate number(s) of such Notes to be so withdrawn, if such Notes are Physical Notes, (IV) the principal amount of the Notes of such Holder to be so withdrawn, which amount must be $1,000 or an integral multiple thereof and (V) the principal amount, if any, of the Notes of such Holder that remain subject to the Purchase Notice delivered by such Holder in accordance with this 0, which amount must be $1,000 or an integral multiple thereof;

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(ix) the Conversion Rate and any adjustments to the Conversion Rate that will result from such Fundamental Change;

(x) that Notes with respect to which a Purchase Notice is given by a Holder may be converted pursuant to Article XI only if such Purchase Notice has been withdrawn in accordance with this 0;

(xi) the CUSIP number or numbers, as the case may be, of the Notes; and

(xii) if provided prior to the date of the consummation of the Fundamental Change, that the Fundamental Change Notice is conditioned on the Fundamental Change occurring prior to the applicable Fundamental Change Date.

At the Company’s request, upon reasonable prior notice, the Trustee shall mail such Fundamental Change Notice in the Company’s name and at the Company’s expense; provided, however, that the form and content of such Fundamental Change Notice shall be prepared by the Company.

No failure of the Company to give a Fundamental Change Notice shall limit any Holder’s right to exercise a Fundamental Change Repurchase Right.

(p) Notes with respect to which a Purchase Notice has been duly delivered in accordance with this 0 may be converted pursuant to Article XI, if such Purchase Notice has been withdrawn in accordance with this 0.

Payment of Option Purchase Price or Fundamental Change Repurchase Price.

(q) Subject to the provisions of 0 and 0, the Company shall pay, or cause to be paid, the Option Purchase Price or the Fundamental Change Repurchase Price, as the case may be, with respect to each Note to be repurchased to the Holder thereof as promptly as practicable, but in no event later than the later of the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be, and the time such Note (together with all necessary endorsements) is surrendered or transferred, by book-entry, is surrendered to the Paying Agent (except that, if the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be, is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender or transfer such Notes to the Paying Agent).

(r) Subject to receipt of funds by the Paying Agent as provided by 0, payment for the Notes surrendered for repurchase (and not withdrawn prior to the close of business on the Business Day immediately preceding the Option Purchase Date or the Fundamental Change Repurchase Date, as the case may be) shall be made promptly after the later of (i) the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, for such Notes (provided that the Holder has satisfied the conditions in Sections 3.1(k) or 3.1(n), as the case may be), and (ii) the time such Note (together with all necessary endorsements) is surrendered or

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transferred, by book-entry, to the Trustee or the Paying Agent by the Holder thereof in the manner required by Section 3.1(q) (except that, if the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, is after an Interest Record Date and on or before the immediately following Interest Payment Date, then accrued and unpaid interest on such Notes to, but excluding, such Interest Payment Date will be paid, on such Interest Payment Date, to the Holder(s) of record of such Notes at the close of business on such Interest Record Date without any requirement to surrender or transfer such Notes to the Trustee or the Paying Agent). The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose.

(s) If, by 11:00 A.M., New York City time on the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Option Purchase Date, then (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Option Purchase Price or Fundamental Change Repurchase Price, as the case may be, and previously accrued but unpaid interest upon delivery of the Notes).

(t) Any Note which is to be submitted for repurchase pursuant to 0 or 0 only in part shall be delivered pursuant to 0 or 0, as the case may be (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 its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Note not duly submitted for Repurchase Upon Fundamental Change.

(u) If any Note shall not be fully and duly paid in accordance herewith upon repurchase, the consideration payable on the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be, shall bear interest pursuant to 0 and such Note shall continue to be convertible pursuant to Article XI.

Repurchases Following Acceleration of the Notes.

Notwithstanding anything in this Indenture or the Notes to the contrary, there shall be no purchase of any Notes pursuant to 0 or 0 if the principal amount of the Notes has been accelerated pursuant to 0 and such acceleration shall not have been rescinded on or before the Option Purchase Date or Fundamental Change Repurchase Date, as the case may be (except in the case of an acceleration resulting from a default by the Company in the payment of the Option Purchase Price or Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Notes tendered to it for repurchase pursuant to 0 or 0, as the case may be, during the continuance of such an acceleration (except in the case of an acceleration resulting from a default by the Company in the payment of the Option Purchase Price or Fundamental Change Repurchase Price with respect to

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such Notes) and shall cancel any instructions for a book-entry transfer of the Notes in compliance with the procedures of the Depositary, in which case, upon such return or cancellation, as the case may be, the Purchase Notice or Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

Covenant to Comply with Applicable Laws Upon Repurchases.

Notwithstanding anything in this Indenture or the Notes to the contrary, in connection with any repurchase offer, the Company shall comply with all applicable tender offer rules under the Exchange Act, including Rule 13e-4, Rule 14e-1 and Regulation 14E thereunder, and with any other tender offer rules under the Exchange Act, and will file a Schedule TO or any other schedules required under the Exchange Act or any other applicable laws.

ARTICLE IV.

COVENANTS

Payment of Notes. The Company will promptly pay or cause to be paid the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on each of the Notes at the places and time and in the manner provided in the Notes and this Indenture. An installment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium or interest will be considered paid on the date it is due if the Trustee or Paying Agent holds on that date in accordance with this Indenture money designated for and sufficient to pay the installment then due.

The Company will pay or cause to be paid interest on overdue principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) pursuant to 0; it will also pay interest on overdue installments of interest pursuant to 0, to the extent lawful.

Rule 144A Information Requirement and Annual Reports.

(a) The Company shall deliver to the Trustee copies of the Company’s annual and quarterly reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act within fifteen (15) days after the Company is required to file such annual and quarterly reports, information, documents and other reports with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Documents that are filed by the Company with the SEC via EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee as of the time such documents are filed with EDGAR. The Company shall comply with the other provisions of Trust Indenture Act § 314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any

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of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). For the avoidance of doubt, the Company shall not be required to deliver to the Trustee any material for which the Company has sought and received confidential treatment by the SEC.

(b) In addition, if at any time the Company is not required to file with the SEC the annual and quarterly reports, information, documents and other reports described in clause (a) of this 0, the Company shall furnish to the Holders, holders of any Class A Common Stock issuable upon conversion of the Notes, and to beneficial owners and prospective investors in such Notes or shares, upon their request, the information, if any, required under Rule 144A(d)(4) under the Securities Act until such time as these securities are no longer “restricted securities” within the meaning of Rule 144 under the Securities Act. The Company shall take such further action as any Holder or beneficial owner of such Notes or such Class A Common Stock may reasonably request to the extent required from time to time to enable such Holder or beneficial owner to sell such Notes or shares of Class A Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time (assuming that no Affiliate of the Company has held any beneficial interest in such Notes or shares have).

Corporate Existence. Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company will not be required to preserve any such right or franchise if the Board of Directors determines that the preservation of the right or franchise is no longer desirable in the conduct of the business of the Company and that its loss will not be disadvantageous in any material respect to the Holders.

Compliance Certificate. The Company will deliver to the Trustee within 120 days after the end of each Fiscal Year of the Company an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any failure by the Company to comply with all conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof. The Company shall promptly deliver to the Trustee, and in any event within twenty (20) days after the Company becomes aware of the occurrence of any Event of Default or Default, an Officers’ Certificate describing the Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also will comply with TIA Section 314(a)(4). For the purposes of this provision of the Indenture, compliance is determined without regard to any grace period or requirement of notice under the Indenture.

Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Furnishing Guarantees. The Company shall cause any wholly owned Subsidiary formed or acquired after the date hereof (other than its finance company Subsidiaries and any foreign Subsidiaries), that guarantees any of the Company’s Indebtedness or guarantees the obligations of any Restricted Subsidiary as a guarantor of the Company’s Indebtedness, to become a Guarantor by causing, as promptly as practicable, but in any event not later than the

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date on which such Subsidiary becomes a guarantor of any other Indebtedness of the Company or any Subsidiary, such Subsidiary to execute and deliver to the Trustee a Guarantee in substantially the form of Exhibit D hereto and the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the 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.

ARTICLE V.

SUCCESSOR CORPORATION

Company May Consolidate, etc., Only on Certain Terms. The Company will not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

(1) the corporation formed by the consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety, if not the Company, will be a corporation organized and existing under the laws of the United States of America, or any State thereof or the District of Columbia, and expressly assumes, by one or more supplemental indentures, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on all the Notes and the performance of every covenant of this Indenture to be performed or observed by the Company;

(2) immediately after giving effect to the transaction, no Event of Default and no Default will have occurred and be continuing; and

(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the consolidation, merger, conveyance, transfer or lease and the supplemental indenture (or the supplemental indentures together) comply with this Article and that all the conditions precedent relating to the transaction set forth in this Section have been fulfilled.

Successor Corporation Substituted. Upon any event described in 0, the successor corporation will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if it had been named herein as the party of the first part, except in connection with a lease transaction of the Company’s properties and assets, substantially as an entirety, the predecessor corporation will be relieved of all obligations and covenants under this Indenture.

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ARTICLE VI.

DEFAULTS AND REMEDIES

Events of Default.

An “Event of Default” occurs if:

(a) there is a default by the Company in the payment when due of interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on the Notes, which default continues for a period of 30 days past the applicable due date;

(b) there is a failure to deliver the Make-Whole Applicable Increase upon a Make-Whole Fundamental Change as described in 0, which failure continues for a period of ten (10) Business Days past the applicable delivery date;

(c) there is a default by the Company in the payment when due of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) due with respect to the Notes, upon required repurchase, upon optional redemption, upon declaration of acceleration, or otherwise;

(d) the Company fails to timely provide a Fundamental Change Notice, as required by the provisions of this Indenture;

(e) there is a default by the Company with respect to its obligation to deliver the Conversion Consideration due upon conversion of the Notes, in accordance with 0, and such default continues for a period of ten (10) Business Days past the applicable settlement date;

(f) the Company fails to comply with its obligation to repurchase the Notes at the option of a Holder upon a Fundamental Change or on the Option Purchase Date, in each case in accordance with Article III;

(g) there is a default by the Company or any Restricted Subsidiary with respect to its obligation to pay Indebtedness for borrowed money (other than any Non-Recourse Indebtedness owed to the Company or any Restricted Subsidiary), which default shall have resulted in the acceleration of, or be a failure to pay at final maturity, Indebtedness aggregating more than $50 million;

(h) there is a failure by the Company to perform any other covenant or warranty of the Company herein, which continues for 30 days after written notice is provided in accordance with the requirements set forth below in this 0;

(i) final judgments or orders are rendered against the Company or any Restricted Subsidiary which require the payment by the Company or any Restricted Subsidiary of an amount (to the extent not covered by insurance) in excess of $50 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;

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(j) the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary), pursuant to any Bankruptcy Law applicable to the Company or such Significant Subsidiary (or such group): (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case against it; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors; or

(k) a court of competent jurisdiction enters an order or decree under any applicable Bankruptcy Law: (A) for relief in an involuntary case against the Company or any Significant Subsidiary (or any group of Subsidiaries that taken as a whole, would constitute a Significant Subsidiary); (B) appointing a Custodian of the Company or any such Significant Subsidiary (or any such group) or for any substantial part of its respective property; or (C) ordering the winding up or liquidation of the Company or any such Significant Subsidiary (or any such group); and the order or decree remains unstayed and in effect for 90 days.

Each of the occurrences described in clauses (a) through (k) of this 0 will constitute an Event of Default whatever the reason for the occurrence and whether it is voluntary or involuntary or is 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.

A Default under clause (h) of this 0 is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes with regard to which the Company has failed to comply with a covenant or agreement notify the Company and the Trustee, of the Default and the Company does not cure the Default within 30 days after the giving of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.”

The term “Bankruptcy Law” means Title 11 of the United States Code or any similar United States Federal or State law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

The Company will deliver to the Trustee, within 20 days after it occurs, written notice in the form of an Officers’ Certificate of any event of which the Company is aware which with the giving of notice and the lapse of time would become an Event of Default under clause (h), its status and what action the Company is taking or proposes to take with respect to it.

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% in aggregate principal amount of the Notes then outstanding by notice to the Company and the Trustee, may declare the outstanding principal of the Notes and any accrued and unpaid interest through the date of such declaration on all of the Notes to be immediately due and payable. Upon such a declaration, such outstanding principal amount and accrued and unpaid interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any), if any, shall be due and payable immediately. If an Event of Default specified in ARTICLE VI(j) or VI(k) occurs and is continuing, the outstanding principal amount 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 of the Notes then outstanding, on behalf of the Holders of all of the Notes, by notice to

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the Company and the Trustee (and without notice to any other Holder), may rescind any acceleration and its consequences or waive any past default if the rescission or waiver would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived, except a Default relating to the non-payment of the outstanding principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on, any Note, or a failure to convert any Notes pursuant to 0, a Default arising from the failure of the Company to redeem or repurchase any Notes pursuant to Sections 0, 0 and 0, or a Default in respect of any covenant that cannot be amended without the consent of each Holder affected. No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto.

In case the Trustee shall have proceeded to enforce any right under this 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.

The Trustee shall, within 90 days after a Trust Officer has knowledge of the occurrence of a Default or any 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 such Trust Officer, 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 (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest 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.

Other Remedies. If an Event of Default as to the Notes occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, and interest, if any, on the Notes or to enforce the performance of any provision under this Indenture.

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

Waiver of Existing Defaults. The Holders of a majority in aggregate principal amount of the Notes then outstanding, on behalf of the Holders of all the Notes, by notice to the Trustee may consent to the waiver of any past Default with regard to the Notes and its consequences except (i) a default in the payment of interest or premium, if any, on, or the

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principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price) of, Notes, (ii) a failure to redeem or repurchase any Notes as required under this Indenture or (iii) a default in respect of a covenant or a provision that under 0 cannot be modified or amended without the consent of the Holders of all Notes then outstanding. The defaults described in clauses (i) and (iii) in the previous sentence may be waived with the consent of the Holders of all Notes then outstanding. When a Default or Event of Default is waived, it is deemed cured and not continuing, but no waiver will extend to any subsequent or other Default or impair any consequent right. Without limiting the provisions of 0, the Trustee shall be compensated by the Company for all costs and expenses incurred by it in connection with any action taken by it pursuant to this 0.

Control by Majority. The Holders of a majority in principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee with regard to the Notes or of exercising any trust or power conferred on the Trustee with regard to the Notes. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to 0, that the Trustee determines is unduly prejudicial to the rights of other Holders or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action as a result of a direction given under this Section, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking that action.

Payments of Notes on Default; Suit Therefor. The Company covenants that upon the occurrence of an Event of Default described in ARTICLE VI(a) or VI(b), then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Holders, the whole amount that will then have become due and payable on all such Notes for the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, accrued and unpaid interest, if any (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) to the extent that payment of such interest is enforceable under applicable law on the overdue installments of interest at the rate borne by the Notes and the consideration due upon conversion of the Notes, if any; and, in addition, such further amount as will be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith. Until such demand by the Trustee, the Company may pay the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of and premium, if any, and interest on the Notes to the registered Holders, whether or not the Notes are overdue.

Limitation on Suits. Subject to Article VII relating to the duties of the Trustee, if an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. A Holder may not pursue any remedy with respect to this Indenture unless:

(l) the Holder gives to the Trustee written notice stating that an Event of Default is continuing;

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

(n) such Holder or Holders offer to the Trustee indemnity or security reasonably satisfactory to the Trustee against any costs, loss, liability or expense;

(o) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity, and the Event of Default has not been waived; and

(p) the Trustee has received no inconsistent direction from the Holders of a majority in principal amount of the Notes then outstanding during such 60-day period.

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

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or deliver, as the case may be, on or after such respective dates against the Company shall not be impaired or affected without the consent of such Holder.

Collection Suit by Trustee. If an Event of Default in payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, or interest, if any, specified in clause (a) or (b) of 0 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, and interest remaining unpaid (together with interest on that unpaid interest to the extent lawful) and the amounts provided for in 0.

Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under 0.

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Restoration of Positions. If a judicial proceeding by the Trustee or a Holder to enforce any right or remedy under this Indenture is dismissed or decided favorably to the Company, except as otherwise provided in the judicial proceeding, the Company, the Trustee and the Holders will be restored to the positions they would have been in if the judicial proceeding had not been instituted.

Priorities. If the Trustee collects any money pursuant to this Article VI with respect to the Notes, it will pay out the money or property in the following order:

FIRST: to the Trustee for amounts due under 0;

SECOND: to the Holders for amounts due and unpaid on the Notes for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium and interest, respectively; and

THIRD: to the Company.

The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before the record date, the Company will mail to each Holder and the Trustee a notice that states the record date, the payment date and the amount to be paid.

Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This 0 does not apply to a suit by the Trustee, a suit by a Holder pursuant to 0, or a suit by Holders of in aggregate more than 10% in principal amount of the Notes then outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, premium, if any, or interest on any Note held by that Holder on or after the due date provided in the Note or to any suit for the enforcement of the right to convert any Note pursuant to Article XI of this Indenture.

Reporting Event of Default.

(q) Notwithstanding anything in this Indenture or the Notes to contrary, if:

(i) an Event of Default occurs pursuant to clause (h) of 0 solely as a result of the Company’s failure to comply with 0 (such Event of Default, a “Reporting Event of Default”); and

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(ii) on or before the close of business on the date on which such Reporting Event of Default first occurs, the Company notifies, in writing, each Holder and the Trustee and Paying Agent that it elects the provisions of this 0 to apply with respect to such Reporting Event of Default (such notice, the “Reporting Event of Default Election Notice”),

then:

(A) the sole remedy for such Reporting Event of Default during the period consisting of the one hundred and eighty (180) calendar days after the date such Reporting Event of Default occurs shall consist exclusively of the payment of additional interest (“Additional Interest”) on each Note at a rate of 0.50% per annum on the principal amount of each Note;

(B) such Additional Interest shall be payable in arrears on each Interest Payment Date in the same manner as regular interest on the Notes;

(C) such Additional Interest shall accrue interest from, and including, the date of such Reporting Event of Default first occurs to, but excluding, the 180^th day thereafter or, if earlier, the date on which such Reporting Event of Default shall have been cured or waived; and

(D) on the 180^th day following the date such Reporting Event of Default first occurs, the Notes shall be subject to acceleration as provided in 0 if such Reporting Event of Default is not cured or waived prior to such date.

(r) In the event that the Company does not elect to pay Additional Interest following a Reporting Event of Default in accordance with this 0, the Notes shall be subject to acceleration as provided in 0.

(s) The provisions of this 0 shall not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default. The provisions of this 0 shall not be applicable in the event that the failure to comply with reporting obligations that gives rise to an Event of Default also gives rise to a default under, and results in the acceleration of, other indebtedness for borrowed money of the Company or any Subsidiary (other than Indebtedness that is non-recourse to the Company or any Subsidiary), in which case the Event of Default shall be subject to the remedies that are otherwise applicable as provided herein.

(t) The Additional Interest that is payable in accordance with this 0 shall be in addition to, and not in lieu of, any Restricted Transfer Default Interest that may be payable pursuant to 0.

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Restricted Transfer Default.

(u) If either:

(i) at any time during the six-month period beginning on, and including, the date that is six months after the last date on which any of the Notes are originally issued, (a) the Company fails to file timely any document or report that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods under SEC rules and other than current reports on Form 8-K), (b) the Company fails to submit electronically and post on its website every information data file the Company is required to submit and post, or (c) the Notes are not otherwise freely tradable by Holders other than the Affiliates of the Company (as a result of restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes); or

(ii) at any time after the first anniversary of the last date on which any of the Notes are originally issued, the restrictive legend on a Holder’s Notes specified in 0 is not removed in response to a prior request from the Holder, or the Notes are not otherwise freely tradable by Holders other than Affiliates of the Company (without restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes)

(each event referred to in clause (i) or (ii) being a “Restricted Transfer Default”), and the Company has not cured any such Restricted Transfer Default within 14 calendar days following the occurrence of such Restricted Transfer Default (that date being the “Restricted Transfer Triggering Date”), then the Company shall pay additional interest (“Restricted Transfer Default Interest”) on the Notes until the Restricted Transfer Default is cured. Restricted Transfer Default Interest on the Notes shall accrue with respect to the first 90-day period (or portion thereof) following the Restricted Transfer Triggering Date at the rate of 0.25% per annum of the principal amount of the Notes outstanding for each day during such period during which such Restricted Transfer Default is continuing, which rate shall increase by an additional 0.25% per annum of the principal amount of the Notes for each subsequent 90-day period (or portion thereof) until all Restricted Transfer Defaults have been cured, up to a maximum of 0.50% per annum of the principal amount of the Notes. Restricted Transfer Default Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes. Following the cure of all Restricted Transfer Defaults, the accrual of Restricted Transfer Default Interest arising from Restricted Transfer Defaults shall cease.

(v) If, and for so long as, the restrictive legend on a Holder’s Notes specified in 0 is not removed in response to a prior request from the Holder, or the Notes are not otherwise freely tradable by Holders other than Affiliates of the Company (without restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes), the Company may elect to designate an effective shelf registration statement for the resale of the Notes or any shares of the Class A Common Stock issuable upon conversion of the Notes. Restricted Transfer Default Interest will not accrue for any day on which such registration statement remains effective and usable by Holders for the resale of the Notes or any Class A Common Stock issuable upon conversion of the Notes. Any such registration will be effected on terms that are customary with regard to convertible notes that are offered in reliance upon Rule 144A under the Securities Act.

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(w) If Restricted Transfer Default Interest is payable by the Company pursuant to ARTICLE VI(u), the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (i) the amount of such Restricted Transfer Default Interest that is payable and (ii) the date on which such Restricted Transfer Default Interest is payable. Unless and until a Trust Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Restricted Transfer Default Interest is payable. If the Company has paid Restricted Transfer Default Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such payment.

(x) The Restricted Transfer Default Interest that is payable in accordance with this 0 shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Company’s election pursuant to 0.

Stay, Extension or Usury Laws. The Company agrees (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, any stay or extension law or any usury or other law, wherever enacted, now or at any subsequent time in force, which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, and/or interest on any of the Notes as contemplated in this Indenture, or which may affect the covenants or performance of this Indenture, and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and agrees that it will not hinder, delay or impede the execution of any power granted to the Trustee in this Indenture, but (to the extent that it may lawfully do so) will suffer and permit the execution of any such power as though no such law had been enacted.

Liability of Stockholders, Officers, Directors and Incorporators. No stockholder, officer, director, employee, incorporator or partner of the Company, as such, past, present or future, of the Company, or any of its successor corporations, will have any personal liability in respect of the Company’s obligations under this Indenture or any Notes by reason of his or its status as such stockholder, officer, director, employee, incorporator or partner; provided, however, that nothing in this Indenture or in the Notes will prevent recourse to and enforcement of the liability of any stockholder or subscriber to Capital Stock in respect of shares of Capital Stock which have not been fully paid up.

ARTICLE VII.

TRUSTEE

Duties of Trustee.

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

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

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations will be read into this Indenture against the Trustee; and

(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed in them, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture in the absence of bad faith on the Trustee’s part; provided, however, that in the case of any such certificate or opinion which by any provision hereof is specifically required to be furnished to the Trustee, then the Trustee will examine the certificates and opinions to determine whether or not they substantially conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculation or other facts stated therein).

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

(i) this paragraph does not limit the effect of paragraph (b) of this 0;

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

(iii) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction of the Holders of not less than a majority in principal amount of the Notes then outstanding pursuant to 0; and

(iv) the Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under this Indenture or in the exercise of any of its rights or powers, if it has reasonable grounds to believe repayment of the funds or adequate indemnity against the risk or liability is not reasonably assured to it.

(d) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of this 0 and to the provisions of the TIA.

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

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

Rights of Trustee.

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

(h) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and an Opinion of Counsel. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such an Officers’ Certificate or Opinion of Counsel.

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

(j) The Trustee will not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, except conduct which constitutes willful misconduct, negligence or bad faith.

(k) The Trustee may consult with counsel of its selection, and the Trustee will not be liable for any action it takes or omits in reliance on, and in accordance with, advice of such counsel or any Opinion of Counsel.

(l) The Trustee will not be required to investigate any facts or matters stated in any document, but if it decides to investigate any matters or facts, the Trustee or its agents or attorneys will be entitled to examine the books, records and premises of the Company at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(m) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

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

(o) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

(p) The Trustee shall not be deemed to have notice of any Default or Event of Default except any Default or Event of Default occurring pursuant to clause (a) or (b) of 0 if, at the time of the occurrence of such Default or Event of Default, the Trustee is the Paying Agent, unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by a Trust Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(q) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

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(r) Any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent, co-Registrar, co-Paying Agent or co-Conversion Agent may do the same with like rights. However, the Trustee must comply with Sections 0 and 0.

Trustee’s Disclaimer. The Trustee (i) is not responsible for and makes no representation as to the validity or adequacy of this Indenture, (ii) will not be accountable for the Company’s use of the proceeds from the Notes, and (iii) will not be responsible for any statement of the Company in this Indenture, other than the Trustee’s certificate of authentication, or in any document used in the sale of the Notes, other than statements, if any, provided in writing by the Trustee for use in such a document.

Notice of Defaults. The Trustee will give to the Holders notice of any Default with regard to the Notes known to the Trustee, within 90 days after it occurs; provided that, except in the case of a Default in the payment of the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or premium, if any, or interest on any Note, the Trustee will be protected in withholding notice of the Default if and so long as a committee of its Trust Officers in good faith determines that the withholding of the notice is in the interests of the Holders.

Reports by Trustee. Within 60 days after each November 30 beginning with the November 30 following the date of this Indenture, the Trustee will mail to each Holder, at the name and address which appears on the registration books of the Company, and to each Holder who has, within the two years preceding the mailing, filed that person’s name and address with the Trustee for that purpose and each Holder whose name and address have been furnished to the Trustee pursuant to 0, a brief report dated as of that November 30 which complies with TIA Section 313(a). The Trustee also will comply with TIA Section 313(b).

Compensation and Indemnity. The Company will pay to the Trustee from time to time reasonable compensation for its services as the Company and Trustee shall from time to time agree in writing. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or disbursements and advances made by it, including costs of collection, in addition to the compensation for its services. Those expenses will include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Company will indemnify the Trustee against any and all loss, claim, damage, liability or expense (including reasonable attorneys’ fees) incurred by it in connection with the administration of the trust created by this Indenture and the performance of its duties under this Indenture. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company of its obligations under this Section. The Company will defend the claim and the Trustee may have separate counsel and the Company will pay the fees

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and expenses of such counsel. The Company need not pay for any settlement made without its consent. The Company need not reimburse any expense or indemnify against any loss, expense or liability incurred by the Trustee to the extent it is due to the Trustee’s own willful misconduct, negligence or bad faith.

To secure the Company’s obligation to make payments to the Trustee under this 0, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, other than money or property held in trust to pay principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, or interest on, the Notes.

When the Trustee incurs expenses or renders services after an Event of Default specified in clause (j) or (k) of 0 occurs, the expenses and the compensation for the services of the Trustee are intended to constitute expenses of administration under any Bankruptcy Law.

For purposes of this 0, “Trustee” will include any predecessor Trustee, but the willful misconduct, negligence or bad faith of any Trustee will not affect the rights of any other Trustee under this 0.

The provisions of this 0 shall survive the termination of this Indenture.

Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Holders of a majority in aggregate principal amount of the Notes then outstanding may remove the Trustee by so notifying the Trustee and the Company and may appoint a successor Trustee. The Company may remove the Trustee if:

(s) the Trustee fails to comply with 0;

(t) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

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

(v) the Trustee becomes incapable of acting.

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

No removal or appointment of a Trustee will be valid if that removal or appointment would conflict with any law applicable to the Company.

A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee will, subject to the lien provided for in 0, transfer all property held by it as a Trustee to the successor Trustee, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee will mail notice of its succession to each Holder.

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If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the expense of the Company), the Company or the Holders of a majority in aggregate principal amount of the Notes then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with 0, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s obligations under 0 will continue for the benefit of the retiring Trustee.

Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another Person, the resulting, surviving or transferee Person will, without any further act, be the successor Trustee.

If at the time a successor by merger, conversion or consolidation to the Trustee succeeds to the trusts created by this Indenture any of the Notes have been authenticated but not delivered, the successor to the Trustee may adopt the certificate of authentication of the predecessor Trustee, and deliver the Notes which were authenticated by the predecessor Trustee; and if at that time any of the Notes have not been authenticated, the successor to the Trustee may authenticate those Notes either in the name of the predecessor or in its own name as the successor to the Trustee; and in either case the certificates of authentication will have the full force provided in this Indenture for certificates of authentication.

Eligibility; Disqualification. The Trustee will at all times satisfy the requirements of TIA Section 310(a). The Trustee will at all times have a combined capital and surplus of at least $50 million as set forth in its most recently published annual report of condition, which will be deemed for this paragraph to be its combined capital and surplus. The Trustee will comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9).

Preferential Collection of Claims. The Trustee will comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed will be subject to TIA Section 311(a) to the extent indicated.

ARTICLE VIII.

DISCHARGE OF INDENTURE

Termination of the Company’s Obligations. When the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated (other 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, then this Indenture shall cease to

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be of further effect with respect to the Notes (except as to the rights, obligations and immunities of the Trustee under this Indenture which expressly provide that they survive such termination), and the Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by 0 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to the Notes; 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 this Indenture or the Notes.

Officers’ Certificate; Opinion of Counsel. Upon any application or demand by the Company to the Trustee to take any action under 0, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the 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 such Officers’ Certificate and Opinion of Counsel provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant pursuant to the previous paragraph shall comply with the provisions of Section 13.2.

ARTICLE IX.

MODIFICATION OF THE INDENTURE

Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Notes without notice to or consent of any Holder:

(a) to cure any ambiguity, defect or inconsistency that does not adversely affect the rights of any Holder;

(b) to make any change that does not adversely affect the rights of any Holder;

(c) to provide for the assumption by a successor corporation of our obligations under the Indenture;

(d) to add guarantees, or to secure the obligations of the Company, with respect to the Notes;

(e) to add to the covenants of the Company in this Indenture for the benefit of Holders;

(f) to conform, as necessary, the Indenture and the form or terms of the Notes to the description thereof contained under the caption “Description of Notes” in the preliminary offering memorandum of the Notes dated November 4, 2010, as supplemented by the related pricing term sheet dated November 4, 2010;

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(g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes;

(h) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary for this Indenture to comply with any requirement of the SEC in connection with qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted; or

(i) to remove the ability to issue shares of Class A Common Stock in satisfaction of the Company’s obligation upon conversion of Notes; provided that no such amendment may be made (A) with respect to Notes after the Company has specified a Settlement Method for conversion of such Notes, (B) with respect to Notes that the Company has called for redemption after the date on which the Company has issued a Notice of Redemption pursuant to 0, or (C) after September 15, 2020.

With Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Notes without notice to any Holder but with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. The Holders of a majority in principal amount of the Notes then outstanding may waive compliance by the Company with any provision of this Indenture or the Notes without notice to any Holder. However, without the consent of the Holder so affected, no amendment, supplement or waiver, including a waiver pursuant to 0, may:

(j) extend the Maturity Date of any Note;

(k) reduce the rate or extend the time for payment of interest (including, without limitation, Contingent Interest, Additional Interest and Restricted Transfer Default Interest, if any) on any Note;

(l) reduce any principal amount of any Note, the Redemption Price, the Option Purchase Price or Fundamental Change Repurchase Price, or change the time at which or circumstances under which the Notes may or shall be repurchased or redeemed;

(m) impair the right of any Holder to receive payment of principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of, and interest on, such Holder’s Notes on or after the due dates therefore or to institute suit for the enforcement of any payment of any Note;

(n) change the currency in which any Note is payable;

(o) adversely affect the repurchase option of a Holder or the conversion rights of any Note under Article XI, or reduce the number of shares of the Class A Common Stock or any other property receivable upon conversion of any Note in accordance with Article XI;

(p) modify the redemption provisions of this Indenture in a manner adverse to the Holders;

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(q) modify the provisions of this Indenture with respect to amendments, modifications or waivers (including waiver of a Default or an Event of Default), except to increase the percentage required for an amendment, modification or waiver or to provide for the consent of each affected Holder;

(r) reduce the percentage of Notes required to consent to an amendment, supplement or waiver;

(s) make any change in 0 or 0 or the second sentence of this Section; or

(t) release any Guarantor except as provided in Article X hereof.

Notwithstanding anything to the contrary in this Indenture, without the consent of Holders of all of the Notes then outstanding, no amendment, supplement or waiver, including a waiver pursuant to 0, may reduce the percentage of Notes required to consent to an amendment, supplement or waiver.

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

Form of Amendment. After an amendment under this Article IX becomes effective, the Company will mail to the Holders a notice briefly describing the amendment. The failure to give such notice to all Holders, or any defect in a notice, will not impair or affect the validity of an amendment under this Section.

Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes will comply with the TIA as then in effect.

Revocation and Effect of Consents. A consent to an amendment, supplement or waiver by a Holder will bind the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to the Holder’s Note or portion of a Note. For a revocation to be effective, the Trustee must receive notice of the revocation before the date the amendment, supplement or waiver becomes effective. After an amendment, supplement or waiver becomes effective in accordance with its terms, it will bind every Holder of every Note.

Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of the Notes, the Trustee may require the Holder of a Note to deliver the Holder’s Note to the Trustee, who will place an appropriate notation about the amendment, supplement or waiver on the Note and will return it to the Holder. Alternatively, the Company may, in exchange for the Note, issue, and the Trustee will authenticate, a new Note that reflects the amendment, supplement or waiver.

Trustee to Sign Amendments, etc. The Trustee will sign any amendment, supplement or waiver authorized pursuant to Article II or this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does adversely affect those rights, liabilities or immunities, the Trustee may but need not sign it. The Company may not sign an amendment or supplement until the amendment or supplement is approved by an appropriate Board Resolution.

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In signing such amendment the Trustee shall receive indemnity reasonably satisfactory to it and shall receive, and shall be fully protected in relying upon, in addition to the documents required by 0, an Officers’ Certificate and an Opinion of Counsel each stating that such amendment is authorized or permitted by this Indenture and the TIA.

ARTICLE X.

GUARANTEE OF NOTES

Unconditional Guarantee. Each Guarantor, if any, hereby jointly and severally, unconditionally and irrevocably guarantees (such guarantee to be referred to herein as a “Guarantee”) to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, that: (a) all amounts due with respect to the Notes shall be duly and punctually paid in full when due, whether upon conversion, at maturity, by acceleration or otherwise, and interest on the overdue principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) and (to the extent permitted by law) interest, if any, on the Notes and all other obligations of the Company or the Guarantors to the Holders or the Trustee hereunder or thereunder and all other obligations shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Company to the Holders under this Indenture or under the Notes, for whatever reason, each Guarantor shall be obligated to pay, or to perform or cause the performance of, the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under each Guarantee, and shall entitle the Holders of Notes to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the obligations of the Company.

Each of the Guarantors hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, any release of any other Guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not a Guarantee is affixed to any particular Note, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each of the Guarantors hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and each Guarantee. Each Guarantee is a guarantee of payment and not of collection. Each Guarantor further agrees that, as between it, on

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the one hand, and the Holders of Notes and the Trustee, on the other hand, (a) subject to this Article X, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of each Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of each Guarantee.

No stockholder, officer, director, employee or incorporator, past, present or future, of any Guarantor, as such, shall have any personal liability under any Guarantee by reason of his, her or its status as such stockholder, officer, director, employee or incorporator.

Each Guarantor that makes a payment or distribution under its Guarantee shall be entitled to a contribution from each other Guarantor in an amount pro rata, based on the net assets of each Guarantor, determined in accordance with GAAP.

Limitations on Guarantees; Release or Suspension of Particular Guarantors’ Obligations. The obligations of each Guarantor under its Guarantee will be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantors in respect of the obligations of such other Guarantors under their Guarantees or pursuant to their contribution obligations under this Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

Additionally, if any Guarantor is released from its guarantee (rather than a suspension of its guarantee) of the outstanding Indebtedness of the Company or the obligations of any Restricted Subsidiary as a guarantor of the Company’s Indebtedness, such Guarantor shall be automatically released from its obligations as Guarantor, and from and after such date, such Guarantor shall cease to constitute a Guarantor and a Restricted Subsidiary.

The obligations of a Guarantor will be automatically suspended, and such Guarantor shall not constitute a guarantor and shall not have any obligations with regard to the Notes, during any period when the principal amount of the Company’s obligations and any Restricted Subsidiary’s obligations as a guarantor of the Company’s obligations, in each case other than the Notes and other Indebtedness containing provisions similar to this, that the Guarantor is guaranteeing total less than $75 million.

Execution and Delivery of Guarantee. To further evidence the Guarantee set forth in ARTICLE X(a), each Guarantor hereby agrees to execute and deliver to the Trustee a Guarantee in substantially the form of Exhibit D hereto. Such Guarantee shall be executed on behalf of each Guarantor by either manual or facsimile signature of an officer or agent of each Guarantor, each of whom, in each case, shall have been duly authorized to so execute by all requisite corporate action. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any Note or Notes.

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If an officer or agent of a Guarantor whose signature is on this Indenture or a Guarantee no longer holds that office at the time the Trustee authenticates a Note to which such Guarantee relates or at any time thereafter, such Guarantor’s Guarantee of such Note shall be valid nevertheless.

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

Release of a Guarantor due to Extraordinary Events. If no Default exists or would exist under this Indenture, upon the sale or disposition of all or substantially all of the assets of a Guarantor, or all of the Capital Stock of a Guarantor (including by consolidation, merger, issuance or otherwise), by the Company or a Subsidiary of the Company, or upon the consolidation or merger of a Guarantor with or into any Person (in each case, other than to the Company or an Affiliate of the Company or a Subsidiary), or if any Guarantor is dissolved or liquidated, such Guarantor and each Subsidiary of such Guarantor that is also a Guarantor, or the Person acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor), shall be deemed automatically and unconditionally released and discharged from all of its obligations under this Article X without any further action required on the part of the Trustee or any Holder.

The Trustee shall execute any documents reasonably requested by the Company or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Guarantee of the Notes under this Article X.

Nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.

Waiver of Subrogation. Until this Indenture is discharged and all of the Notes are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company’s obligations under the Notes or this Indenture and such Guarantor’s obligations under its Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders of Notes under the Notes, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Trustee or the Holders and shall forthwith be paid to the Trustee for the benefit of itself or such Holders to be credited and

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applied to the obligations in favor of the Trustee or the Holders, as the case may be, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this 0 is knowingly made in contemplation of such benefits.

No Set-Off. Each payment to be made by a Guarantor hereunder in respect of the Obligations shall be payable in the currency or currencies in which such Obligations are denominated, and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Obligations Absolute. The obligations of each Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by each Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof.

Obligations Continuing. The obligations of each Guarantor hereunder shall be continuing and shall remain in full force and effect until all the obligations have been paid and satisfied in full. Each Guarantor agrees with the Trustee that it will from time to time deliver to the Trustee suitable acknowledgments of its continued liability hereunder and under any other instrument or instruments in such form as counsel to the Trustee may advise and as will prevent any action brought against it in respect of any default hereunder being barred by any statute of limitations now or hereafter in force and, in the event of the failure of a Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and agent of such Guarantor to make, execute and deliver such written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Guarantor hereunder.

Obligations Not Reduced. Except as otherwise provided in Sections 0 and 0, the obligations of each Guarantor hereunder shall not be satisfied, reduced or discharged except solely by the payment of such principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable), premium, if any, interest, fees and other monies or amounts as may at any time prior to discharge of this Indenture pursuant to Article VIII be or become owing or payable under or by virtue of or otherwise in connection with the Notes or this Indenture.

Obligations Reinstate. The obligations of each Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of any Guarantor hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of a Guarantor) is rescinded or reclaimed from the Trustee or any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Company or any Guarantor or otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such Indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein.

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Obligations Not Affected. Except as otherwise provided in Sections 0 and 0, the obligations of each Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by any Guarantor or any of the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against any Guarantor hereunder or might operate to release or otherwise exonerate any Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including, without limitation:

(c) any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other Person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding up or other proceeding involving or affecting the Company or any other Person;

(d) any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Company or any other Person under this Indenture, the Notes or any other document or instrument;

(e) any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Notes, or to give notice thereof to a Guarantor;

(f) the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other Person or their respective assets or the release or discharge of any such right or remedy;

(g) the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;

(h) any change in the time, manner or place of payment of, or in any other term of, any of the Notes, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Notes or this Indenture, including, without limitation, any increase or decrease in any amount due with respect to any of the Notes;

(i) any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or a Guarantor;

(j) any merger or amalgamation of the Company or a Guarantor with any Person or Persons;

(k) the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Obligations or the obligations of a Guarantor under its Guarantee; and

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(l) any other circumstance (other than by complete, irrevocable payment) that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Notes or of a Guarantor in respect of its Guarantee hereunder.

Waiver. Without in any way limiting the provisions of ARTICLE X(a) hereof, each Guarantor hereby waives notice of acceptance hereof, notice of any liability of any Guarantor hereunder, notice or proof of reliance by the Holders upon the obligations of any Guarantor hereunder, and diligence, presentment, demand for payment on the Company, protest, notice of dishonor or non-payment of any of the Obligations, or other notice or formalities to the Company or any Guarantor of any kind whatsoever.

No Obligation to Take Action Against the Company. Neither the Trustee nor any other Person shall have any obligation to enforce or exhaust any rights or remedies or to take any other steps under any security for the Obligations or against the Company or any other Person or any Property of the Company or any other Person before the Trustee is entitled to demand payment and performance by any or all Guarantors of their liabilities and obligations under their Guarantees or under this Indenture.

Dealing with the Company and Others. The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Guarantor hereunder and without the consent of or notice to any Guarantor, may:

(m) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;

(n) take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;

(o) release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by this Indenture or the Notes;

(p) accept compromises or arrangements from the Company;

(q) apply all monies at any time received from the Company or from any security upon such part of the Obligations as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and

(r) otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.

Default and Enforcement. If any Guarantor fails to pay in accordance with ARTICLE X(a) hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of the Guarantee of any such Guarantor and such Guarantor’s obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from such Guarantor the obligations.

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Amendment, etc. No amendment, modification or waiver of any provision of this Indenture relating to any Guarantor or consent to any departure by any Guarantor or any other Person from any such provision will in any event be effective or affect the obligation of any other Guarantor unless it is signed by such Guarantor and the Trustee.

Acknowledgment. Each Guarantor hereby acknowledges communication of the terms of this Indenture and the Notes and consents to and approves of the same.

Costs and Expenses. Each Guarantor shall pay on demand by the Trustee any and all costs, fees and expenses (including, without limitation, legal fees) incurred by the Trustee, its agents, advisors and counsel or any of the Holders in enforcing any of their rights under any Guarantee.

No Merger or Waiver; Cumulative Remedies. No Guarantee shall operate by way of merger of any of the obligations of a Guarantor under any other agreement, including, without limitation, this Indenture. No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under the Notes or the Guarantees, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Notes or the Guarantees preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges in the Guarantee and under this Indenture, the Notes and any other document or instrument between a Guarantor and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Survival of Obligations. Without prejudice to the survival of any of the other obligations of each Guarantor hereunder, the obligations of each Guarantor under ARTICLE X(a) shall survive until the indefeasible payment in full of the Obligations and shall be enforceable against such Guarantor without regard to and without giving effect to any defense, right of offset or counterclaim available to or which may be asserted by the Company or any Guarantor.

Guarantee in Addition to Other Obligations. The obligations of each Guarantor under its Guarantee and this Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them.

Severability. Any provision of this Article X which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction unless its removal would substantially defeat the basic intent, spirit and purpose of this Indenture and this Article X.

Successors and Assigns. Each Guarantee shall be binding upon and inure to the benefit of each Guarantor and the Trustee and the Holders and their respective successors and permitted assigns, except that no Guarantor may assign any of its obligations hereunder or thereunder.

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Acknowledgement under TIA. Each Guarantor acknowledges that, by virtue of its Guarantee, it is becoming an “obligor” on indenture securities under the TIA.

ARTICLE XI.

CONVERSION

General. Subject to and upon compliance with the provisions of Article III and this Article XI, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion of the principal amount of a Note, if such portion is $1,000 principal amount or an integral multiple of $1,000 principal amount, (i) at any time prior to the close of business on the Business Day immediately preceding September 15, 2020, subject to satisfaction of the conditions, circumstances and during the periods described in Section 11.2(a), and (ii) whether or not the conditions described in Section 11.2(a) exist, on or after September 15, 2020 and 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 of 45.1794 shares of Class A Common Stock (the “Conversion Rate”) per $1,000 principal amount of Notes (subject to the settlement provisions of 0, the “Conversion Obligation”). The Conversion Rate shall be subject to adjustment in accordance with Sections 0 through 0.

Section 11.2 Conversion Privilege.

(a) (i) Prior to the close of business on the Business Day immediately preceding September 15, 2020, the Notes may be surrendered for conversion during the five Business Day period immediately after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder of Notes in accordance with this subsection (a)(i), for each Trading Day of the Measurement Period was less than 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the Conversion Rate on each such Trading Day. The Trading Prices shall be determined by the Bid Solicitation Agent pursuant to this subsection (a)(i) and the definition of Trading Price set forth in this Indenture. The Company shall provide written notice to the Bid Solicitation Agent of the three independent nationally recognized securities dealers selected by the Company pursuant to the definition of Trading Price, along with appropriate contact information for each. The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes unless the Company has requested such determination, and the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of the Notes would be less than 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the Conversion Rate, at which time the Company shall instruct the Bid Solicitation Agent to determine the Trading Price per $1,000 principal amount of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per Note is greater than or equal to 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the Conversion Rate. If the Company does not instruct the Bid Solicitation Agent to determine the Trading Price of the Notes when obligated as provided in the preceding sentence, or if the Company instructs the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent fails to make such determination, then, in either case, the Trading Price per $1,000 principal amount of Notes shall be deemed to be less

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than 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the Conversion Rate on each day of such failure. If the Trading Price condition set forth above has been met, the Company shall so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee). If, at any time after the Trading Price condition set forth above has been met, the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Class A Common Stock and the applicable Conversion Rate, the Company shall so notify the Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee).

(ii) If, prior to the close of business on the Business Day immediately preceding September 15, 2020, the Company elects to:

(A) issue to all or substantially all holders of its Class A Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of its Class A Common Stock, at a price per share that is less than the average of the Last Reported Sale Prices of the Class A Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or

(B) distribute to all or substantially all holders of its Class A Common Stock assets of the Company, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price of the Class A Common Stock on the Trading Day preceding the date of announcement for such distribution,

then, in either case, the Company shall notify all Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee) at least 30 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. Once the Company has given such notice, the Notes may be surrendered for conversion at any time until the earlier of (1) 5:00 p.m. New York City time on the Business Day immediately preceding the Ex-Dividend Date for such issuance or distribution and (2) the Company’s announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time.

(iii) If a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs prior to the close of business on the Business Day immediately preceding December 20, 2015, regardless of whether a Holder has the right to require the Company to purchase the Notes pursuant to Section 3.12, or if the Company is a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of its assets, pursuant to which the Class A Common Stock would be converted into cash, securities or other assets, the Notes may be surrendered for conversion at any time from or after the date that is 30 Scheduled Trading Days prior to the anticipated effective date of the transaction (or, if later, the Business Day after the Company gives notice of such transaction) until 35 Trading Days after the actual effective date of

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such transaction or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Repurchase Date. The Company shall notify Holders and the Trustee (i) as promptly as practicable following the date the Company publicly announces such transaction but in no event less than 30 Scheduled Trading Days prior to the anticipated effective date of such transaction or (ii) if the Company does not have knowledge of such transaction at least 30 Scheduled Trading Days prior to the anticipated effective date of such transaction, within one Business Day of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction but in no event later than the actual effective date of such transaction.

(iv) Prior to the close of business on the Business Day immediately preceding September 15, 2020, the Notes may be surrendered for conversion during any fiscal quarter commencing after the fiscal quarter ending on November 30, 2010 (and only during such fiscal quarter), if the Last Reported Sale Price of the Class A Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the Conversion Price on each applicable Trading Day. The Company shall determine at the beginning of each fiscal quarter commencing after November 30, 2010 whether the Notes may be surrendered for conversion in accordance with this clause (iv) and shall notify the Trustee if the Notes become convertible in accordance with this clause (iv).

(v) If the Company calls any or all of the Notes for redemption pursuant to Article III prior to the close of business on the Business Day immediately preceding September 15, 2020, then Holders may surrender Notes that have been so called for redemption at any time prior to the close of business on the Scheduled Trading Day prior to the Redemption Date, even if the Notes are not otherwise convertible at that time. After that time, the right to convert shall expire, unless the Company defaults in the payment of the Redemption Price, in which case a Holder of Notes may convert its Notes until the Redemption Price has been paid or duly provided for.

Conversion Procedure and Payment upon Conversion.

(b) If a Note is tendered for conversion in accordance with this Article XI, then:

(i) Subject to this 0, Section 11.2(w) and Section 11.2(ee), upon conversion of any Note, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Class A Common Stock, together with cash, if applicable, in lieu of any fractional share of Class A Common Stock in accordance with subsection (g) of this 0 (“Physical Settlement”) or a combination of cash and shares of Class A Common Stock, together with cash, if applicable, in lieu of any fractional share of Class A Common Stock in accordance with subsection (g) of this 0 (“Combination Settlement”), at its election, as set forth in this 0 (such cash, shares of Class A Common Stock or combination thereof, the “Conversion Consideration”).

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(A) All conversions occurring on or after September 15, 2020 and after the Company’s issuance of a Notice of Redemption with respect to the Notes and prior to the related Redemption Date shall be settled using the same Settlement Method.

(B) Prior to September 15, 2020, except for any conversions that occur after the Company’s issuance of a Notice of Redemption with respect to the Notes but prior to the related Redemption Date, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days.

(C) If, in respect of any Conversion Date (or the period beginning on, but excluding, September 15, 2020 and ending on, and including, the Business 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 close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring (x) after the date of issuance of a Notice of Redemption with respect to the Notes and prior to the related Redemption Date, in such Notice of Redemption or (y) on or after September 15, 2020, no later than September 15, 2020). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000. Such Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount. If the Company delivers a Settlement Notice electing Combination Settlement 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 $1,000.

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(D) The cash, shares of Class A Common Stock or combination of cash and shares of Class A Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:

(1) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver, or cause to be delivered, to the converting Holder a number of shares of Class A Common Stock equal to the product of (1) the aggregate principal amount of Notes to be converted, divided by $1,000, and (2) the Conversion Rate in effect on the Conversion Date;

(2) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 20 consecutive Trading Days during the related Observation Period; and

(3) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 20 consecutive Trading Days during the related Observation Period.

(ii) 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 applicable Observation 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 payable in lieu of any fractional share, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) in writing of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of fractional shares of Class A Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.

(iii) The Person in whose name any shares of Class A Common Stock constituting the Conversion Consideration due upon such conversion shall be treated as the stockholder of record of such shares as of the close of business on the relevant Conversion Date of such conversion (if the Company elects to satisfy the related Conversion Obligation by Physical Settlement) or the last Trading Day of the relevant Observation Period (if the Company elects to satisfy the related Conversion Obligation by Combination Settlement), as the case may be, and either stock certificates shall be delivered, or a book-entry transfer through the Depositary shall be made, to such Person for such shares of Class A Common Stock on such date. Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.

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(iv) except as provided in Section 11.13 and in connection with any recapitalization, reclassification or similar change to the Class A Common Stock in accordance with Section 11.10, the Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the third Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement, or on the third Business Day immediately following the last Trading Day of the Observation Period, in the case of any other Settlement Method. If any shares of Class A Common Stock are due to converting Holders, the Company shall issue or cause to be issued, and deliver to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the full number of shares of Class A Common Stock to which such Holder shall be entitled in satisfaction of the Company’s Conversion Obligation; and

(v) on and after the Conversion Date for such conversion, all rights of the Holder(s) of such Note with respect to such Note shall terminate, other than the right to receive the Conversion Consideration due upon such conversion in accordance with this Indenture.

(c) To convert a Note that is a Physical Note, a Holder must do each of the following:

(i) complete and manually sign the Conversion Notice on the back of the Note, or a facsimile of the Conversion Notice, and deliver such Conversion Notice to the Conversion Agent;

(ii) surrender the Note to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) pay all transfer or similar taxes, if any, as required by 0; and

(v) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in clause (c) of this 0.

If a Holder’s interest in a Note is a beneficial interest in a Global Note, in order to convert the Holder must comply with the last three requirements listed above for conversions of Physical Notes and comply with the Depositary’s procedures for converting a beneficial interest in a Global Note. No Conversion Notice with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Purchase Notice to the Company in respect of such Notes and not validly withdrawn such Purchase Notice in accordance with Section 3.12.

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 above in this clause (b) with respect to such Note. From and after the Conversion Date, such Note shall cease to be outstanding, and interest, if any, shall cease to accrue on such Note unless there shall be a Default in the payment or delivery of the Conversion Consideration payable hereunder upon such conversion; provided, however, that an exchange in lieu of conversion in accordance with 0 shall not be deemed to be a conversion for purposes of this paragraph.

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A Holder may obtain copies of the required form of Conversion Notice from the Conversion Agent.

(d) Upon conversion of a Note in accordance with this Article XI, the Holder of such Note shall not be entitled to receive, on account of such conversion, any separate cash payment for accrued and unpaid interest, except as provided in the immediately following sentence. The Company’s delivery of the Conversion Consideration due upon any conversion of a Note will be deemed to satisfy in full the Company’s obligation to pay (i) the principal amount of such Note, and (ii) accrued and unpaid interest to, but excluding, the Conversion Date of such conversion. As a result, accrued and unpaid interest to, but excluding, such Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. If a Holder surrenders a Note for conversion after the close of business on an Interest Record Date and prior to the opening of business on the immediately following Interest Payment Date, then, notwithstanding such conversion, the interest payable with respect to such Note on such Interest Payment Date shall be paid on such Interest Payment Date to the Holder of record of such Note at the close of business on such Interest Record Date; provided, however, that such Note, when surrendered for conversion, must be accompanied by payment to the Conversion Agent on behalf of the Company of an amount equal to the interest payable on such Interest Payment Date on the portion of such Note to be so converted, except that no such payment is required (i) if the Company shall have specified a Redemption Date or Fundamental Change Repurchase Date that is after such Interest Record Date and on or prior to such Interest Payment Date, (ii) if the Conversion Date for such conversion is after the Interest Record Date that immediately precedes the Maturity Date, or (iii) to the extent of any Defaulted Interest, if any Defaulted Interest exist as of the Conversion Date (it being understood that nothing in this Section 11.2(d) shall affect the Company’s obligations under 0).

(e) If a Holder converts more than one Note at the same time, the number of full shares of Class A Common Stock issuable, if any, upon such conversion shall be based on the total principal amount of all Notes converted.

(f) Upon surrender of a Note that is converted in part, the Trustee shall authenticate for the Holder a new Note equal in principal amount to the unconverted portion of the Note surrendered.

(g) If the last day on which a Note may be converted is not a Business Day, then the Note may be surrendered to that Conversion Agent on the next succeeding day that is a Business Day.

(h) The Company shall not issue any fractional share of Class A Common Stock upon conversion of the Notes and shall instead pay cash in lieu of any fractional share of Class A Common Stock issuable upon conversion based on the Daily VWAP of the Class A Common Stock on the relevant Conversion Date (in the case of Physical Settlement) or based on

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the Daily VWAP on the last Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the applicable Observation Period and any fractional shares remaining after such computation shall be paid in cash.

Taxes On Conversion. If a Holder converts its Note, the Company shall pay any documentary, stamp or similar issue or transfer tax or duty due on the issue of shares of Class A Common Stock upon such conversion, if any, unless the tax is due because such Holder requests that the shares of Class A Common Stock be issued in a name other than such Holder’s name, in which case such Holder shall pay such tax. Nothing herein shall preclude any tax withholding required by law or regulation.

Company to Provide Stock. The Company shall at all times reserve out of its authorized but unissued Class A Common Stock or Class A Common Stock held in its treasury enough shares of Class A Common Stock to permit the conversion, in accordance herewith, of all of the outstanding Notes (assuming that at the time of computation of such number of shares, all such Notes would be converted by a single Holder and that Physical Settlement is applicable).

All shares of Class A Common Stock which may be issued upon conversion of the Notes shall be validly issued, fully paid and non-assessable and shall be free of preemptive or similar rights and free of any lien or adverse claim.

The Company shall comply with all securities laws regulating the offer and delivery of shares of Class A Common Stock, if applicable, upon conversion of Notes.

Conversion Rate Adjustments. The Conversion Rate shall be subject to adjustment from time to time only as set forth below; provided, however, that the Company shall not make any adjustments to the Conversion Rate if Holders participate (as a result of holding the Notes, and at the same time as the holders of the Class A Common Stock participate) in any of the transactions described below as if such Holders held a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to the event that otherwise would result in a Conversion Rate adjustment, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder, without having to convert their notes.

(i) If the Company issues shares of Class A Common Stock as a dividend or distribution on shares of Class A Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

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where,

CR(0) = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be;

CR’ = the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be;

OS(0) = the number of shares of the Class A Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be; and

OS’ = the number of shares of the Class A Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

Any adjustment made pursuant to this Section 11.2(i) shall become effective immediately after (x) the open of business on the Ex-Dividend Date for such dividend or distribution or (y) the open of business on the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in Section 11.2(i) is declared but not so paid or made, the new Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(j) If the Company distributes to all or substantially all holders of Class A Common Stock any rights or warrants entitling them to purchase, for a period of not more than 45 days after the declaration date for the distribution, shares of Class A Common Stock at a price per share less than the average of the Last Reported Sale Prices of Class A Common Stock for the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the declaration date for such distribution, the Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to their expiration):

where,

CR(0) = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

CR’ = the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

OS(0) = the number of shares of the Class A Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such distribution;

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X = the total number of shares of the Class A Common Stock issuable pursuant to such rights or warrants; and

Y = the number of shares of the Class A Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period ending on, and including the Trading Day immediately preceding the Declaration Date for such distribution.

To the extent such rights or warrants are not exercised prior to their expiration or termination, 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 the delivery of only the number of shares of Class A Common Stock actually delivered. If such rights or warrants are not so issued, then the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if the date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. For the purposes of this Section 11.2(j) in determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of the Class A Common Stock at less than the Last Reported Sale Price per share of the Class A Common Stock on the Trading Day immediately preceding the declaration date of such distribution, and in determining the aggregate exercise price payable for such shares of Class A Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable upon exercise thereof, with the value of such consideration, if other than cash, as shall be determined in good faith by the Board of Directors.

Any increase made under this Section 11.2(j) will be made successively whenever any such rights or warrants are distributed and shall become effectively immediately after the open of business on the Ex-Dividend Date. If any right or warrant described in this Section 11.2(j) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of the Class A Common Stock actually delivered. If such rights or warrants are not so distributed, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to distribute such rights or warrants, to the Conversion Rate that would then be in effect if the Ex-Dividend Date for the distribution had not occurred.

(k) If the Company distributes shares of capital stock, evidences of the Company’s indebtedness or other assets or property or rights, options or warrants to acquire the Company’s capital stock or other securities, to all or substantially all holders of Class A Common Stock, excluding:

(i) dividends, distributions, rights or warrants as to which such an adjustment was effected pursuant to Section 11.2(i) and Section 11.2(j);

(ii) dividends or distributions paid exclusively in cash as to which such an adjustment was effected pursuant to Section 11.2(l) below; and

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(iii) spin-offs to which the provisions set forth below in this Section 11.2(k) shall apply,

(any of such shares of Capital Stock, evidences of indebtedness or other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate will be adjusted based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

CR’ = the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

SP(0) = the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period ending on and including the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined in good faith by the Board of Directors) of the shares of capital stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of the Class A Common Stock on the Ex-Dividend Date for such distribution.

If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 11.2(k) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Class A Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP(0)” (as defined above), in lieu of the foregoing increase, each Holder shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Class A Common Stock receive the Distributed Property, the amount of Distributed Property such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.

Such adjustment shall become effective immediately after the open for business on the Ex-Dividend Date for the applicable distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

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With respect to an adjustment pursuant to this Section 11.2(k) where there has been a payment of a dividend or other distribution on the Class A Common Stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit that are, or when issued, will be, traded on a U.S. national securities exchange, (each, a “spin-off”) the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the tenth Trading Day immediately following, and including, the effective date of the spin-off will be increased based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the tenth Trading Day immediately following, and including, the effective date of the spin-off;

CR’ = the new Conversion Rate in effect immediately after the tenth Trading Day immediately following, and including, the effective date of the spin-off;

FMV(0) = the average of the Last Reported Sale Prices of the capital stock or similar equity interest distributed to holders of the Class A Common Stock applicable to one share of the Class A Common Stock over the first ten consecutive Trading Day period immediately following, and including, the effective date of the spin-off; and

MP(0) = the average of the Last Reported Sale Prices of the Class A Common Stock over the first ten consecutive Trading Day period immediately following, and including, the effective date of the spin-off.

Such adjustment to the Conversion Rate pursuant to this Section 11.2(k) shall occur immediately after the tenth Trading Day immediately following, and including, the effective date of the spin-off; provided that, for purposes of determining the Conversion Rate in respect of any conversion during the ten Trading Days following the effective date of any spin-off, references within the portion of this Section 11.2(k) related to “spin-offs” to ten trading days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the effective date of such spin-off and the relevant Conversion Date.

For purposes of this Section 11.2(k) (and subject in all respect to 0), rights, options or warrants distributed by the Company to all holders of its Class A Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Class A Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Class A Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Class A Common Stock, shall be deemed not to have been distributed for purposes of this Section 11.2(k) (and no adjustment to the Conversion Rate under this Section 11.2(k) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be

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made under this Section 11.2(k). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 11.2(k) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Class A Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Class A Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 11.2(i), Section 11.2(j) and this Section 11.2(k), any dividend or distribution to which this Section 11.2(k) is applicable that also includes one or both of:

(A) a dividend or distribution of shares of Class A Common Stock to which Section 11.2(i) is applicable (the “Clause A Distribution”); or

(B) a dividend or distribution of rights, options or warrants to which Section 11.2(j) is applicable (the “Clause B Distribution”),

then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 11.2(k) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 11.2(k) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 11.2(i) and Section 11.2(j) with respect thereto shall then be made, except that, if determined by the Company (I) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (II) any shares of Class A Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Ex-Dividend Date or effective date” within the meaning of Section 11.2(i) or “outstanding immediately prior to the open of business on such Ex-Dividend Date” within the meaning of Section 11.2(j).

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(l) If any cash dividend or distribution is made to all or substantially all holders of the Class A Common Stock (excluding any regular quarterly cash dividend on the Class A Common Stock to the extent that the aggregate amount of such regular quarterly cash dividend per share of the Class A Common Stock does not exceed $0.04 for the relevant quarterly period) ($0.04 being the “Reference Dividend Amount”), the Conversion Rate will be adjusted based on the following formula:

where,

CR(0) = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

CR’ = the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend for such dividend or distribution;

SP(0) = the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

C = the amount in cash per share the Company distributes to holders of Class A Common Stock that exceeds the Reference Dividend Amount.

Such an adjustment to the conversion rate made pursuant to this Section 11.2(l) shall become effective immediately after the open of business on the Ex-Dividend Date for the applicable dividend or distribution. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP(0)” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Class A Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate on the Ex-Dividend Date for such cash dividend or distribution. If any dividend or distribution described in this Section 11.2(l) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

The Reference Dividend Amount shall be subject to adjustment in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment shall be made to the Reference Dividend Amount for any adjustment to the Conversion Rate pursuant to this Section 11.2(l).

Notwithstanding the foregoing, if an adjustment is required to be made under this Section 11.2(l) as a result of a distribution that is not a regular quarterly dividend, the Reference Dividend Amount will be deemed to be zero.

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(m) If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for Class A Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Class A Common Stock exceeds the Last Reported Sale Price of the Class A Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

where,

CR(0) = the Conversion Rate in effect at the close of business on the last Trading Day of the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires;

CR’ = the new Conversion Rate in effect immediately following the last Trading Day of the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires;

AC = the aggregate value of all cash and any other consideration (as determined in good faith by the Board of Directors) paid or payable for shares of Class A Common Stock purchased in such tender or exchange offer;

OS(0) = the number of shares of Class A Common Stock outstanding immediately prior to the expiration of such tender or exchange offer (prior to giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS’ = the number of shares of the Class A Common Stock outstanding immediately after the expiration of such tender or exchange offer (after giving effect to the purchase or exchange of shares of Class A Common Stock pursuant to such tender or exchange offer); and

SP’ = the average of the Last Reported Sale Prices of the Class A Common Stock over the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires.

The adjustment to the Conversion Rate pursuant to this Section 11.2(m) shall become effective immediately following the tenth Trading Day next succeeding the date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Rate in respect of any conversion during the ten Trading Days following the date that any tender or exchange offer expires, references within this Section 11.2(m) to ten Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the date such tender or exchange offer expires and the relevant Conversion Date. If the Company or one of its Subsidiaries is obligated to purchase Class A Common Stock pursuant to any such tender or exchange offer but are permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made.

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(n) Notwithstanding anything in this 0 to the contrary, if any dividend or distribution subject to Section 11.2(i), Section 11.2(k) or Section 11.2(l) is declared but not so paid or made, then the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(o) If at any time the rules of the New York Stock Exchange, or such other securities exchange as may be the principal exchange on which the Class A Common Stock is traded, require stockholder approval of the issuance of Class A Common Stock on conversion of the Notes, during the period when that stockholder approval is required by such exchange, unless and until the Company’s stockholders have given the required approval, the Company will elect Cash Settlement for all conversions of Notes, or, if Combination Settlement of particular conversions would not require stockholder approval, the Company will elect either Cash Settlement or Combination Settlement for those conversions.

(p) Notwithstanding the foregoing, if a Conversion Rate adjustment becomes effective on any Ex-Dividend Date as described above, and a Holder that has converted its Notes on or after such Ex-Dividend Date and on or prior to the related record date would be treated as the record holder of shares of Class A Common Stock as of the related Conversion Date as described under 0 based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the Conversion Rate adjustment relating to such Ex-Dividend Date will not be made for such converting Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Class A Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

(q) In addition to the foregoing adjustments in subsections (a), (b), (c), (d), (e) and (g) above, the Company may, subject to any applicable stock exchange listing requirements, increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. Any such determination by the Board of Directors shall be conclusive. The Company may, in its sole discretion, increase the Conversion Rate as the Board of Directors deems advisable to avoid or diminish any income tax to holders of Class A Common Stock resulting from any dividend or distribution of Capital Stock (or rights to acquire Capital Stock) or from any event treated as such for tax purposes. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall mail to the Holder of each Note at its last address appearing on the Register a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(r) The Company shall not effect a share split or share combination of the Class B Common Stock, or make any dividend, distribution, payment on liquidation or other payment, whether in cash or shares or otherwise, to holders of Class B Common Stock, unless the Company effects an equivalent share split or share combination of the Class A Common Stock or makes an equivalent dividend, distribution, payment on liquidation or other payment to holders of Class A Common Stock, as the case may be, except that in the case of dividends or other distributions payable in Capital Stock of the Company other than the preferred stock of the Company, par value $10.00 per share, the Board of Directors may determine that the stock distributed with respect to the Class A Common Stock will be additional shares of the Class A Common Stock and the stock distributed with respect to the Class B Common Stock will be additional shares of Class B Common Stock.

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No Adjustment.

(s) No adjustment to the Conversion Rate shall be made except as specifically set forth in this Article XI.

(t) No adjustment in the Conversion Rate pursuant to this Article XI shall be required unless the adjustment would require a change of at least one percent (1.0%) in the Conversion Rate. However, any adjustments which are not required to be made because they would have required an increase or decrease of less than one percent (1.0%) shall be carried forward and be made on the first to occur of (i) any subsequent adjustment, (ii) the first day of the next calendar year and (iii) any conversion of the Notes.

(u) Except as expressly provided in this Article XI, the Company shall not adjust the Conversion Rate for the issuance of shares of Class A Common Stock or any securities convertible into or exchangeable for shares of Class A Common Stock or the right to purchase shares of Class A Common Stock or such convertible or exchangeable securities; provided, however, that if the application of the Conversion Rate adjustment provisions of 0 would result in a decrease in the Conversion Rate, then no adjustment to the Conversion Rate shall be made (other than as a result of a share combination).

(v) Without limiting the foregoing, the Conversion Rate will not be adjusted:

(i) upon the issuance of any shares of Class A Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Class A Common Stock under any plan;

(ii) upon the issuance of any shares of Class A Common Stock or options or rights to purchase shares of Class A Common Stock pursuant to any present or future employee, director or consultant benefit plan or program or employee stock purchase plan of or assumed by the Company or any of its Subsidiaries;

(iii) upon the issuance of any shares of Class A Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding clause and outstanding as of the date the Notes were first issued;

(iv) solely for a change in the par value of the Class A Common Stock; or

(v) for accrued and unpaid interest, if any.

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Notice of Adjustment. Whenever the Conversion Rate is adjusted the Company shall mail, within at least fifteen (15) calendar days following such adjustment, a notice of such adjustment to Holders at the addresses appearing on the Registrar’s books a notice of the adjustment and file with the Trustee an Officers’ Certificate briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence of the correctness of such adjustment.

Adjustment of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts over a span of multiple days (including an Observation Period and the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Board of Directors shall make appropriate adjustments to each 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 of the event occurs, at any time during the period when the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts are to be calculated.

Effect of Reclassifications, Consolidations, Mergers, Binding Share Exchanges or Sales on Conversion.

(w) In the event of:

(i) any recapitalization, reclassification or change of the Class A Common Stock;

(ii) a consolidation, merger, binding share exchange or combination involving the Company;

(iii) a sale, lease or conveyance to another Person or entity of all or substantially all of the Company’s assets; or

(iv) any statutory share exchange,

in each case, in which the holders of Class A Common Stock would be entitled to receive stock, other securities, other property or assets (including cash or any combination thereof) for their Class A Common Stock (any such event, a “Merger Event”), then, at and after the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Class A Common Stock is entitled to receive) upon such Merger Event and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture pursuant to ARTICLE IX(c) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Merger Event, (A) the Company shall continue to have the right to

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determine the form of consideration to be paid or delivered, as the case may be, upon conversion of Notes in accordance with 0 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with 0 shall continue to be payable in cash, (II) any shares of Class A Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with 0 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Class A Common Stock would have been entitled to receive in such Merger Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property that a holder of one (1) share of Class A Common Stock would have been entitled to receive in such transaction. If the holders receive only cash in such Merger Event, then for all conversions that occur after the effective date of such Merger Event (x) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Make-Whole Applicable Increase pursuant to 0), multiplied by the price paid per share of Class A Common Stock in such Merger Event and (y) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the third Scheduled Trading Day immediately following the Conversion Date.

(x) The supplemental indenture referred to in clause (a) of this 0 shall provide for adjustments of the Conversion Rate which shall be as nearly equivalent as may be practicable to the adjustments of the Conversion Rate provided for in this Article XI. The foregoing, however, shall not in any way affect the right a Holder of a Note may otherwise have, pursuant to 0, to receive rights or warrants upon conversion of a Note. If the Reference Property includes shares of stock or other securities and property of a Person other than the successor or purchasing Person, as the case may be, in such transaction, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors in good faith shall reasonably determine necessary by reason of the foregoing.

(y) The provisions of this 0 shall similarly apply to successive consolidations, mergers, binding share exchanges, sales, transfers, leases, conveyances or dispositions.

(z) In the event the Company shall execute a supplemental indenture pursuant to this 0, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of Reference Property receivable by Holders of the Notes upon the conversion of their Notes after such transaction and any adjustments to the Conversion Rate to be made on account of such Transaction.

(aa) In connection with any Merger Event, the Reference Dividend Amount shall be subject to adjustment as described in clause (A), clause (B) or clause (C) below, as the case may be.

(A) In the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to Section 11.2(w) above and excluding any dissenters’ appraisal rights) is composed entirely of shares of common stock (the “Merger Common Stock”), the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to (x) the Reference Dividend Amount immediately prior to the effective time of such Merger Event, divided by (y) the number of shares of Merger Common Stock that a holder of one share of Class A Common Stock would receive in such Merger Event (such quotient rounded down to nearest cent).

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(B) In the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to Section 11.2(w) above and excluding any dissenters’ appraisal rights) is composed in part of shares of Merger Common Stock, the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to (x) the Reference Dividend Amount immediately prior to the effective time of such Merger Event, multiplied by (y) the Merger Valuation Percentage for such Merger Event (such quotient rounded down to nearest cent).

(C) For the avoidance of doubt, in the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to subsection (a) above and excluding any dissenters’ appraisal rights) is composed entirely of consideration other than shares of common stock, the Reference Dividend Amount at and after the effective time of such Merger Event will be equal to zero.

(bb) For purposes of clause (e) of this 0, the following terms shall have the following meanings:

(i) The “Merger Valuation Percentage” for any Merger Event shall be equal to (x) the arithmetic average of the Last Reported Sale Prices of one share of such Merger Common Stock over the relevant Merger Valuation Period (determined as if references to “Class A Common Stock” in the definition of “Last Reported Sale Price” were references to the “Merger Common Stock” for such Merger Event), divided by (y) the arithmetic average of the Last Reported Sale Prices of one share of Class A Common Stock over the relevant Merger Valuation Period.

(ii) The “Merger Valuation Period” for any Merger Event means the five consecutive Trading Day period immediately preceding, but excluding, the effective date for such Merger Event.

Trustee’s Disclaimer. The Trustee has no duty to determine when an adjustment under this Article XI should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of the correctness of any such adjustment, and shall be protected in relying upon, the Officers’ Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 13.2 hereof. The Trustee shall not be accountable for and makes no representation as to the validity or value of any securities or assets issued or delivered upon conversion of Notes, and the Trustee shall not be responsible for the failure by the Company to comply with any provisions of this Article XI. The Trustee has no duty to determine whether a supplemental indenture under 0 need be entered into or whether any provisions of any supplemental indenture are correct. Each Conversion Agent (other than the Company or an Affiliate of the Company) shall have the same protection under this 0 as the Trustee.

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Rights Distributions Pursuant to Stockholders’ Rights Plans. Upon conversion of any Note or a portion thereof, the Company shall make provisions for the Holder thereof, to the extent such Holder is to receive any shares of Class A Common Stock, if any, upon such conversion, to receive, in addition to, and concurrently with the delivery of, the Conversion Consideration otherwise payable hereunder upon such conversion, the rights described in any stockholder’s rights plan the Company may have in effect at such time, unless such rights have separated from the Class A Common Stock at the time of such conversion, in which case the Conversion Rate shall be adjusted upon such separation in accordance with Section 11.2(k). A further adjustment shall occur as described in Section 11.2(k) above if such rights become exercisable to purchase different securities, evidences of indebtedness, or assets, subject to readjustment in the event of the expiration, termination or redemption of such right.

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

(cc) Notwithstanding anything in this Indenture or the Notes to the contrary, if the effective date or anticipated effective date of a Make-Whole Fundamental Change occurs prior to December 20, 2015, then the Conversion Rate applicable to each Note to be converted shall, if the applicable Conversion Notice therefor is received by the Conversion Agent at any time from, and including, the Trading Day following the effective date of such Make-Whole Fundamental Change to, and including, the thirty-fifth (35^th) Trading Day immediately following the effective date of such Make-Whole Fundamental Change (or, if such Make-Whole Fundamental Change constitutes a Fundamental Change, until the close of business on the Business Day immediately preceding the applicable Fundamental Change Repurchase Date), be increased to an amount equal to the Conversion Rate that would, but for this 0, otherwise apply to such Note pursuant to this Article XI, plus an amount equal to the Make-Whole Applicable Increase.

For avoidance of doubt, the Conversion Consideration due upon a conversion of a Note to which this 0 applies shall be determined in accordance with Section 11.2(b)(i), based on the Conversion Rate as adjusted pursuant to this 0 (and any other applicable provisions of this Indenture), and paid in accordance with Section 11.2(b)(iv).

(dd) As used herein, “Make-Whole Applicable Increase” shall mean, with respect to a Make-Whole Fundamental Change, the number of additional shares of Class A Common Stock to be added to the Conversion Rate per $1,000 principal amount of Notes, set forth in the table below, which corresponds to the date such Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed paid) per share of the Class A Common Stock in such Make-Whole Fundamental Change. If the holders of the Class A Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (c) of the definition of Change of Control, the Stock Price shall be the cash amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Class A Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the

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Make-Whole Fundamental Change. The Board of Directors shall make appropriate adjustments to the Stock Price, 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 of the event occurs, during such five consecutive Trading Day period.

(ee) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 11.2(a)(iii), the Company shall, at its option, satisfy the related Conversion Obligation by Physical Settlement, Cash Settlement or Combination Settlement in accordance with 0; provided, however, that if, at the effective time of a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Reference Property is composed entirely of cash, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the Conversion Obligation shall be calculated based solely on the Stock Price for the transaction and shall be deemed to be an amount of cash per $1,000 principal amount of converted Notes equal to the Conversion Rate (including any adjustment for Make-Whole Applicable Increase), multiplied by such Stock Price. In such event, the Conversion Obligation shall be paid to Holders in cash on the third Business Day following the Conversion Date. The Company shall notify the Holders of Notes of the Effective Date of any Make-Whole Fundamental Change and issue a press release announcing such Effective Date no later than five Business Days after such Effective Date.

(ff) The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The Make-Whole Applicable Increase set forth in the table below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in 0.

(gg) The following table sets forth the Make-Whole Applicable Increase to be received per $1,000 principal amount of Notes pursuant to this 0 for each Stock Price and Effective Date set forth below:

	Stock Price
Effective Date	$15.81		$17.50		$20.00		$22.50		$25.00		$27.50		$30.00		$32.50		$35.00		$37.50		$40.00		$42.50		$45.00		$70.00
November 10, 2010		18.0717		15.3538		11.6130		9.0016		7.1249		5.7422		4.7012		3.9021		3.2780		2.7829		2.3844		2.0594		1.7913		0.5533
December 15, 2011		18.0717		15.2257		11.2579		8.5283		6.6003		5.2070		4.1791		3.4063		2.8152		2.3558		1.9931		1.7028		1.4673		0.4333
December 15, 2012		18.0717		14.8380		10.6166		7.7694		5.8079		4.4303		3.4451		2.7283		2.1979		1.7988		1.4936		1.2564		1.0691		0.3038
December 15, 2013		18.0717		13.9719		9.4693		6.5250		4.5801		3.2817		2.4048		1.8046		1.3877		1.0931		0.8811		0.7253		0.6083		0.1747
December 15, 2014		18.0717		12.7528		7.7392		4.6366		2.7660		1.6621		1.0204		0.6504		0.4370		0.3124		0.2378		0.1913		0.1605		0.0516
December 20, 2015		18.0717		11.9635		4.8206		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000

(hh) The exact Stock Prices and Effective Dates may not be set forth in the table above, in which case:

(i) If the Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the Make-Whole Applicable Increase will be determined by straight-line interpolation between the Make-Whole Applicable Increase set forth for the higher and lower Stock Price amounts and the earlier and later Effective Dates, as applicable, based on a 365-day year.

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(ii) If the Stock Price is in excess of $70.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above), the Make-Whole Applicable Increase will be zero and the Conversion Rate will not be increased pursuant to this 0.

(iii) If the Stock Price is less than $15.81 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), the Make-Whole Applicable Increase will be zero and the Conversion Rate will not be increased pursuant to this 0.

(ii) Notwithstanding the foregoing, in no event will the total number of shares of Class A Common Stock upon conversion exceed 63.2511 per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate.

(jj) At least thirty (30) calendar days before the anticipated effective date of each proposed Make-Whole Fundamental Change, the Company shall mail to each Holder written notice of the anticipated effective date of such proposed Make-Whole Fundamental Change. Each such notice shall also state that, in connection with such Make-Whole Fundamental Change, if consummated, the Company shall increase, in accordance herewith, the Conversion Rate applicable to Notes entitled as provided herein to such increase (along with a description of how such increase shall be calculated and the time periods during which Notes must be surrendered in order to be entitled to such increase). No later than the third (3rd) Business Day after the Effective Date of each Make-Whole Fundamental Change, the Company shall mail to Holders written notice of such Effective Date and the Make-Whole Applicable Increase applicable to such Make-Whole Fundamental Change.

(kk) For avoidance of doubt, the provisions of this 0 shall not affect or diminish the Company’s obligations, if any, pursuant to Article III with respect to a Make-Whole Fundamental Change.

(ll) Nothing in this 0 shall prevent an adjustment to the Conversion Rate pursuant to 0 in respect of a Make-Whole Fundamental Change.

(mm) Upon effectiveness of certain Make-Whole Fundamental Changes, the Notes will be convertible into Reference Property (or cash or a combination of cash and Reference Property, if the Company so elects) pursuant to 0. If the Company is required to increase the Conversion Rate by the Make-Whole Applicable Increase as a result of a Make-Whole Fundamental Change, Notes surrendered for conversion shall be settled as follows:

(i) If the date (the “Delivery Date”) on which the Company is otherwise required to deliver the Conversion Consideration upon conversion is prior to the Effective Date of such Make-Whole Fundamental Change, the Company shall settle such conversion by paying or delivering cash, the number of

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shares of Class A Common Stock or combination thereof, as applicable, based on the Conversion Rate, in each case without regard to the Make-Whole Applicable Increase to be added to the Conversion Rate pursuant to this 0, on such Delivery Date. In addition, as soon as practicable following the Effective Date of such Make-Whole Fundamental Change, the Company shall pay or deliver the increase in such amount of cash, Class A Common Stock or combination thereof or of Reference Property deliverable in lieu of shares of Class A Common Stock, if any, as if the Conversion Rate had been increased by the Make-Whole Applicable Increase on the relevant Conversion Date (or, if applicable, during the related conversion reference period and based upon the related conversion value). If the Company has elected Cash Settlement or Combination Settlement and such increased amount results in an increase to the amount of cash to be paid to Holders, the Company shall pay such increase in cash, and if such increased amount results in an increase to the number of shares of Class A Common Stock, the Company shall deliver such increase by delivering Class A Common Stock or Reference Property, as applicable, based on such increased number of shares of Class A Common Stock; or

(ii) If the Delivery Date related to Notes surrendered for conversion is on or following the Effective Date of such Make-Whole Fundamental Change, the Company shall settle such conversion based on the Conversion Rate as increased by the Make-Whole Applicable Increase to be added to the Conversion Rate pursuant to this 0 on such Delivery Date.

Exchange In Lieu of Conversion.

(nn) Notwithstanding anything in this Indenture or the Notes to the contrary, if a Holder surrenders any Note for conversion, the Company may, but is not obligated to, direct the Conversion Agent to surrender, on or prior to the second (2nd) Trading Day following the Conversion Date of such conversion, such Note to a financial institution designated by the Company (which may not be an Affiliate of the Company; provided that, for purposes of this 0, an “Affiliate” shall include any Person with direct or indirect ownership of ten percent (10%) or more of the equity of the Company or the power to directly or indirectly vote more than ten percent (10%) of the securities having ordinary voting power for the election of directors of the Company) (a “Financial Institution”) for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, such Financial Institution must agree to deliver, in exchange for such Notes, the Conversion Consideration due upon such conversion as prescribed by Section 11.2(b)(i) (the “Exchange Consideration”). By the close of business on the second (2nd) Trading Day immediately following such Conversion Date, the Company shall notify such Holder, the Trustee and the Conversion Agent that the Company has directed such Financial Institution to make an exchange in lieu of such conversion.

(oo) In order to accept such Note surrendered for conversion, the Financial Institution must agree to deliver, in exchange for such Note, the Exchange Consideration.

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(pp) If such Financial Institution so accepts any such Note to be converted, then it shall deliver the Exchange Consideration in accordance with the Company’s instructions, and the Company shall deliver or cause to be delivered such Exchange Consideration to the applicable Holder, in each case within the time frames prescribed by Section 11.2(b)(iv). Each Note so exchanged by such Financial Institution shall remain outstanding.

(qq) If such Financial Institution agrees to accept such Note for exchange but does not timely deliver the Exchange Consideration, or if such Financial Institution does not accept such Note for exchange, then the Company shall deliver, as promptly as practicable thereafter, the applicable Conversion Consideration as if the Company had not made an exchange election.

(rr) The Company shall not provide to the Financial Institution, directly or indirectly, any of such Exchange Consideration to be delivered by the Financial Institution in exchange for such Note.

(ss) In no event shall the Company’s designation of a Financial Institution pursuant to this 0 require such Financial Institution to accept any Notes for exchange. The Company shall not pay any consideration to, or otherwise enter into any agreement or arrangement with, a Financial Institution for or with respect to such designation pursuant to this 0.

Notice to Holders Prior to Certain Actions.

(tt) In case of any:

(i) action by the Company or one of its Subsidiaries that would require an adjustment in the Conversion Rate pursuant to 0 or 0; or

(ii) Merger Event; or

(iii) voluntary or involuntary dissolution, liquidation or winding-up of the Company or any of its Subsidiaries;

then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be mailed to each Holder at its address appearing on the Note Register, as promptly as possible but in any event at least 20 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Company or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Class A Common Stock of record are to be determined for the purposes of such action by the Company or one of its Subsidiaries, or (ii) the date on which such Merger Event, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Class A Common Stock of record shall be entitled to exchange their Class A Common Stock for securities or other property deliverable upon such Merger Event, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company or one of its Subsidiaries, Merger Event, dissolution, liquidation or winding-up.

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Calculation of Adjustments. All calculations and other determinations under this Article XI shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000^th) of a share.

Conversion Responsibilities of Trustee and Conversion Agent. The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment to the Conversion Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed herein or in any supplemental indenture in making the same, or whether a supplemental indenture need be entered into, or to perform any calculations hereunder. Neither the Trustee nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Class A Common Stock, or of any other securities or property or cash, that may at any time be issued or delivered upon the conversion of any Note; and it or they do not make any representation with respect thereto. Neither the Trustee, subject to the provisions of 0, nor any Conversion Agent shall be responsible for any failure of the Company to make or calculate any cash payment or to issue, transfer or deliver any shares of Class A Common Stock or share certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion; and the Trustee and any Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article XI.

ARTICLE XII.

CONTINGENT INTEREST AND TAX TREATMENT

Contingent Interest.

(a) Beginning with the period commencing on December 20, 2015 and ending on June 14, 2016, and for each subsequent six-month period from, and including, June 15 to, and including, the following December 14 and from, and including, December 15 to, and including, the following June 14 (each, a “Contingent Interest Period”), the Company will pay additional interest (“Contingent Interest”) to Holders for the applicable interest period, if the Contingent Interest Trading Price of the Notes for the five-consecutive-Trading-Day period ending on the second Trading Day immediately preceding the first day of the applicable Contingent Interest Period (each, a “Contingent Interest Measurement Period”) equals or exceeds 120% of the principal amount of the Notes.

(b) The rate of Contingent Interest payable in respect of any such Contingent Interest Period will be equal to 0.75% per annum of the Contingent Interest Trading Price of the Notes during the Contingent Interest Measurement Period triggering the Contingent Interest payment under ARTICLE XII(a). Contingent Interest, if any, will accrue from the first day of any relevant Contingent Interest Period and be payable on the Interest Payment Date at the end of such Contingent Interest Period to Holders on the Interest Record Date relating to such Interest Payment Date. Contingent Interest, if any, shall be payable in addition to, and not in lieu of, regular interest in respect of the Notes (which shall continue to accrue at the stated rate of 2.75% per annum without regard to whether Contingent Interest is also payable) and any Additional Interest and Restricted Transfer Default Interest payable in respect of the Notes.

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(c) Upon determination that Holders will be entitled to receive Contingent Interest which may become payable during a relevant Contingent Interest Period, the Company shall notify the Trustee and the Holders of the Notes upon such determination on or prior to the start of such Contingent Interest Period.

(d) Notwithstanding anything to the contrary contained herein, amounts of Contingent Interest deposited with the Paying Agent shall be net of 30% of any Contingent Interest payments to be made to non-U.S. holders, which shall be withheld for U.S. federal income tax purposes, subject to reduction in such withholding rate by an applicable treaty or upon the receipt of a Form W-8ECI from a non-U.S. holder claiming that the payments are effectively connected with the conduct of a United States trade or business.

Tax Treatment. The Company hereby agrees and, by acceptance of a beneficial interest in a Note, each Holder and any beneficial owner of a Note will be deemed to have agreed (in the absence of administrative or judicial determination to the contrary):

(e) to treat the Notes as indebtedness of the Company for all U.S. federal income tax purposes;

(f) to treat the Notes as debt instruments that are subject to Treasury Regulation section 1.1275-4(b);

(g) to be bound by the Company’s application of Treasury Regulation section 1.1275-4(b), including the Company’s determination of the comparable yield and the projected payment schedule; and

(h) to treat the delivery of cash, Class A Common Stock or a combination of cash and Class A Common Stock (in all cases including cash delivered in lieu of a fractional share) to a Holder of a Note upon conversion of such Note, as a contingent payment (in an amount equal to the sum of the fair market value of such Class A Common Stock and any cash received (as determined in good faith by the Board of Directors of the Company)) under Treasury Regulation section 1.1275-4(b).

Comparable Yield And Projected Payment Schedule.

(i) The Company shall:

(i) for U.S. federal income tax purposes, accrue interest with respect to outstanding Notes as original issue discount according to the “noncontingent bond method,” as set forth in Treasury Regulation section 1.1275-4(b), using a comparable yield of 8.20%, compounded semiannually, and the projected payment schedule as determined by the Company; and

(ii) file with the Trustee promptly following the end of each calendar year (A) a written notice specifying the amount of original issue discount for U.S. federal income tax purposes accrued on outstanding Notes as of the end of such year and (B) such other specific information relating to such original issue discount that the Company determines to 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.

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(j) Set forth in Schedule II hereto is the projected payment schedule with respect to the Notes that includes the stated interest payments on the Notes and estimates of the amount and timing of Contingent Interest payments and a payment upon maturity of the Notes taking into account the cash and/or fair market value of the Class A Common Stock that might be issued upon a conversion of the Notes.

ARTICLE XIII.

MISCELLANEOUS

TIA Controls.

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control; provided, however, that this 0 shall not of itself require that this Indenture or the Trustee be qualified under the TIA or constitute any admission or acknowledgment by any party hereto that any such qualification is required prior to the time this Indenture and the Trustee are required by the TIA to be so qualified.

Notices.

Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by facsimile, by telecopier or overnight courier guaranteeing next-day delivery or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Company or the Guarantors:

Lennar Corporation

700 N.W. 107th Avenue

Miami, Florida 33172

Attention: General Counsel

with a copy to:

K&L Gates LLP

599 Lexington Avenue

New York, NY 10022

Attention: David W. Bernstein

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if to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway North

Jacksonville, FL 32256

Attention: Corporate Trust Administration

Each of the Company and the Trustee by written notice to the other may designate additional or different addresses for notices to such Person. Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so delivered if hand delivered; when answered back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

Any notice or communication mailed to a Holder shall be mailed by first class mail, certified or registered return receipt requested, or by overnight courier guaranteeing next day delivery to its address as it appears on the registration books of the Registrar; provided that notices given to Holders holding Notes in book-entry form may be given through the facilities of the Depositary or any successor depository. Any notice or communication shall be mailed to any Person as described in TIA Section 313(c), to the extent required by the TIA.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If a party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Communications by Holders with Other Holders.

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

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Certificate and Opinion as to Conditions Precedent.

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

(a) an Officers’ Certificate, in form and substance satisfactory to the Trustee, stating that, in the opinion of the signers, all conditions precedent to be performed, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent to be performed, if any, provided for in this Indenture relating to the proposed action have been complied with (which counsel, as to factual matters, may rely on an Officers’ Certificate).

Section 13.5 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, other than the Officers’ Certificate required by 0, shall include:

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

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

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

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

Rules by Trustee, Paying Agent, Registrar.

The Trustee may make reasonable rules in accordance with the Trustee’s customary practices for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

Legal Holidays.

If any Interest Payment Date, Maturity Date, Redemption Date, Option Purchase Date, Fundamental Change Repurchase Date, settlement date or other date on which payment is due falls on a day other than a Business Day, such payment shall be made on the next succeeding Business Day with the same force and effect as if made on the date that the relevant payment was due, and no interest shall accrue for the intervening period.

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Governing Law.

THIS INDENTURE AND THE NOTES, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THE INDENTURE OR THE NOTES, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES THAT WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION. Each of the parties hereto agrees to submit to the jurisdiction of the courts of the State of New York sitting in the County of New York, or of the United States of America for the Southern District of New York in any action or proceeding arising out of or relating to this Indenture.

No Adverse Interpretation of Other Agreements.

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

No Personal Liability.

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

Successors. All agreements of the Company in this Indenture and the Notes shall bind their successors and permitted assigns. All agreements of the Trustee in this Indenture shall bind its successors and permitted assigns.

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

Severability. In case any one or more of the provisions in this Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

Calculations. Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under this Indenture. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Class A Common Stock, accrued interest payable on the Notes (including Contingent Interest and Additional Interest, if any) and the Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders. Upon request from the Trustee, the Company shall provide a

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schedule of its calculations to the Trustee, and the Trustee is entitled to rely upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder upon the request of such Holder at the sole cost and expense of the Company.

Waivers of Jury Trial. EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

[Signature page follows]

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

LENNAR CORPORATION
By:	/s/ Mark Sustana
	Name:	Mark Sustana
	Title:	Secretary and General Counsel

Authorized signatory for each of the Guarantors listed on Schedule I hereto
By:	/s/ Mark Sustana
	Name:	Mark Sustana
	Title:	Secretary and General Counsel

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Craig Kaye
	Name:	Craig Kaye
	Title:	Vice President

[Signature Page to Indenture]

EXHIBIT A

[FORM OF NOTE]

[INCLUDE THE FOLLOWING LEGEND IF A RESTRICTED SECURITY]

THE OFFER AND SALE OF THIS SECURITY AND ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR THERE TO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH LENNAR CORPORATION OR ANY AFFILIATE OF LENNAR CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO LENNAR CORPORATION OR ANY PARENT OR SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF LENNAR CORPORATION AND THE TRUSTEE FOR THIS SECURITY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

A-1

THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS NOVEMBER 10, 2010 AND THE COMPARABLE YIELD IS 8.20%, COMPOUNDED SEMI-ANNUALLY. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: LENNAR CORPORATION, 700 N.W. 107^TH AVENUE, MIAMI, FLORIDA 33172, ATTENTION: GENERAL COUNSEL.

A-2

CUSIP No.: 526057 BE3

LENNAR CORPORATION

2.75% CONVERTIBLE SENIOR NOTES DUE 2020

No. [        ] Initially $435,000,000

Interest Rate:	2.75% per annum.
Interest Payment Dates:	June 15 and December 15, commencing June 15, 2011.
Interest Record Dates:	June 1 and December 1 preceding June 15 or December 15, respectively (whether or not such day is a Business Day).

Lennar Corporation, a Delaware corporation (the “Company,” which term includes any successor entities), for value received, promises to pay to CEDE & CO. or registered assigns, on December 15, 2020, the principal sum as set forth in the “Schedule of Exchanges of Notes” attached hereto, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $435,000,000 in aggregate at any time [(or $500,000,000 if the Initial Purchasers exercise their option to purchase additional Notes in full as set forth in the Purchase Agreement)], in accordance with the rules and procedures of the Depositary, together with interest thereon as hereinafter provided.

THIS NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS NOTE, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF).

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control.

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

A-3

IN WITNESS WHEREOF, Lennar Corporation has caused this instrument to be signed manually or by facsimile by its duly authorized officer.

LENNAR CORPORATION

By:

Name:

Title:

Dated:                    

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:
	Name:
	Title:

A-4

(REVERSE OF SECURITY)

2.75% Convertible Senior Note due 2020

Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Indenture relating to the Notes, dated as of November 10, 2010 (as amended from time to time, the “Indenture”), by and among Lennar Corporation, a Delaware corporation (the “Company”), the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended, supplemented or otherwise modified from time to time.

1. INTEREST

The Company promises to pay interest on the principal amount of this Note at the rate per annum set forth above. Interest on this Note will accrue from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid, from November 10, 2010, to, but excluding, the next Interest Payment Date set forth above until December 15, 2020. The Company shall pay interest semi-annually in arrears on each Interest Payment Date set forth above, commencing as of the Interest Payment Date referred to above, to Holders of record at the close of business on the applicable Interest Record Date set forth above. Interest will be computed on the basis of a 360-day year of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed.

Beginning with the period commencing on December 20, 2015 and ending on June 14, 2016, and for each subsequent six-month period from, and including, June 15 to, and including, the following December 14 and from, and including, December 15 to, and including, the following June 14, the Company will pay Contingent Interest on this Note as set forth in 0 of the Indenture, if the Contingent Interest Trading Price of the Notes for the five-consecutive-Trading-Day period ending on the second Trading Day immediately preceding the first day of the applicable Contingent Interest Period equals or exceeds 120% of the principal amount of the Notes.

Additional Interest will be payable on this Note as set forth in ARTICLE VI(q) of the Indenture, and Restricted Transfer Default Interest will be payable on this Note as set forth in ARTICLE VI(u) of the Indenture.

Defaulted Interest will be payable on any Defaulted Amounts at the rate of interest borne by the Notes, plus one percent per annum, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company in accordance with the Indenture.

Any reference to interest on, or in respect of, this Note herein or in the Indenture shall be deemed to include (a) any Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of ARTICLE VI(q) of the Indenture, (b) any Contingent Interest if, in such context, Contingent Interest is, was or would be payable pursuant

A-5

to 0 of the Indenture, (c) any Defaulted Interest if, in such context, Defaulted Interest is, was or would be payable pursuant to ARTICLE II(g) of the Indenture, and (d) any Restricted Transfer Default Interest if, in such context, Restricted Transfer Default Interest is, was or would be payable pursuant to ARTICLE VI(u) of the Indenture. Any express mention of Additional Interest, Defaulted Interest, Restricted Transfer Default Interest or Contingent Interest in any provision of this Note or the Indenture shall not be construed as excluding Additional Interest, Defaulted Interest, Restricted Transfer Default Interest or Contingent Interest, as the case may be, in those provisions hereof or thereof where such express mention is not made.

2. METHOD OF PAYMENT

Subject to the terms and conditions of the Indenture, the Company shall (a) pay interest on the Notes as set forth above, and (b) make all payments and deliveries in respect of the Redemption Price, Option Purchase Price, Fundamental Change Repurchase Price and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. As provided in and subject to the provisions of the Indenture, the Company shall pay any amounts due in respect of the Notes (other than Notes that are Global Notes) at the office or agency designated by the company for that purpose as described under paragraph 4 below.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal (including, without limitation, the Redemption Price, Option Purchase Price and Fundamental Change Repurchase Price, if applicable) of and accrued and unpaid interest on this Note at the place, at the respective times, at the rate and in the lawful money herein prescribed.

3. MATURITY

The Notes will mature on December 15, 2020, unless earlier converted, redeemed or repurchased.

4. PAYING AGENT, CONVERSION AGENT, AND REGISTRAR

Initially, the Trustee will act as Paying Agent, Registrar and Conversion Agent, and its agency in the City of Jacksonville, State of Florida, as a place where Notes may be presented for payment, conversion or for registration of transfer. The Company may change any Paying Agent, Registrar or Conversion Agent without notice.

5. INDENTURE

The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act in effect at the date of the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. The Securities are general unsecured senior obligations of the Company. Terms used herein without definition and which are defined in the Indenture have the meanings assigned to them in the Indenture.

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6. OPTIONAL REDEMPTION

Subject to the terms and conditions of the Indenture, the Company shall have the right, at the Company’s option, at any time, and from time to time, on a Redemption Date occurring on or after December 20, 2015, to redeem (an “Optional Redemption”) all or any part of the Notes at a price payable in cash equal to the Redemption Price.

7. PURCHASE BY THE COMPANY AT THE HOLDER’S OPTION

Subject to the terms and conditions of the Indenture, the Company shall be required to purchase Notes (or portions thereof that are integral multiples of $1,000 in principal amount), at the option of the Holder thereof, on December 15, 2015 (the “Option Purchase Date”) at the Option Purchase Price, payable in cash, upon the due delivery, in accordance with the Indenture, of a Purchase Notice containing the information set forth in the Indenture, and upon delivery of such Notes to the Trustee or the Paying Agent as set forth in the Indenture.

8. REPURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

Subject to the terms and conditions of the Indenture, in the event of a Fundamental Change, each Holder of the Notes shall have the right, at the Holder’s option, to require the Company, upon the Holder’s satisfaction of certain conditions set forth in the Indenture, to repurchase all or any part (equal to integral multiples of $1,000 in principal amount) of such Holder’s Notes on a date selected by the Company in accordance with the terms of the Indenture (the “Fundamental Change Repurchase Date”), which Fundamental Change Repurchase Date shall be no later than thirty five (35) calendar days, nor earlier than twenty (20) calendar days, after the date the Fundamental Change Notice is mailed to Holders in accordance with the Indenture, at a price, payable in cash, equal to the Fundamental Change Repurchase Price for such Notes.

9. CONVERSION

Subject to the terms and conditions of the Indenture, the Notes are convertible (in integral multiples of $1,000 principal amount) into cash, shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock, as applicable, in accordance with Article XI of the Indenture.

The initial Conversion Rate is 45.1794 shares of Class A Common Stock per $1,000 principal amount of Notes, subject to adjustment in accordance with the provisions of the Indenture. The Company will pay cash in lieu of any fractional share. Each conversion of a Note will be settled in accordance with the Indenture.

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To convert a Note that is a Physical Note, a Holder must (i) complete and manually sign the Conversion Notice on the back of the Note, or a facsimile of the Conversion Notice, and deliver such Conversion Notice to the Conversion Agent, (ii) surrender the Note to the Conversion Agent, (iii) if required, furnish appropriate endorsements and transfer documents, (iv) pay all transfer or similar taxes, if any, as required by 0 of the Indenture, and (v) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 11.2(d) of the Indenture; provided, however, that if such Note is represented by a Global Note, then in order to convert, the Holder must comply with the requirements (iii), (iv) and (v) and comply with the Depositary’s procedures for converting a beneficial interest in a Global Note.

If a Holder surrenders a Note for conversion after the close of business on an Interest Record Date and prior to the opening of business on the immediately following Interest Payment Date, then, notwithstanding such conversion, the interest payable with respect to such Note on such Interest Payment Date shall be paid on such Interest Payment Date to the Holder of record of such Note at the close of business on such Interest Record Date; provided, however, that such Note, when surrendered for conversion, must be accompanied by payment to the Conversion Agent on behalf of the Company of an amount equal to the interest payable on such Interest Payment Date on the portion of such Note to be so converted, except that no such payment is required (i) if the Company shall have specified a Redemption Date or Fundamental Change Repurchase Date that is after such Interest Record Date and on or prior to such Interest Payment Date, (ii) if the Conversion Date for such conversion is after the Interest Record Date that immediately precedes the Maturity Date, or (iii) to the extent of any Defaulted Interest, if any Defaulted Interest exist as of the Conversion Date (it being understood that nothing in this paragraph shall affect the Company’s obligations under 0 of the Indenture).

10. GUARANTEE

This Note will be entitled to the benefits of certain Guarantees, if any, made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

11. DENOMINATIONS; TRANSFER; EXCHANGE

The Notes are in fully registered form, without coupons, in denominations of $1,000 principal amount and integral multiples thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge shall be made for any registration of transfer or exchange, but the Company and the Trustee may require payment to cover any transfer tax, fee or similar governmental charge payable in connection therewith where required by law (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers pursuant to 0, Article III or Article XI of the Indenture) or permitted pursuant to 0 of the Indenture. The Company is not required to effect any transfer or exchange of Notes in certain situations, as set forth in the Indenture.

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12. PERSONS DEEMED OWNERS

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

13. DEFAULTS AND REMEDIES

The Notes may become immediately due and payable in full after the occurrence of an Event of Default if certain conditions are satisfied, as provided in the Indenture.

14. TRUSTEE DEALINGS WITH THE COMPANY

The Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for, the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee.

15. NO RECOURSE AGAINST OTHERS

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

16. RANKING

The Notes shall be direct, unsecured obligations of the Company and shall rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company. The Guarantees shall be direct, unsecured obligations of the Guarantors and shall rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Guarantors.

17. AUTHENTICATION

This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent in accordance with the Indenture.

18. 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).

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

Lennar Corporation

700 N.W. 107^th Avenue

Miami, Florida 33172

Attn: General Counsel

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SCHEDULE A

SCHEDULE OF EXCHANGES OF NOTES

LENNAR CORPORATION

2.75% CONVERTIBLE SENIOR NOTES DUE 2020

The initial principal amount of this Global Note is FOUR HUNDRED THIRTY-FIVE MILLION DOLLARS ($435,000,000). The following increases or decreases in this Global Note have been made:

Date of Exchange Amount of
decrease in
Principal Amount
of this Global  Note Amount of
increase in
Principal Amount
of this Global Note Principal Amount
of this Global Note
following such
decrease or
increase Signature of
authorized
signatory of
Trustee or
Custodian

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ATTACHMENT 1

ASSIGNMENT FORM

If you, the Holder, want to assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to:

________________________________________________

________________________________________________

________________________________________________

(Print or type name, address and zip code and social security or tax ID number of assignee)

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

Dated: ______________

Signed:
	(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee: ________________________

Signature must be guaranteed by an “eligible guarantor institution,” that is, a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934.

In connection with any transfer of this Note occurring prior to the Resale Restriction Termination Date (as defined in the Indenture governing such Note), the undersigned confirms that such Note is being transferred:

[Check One]

(1)	¨	to the Company or a Subsidiary thereof; or
(2)	¨	pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)	¨	pursuant to a registration statement that has been declared effective under the Securities Act; or
(4)	¨	pursuant to another available exemption from the registration requirements of the Securities Act.

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Unless one of the items is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if item (4) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions, certifications and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in 0 of the Indenture shall have been satisfied.

Dated:	Signed:
		(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:

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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	NOTICE: To be executed by an executive officer

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ATTACHMENT 2

FORM OF PURCHASE NOTICE

Certificate No. of Note: ___________

If you want to elect to have this Note purchased by the Company pursuant to 0 of the Indenture, check the box:   ¨

If you want to elect to have this Note purchased by the Company pursuant to 0 of the Indenture, check the box:   ¨

If you want to elect to have only part of this Note purchased by the Company pursuant to Sections 0 or 0 of the Indenture, as applicable, state the principal amount to be so purchased by the Company:

$ ________________________

(in an integral multiple of $1,000)

Date:	_________________________________	Signature(s):
		(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
		(All signatures must be guaranteed by a guarantor institution participating in the Securities  Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

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ATTACHMENT 3

FORM OF CONVERSION NOTICE

To convert this Note in accordance with the Indenture, check the box:   ¨

To convert only part of this Note, state the principal amount to be converted (must be in multiples of $1,000):

$__________________

If you want the stock certificate representing any shares of Class A Common Stock issuable upon conversion made out in another person’s name, fill in the form below:

(Insert other person’s soc. sec. or tax I.D. no.)

(Print or type other person’s name, address and zip code)

Date:	Signature(s):
	(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by:
	(All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.)

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EXHIBIT B

GLOBAL NOTE LEGEND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS 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 DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. REPRESENTATIVE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

B-1

EXHIBIT C

RESTRICTED COMMON STOCK LEGEND

THE OFFER AND SALE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR THERE TO) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH LENNAR CORPORATION OR ANY AFFILIATE OF LENNAR CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO LENNAR CORPORATION OR ANY PARENT OR SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF LENNAR CORPORATION AND THE TRUSTEE FOR THIS SECURITY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

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EXHIBIT D

GUARANTEE

For value received, the undersigned each hereby unconditionally guarantees, as principal obligor and not only as a surety, to the Holders of the 2.75% Convertible Senior Notes due 2020 (the “Notes”) of Lennar Corporation, a Delaware corporation (the “Company”), the cash payments in United States Dollars of any amounts due with respect to the Notes in the amounts and at the times when due and interest on all overdue amounts, to the extent lawful, and the payment or performance of all other obligations of the Company under the Indenture (as defined below) or the Notes, to the Holders and the Trustee (as defined below), all in accordance with and subject to the terms and limitations of the Notes, Article X of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Article X of the Indenture and its terms shall be evidenced therein. The validity and enforceability of this Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture, dated as of November 10, 2010, among the Company, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended or supplemented (the “Indenture”), governing the Company’s issuance of the Notes.

The obligations of each of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates.

THIS GUARANTEE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS GUARANTEE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES THAT WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION. Each of the Guarantors hereto agrees to submit to the jurisdiction of the courts of the State of New York sitting in the County of New York, or of the United States of America for the Southern District of New York in any action or proceeding arising out of or relating to this Guarantee.

This Guarantee is subject to release upon the terms set forth in the Indenture.

The undersigned acknowledges that this Guarantee is subject to the TIA and each of the undersigned agrees to discharge its duties under the TIA.

D-1

IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly executed.

Dated:                                         

[GUARANTOR],     as Guarantor
By:
	Name:
	Title:

D-2

SCHEDULE I

GUARANTORS

Aquaterra Utilities, Inc.

Asbury Woods, LLC

Astoria Options, LLC

Avalon Sienna III L.L.C.

Aylon, LLC

Bay Colony Expansion 369, Ltd.

Bay River Colony Development, Ltd.

BB Investment Holdings, LLC

BCI Properties, LLC

BPH I, LLC

Bramalea California, Inc.

Builders LP, Inc.

C & C Ranch, LLC

Cambria, LLC

Camelot Ventures, LLC

Cary Woods, LLC

Cedar Lakes II, LLC

Cherrytree I LLC

Cherrytree II LLC

CL Ventures, LLC

Colonial Heritage LLC

Columbia Station, LLC

Concord Station

Coto de Caza, Ltd.

Coventry, LLC

Creekside Crossing, LLC

Darcy-Joliet, LLC

DBJ Holdings, LLC

Enclave Land, LLC

Evergreen Village

F&R QVI Home Investments USA, LLC

Fox-Maple Associates, LLC

Friendswood Development Company, LLC

Garco Investments, LLC

Greystone Construction, Inc.

Greystone Homes of Nevada, Inc.

Greystone Homes, Inc.

Greystone Nevada, LLC

Greywall Club, LLC

Haverton, LLC

Heathcote Commons LLC

Home Buyer’s Advantage Realty, Inc.

I-1

Homecraft Corporation

HTC Golf Club, LLC

Independence L.L.C.

Lakelands at Easton, L.L.C.

Legends Club, LLC

Legends Golf Club, LLC

Len Paradise, LLC

Lencraft, LLC

LENH I, LLC

Lennar Aircraft I, LLC

Lennar Arizona Construction, Inc.

Lennar Arizona, Inc.

Lennar Associates Management Holding Company

Lennar Associates Management, LLC

Lennar Buffington Colorado Crossing, L.P.

Lennar Buffington Zachary Scott, L.P.

Lennar Carolinas, LLC

Lennar Central Park, LLC

Lennar Central Region Sweep, Inc.

Lennar Chicago, Inc.

Lennar Cobra, LLC

Lennar Colorado, LLC

Lennar Communities Development, Inc.

Lennar Communities Nevada, LLC

Lennar Communities of Chicago L.L.C.

Lennar Communities, Inc.

Lennar Construction, Inc.

Lennar Coto Holdings, LLC

Lennar Developers, Inc.

Lennar Family of Builders GP, Inc.

Lennar Family of Builders Limited Partnership

Lennar Financial Services, LLC

Lennar Fresno, Inc.

Lennar Georgia, Inc.

Lennar Hingham Holdings, LLC

Lennar Hingham JV, LLC

Lennar Homes Holding, LLC

Lennar Homes of Arizona, Inc.

Lennar Homes of California, Inc.

Lennar Homes of Texas Land and Construction, Ltd.

Lennar Homes of Texas Sales and Marketing, Ltd.

Lennar Homes, LLC

Lennar Illinois Trading Company, LLC

Lennar Imperial Holdings Limited Partnership

Lennar Land Partners Sub II, Inc.

Lennar Land Partners Sub, Inc.

I-2

Lennar Layton, LLC

Lennar Mare Island, LLC

Lennar Marina A Funding, LLC

Lennar Massachusetts Properties, Inc.

Lennar Nevada, Inc.

Lennar New Jersey Properties, Inc.

Lennar New York, LLC

Lennar Northeast Properties LLC

Lennar Northeast Properties, Inc.

Lennar Pacific Properties Management, Inc.

Lennar Pacific Properties, Inc.

Lennar Pacific, Inc.

Lennar PI Acquisition, LLC

Lennar PI Property Acquisition, LLC

Lennar PIS Management Company, LLC

Lennar Placentia TOD Properties, LLC

Lennar PNW, Inc.

Lennar Port Imperial South, LLC

Lennar Realty, Inc.

Lennar Renaissance, Inc.

Lennar Reno, LLC

Lennar Riverside West Urban Renewal Company, L.L.C.

Lennar Riverside West, LLC

Lennar Sacramento, Inc.

Lennar Sales Corp.

Lennar San Jose Holdings, Inc.

Lennar Southland I, Inc.

Lennar Southwest Holding Corp.

Lennar Texas Holding Company

Lennar Trading Company, LP

Lennar Ventures, LLC

Lennar West Valley, LLC

Lennar.com Inc.

LFS Holding Company, LLC

LH Eastwind, LLC

LHI Renaissance, LLC

LLPII HCC Holdings, LLC

LNC at Meadowbrook, LLC

LNC at Ravena, LLC

LNC Communities I, Inc.

LNC Communities II, Inc.

LNC Communities III, Inc.

LNC Communities IV, Inc.

LNC Communities V, Inc.

LNC Communities VI, Inc.

LNC Communities VII, Inc.

I-3

LNC Communities VIII, Inc.

LNC Communities IX, Inc.

LNC Northeast Mortgage, Inc.

LNC Pennsylvania Realty, Inc.

Long Beach Development, LLC

Lori Gardens Associates II, LLC

Lori Gardens Associates III, LLC

Lorton Station, L.L.C.

Madrona Village Mews L.L.C.

Madrona Village, LLC

Mid-County Utilities, Inc.

Mission Viejo 12S Venture, LP

Mission Viejo Holdings, Inc.

Montgomery Crossings, LLC

Northbridge L.L.C.

Northeastern Properties LP, Inc.

Palm Gardens at Doral, LLC

Palm Gardens at Doral Clubhouse, LLC

Palm Vista Preserve, LLC

Perris Green Valley Associates, a California limited partnership

PG Properties Holding, LLC

Pioneer Meadows Development, LLC

Pioneer Meadows Investments, LLC

POMAC, LLC

Prestonfield, L.L.C

Raintree Village II, LLC

Raintree Village, L.L.C.

Rivenhome Corporation

Rutenberg Homes of Texas, Inc.

Rutenberg Homes, Inc. (Florida)

Rye Hill Company, LLC

S. Florida Construction II, LLC

S. Florida Construction III, LLC

S. Florida Construction, LLC

San Lucia, LLC

Savell Gulley Development, LLC

Scarsdale, LTD.

Seminole/70th, LLC

Siena at Old Orchard, LLC

Sonoma L.L.C.

Spanish Springs Development, LLC

Stoney Corporation

Stoneybrook Golf Club, Inc.

Strategic Cable Technologies, L.P.

Strategic Holdings, Inc. d/b/a Lennar Communications Ventures (LCV)

Strategic Technologies Communications of California, Inc.

I-4

Strategic Technologies, LLC

Summerfield Venture L.L.C.

Summerwood, LLC

Temecula Valley, LLC

The Courts of Indian Creek L.L.C.

The LNC Northeast Group, Inc.

The Preserve at Coconut Creek, LLC

Trade Services Investments, Inc.

U.S. Home Corporation

U.S. Home of Arizona Construction Co.

U.S. Home Realty, Inc.

U.S.H. Los Prados, Inc.

U.S.H. Realty, Inc.

USH — Flag, LLC

USH (West Lake), Inc.

USH Equity Corporation

USH Millennium Ventures Corp.

USH Woodbridge, Inc.

UST Lennar GP PIS 10, LLC

UST Lennar GP PIS 7, LLC

WCP, LLC

West Chocolate Bayou Development, LLC

West Van Buren, LLC

Westchase, Inc.

I-5

SCHEDULE II

PROJECTED PAYMENT SCHEDULE

May be obtained upon written request.

II-1

EX-10.22

Exhibit 10.22

AIRCRAFT TIME SHARING AGREEMENT

This Aircraft Time Sharing Agreement (“Agreement”) is entered into as of this 26th day of January, 2011 by and between U.S. Home Corporation (“Lessor”), a Delaware corporation whose address is 1707 Market Place Blvd., Suite 120, Irving, Texas 75063, and Richard Beckwitt (“Lessee”), whose address is 1707 Market Place Blvd., Suite 120, Irving, Texas 75063 (collectively the “Parties”).

RECITALS

WHEREAS, Lessor on the Effective Date (hereinafter defined) will operate and rightfully possess the aircraft described in Exhibit A attached hereto (“Aircraft”);

WHEREAS, Lessor desires to lease the Aircraft to Lessee, and Lessee desires to lease the Aircraft from Lessor from time to time on a time-sharing basis as defined in Sections 91.501(b)(6), 91.501(c)(1) and 91.501(d) of the Federal Aviation Regulations (“FAR”);

WHEREAS, this Agreement sets forth the understanding of the Parties as to the terms under which Lessor will provide Lessee with the use, on a periodic basis, of the Aircraft; and

WHEREAS, the use of the Aircraft will at all times be pursuant to and in full compliance with the requirements of FAR Part 91.501(b)(6), 91.501(c)(1), and 91.501(d).

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties agree as follows:

1. General Provisions.

Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Part 91.501(c)(1) and to provide a fully qualified flight crew for all operations. This Agreement shall commence on a date to be specified by Lessor and communicated to the Lessee in writing (the “Effective Date”), and continue for the remaining portion of the Calendar Year (“Calendar Year” being defined as the period beginning January 1st of each year and ending December 31st of the same year). Thereafter, this Agreement may be renewed by Lessor upon the designation of a new Effective Date (the “New Effective Date”), in each subsequent Calendar Year, in which case this Agreement shall continue from the New Effective Date for the remaining portion of that Calendar Year. Either party may at any time terminate this Agreement upon thirty (30) days prior written notice to the other party.

2. Cost of Use of Aircraft.

(a)      In exchange for use of the Aircraft, Lessee shall pay to the Lessor for each flight conducted under this Agreement a lease fee not to exceed the actual expenses of each specific flight as authorized by FAR Part 91.501(d). Such actual expenses shall include and are limited to:

(1) Fuel, oil, lubricants and other additives;

(2) Travel expenses of the crew, including food, lodging, and ground transportation;

(3) Hangar and tie-down costs away from the Aircraft’s base of operation;

(4) Insurance obtained for the specific flight;.

(5) Landing fees, airport taxes, and similar assessments;

(6) Customs, foreign permit, and similar fees directly related to the flight;

(7) Inflight food and beverages;

(8) Passenger ground transportation;

(9) Flight planning and weather contract services; and

(10) An additional charge equal to 100 percent of the expenses listed in sub-paragraph (a)(1) of this Section.

(b)      Lessor shall invoice, and Lessee shall pay, for all appropriate charges, in accordance with Sections 3 and 4 hereof.

3. Taxes.

The parties acknowledge that, with the exception of paragraph 2.(7) and (8), the payments specified in Section 2 from Lessee to Lessor may be subject to federal excise tax imposed under Article 4261 of the Internal Revenue Code of 1986, as amended (the “Commercial Transportation Tax”). If applicable, Lessee shall pay to Lessor (for remittance to the appropriate governmental agency) all Commercial Transportation Tax applicable to flights of the Aircraft conducted hereunder.

4. Prepayment for Flights.

Upon the Effective Date hereof, Lessee shall deliver to Lessor $100,000 to fund an account for the actual costs and payment of flights hereunder (the “Prepayment Fund”). No interest shall be paid on the Prepayment Fund. Immediately upon presentment of invoices for time-sharing flights, Lessor shall apply funds from the Prepayment Fund to pay for and reimburse all reimbursable expenses hereunder for those flights. Monthly reconciliations shall be provided to Lessee which shall set forth the expenses of each specific flight through the last day of the month in which any flight or flights for the account of Lessee occur, which expenses shall conform to FAR Part 91.501(d). Upon termination of this Agreement, any funds remaining in the Prepayment Fund shall be returned to Lessee within (30) days. As a matter of clarification, the Prepayment Fund is in the nature of a security deposit and not payment for

2

transportation unless and until such time as an invoice is presented and funds are withdrawn to pay such invoice.

5. Operating Expenses.

Lessor shall pay all expenses related to the operation of the Aircraft for time-sharing flights when such expenses are incurred. Lessor will provide a monthly reconciliation to Lessee for the expenses enumerated in paragraph 2 above on the last day of the month in which any flight or flights for the account of the Lessee occur. In the event that the net balance of the Prepayment Fund respecting any monthly reconciliation is less than $75,000, Lessee shall replenish the Prepayment Fund in an amount such that on the first day of the following month the account shall be funded in an amount not less than $100,000. In the event expenses exceed the Prepayment Fund in any given month, Lessee shall pay such additional expenses upon receipt of the invoice for the amounts exceeding the Prepayment Fund, which invoice shall be presented within fifteen (15) days of time such expenses are incurred.

6. Flight Crew.

Lessor shall pay for and provide a qualified flight crew for all flight operations under this Agreement. In accordance with applicable Federal Aviation Regulations, the qualified flight crew provided by Lessor will exercise all of its duties and responsibilities in regard to the safety of each flight conducted hereunder. Lessee specifically agrees that the flight crew, in its sole discretion, may terminate any flight, refuse to commence any flight, or take other action which in the considered judgment of the pilot in command is necessitated by considerations of safety. No such action of the pilot in command shall create or support any liability for loss, injury, damage or delay to Lessee or any other person. The parties further agree that Lessor shall not be liable for delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason, including, without limitation, when such failure is caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes, weather conditions, acts of God or other circumstances beyond Lessor’s control.

7. Operational Control.

Lessor shall be responsible for the physical and technical operation of the Aircraft and the safe performance of all flights and shall retain full authority and control, including exclusive operational control, and possession of the Aircraft at all times during the term of this Agreement. In accordance with applicable FARs, the qualified flight crew provided by Lessor will exercise all required and/or appropriate duties and responsibilities in regard to the safety of each flight conducted hereunder. The Pilot-In-Command shall have absolute discretion in all matters concerning the preparation of the Aircraft for flight and the flight itself, the load carried and its distribution, the decision whether or not a flight shall be undertaken, the route to be flown, the place where landings shall be made and all other matters relating to operation of the Aircraft. Lessee specifically agrees that the flight crew shall have final and complete authority to delay or cancel any flight for any reason or condition which, in the sole judgment of the Pilot-In-Command, could compromise the safety of the flight and to take any other action which, in the sole judgment of the Pilot-In-Command, is necessitated by considerations of safety. No such action of the Pilot-In-Command shall create or support any liability to Lessee or any other person

3

for loss, injury, damages or delay. Lessee agrees that Lessor’s operation of the Aircraft is within the operation guidelines of the Lessor’s Flight Operations Department manual and that the crews are responsible to operate within the guidelines of FAR Part 91 and the Lessor’s Flight Operations Department manual.

8. Covenants Regarding Aircraft Maintenance.

The Aircraft has been inspected in accordance with the provisions of FAR Part 91. Lessor shall, at its own expense, inspect, maintain, service, repair, overhaul, and test the Aircraft in accordance with FAR Part 91. The Aircraft will remain in good operating condition and in a condition consistent with its airworthiness certification, including all FAA-issued airworthiness directives and mandatory service bulletins. In the event that any non-standard maintenance is required during any applicable lease term, Lessor, or Lessor’s Pilot-In-Command, shall immediately notify Lessee of the maintenance required, the effect on the ability to comply with Lessee’s dispatch requirements and the manner in which the Parties will proceed with the performance of such maintenance and conduct of the balance of the planned flight(s).

9. No Warranty.

NEITHER LESSOR (NOR ITS AFFILIATES) MAKES, HAS MADE OR SHALL BE DEEMED TO MAKE OR HAVE MADE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE AIRCRAFT TO BE USED HEREUNDER OR ANY ENGINE OR COMPONENT THEREOF INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, AIRWORTHINESS, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR TITLE.

10. Use of the Aircraft.

(a)      Lessee’s use of the Aircraft from time to time, may be for any and all purposes allowed by applicable law. Lessee’s use shall include use of the Aircraft for the benefit of any related family member.

(b)      Lessee represents, warrants and covenants to Lessor that:

(1)      Lessee will use the Aircraft for and on account of his own business or personal use only and will not use any Aircraft for the purposes of providing transportation of passengers or cargo in air commerce for compensation or hire;

(2)      Lessee shall refrain from incurring any mechanics or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft, whether permissible or impermissible under this Agreement, and Lessee shall not attempt to convey, mortgage, assign, lease or any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien;

4

(3)      during the term of this Agreement, Lessee will abide by and conform to all such laws, governmental, and airport orders, rules, and regulations as shall from time to time be in effect relating in any way to the operation and use of the Aircraft by a time-sharing Lessee;

(4)      Lessee shall abide by all customs, immigration, border patrol and other laws and regulations regarding entry and exit from the United States, and agrees that he will take no action that would or could cause the impoundment or seizure of the Aircraft.

(c)      Lessee shall provide Lessor’s Flight Operations Department with notice of his desire to use the Aircraft and proposed flight schedules as far in advance of any given flight as possible, and in any case, at least forty-eight (48) hours in advance of Lessee’s planned departure. Requests for flight time shall be in a form, whether written or oral, mutually convenient to, and agreed upon, by the Parties. In addition to the proposed schedules and flight times, Lessee shall provide at least the following information for each proposed flight at least one hour prior to scheduled departure as required by the Lessor or Lessor’s flight crew:

(1) proposed departure point;

(2) destination;

(3) date and time of flight;

(4) the number and identity of anticipated passengers and relationship to the Lessee;

(5) the nature and extent of luggage and/or cargo to be carried;

(6) the date and time of return flight, if any; and

(7) any other information concerning the proposed flight that may be pertinent or required by Lessor or Lessor’s flight crew.

(d)      Lessor shall notify Lessee as to whether or not the requested use of the Aircraft can be accommodated.

(e)      Lessor’s prior planned utilization of the Aircraft will take precedence over Lessee’s use. Additionally, any maintenance and inspection of the Aircraft takes precedence over scheduling of the Aircraft unless such maintenance or inspection can be safely deferred in accordance with applicable laws and regulations and within the sound discretion of the Pilot-In-Command.

(f)      Lessor shall have sole and exclusive authority over the scheduling of the Aircraft. Lessor shall not be liable to Lessee or any other person for loss, injury, or damage occasioned by the delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason.

5

11. Base of Operations.

For purposes of this Agreement, the base of operation of the Aircraft is Dallas Love Field, Dallas, Texas; provided, that such base may be changed permanently upon notice from Lessor to Lessee.

12. Successors and Assigns.

Neither this Agreement nor any party’s interest herein shall be assignable without the other party’s prior written consent thereto. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their heirs, representatives, successors and permitted assigns.

13. Notices.

All notices and other communications under this Agreement shall be in writing (except as permitted in Section 10(c)) and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by personal delivery, the next business day if given by facsimile (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid) or by a reputable overnight courier service, addressed as follows:

If to Lessor:

General Counsel

U.S. Home Corporation

1707 Market Place Boulevard

Suite 120

Irving, Texas 75063

Phone: (469) 587-5200

Fax: (469) 587-5220

If to Lessee:

Richard Beckwitt

c/o U.S. Home Corporation

1707 Market Place Boulevard

Suite 120

Irving, Texas 75063

Phone: (469) 587-5200

Fax: (469) 587-5220

or to such other person or address as either party shall from time to time designate by writing to the other party.

6

14. Governing Law and Consent to Jurisdiction.

This Agreement is entered into under and is to be construed in accordance with the laws of the State of Delaware. The parties hereby consent and agree to submit to the exclusive jurisdiction and venue of any state or federal court in the State of Delaware in any proceedings hereunder, and each hereby waives any objection to any such proceedings based on improper venue or forum non-conveniens or similar principles. The parties hereto hereby further consent and agree to the exercise of such personal jurisdiction over them by such courts with respect to any such proceedings, waive any objection to the assertion or exercise of such jurisdiction and consent to process being served in any such proceedings in the manner provided for the giving of notices hereunder.

15. Representations of Lessor. Lessor represents and warrants that:

(a)      It has the right, power and authority to enter into and perform its obligations under this Agreement, and the execution and delivery of this Agreement by Lessor has been duly authorized by all necessary action on the part of Lessor. This Agreement constitutes a legal, valid and binding obligation of Lessor, enforceable in accordance with its terms.

(b)      It is a corporation duly organized, existing and in good standing under the laws of the State of Delaware and has all necessary power and authority under applicable law and its organizational documents to own or lease its properties and to carry on its business as presently conducted.

(c)      It is a “citizen of the United States” as defined in Article 40102(a)(15) of Title 49, United States Code.

16. Representations of Lessee. Lessee represents and warrants that:

(a)      Lessee will use the Aircraft for and on account of Lessee’s own business or personal use only in strict accordance with the provisions of this Agreement, and specifically in accordance with FAR Part 91.501, and will neither sell seats to passengers nor sell space for cargo or otherwise use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for any compensation or hire.

(b)      Lessee shall refrain from incurring any mechanics or other lien in connection with inspection, preventive maintenance, maintenance or storage of the Aircraft or otherwise, whether permissible or impermissible under this Agreement, and that Lessee shall refrain from attempting to convey, mortgage, assign, lease or any way alienate the Aircraft or from creating any kind of lien or security interest involving the Aircraft, or do anything or take any action that might mature through notice or the passage of time into such a lien.

(c)      During the term of this Agreement, Lessee will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft by a time-sharing lessee, including, without limitation, Part 91 of the FARs.

7

17. Limitation of Liability; Indemnification.

EACH PARTY AGREES THAT (A) THE PROCEEDS OF INSURANCE TO WHICH IT IS ENTITLED, (B) ITS RIGHTS TO INDEMNIFICATION FROM THE OTHER PARTY UNDER THIS SECTION, AND (C) ITS RIGHT TO DIRECT DAMAGES ARISING IN CONTRACT FROM A MATERIAL BREACH OF THE OTHER PARTY’S OBLIGATIONS UNDER THIS AGREEMENT ARE THE SOLE REMEDIES FOR ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE SERVICES PROVIDED HEREUNDER OR CONTEMPLATED HEREBY.

EXCEPT AS SET FORTH IN THIS SECTION 17, EACH PARTY WAIVES ANY RIGHT TO RECOVER ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE SERVICES PROVIDED HEREUNDER OR CONTEMPLATED HEREBY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR OR HAVE ANY DUTY FOR INDEMNIFICATION OR CONTRIBUTION TO THE OTHER PARTY FOR ANY CLAIMED INDIRECT, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR FOR ANY DAMAGES CONSISTING OF DAMAGES FOR LOSS OF USE OR DEPRECIATION OF VALUE OF THE AIRCRAFT, LOSS OF PROFITS OR INSURANCE DEDUCTIBLE.

The provisions of this Section 17 shall survive the termination or expiration of this Agreement.

18. Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement, binding on all the parties notwithstanding that all the parties are not signatories to the same counterpart.

19. Further Acts.

Lessor and Lessee shall from time to time perform such other and further acts and execute such other and further instruments as may be required by law or may be reasonably necessary to: (i) carry out the intent and purpose of this Agreement; and (ii) establish, maintain and protect the respective rights and remedies of the other party.

20. Entire Agreement.

This Agreement constitutes the entire understanding among the Parties with respect to its subject matter, and there are no representations, warranties, rights, obligations, liabilities, conditions, covenants, or agreements other than as expressly set forth herein.

21. Severability.

In the event that any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable, those provisions shall be replaced by provisions acceptable to both Parties to this Agreement.

8

22. Truth-in-Leasing.

The Lessor shall mail a copy of this Agreement for and on behalf of both Parties to the Federal Aviation Administration Civil Aircraft Registry- Technical Section within twenty-four (24) hours of its execution, as provided by FAR Part 91.23(c)(1). Additionally, Lessor agrees to comply with the notification requirements of FAR Section 91.23 by notifying the FAA Flight Standards District Office nearest to the departure location at least forty-eight (48) hours prior to the first flight under this Agreement.

(a)       LESSOR CERTIFIES THAT AS OF THE EFFECTIVE DATE THE AIRCRAFT HAS BEEN INSPECTED IN ACCORDANCE WITH THE PROVISIONS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS AND THAT ALL APPLICABLE REQUIREMENTS FOR THE AIRCRAFT’S MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET AND ARE VALID FOR THE OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.

(b)      LESSOR, WHOSE ADDRESS APPEARS IN PARAGRAPH 13 ABOVE AND WHOSE AUTHORIZED SIGNATURE APPEARS BELOW, AGREES, CERTIFIES AND ACKNOWLEDGES THAT WHENEVER THE AIRCRAFT IS OPERATED UNDER THIS AGREEMENT, LESSOR SHALL BE KNOWN AS, CONSIDERED AND SHALL IN FACT BE THE OPERATOR OF THE AIRCRAFT AND THAT LESSOR UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

(c)      THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

[SIGNATURE PAGE FOLLOWS]

9

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the day and year first above written.

Lessor: U.S. HOME CORPORATION
By:	/s/ L. Christian Marlin
Name:	L. Christian Marlin
Title:	Vice President
Lessee:
/s/ Richard Beckwitt
RICHARD BECKWITT

Exhibit A

Description of Aircraft

One (1) Canadair Ltd. model CL-600-2B16 (a/k/a Challenger 601 aircraft bearing United States Registration number N623BM and manufacturer’s serial number 5159, together with two (2) General Electric model CF34-3A2 aircraft engines bearing manufacturer’s serial numbers 807158 and 807159 (each of which has 750 or more rated takeoff horsepower or the equivalent of such horsepower).

EX-21

Exhibit 21

List of Subsidiaries

Company Name	State of Incorporation	DBAs
308 Furman, Ltd.	TX
360 Developers, LLC	FL
Aquaterra Utilities, Inc.	FL
Asbury Woods, LLC	IL
Astoria Options, LLC	DE
Avalon Sienna III L.L.C.	IL
Aylon, LLC	DE
Bay Colony Expansion 369, Ltd.	TX
Bay River Colony Development, Ltd.	TX
BB Investment Holdings, LLC	NV
BCI Properties, LLC	NV
Belle Meade LEN Holdings, LLC	FL
Belle Meade Partners, LLC	FL
BPH I, LLC	NV
Bramalea California, Inc.	CA
Builders LP, Inc.	DE
Cambria L.L.C.	IL
Camelot Ventures, LLC	MD
Cary Woods, LLC	IL
Casa Marina Development, LLC	FL
Caswell Acquisition Group, LLC	DE
Cedar Lakes II, LLC	NC
Cherrytree I LLC	MD
Cherrytree II LLC	MD
CL Ventures, LLC	FL
Colonial Heritage LLC	VA
Colony Escrow, Inc.	WA
Columbia Station L.L.C.	IL
Concord Station, LLP	FL	Club Concord Station
Coto de Caza, Ltd.	CA

Company Name	State of Incorporation	DBAs
Coventry L.L.C.	IL
CP Red Oak Management, LLC	TX
CP Red Oak Partners, Ltd.	TX
Creekside Crossing, L.L.C.	IL
Danville Tassajara Partners, LLC	DE
Darcy-Joliet, LLC	IL
DBJ Holdings, LLC	NV
DCA Financial, LLC	FL
Eagle Bend Commercial, LLC	CO
Eagle Home Mortgage Holdings, LLC	DE
Eagle Home Mortgage of California, Inc.	CA
Eagle Home Mortgage, LLC	DE
Edgewater Reinsurance, Ltd.
Elianto, LLC	AZ	Elianto
Enclave Land, LLC	IL
Equity Home Mortgage LLC	OR
Evergreen Village LLC	DE
F&R Florida Homes, LLC	FL
F&R QVI Home Investments USA, LLC	DE
Fidelity Guaranty and Acceptance Corp.	DE	FIRST TEXAS FIDELITY COMPANY
Fox-Maple Associates, LLC	NJ	Maple Ridge Associates, LLC
Friendswood Development Company, LLC	TX
Garco Investments, LLC	FL
Greentree Holdings, LLC	NJ
Greystone Construction, Inc.	AZ
Greystone Homes of Nevada, Inc.	DE
Greystone Homes, Inc.	DE
Greystone Nevada, LLC	DE	Lennar Homes
Greywall Club L.L.C.	IL
Harveston, LLC	DE
Haverford Venture L.L.C.	IL
Haverton L.L.C.	IL
Heathcote Commons LLC	VA

Company Name	State of Incorporation	DBAs
Heritage of Auburn Hills, LLC	MI
Hewitts Landing Trustee, LLC	MA
Home Buyer’s Advantage Realty, Inc.	TX
Homecraft Corporation	TX
HTC Golf Club, LLC	CO
Inactive Companies, LLC	FL
Independence L.L.C.	VA
Isles at Bayshore Club, LLC	FL
Lakelands at Easton, L.L.C.	MD
Lakeside Farm, LLC	MD
LCD Asante, LLC	DE
Legends Club, LLC	FL
Legends Golf Club, LLC	FL
LEN - Belle Meade, LLC	FL
LEN - Palm Vista, LLC	FL
LEN Paradise Cable, LLC	FL
LEN Paradise Operating, LLC	FL
Len Paradise, LLC	FL
Lencraft, LLC	MD
LENH I, LLC	FL
Lennar - BVHP, LLC	CA
Lennar Aircraft I, LLC	DE
Lennar Arizona Construction, Inc.	AZ
Lennar Arizona, Inc.	AZ
Lennar Associates Management Holding Company	FL
Lennar Associates Management, LLC	DE
Lennar Buffington Colorado Crossing, L.P.	TX
Lennar Buffington Zachary Scott, L.P.	TX
Lennar Carolinas, LLC	DE
Lennar Central Park, LLC	DE
Lennar Central Region Sweep, Inc.	NV
Lennar Central Texas, L.P.	TX
Lennar Chicago, Inc.	IL	Lennar
Lennar Cobra, LLC	DE

Company Name	State of Incorporation	DBAs
Lennar Colorado, LLC	CO	Blackstone Country Club
Lennar Communities Development, Inc.	DE
Lennar Communities Nevada, LLC	NV
Lennar Communities of Chicago L.L.C.	IL
Lennar Communities, Inc.	CA
Lennar Construction, Inc.	AZ
Lennar Coto Holdings, LLC	CA
Lennar Developers, Inc.	FL
Lennar Distressed Investments, LLC	DE
Lennar Family of Builders GP, Inc.	DE
Lennar Family of Builders Limited Partnership	DE
Lennar Financial Services, LLC	FL
Lennar Fresno, Inc.	CA
Lennar Georgia, Inc.	GA
Lennar Greer Ranch Venture, LLC	CA
Lennar Heritage Fields, LLC	CA
Lennar Hingham Holdings, LLC	DE
Lennar Hingham JV, LLC	DE
Lennar Homes Holding, LLC	DE
Lennar Homes of Arizona, Inc.	AZ
Lennar Homes of California, Inc.	CA
Lennar Homes of Texas Land and Construction, Ltd.	TX	Friendswood Development Company
	TX	Village Builders Land Company
Lennar Homes of Texas Sales and Marketing, Ltd.	TX	Kingswood Sales Associates
	TX	Houston Village Builders, Inc.
	TX	Friendswood Land Development Company
	TX	Bay Oaks Sales Associates
	TX	Lennar Homes of Texas, Inc.
	TX	U.S. Home

Company Name	State of Incorporation	DBAs
	TX	U.S. Home of Texas
	TX	U.S. Home of Texas, Inc.
	TX	NuHome Designs, Inc.
	TX	Village Builders, Inc.
	TX	NuHome of Texas, Inc.
	TX	NuHome Designs
	TX	NuHome of Texas
	TX	Lennar Homes of Texas, Inc.
	TX	Lennar Homes
	TX	Lennar Homes of Texas
	TX	Village Builders
	TX	Friendswood Development Company
	TX	Friendswood Land Development Company
Lennar Homes, LLC	FL	Baywinds Land Trust D/B/A Club Vineyards
		Your Hometown Builder
	FL	Lennar Communities, North Florida Division
	FL	Copper Creek Club, Inc.
	FL	Lake Osborne Trailer Ranch
	FL	Tripson Estates Club, Inc.
	FL	Club Carriage Pointe
	FL	Club Tuscany Village
	FL	Club Silver Palms
	FL	Bent Creek Club, Inc.
	FL	U.S. HOME
	FL	Verona Trace Club, Inc.
	FL	Club Malibu Bay
	FL	Isles of Bayshore Club
Lennar Illinois Trading Company, LLC	IL
Lennar Imperial Holdings Limited Partnership	DE

Company Name	State of Incorporation	DBAs
Lennar Insurance Services, Inc.	FL
Lennar Land Partners Sub II, Inc.	NV
Lennar Land Partners Sub, Inc.	DE
Lennar Layton, LLC	DE
Lennar Long Beach Promenade Partners, LLC	DE
Lennar Lytle, LLC	DE
Lennar Mare Island, LLC	CA
Lennar Marina A Funding, LLC	DE
Lennar Massachusetts Properties, Inc.	DE
Lennar New Jersey Properties, Inc.	DE
Lennar New York, LLC	NY
Lennar Northeast Properties LLC	NJ
Lennar Northeast Properties, Inc.	NV
Lennar Pacific Properties Management, Inc.	DE
Lennar Pacific Properties, Inc.	DE
Lennar Pacific, Inc.	DE
Lennar PI Acquisition, LLC	NJ
Lennar PI Property Acquisition, LLC	NJ
Lennar PIS Management Company, LLC	DE
Lennar Placentia TOD Properties, LLC	DE
Lennar PNW, Inc.	WA
Lennar Port Imperial South, LLC	DE
Lennar Realty, Inc.	FL
Lennar Renaissance, Inc.	CA
Lennar Reno, LLC	NV	Lennar Homes
	NV	Lennar Communities
Lennar Rialto Investment LP	DE
Lennar Riverside West Urban Renewal Company, L.L.C.	NJ
Lennar Riverside West, LLC	DE
Lennar Sacramento, Inc.	CA
Lennar Sales Corp.	CA
Lennar San Jose Holdings, Inc.	CA
Lennar Southland I, Inc.	CA

Company Name	State of Incorporation	DBAs
Lennar Southwest Holding Corp.	NV
Lennar Spencer’s Crossing, LLC	DE
Lennar Texas Holding Company	TX
Lennar Trading Company, LP	TX
Lennar Ventures, LLC	FL
Lennar West Valley, LLC	CA
Lennar.com Inc.	FL
Lennar-Lantana Boatyard, Inc.	FL
Len-Verandahs, LLP	FL
LFS Holding Company, LLC	DE
LH Eastwind, LLC	FL
LH-EH Layton Lakes Estates, LLC	AZ
LHI Renaissance, LLC	FL	Club Oasis
LLPII HCC Holdings, LLC	DE
LNC at Meadowbrook, LLC	IL
LNC at Ravenna, LLC	IL
LNC Communities I, Inc.	CO
LNC Communities II, LLC	CO
LNC Communities III, Inc.	CO
LNC Communities IV, LLC	CO
LNC Communities IX, LLC	CO
LNC Communities V, LLC	CO
LNC Communities VI, LLC	CO
LNC Communities VII, LLC	CO
LNC Communities VIII, LLC	CO
LNC Northeast Mortgage, Inc.	DE
LNC Pennsylvania Realty, Inc.	PA
Long Beach Development, LLC	TX
Lori Gardens Associates II, LLC	NJ
Lori Gardens Associates III, LLC	NJ
Lori Gardens Associates, L.L.C.	NJ
Lorton Station, LLC	VA
LW D’Andrea, LLC	DE
Madrona Ridge L.L.C.	IL
Madrona Village L.L.C.	IL

Company Name	State of Incorporation	DBAs
Madrona Village Mews L.L.C.	IL
Majestic Woods, LLC	NJ
Mid-County Utilities, Inc.	MD
Mission Viejo 12S Venture, LP	CA
Mission Viejo Holdings, Inc.	CA
Montgomery Crossings, LLC	IL
NASSA LLC	FL
NC Properties I, LLC	DE
NC Properties II, LLC	DE
NGMC Finance Company IV, LLC	FL
North American Advantage Insurance Services, LLC	TX
North American Asset Development Corporation	CA
North American Exchange Company	CA
North American Legal Services, L.L.C.	NJ
North American Services, LLC	CA
North American Title Agency, Inc.	NJ	North American Abstract Agency
North American Title Alliance, LLC	FL
North American Title Company (AZ)	AZ
North American Title Company (FL)	FL	North American Title company
North American Title Company (IL)	IL
North American Title Company (MD)	MD
North American Title Company (MN)	MN
North American Title Company (NV)	NV
North American Title Company (TX)	TX	Southwest Land Title Company
North American Title Company of Colorado	CO
North American Title Company, Inc. (CA)	CA
North American Title Florida Alliance, LLC	FL
North American Title Group, Inc. (FL)	FL
North American Title Insurance Company	CA
North American Trust, Inc.	FL

Company Name	State of Incorporation	DBAs
Northbridge L.L.C.	IL
Northeastern Properties LP, Inc.	NV
OHC/Ascot Belle Meade, LLC	FL
One SR, L.P.	TX
Palm Gardens At Doral Clubhouse, LLC	FL
Palm Gardens at Doral, LLC	FL
Palm Vista Preserve, LLC	FL
PD-Len Boca Raton, LLC	DE
PD-Len Delray, LLC	DE
PG Properties Holding, LLC	NC
Pioneer Meadows Development, LLC	NV
Pioneer Meadows Investments, LLC	NV
POMAC, LLC	MD
Port Imperial South Building 14, LLC	NJ
Prestonfield L.L.C.	IL
Providence Lakes, LLP	FL
Raintree Village II L.L.C.	IL
Raintree Village, L.L.C.	IL
Renaissance Joint Venture	FL
Reserve @ Pleasant Grove II LLC	NJ	Lennar
Reserve @ Pleasant Grove LLC	NJ	Lennar
Reserve at River Park, LLC	NJ
Reserve at South Harrison, LLC	NJ
Rialto Capital Advisors of New York, LLC	DE
Rialto Capital Advisors, LLC	DE
Rialto Capital Management, LLC	DE
Rialto Capital Partners, LLC	DE
Rialto Capital Services, LLC	DE

Company Name	State of Incorporation	DBAs
Rialto Partners GP, LLC	DE
Rialto REGI, LLC	FL
Rialto RL CML 2009-1, LLC	DE
Rialto RL RES 2009-1, LLC	DE
Rivendell Joint Venture	FL
Rivenhome Corporation	FL
RL BB FINANCIAL, LLC	FL
RL CMBS Holdings, LLC	DE
RL CMBS Investor, LLC	DE
RL REGI ALABAMA, LLC	AL
RL REGI ARKANSAS, LLC	AR
RL REGI FINANCIAL, LLC	FL
RL REGI FLORIDA, LLC	FL
RL REGI GEORGIA, LLC	GA
RL REGI KANSAS, LLC	KS
RL REGI LOUISIANA, LLC	LA
RL REGI MISSISSIPPI, LLC	MS
RL REGI MISSOURI, LLC	MO
RL REGI NORTH CAROLINA, LLC	NC
RL REGI SOUTH CAROLINA, LLC	SC
RL REGI TENNESSEE, LLC	TN
RL REGI VIRGINIA, LLC	VA
RL REGI-FL FT. PIERCE, LLC	FL
RL REGI-FL PASCO COUNTY, LLC	FL
RL REGI-FL RUSKIN, LLC	FL
RL REGI-MO MOSCOW MILLS, LLC	MO
RL REGI-NC RALEIGH, LLC	NC
Rutenberg Homes of Texas, Inc.	TX
Rutenberg Homes, Inc.	FL
Rye Hill Company, LLC	NY
S. Florida Construction II, LLC	FL
S. Florida Construction III, LLC	FL
S. Florida Construction, LLC	FL

Company Name	State of Incorporation	DBAs
San Felipe Indemnity Co., Ltd.
San Lucia, LLC	FL
Santa Ana Transit Village, LLC	CA
Savell Gulley Development, LLC	TX
Scarsdale, LTD.	TX
Schulz Ranch Developers, LLC	DE
Seminole/70th, LLC	FL
Siena at Old Orchard, LLC	IL
Sonoma L.L.C.	IL
Spanish Springs Development, LLC	NV
St. Charles Active Adult Community, LLC	MD
State Home Acceptance Corp.	FL
Stoney Corporation	FL
Stoneybrook Clubhouse, Inc.	FL
Stoneybrook Golf Club, Inc.	FL
Stoneybrook Joint Venture	FL
Strategic Cable Technologies, L.P.	TX
Strategic Holdings, Inc. d/b/a Lennar Communications Ventures	NV	Lennar Communications Ventures
Strategic Technologies Communications of California, Inc.	CA
Strategic Technologies, LLC	FL	Strategic Cable Technologies - Texas, Inc.
Summerfield Venture L.L.C.	IL
Summerwood, LLC	MD
Temecula Valley, LLC	DE
Texas-Wide General Agency, Inc.	TX
The Baywinds Land Trust	FL	Baywinds Land Trust D/B/A Club Vineyards, Dade County
The Courts of Indian Creek L.L.C.	IL
The LNC Northeast Group, Inc.	DE
The Preserve at Coconut Creek, LLC	FL
Trade Services Investments, Inc.	CA
U.S. Home Corporation	DE	Lennar
	DE	Lennar Corporation

Company Name	State of Incorporation	DBAs
U.S. Home of Arizona Construction Co.	AZ
U.S. Home Realty, Inc.	TX
U.S. Home/KB North Douglas, LLC	DE
U.S. Insurors, Inc.	FL
U.S.H. Los Prados, Inc.	NV
U.S.H. Realty, Inc.	MD
UAMC Holding Company, LLC	DE
Universal American Insurance Agency, Inc.	FL
Universal American Insurance Agency, Inc.	TX
Universal American Mortgage Company of California	CA
Universal American Mortgage Company, LLC	FL	Universal American Mortgage Company
Universal American Mortgage Company, LLC	FL	UAMC
USH - Flag, LLC	FL
USH (West Lake), Inc.	NJ
USH Equity Corporation	NV
USH Woodbridge, Inc.	TX
UST Lennar GP PIS 10, LLC	DE
UST Lennar GP PIS 7, LLC	DE
Valencia at Doral, LLC	FL
Vineyard Point 2009, LLC	CA
WCP, LLC	SC
West Chocolate Bayou Development, LLC	TX
West Lake Village, LLC	NJ
West Van Buren L.L.C.	IL
Westchase, Inc.	NV
Willowbrook Investors, LLC	NJ
Wright Farm, L.L.C.	VA

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-151924 on Form S-3 and Registration Statement Nos. 333-142732, 333-105019 and 333-70212 on Forms S-8 of our report dated January 31, 2011, relating to the financial statements of Lennar Corporation and subsidiaries (which report expresses an unqualified opinion and includes an explanatory paragraph related to retrospective adjustments for the adoption of certain accounting standards related to the presentation of noncontrolling interests and the disclosure guidance applicable to variable interest entities and the adoption of other provisions of the amended consolidation guidance applicable to variable interest entities which resulted in the deconsolidation of certain option contracts), and our reports dated January 31, 2011, relating to the financial statement schedule of Lennar Corporation and the effectiveness of Lennar Corporation’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Lennar Corporation for the year ended November 30, 2010.

/s/ DELOITTE & TOUCHE LLP

Miami, Florida

January 31, 2011

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER’S CERTIFICATION

I, Stuart A. Miller, certify that:

1. I have reviewed this annual report on Form 10-K of Lennar Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    STUART A. MILLER

Name: Stuart A. Miller

Title: President and Chief Executive Officer

Date: January 28, 2011

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER’S CERTIFICATION

I, Bruce E. Gross, certify that:

1. I have reviewed this annual report on Form 10-K of Lennar Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/    BRUCE E. GROSS

Name: Bruce E. Gross

Title: Vice President and Chief Financial Officer

Date: January 28, 2011

EX-32

Exhibit 32

Officers’ Section 1350 Certifications

Each of the undersigned officers of Lennar Corporation, a Delaware corporation (the “Company”), hereby certifies that (i) the Company’s Annual Report on Form 10-K for the year ended November 30, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Company’s Annual Report on Form 10-K for the year ended November 30, 2010 fairly presents, in all material respects, the financial condition and results of operations of the Company, at and for the periods indicated.

/s/    STUART A. MILLER

Name: Stuart A. Miller

Title: President and Chief Executive Officer

/s/    BRUCE E. GROSS

Name: Bruce E. Gross

Title: Vice President and Chief Financial Officer

Date: January 28, 2011