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<SEC-DOCUMENT>0000950123-09-027458.txt : 20090730
<SEC-HEADER>0000950123-09-027458.hdr.sgml : 20090730
<ACCEPTANCE-DATETIME>20090730110338
ACCESSION NUMBER:		0000950123-09-027458
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20090730
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20090730
DATE AS OF CHANGE:		20090730

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KB HOME
		CENTRAL INDEX KEY:			0000795266
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATIVE BUILDERS [1531]
		IRS NUMBER:				953666267
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09195
		FILM NUMBER:		09972458

	BUSINESS ADDRESS:	
		STREET 1:		10990 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90024
		BUSINESS PHONE:		3102314000

	MAIL ADDRESS:	
		STREET 1:		10990 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90024

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KAUFMAN & BROAD HOME CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v53289e8vk.htm
<DESCRIPTION>8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 OR 15(d) of the Securities Exchange Act of 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): July&nbsp;30, 2009</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>KB HOME</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
(State or other jurisdiction <BR>
of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-9195</B><BR>
(Commission<BR>
File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>95-3666267</B><BR>
(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>10990 Wilshire Boulevard, Los Angeles, California 90024</B><BR>
(Address of principal executive offices) (Zip Code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: (<B>310) 231-4000</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>N/A</B><BR>
(Former name or former address, if changed since last report)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act
(17 CFR 230.425)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act
(17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">Item&nbsp;8.01 Other Events</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;9.01 Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="v53289exv1w2.htm">EX-1.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="v53289exv4w26.htm">EX-4.26</A></TD></TR>
<TR><TD colspan="9"><A HREF="v53289exv4w27.htm">EX-4.27</A></TD></TR>
<TR><TD colspan="9"><A HREF="v53289exv5w2.htm">EX-5.2</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<!-- link1 "Item&nbsp;8.01 Other Events" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8.01 Other Events.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;24, 2009, KB Home filed a prospectus supplement, dated July&nbsp;23, 2009, under its
Registration Statement on Form S-3 (333-154432), relating to the offering of $265,000,000 in
aggregate principal amount of its 9.100% Senior Notes due 2017 (the &#147;Notes&#148;). Exhibits are filed
herewith in connection with the issuance of the Notes on July&nbsp;30, 2009.
</DIV>
<!-- link1 "Item&nbsp;9.01 Exhibits" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01 Exhibits</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibits.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="97%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Underwriting Agreement, dated July&nbsp;23, 2009, regarding $265,000,000 of KB
Home&#146;s 9.100% Senior Notes due 2017.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of 9.100% Senior Note due 2017.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Officers&#146; Certificate and Guarantors&#146; Officers&#146; Certificate dated July&nbsp;30,
2009, establishing the form and terms of the Notes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Munger, Tolles &#038; Olson LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">8.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tax Opinion of Munger, Tolles &#038; Olson LLP (included in Exhibit&nbsp;5.2).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Munger, Tolles &#038; Olson LLP (included in Exhibit&nbsp;5.2).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">Date: July&nbsp;30, 2009</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">KB HOME</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ <FONT style="font-variant: SMALL-CAPS">
Wendy C. Shiba</font>
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="1" valign="top" align="left">Wendy C. Shiba</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="1" valign="top" align="left">Executive Vice President, General Counsel and Secretary</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">EXHIBIT INDEX
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">No.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Underwriting Agreement, dated July&nbsp;23, 2009, regarding $265,000,000 of KB Home&#146;s 9.100%
Senior Notes due 2017.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of 9.100% Senior Note due 2017.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Officers&#146; Certificate and Guarantors&#146; Officers&#146; Certificate dated July&nbsp;30, 2009, establishing
the form and terms of the Notes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Munger, Tolles &#038; Olson LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">8.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tax Opinion of Munger, Tolles &#038; Olson LLP (included in Exhibit&nbsp;5.2).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Munger, Tolles &#038; Olson LLP (included in Exhibit&nbsp;5.2).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.2
<SEQUENCE>2
<FILENAME>v53289exv1w2.htm
<DESCRIPTION>EX-1.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-1.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt">
EXHIBIT 1.2 </div>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>KB HOME<BR>
(a Delaware corporation)</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>$265,000,000</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>9.100% Senior Notes due 2017</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>UNDERWRITING AGREEMENT</B></U>

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">July&nbsp;23, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Citigroup Global Markets Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt"><I>As Representative of the several Underwriters<BR>
named in Annex B hereto</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">388 Greenwich Street<BR>
New York, New York 10013

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KB Home, a Delaware corporation (the &#147;<U>Company</U>&#148;), and the Company&#146;s subsidiaries listed
on Schedule&nbsp;A hereto (the &#147;<U>Guarantors</U>&#148;) confirm their agreement with Citigroup Global
Markets Inc. (&#147;<U>Citigroup</U>&#148; or &#147;<U>you</U>&#148;) and each of the other underwriters, if any,
named in Schedule&nbsp;B hereto (collectively, the &#147;<U>Underwriters</U>,&#148; which term shall also include
any underwriters substituted as hereinafter provided in Section&nbsp;10 hereof), for whom you are acting
as representative (in such capacity, the &#147;<U>Representative</U>&#148;), with respect to the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly, of $265&nbsp;million
aggregate principal amount of the Company&#146;s 9.100% Senior Notes due 2017 (the
&#147;<U>Securities</U>&#148;). The Securities will be unconditionally guaranteed on a senior basis by each
of the Guarantors (the &#147;<U>Guarantees</U>&#148;) pursuant to the Indenture (as defined below). In the
event that only a single Representative is named in the first sentence of this paragraph, then all
references herein to the &#147;Representatives&#148; shall be deemed to mean and refer to such single
Representative, <U>mutatis</U> <U>mutandis</U>. In the event that only a single Underwriter is
named on Schedule&nbsp;B hereto, then (i)&nbsp;all references herein to the &#147;Underwriters&#148; shall be deemed to
mean and refer to such single Underwriter, <U>mutatis</U> <U>mutandis</U>, and (ii)&nbsp;the
provisions of Section&nbsp;10 shall not be applicable and all references herein to Section&nbsp;10 shall be
disregarded.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Securities are to be issued pursuant to an Indenture (the &#147;<U>Original Indenture</U>&#148;)
dated as of January&nbsp;28, 2004, as amended and supplemented by the First Supplemental Indenture (the
&#147;<U>First Supplemental Indenture</U>&#148;) thereto dated as of January&nbsp;28, 2004, as further amended
and supplemented by the Second Supplemental Indenture (the &#147;<U>Second Supplemental Indenture</U>&#148;)
thereto dated as of June&nbsp;30, 2004, the Third Supplemental Indenture (the &#147;<U>Third Supplemental
Indenture</U>&#148;) thereto dated as of May&nbsp;1, 2006, the Fourth Supplemental Indenture (the &#147;<U>Fourth
Supplemental Indenture</U>&#148;) thereto dated as of November&nbsp;9, 2006, and the Fifth Supplemental
Indenture (the &#147;<U>Fifth Supplemental Indenture</U>&#148;) thereto dated as of August&nbsp;17, 2007 (the
Original Indenture, as so amended and supplemented, the &#147;<U>Indenture</U>&#148;), each among the
Company, the Guarantors and U.S. Bank National Association, as successor to SunTrust Bank, as
trustee (the &#147;<U>Trustee</U>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this Agreement, the Guarantors are sometimes referred to as the &#147;<U>Significant
Subsidiaries.</U>&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has filed with the Securities and Exchange Commission (the &#147;<U>Commission</U>&#148;) a
registration statement on Form&nbsp;S-3 (No.&nbsp;333-154432) (the &#147;<U>Current</U> <U>Registration
Statement</U>&#148;) for the registration under the Securities Act of 1933 (the &#147;<U>1933 Act</U>&#148;) of,
among other securities, the Securities and the Guarantees, which registration statement
automatically became effective upon filing on October&nbsp;17, 2008 and copies of which have heretofore
been delivered to you. The Indenture has been qualified under the Trust Indenture Act of 1939, as
amended (the &#147;<U>1939&nbsp;Act</U>&#148;). The Company proposes to file with the Commission, pursuant to
Rule&nbsp;430B (&#147;<U>Rule&nbsp;430B</U>&#148;) of the rules and regulations of the Commission under the 1933&nbsp;Act
(the &#147;<U>1933&nbsp;Act Regulations</U>&#148;) and paragraph (b)&nbsp;of Rule&nbsp;424 (&#147;<U>Rule&nbsp;424(b)</U>&#148;) of the
1933 Act Regulations, the Prospectus Supplement (as defined in Section&nbsp;&nbsp;3(i) hereof) and the
related prospectus dated October&nbsp;17, 2008 (the &#147;<U>Base Prospectus</U>&#148;) relating to the
Securities and Guarantees, and has previously advised you of all further information (financial and
other) with respect to the Company and the Guarantors set forth therein. Any information included
in the Prospectus Supplement or the Base Prospectus that was omitted from the Current Registration
Statement at the time it became effective but that is deemed to be part of and included in the
Current Registration Statement pursuant to paragraph&nbsp;(f) of Rule&nbsp;430B is referred to as the
&#147;<U>Rule&nbsp;430B Information</U>.&#148; Each prospectus, together with the related prospectus supplement,
relating to the Securities that omitted the Rule&nbsp;430B Information or that was captioned &#147;Subject to
Completion&#148; (or a similar caption) that was used after effectiveness of the Current Registration
Statement, is herein called, together with the documents incorporated and deemed to be incorporated
by reference therein pursuant to Item&nbsp;12 of Form&nbsp;S-3 under the 1933 Act, a &#147;<U>Preliminary
Prospectus</U>,&#148; and all references herein to any &#147;Preliminary Prospectus&#148; shall be deemed to
include the Statutory Prospectus (as hereinafter defined). The Current Registration Statement, at
any given time, including the amendments thereto to such time, the exhibits and any schedules
thereto at such time, the documents incorporated and deemed to be incorporated by reference therein
pursuant to Item&nbsp;12 of Form&nbsp;S-3 under the 1933 Act at such time, and the documents and information
(including, without limitation, any 430B Information) otherwise deemed to be a part thereof or
included therein by the 1933 Act Regulations at such time, is hereinafter called, the
&#147;<U>Registration Statement</U>.&#148; The Base Prospectus and the Prospectus Supplement including the
documents incorporated and deemed to be incorporated by reference therein pursuant to Item&nbsp;12 of
Form&nbsp;S-3 under the 1933 Act, in the form first furnished (electronically or otherwise) to the
Underwriters for use in connection with the offering of the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities (whether to meet the requests of purchasers pursuant to Rule&nbsp;173 under the 1933 Act
Regulations or otherwise) or, if not furnished to the Underwriters, in the form first filed by the
Company pursuant to Rule&nbsp;424(b), are herein called collectively, the &#147;<U>Prospectus</U>.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All references in this Agreement to documents, financial statements and schedules and other
information which is &#147;contained,&#148; &#147;included,&#148; &#147;stated,&#148; &#147;described in&#148; or &#147;referred to&#148; in the
Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or any
Preliminary Prospectus (and all other references of like import) shall be deemed to mean and
include all such documents, financial statements and schedules and other information which is
incorporated or deemed to be incorporated by reference in, or otherwise deemed by the 1933 Act
Regulations (including, without limitation, Rule&nbsp;430B) to be a part of or included in, the
Registration Statement, the Prospectus, the Base Prospectus, the Statutory Prospectus or such
Preliminary Prospectus, as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Prospectus, the Base Prospectus, the Statutory
Prospectus or any Preliminary Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934, as amended (the &#147;<U>1934&nbsp;Act</U>&#148;), which is
incorporated or deemed to be incorporated by reference in the Registration Statement, the
Prospectus, the Base Prospectus, the Statutory Prospectus or such Preliminary Prospectus, as the
case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Guarantors understand that the Underwriters propose to make a public
offering (the &#147;<U>Offering</U>&#148;) of the Securities and the Guarantees as soon as the
Representatives deem advisable after this Agreement has been executed and delivered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concurrently with the Offering, the Company also plans to make an offer (the &#147;<U>Tender
Offer</U>&#148;) to purchase up to $250&nbsp;million in aggregate principal amount of the Company&#146;s 6 3/8%
Notes due 2011, on the terms and subject to the conditions set forth in the Offer to Purchase dated
July&nbsp;23, 2009. The Company has appointed Citigroup to act as Dealer Manager for the Tender Offer
pursuant to a Dealer Manager Agreement, dated July&nbsp;23, 2009, by and between Citigroup and the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, the Securities and the Indenture are hereinafter sometimes referred to,
collectively, as the &#147;<U>Operative Documents</U>&#148; and, individually, as an &#147;<U>Operative
Document</U>.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All references herein to a &#147;subsidiary&#148; or &#147;subsidiaries&#148; of the Company shall include,
without limitation (i)&nbsp;the Guarantors and (ii)&nbsp;all other subsidiaries of the Company, including any
consolidated joint ventures in which the Company or any of its other subsidiaries is a participant,
any consolidated limited and general partnerships in which the Company or any of its other
subsidiaries owns partnership interests and any consolidated limited liability companies in which
the Company or any of its other subsidiaries owns membership interests (such consolidated joint
ventures, limited and general partnerships and limited liability companies being hereinafter
called, collectively, the &#147;<U>Partnerships</U>&#148; and, individually, a &#147;<U>Partnership</U>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1. <U>Representations and Warranties</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Company and the Guarantors, jointly and severally, represent and warrant to each
Underwriter as of the date hereof (such date being hereinafter referred to as the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Representation Date&#148;), as of the Applicable Time (as defined below) and as of the Closing
Time (as defined below), and agree with each Underwriter, as follows:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and the Guarantors meet the requirements for use of Form&nbsp;S-3 under the
1933&nbsp;Act and the 1933&nbsp;Act Regulations. No stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the Company, are
threatened by the Commission, and any request on the part of the Commission for additional
information has been complied with.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At (w)&nbsp;the time of filing the Current Registration Statement, (x)&nbsp;the time of the most
recent amendment thereto for the purposes of complying with Section&nbsp;10(a)(3) of the 1933 Act
(whether such amendment was by post-effective amendment, incorporated report filed pursuant
to Sections&nbsp;13 or 15(d) of the 1934 Act or form of prospectus), (y)&nbsp;the time the Company or
any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) of
the 1933 Act Regulations) made any offer relating to the Securities in reliance on the
exemption in Rule&nbsp;163, and (z)&nbsp;the Applicable Time (with such date being used as the
determination date for purposes of this clause (z)), the Company was or is (as the case may
be) a &#147;well-known seasoned issuer&#148; as defined in Rule&nbsp;405 of the 1933 Act Regulations
(&#147;<U>Rule&nbsp;405</U>&#148;). The Registration Statement, as of the Applicable Time (as defined
below), meets the requirements set forth in Rule&nbsp;415(a)(1)(x) of the 1933 Act Regulations.
The Company agrees to pay the fees required by the Commission, if any, relating to the
Securities within the time required by Rule&nbsp;456(b)(1) of the 1933 Act Regulations and
otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time that the Registration Statement was first filed, at the earliest time
thereafter that the Company or another offering participant made a <I>bona fide </I>offer (within
the meaning of Rule&nbsp;164(h)(2) of the 1933 Act Regulations) of the Securities and at the
Applicable Time, the Company was not and is not an &#147;ineligible issuer,&#148; as defined in
Rule&nbsp;405, without taking account of any determination by the Commission pursuant to Rule&nbsp;405
that it is not necessary that the Company be considered such an &#147;ineligible issuer.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the respective times the Registration Statement and any post-effective amendments
thereto first became or become effective, at the time the Company&#146;s most recent Annual
Report on Form&nbsp;10-K was filed with the Commission, at each &#147;new effective date&#148; with respect
to the Underwriters pursuant to Rule&nbsp;430B(f)(2) of the 1933 Act Regulations, at the date
hereof and at the Closing Time, the Registration Statement and any amendments and
supplements thereto complied in all material respects and will comply in all material
respects with the applicable requirements of the 1933 Act, the 1933 Act Regulations, the
1939 Act and the rules and regulations of the Commission under the 1939 Act (the &#147;1939 Act
Regulations&#148;), and did not, do not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Base Prospectus, as of its date and as of the
Representation Date, the Statutory Prospectus and any other Preliminary Prospectus, as of
the date of the preliminary prospectus supplement
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">constituting a part thereof, and the Prospectus and any amendments or supplements
thereto, as of the Representation Date and at the Closing Time, complied, comply and will
comply, in each case, in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and did not, do not and will not contain any untrue statement of
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Preliminary Prospectus, each Issuer Free Writing Prospectus, if any, and the
Prospectus delivered to the Underwriters for use in connection with this offering was or
will be identical to the electronically transmitted copy thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation&nbsp;S-T of the Commission.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the Applicable Time, neither (x)&nbsp;all Issuer General Use Free Writing Prospectuses
(as defined below) issued at or prior to the Applicable Time, the Statutory Prospectus and
the information set forth on Schedule&nbsp;C hereto, all considered together (collectively, the
&#147;<U>General Disclosure Package</U>&#148;), nor (y)&nbsp;any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the General Disclosure Package, nor
(z)&nbsp;any &#147;road show that is a written communication&#148; within the meaning of Rule&nbsp;433(d)(8)(i),
whether or not required to be filed with the Commission, included or will include any untrue
statement of a material fact or omitted or will omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the time that an Issuer Free Writing Prospectus containing the information in the
Final Term Sheet (as defined in Section&nbsp;3(i)) shall have been filed with the Commission, the
General Disclosure Package will not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this subsection and elsewhere in this Agreement:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Applicable Time</U>&#148; shall mean 2:50 p.m. (New York City time) on the date of this
Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Issuer Free Writing Prospectus</U>&#148; means any &#147;issuer free writing prospectus,&#148; as
defined in Rule&nbsp;433 of the 1933 Act Regulations (&#147;Rule&nbsp;433&#148;), relating to the Securities
that (i)&nbsp;is required to be filed with the Commission by the Company, (ii)&nbsp;is a &#147;road show
that is a written communication&#148; within the meaning of Rule&nbsp;433(d)(8)(i), whether or not
required to be filed with the Commission, or (iii)&nbsp;is exempt from filing pursuant to
Rule&nbsp;433(d)(5)(i) because it contains a description of the Securities or of the offering
that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the
Company&#146;s records pursuant to Rule&nbsp;433(g).
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Issuer General Use Free Writing Prospectus</U>&#148; means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as evidenced
by its being specified in Schedule&nbsp;D hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Issuer Limited Use Free Writing Prospectus</U>&#148; means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Statutory Prospectus</U>&#148; means, collectively, the Base Prospectus and the
preliminary prospectus supplement dated July&nbsp;23, 2009 relating to the offering of the
Securities and the Guarantees, including the documents incorporated and deemed to be
incorporated by reference therein pursuant to Item&nbsp;12 of Form&nbsp;S-3 under the 1933 Act, in the
form first furnished (electronically or otherwise) to the Underwriters for use in connection
with the offering of the Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the Company notified or notifies the Representatives as described in Section&nbsp;3(e),
did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated or deemed to be incorporated by reference therein that
has not been superseded or modified.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties in this subsection 1(a)(i) shall not apply to
statements in or omissions from the Registration Statement, the Prospectus, any Preliminary
Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through the
Representatives expressly for use therein or the information contained in any Statement of
Eligibility of a trustee under the 1939 Act filed or incorporated by reference as an exhibit
to the Registration Statement (a &#147;<U>Form&nbsp;T-1</U>&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Ernst&nbsp;&#038; Young&nbsp;LLP, whose reports are incorporated by reference into the
Registration Statement, the Statutory Prospectus and the Prospectus, is an independent
registered public accounting firm with respect to the Company and its subsidiaries as
required by the 1933&nbsp;Act and the 1933 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The financial statements included or incorporated by reference in the
Registration Statement, the General Disclosure Package, and the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of operations of the Company and its consolidated subsidiaries for
the periods specified; except as otherwise stated in the Registration Statement, the General
Disclosure Package and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles in the United States applied on a
consistent basis; the supporting schedules included or incorporated by reference in the
Registration Statement, the Statutory Prospectus, the General Disclosure Package and the
Prospectus present fairly the information required to be stated therein; the Company&#146;s
ratios of earnings to fixed charges and, if applicable, of earnings to combined fixed
charges and preferred stock dividends included in the Base Prospectus
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">under the caption &#147;Ratios of Earnings to Fixed Charges&#148; and in the Prospectus
Supplement under the caption &#147;Selected Consolidated Financial Data&#148; and in Exhibit&nbsp;12.1 to
the Registration Statement have been calculated in compliance with Item&nbsp;503(d) of
Regulation&nbsp;S-K of the Commission; and the pro forma financial statements, if any, and
related notes thereto included in the Registration Statement, the General Disclosure Package
and the Prospectus present fairly the information shown therein, have been prepared in
accordance with the Commission&#146;s rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances referred to therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Since the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package, and the Prospectus, except as otherwise stated
therein, (A)&nbsp;there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, (B)&nbsp;there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise, and (C)&nbsp;except for
regular quarterly dividends in customary amounts per share on the Company&#146;s common stock,
par value $1.00 per share (the &#147;<U>Common Stock</U>&#148;), there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of its capital
stock. As used in this subsection&nbsp;(iv), the term &#147;Registration Statement&#148; means the
Registration Statement excluding any amendments or supplements thereto after the date of
this Agreement; the term &#147;General Disclosure Package&#148; means the General Disclosure Package
excluding any amendments or supplements thereto after the Applicable Time; and the term
&#147;Prospectus&#148; means the Prospectus excluding any amendments or supplements thereto after the
date of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware and has corporate power and authority
to own, lease and operate its properties and to conduct its business as described in the
General Disclosure Package and the Prospectus and to enter into and perform its obligations
under the Operative Documents; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of California and in each other
jurisdiction, if any, in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except jurisdictions (other
than the State of California) where the failure to so qualify or be in good standing would
not have a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and without limitation to the foregoing provisions of this
subparagraph, the only jurisdiction in which the Company is qualified as a foreign
corporation is the State of California.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Each Guarantor is either a corporation or a limited liability company.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Each Guarantor has been duly organized and is validly existing as a corporation or
limited liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, has power and authority to own, lease and operate its
properties and to conduct its business as described in the General Disclosure Package and
the Prospectus and to enter into and perform its obligations under the Operative Documents
to which it is a party, and is duly qualified to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; without limitation to the foregoing provisions of this
subparagraph, none of the Guarantors is qualified as a foreign corporation or limited
liability company in any jurisdiction; all of the issued and outstanding capital stock of
each Guarantor which is a corporation has been duly authorized and validly issued, is fully
paid and non-assessable and is owned (except for directors qualifying shares and a nominal
number of shares held by affiliated parties) by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and all of the outstanding equity interests in each Guarantor which is a
limited liability company have been duly authorized (if applicable) and validly issued, are
fully paid and non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. Except for the Guarantors, no subsidiary of the Company (including,
without limitation, any Partnership) is a &#147;significant subsidiary&#148; as defined in Rule&nbsp;1-02
of Regulation&nbsp;S-X (as in effect on January&nbsp;1, 1996 and as of the date hereof). Schedule&nbsp;A
hereto sets forth the names of each of the Guarantors, its jurisdiction of organization and
whether such Guarantor is a corporation, limited liability company or other entity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(vii) (A)&nbsp;The authorized, issued and outstanding capital stock of the Company
is as set forth in the audited consolidated balance sheet as of November&nbsp;30, 2008
appearing in the Company&#146;s Annual Report on Form&nbsp;10-K for the fiscal year then ended
(except for (1)&nbsp;subsequent issuances, if any, pursuant to reservations, agreements
or employee benefit plans referred to or incorporated by reference in the General
Disclosure Package and the Prospectus, and (2)&nbsp;repurchases of Common Stock pursuant
to stock repurchase programs that are described in the General Disclosure Package
and the Prospectus; the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable; the Common
Stock, the Company&#146;s authorized but unissued special common stock, par value $1.00
per share (the &#147;<U>Special Common Stock</U>&#148;), and the Company&#146;s authorized and
unissued preferred stock, par value $1.00 per share (the &#147;<U>Preferred Stock</U>&#148;),
conform to the respective statements relating thereto included in the General
Disclosure Package and the Prospectus;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued by the Company,
authenticated by the Trustee and delivered pursuant to the provisions of the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Indenture and this Agreement against payment of the consideration set forth
herein, the Securities will have been duly executed and delivered by the Company and
will constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors&#146; rights generally or by general equitable
principles, and will be entitled to the benefits of the Indenture;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) The Original Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental
Indenture and the Fifth Supplemental Indenture have been duly authorized, executed
and delivered by the Company and each of the Guarantors party thereto and constitute
valid and binding agreements of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with their terms,
except in each case as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting creditors&#146;
rights generally or by general equitable principles, and the Indenture has been duly
qualified under the 1939 Act; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) the Operative Documents and the Guarantees conform and will conform in all
material respects to the respective descriptions thereof contained in the General
Disclosure Package and the Prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Neither the Company nor any Guarantor is in violation of any statute, law, rule,
regulation, judgment, order or decree applicable to such party of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over such party or any of its properties (except where such violations would
not have a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Company is not in violation of its charter or by-laws and none of the
Guarantors is in violation of its charter or by-laws or other organizational documents, and
neither the Company nor any of the Guarantors is in default in the performance or observance
of (A)&nbsp;any obligation, agreement, covenant or condition contained in:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Company&#146;s Revolving Loan Agreement dated as of November&nbsp;22,
2005 among the Company, the banks party thereto, Bank of America, N.A. as
Administrative Agent, and the other parties thereto, including all
amendments and supplements thereto, if any, and any promissory notes or
other agreements, guarantees or instruments entered into in connection
therewith (the &#148;Revolving Loan Agreement&#148;), or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any outstanding debt securities previously issued under the
Indenture (the &#147;Senior Notes&#148;), the Indenture or the guarantees of the
Senior Notes (the &#147;Senior Guarantees&#148;), (the Revolving Loan Agreement,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">the Senior Notes, the Indenture and the Senior Guarantees are
hereinafter called, collectively, the &#147;Subject Instruments&#148; and,
individually, a &#147;Subject Instrument&#148;) or (B)&nbsp;any obligation, agreement,
covenant or condition contained in any other contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
of the Guarantors is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of the
Guarantors is subject, which default or violation would have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and the execution, delivery and performance of
this Agreement and the other Operative Documents, the consummation of the
transactions contemplated herein and the other Operative Documents and
compliance by the Company and the Guarantors with their respective
obligations under such agreements to which they are parties have been duly
authorized by all necessary action, corporate or other, and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of the Guarantors pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any of the Guarantors is a party or by which it or any
of them may be bound (including, without limitation, the Subject
Instruments), or to which any of the property or assets of the Company or
any of the Guarantors is subject, except (other than in the case of the
Subject Instruments) for a conflict, breach, default, lien, charge or
encumbrance which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
nor will such action result in any violation of the provisions of the
charter, by laws or other organizational documents of the Company or any of
the Guarantors or any applicable law, administrative regulation or
administrative or court order or decree;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) There is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries, which is required
to be disclosed in the Registration Statement, the Statutory Prospectus or the Prospectus
(other than as disclosed therein), or which is not so disclosed and (net of reserves and
insurance) which the Company believes might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of this Agreement or the other Operative Documents;
all pending legal or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the subject which are not
described in or incorporated by reference in the Registration Statement, the Statutory
Prospectus, the General Disclosure Package and the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Prospectus, including ordinary routine litigation incidental to the business, are,
considered in the aggregate and net of reserves and insurance, not material to the Company
and its subsidiaries considered as one enterprise; and there are no contracts or documents
of the Company or any of its subsidiaries which are required to be filed as exhibits to the
documents incorporated or deemed to be incorporated by reference in the Registration
Statement, the Statutory Prospectus or the Prospectus by the 1933 Act or by the 1933 Act
Regulations which have not been so filed or incorporated by reference.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) No authorization, approval or consent of any court or governmental authority or
agency is necessary in connection with the issuance and sale of the Securities or the
Guarantees, the consummation by the Company or any Guarantor of any of the other
transactions contemplated hereby or by any of the other Operative Documents, except such as
may be required and have been obtained under the 1933 Act, the 1933 Act Regulations, the
1934 Act, the 1934 Act Regulations (as defined below) and the 1939 Act, and such as may be
required under state securities laws.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) This Agreement has been duly authorized, executed and delivered by the Company
and each of the Guarantors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) The documents incorporated or deemed to be incorporated by reference in the
Registration Statement, the Statutory Prospectus and the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934&nbsp;Act and the rules and regulations of the
Commission under the 1934 Act (the &#147;<U>1934&nbsp;Act Regulations</U>&#148;), and (a)&nbsp;when read
together with the other information in the Registration Statement, at the time the
Registration Statement and any amendments thereto first became effective, at the time the
Company&#146;s most recent Annual Report on Form&nbsp;10&#150;K was filed with the Commission and&nbsp;at each
&#147;new effective date&#148; with respect to the Underwriters pursuant to Rule&nbsp;430B(f)(2) of the
1933 Act Regulations, (b)&nbsp;when read together with the other information in the General
Disclosure Package, at the Applicable Time and (c)&nbsp;when read together with the other
information in the Prospectus, at the Representation Date and at the Closing Time, did not,
do not and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) The Securities rank and will rank pari passu in right of payment with the Senior
Notes and with the Company&#146;s borrowing and other obligations under the Revolving Loan
Agreement. The Guarantees rank and will rank pari passu in right of payment with the Senior
Guarantees and with the guarantees of the Company&#146;s borrowings and other obligations under
the Revolving Loan Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) There are no holders of securities of the Company with currently exercisable
registration rights to have any securities registered as part of the Registration Statement
or included in the offering contemplated by this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi)
The Company and each of the Guarantors have good and marketable title
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">to all of their respective properties, in each case free and clear of
all liens, encumbrances and defects, except (i)&nbsp;customary liens and encumbrances arising in
the ordinary course of the Company&#146;s construction and development business and the financing
thereof, (ii)&nbsp;as stated or incorporated by reference in the Statutory Prospectus, the
General Disclosure Package and the Prospectus or (iii)&nbsp;such as do not materially affect the
value of such properties in the aggregate to the Company and its subsidiaries considered as
one enterprise and do not materially interfere with the use made and proposed to be made of
such properties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) The Company and the Guarantors possess such certificates, authorities and
permits issued by the appropriate state, federal and foreign regulatory agencies or bodies
necessary to conduct all material aspects of the business now operated by them, and neither
the Company nor any of the Guarantors has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) No default or event of default with respect to any Indebtedness (as such term
is defined in the Base Prospectus under the caption &#147;Description of Debt Securities&#151;Certain
Definitions&#148;) of the Company or any of the Guarantors entitling, or which, with notice or
lapse of time or both, would entitle, the holders thereof to accelerate the maturity thereof
exists or will exist as a result of the execution and delivery of this Agreement, any of the
other Operative Documents, the issuance and sale of the Securities or the Guarantees or the
consummation of the transactions contemplated hereby or thereby.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) The Company and each of the Guarantors have filed all tax returns required to be
filed, which returns, as amended, are complete and correct in all material respects, and
neither the Company nor any Guarantor is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect to said returns which would
materially and adversely affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) The Company and each of the Guarantors maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A)&nbsp;transactions are executed in
accordance with management&#146;s general or specific authorization; (B)&nbsp;transactions are
recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets;
(C)&nbsp;access to assets is permitted only in accordance with management&#146;s general or specific
authorization; and (D)&nbsp;the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) The Company and its subsidiaries maintain &#147;disclosure controls
and

</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">procedures&#148; (as such term is defined in Rule&nbsp;13a-15(e) under the Exchange Act);
based on the most recent evaluation, the Company&#146;s principal executive officer and principal
financial officer concluded that the Company&#146;s disclosure controls and procedures were
effective as of May&nbsp;31, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) The Company and the Guarantors have not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or
result in, under the 1934 Act, the 1934 Act Regulations or otherwise, stabilization or
manipulation of the price of any security of the Company or the Guarantors to facilitate the
sale or resale of the Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) None of the Operative Documents or the Guarantees is or will be, and no payment
by the Company or any of the Guarantors of any amounts payable under or pursuant to any of
the Operative Documents or the Guarantees (including, without limitation, any principal,
premium, if any, or interest) is or will be, subject to any usury law or other limitation on
the rate or amount of interest or other amounts payable thereunder or the yield thereon
(collectively, &#147;<U>Usury Laws</U>&#148;), or violates, contravenes or breaches, or will violate,
contravene or breach, any Usury Laws.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) Neither the Company nor any of the Guarantors is, and upon issuance and sale of
the Securities and the Guarantees as contemplated by this Agreement and application of the
net proceeds therefrom as described in the Statutory Prospectus, the General Disclosure
Package and the Prospectus, including towards consummation of the Tender Offer, neither the
Company nor any of the Guarantors will be, an &#147;investment company&#148; or an entity &#147;controlled&#148;
by an &#147;investment company&#148; as such terms are defined in the Investment Company Act of 1940,
as amended (the &#147;<U>1940 Act</U>&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) No subsidiary of the Company is a guarantor of, or is a party to or bound by any
instrument or agreement pursuant to which it is or may be required to guarantee or cause
another subsidiary of the Company to guarantee, any borrowings, bonds, notes, debentures or
other indebtedness or lease obligations of the Company, except for the Revolving Loan
Agreement and the Indenture. The Company is not a party to or bound by any instrument or
agreement pursuant to which it is or may be required to cause any of its subsidiaries to
guarantee any borrowings, bonds, notes, debentures or other indebtedness or lease
obligations of the Company, other than the Revolving Loan Agreement and the Indenture. The
only persons or entities that have guaranteed the Senior Notes or any indebtedness or other
obligations of the Company under the Revolving Loan Agreement or the Indenture, are the
Guarantors. Except as provided by law, no subsidiary of the Company (other than previously
unconsolidated joint ventures) is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such subsidiary&#146;s
capital stock, from repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary&#146;s property or assets to the Company
or any other subsidiary of the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi) The Company and, to the best of its knowledge, its officers and directors in
their capacities as such, are in compliance with the applicable
provisions of the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission
promulgated in connection therewith that are effective as of the date hereof, except where
the failure to so comply would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii) The Company and the Guarantors are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes, pollutants or
contaminants (&#147;<U>Environmental Laws</U>&#148;), except where such noncompliance with
Environmental Laws would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise. There are no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval or any related constraints on operating activities
or any potential liabilities to third parties) which would have a material adverse effect on
the condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii) Neither the Company nor any Guarantor has any liability for any prohibited
transaction or accumulated funding deficiency (within the meaning of Section&nbsp;412 of the
Internal Revenue Code of 1986, as amended) or any complete or partial withdrawal liability
with respect to any pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended (&#147;<U>ERISA</U>&#148;), to which the Company
or any Guarantor makes or ever has made a contribution and in which any employee of the
Company or any Guarantor is or has ever been a participant, except where such liability
would not have a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise. With respect to such plans, the Company and each Guarantor is
in compliance in all material respects with all applicable provisions of ERISA, except where
such noncompliance would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxix) The Registration Statement is not the subject of a pending proceeding or
examination under Section 8(d) or 8(e) of the 1933 Act, and neither the Company nor any of
the Guarantors nor any of the Company&#146;s other subsidiaries is the subject of a pending
proceeding under Section&nbsp;8A of the 1933 Act in connection with the offering of the
Securities or the Guarantees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx) The statements (including any assumptions described therein) included under the
caption &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#151;Outlook&#148; in each of the Company&#146;s Annual Report on Form 10-K for the fiscal year
ended November&nbsp;30, 2008 and the Company&#146;s Quarterly Reports on
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Form 10-Q for the quarters ended February&nbsp;28, 2009 and May&nbsp;31,
2009 are within the coverage of Rule 175(b) under the 1933 Act to the extent such
statements constitute &#147;forward-looking statements&#148; as defined in Rule 175(c) under the 1933
Act and were made by the Company with a reasonable basis and reflect the Company&#146;s good
faith estimate of the matters described therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Any certificate signed by any officer or other authorized signatory of the Company or any
of the Guarantors and delivered to the Representatives or to counsel for the Underwriters shall be
deemed a joint and several representation and warranty by the Company and the Guarantors to each
Underwriter as to the matters covered thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2. <U>Sale and Delivery to Underwriter; Closing</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;On the basis of the representations and warranties herein contained and subject to the
terms and conditions herein set forth, the Company agrees to sell to each Underwriter, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at 96.639% of the
principal amount thereof, the aggregate principal amount of Securities set forth in Schedule&nbsp;B
opposite the name of such Underwriter, plus any additional aggregate principal amount of Securities
which such Underwriter may become obligated to purchase pursuant to the provisions of Section&nbsp;10
hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Payment of the purchase price for the Securities shall be made at the offices of the
Company, 10990 Wilshire Boulevard, Los Angeles, California, or at such other place as shall be
agreed upon by the Representatives and the Company, at 7:00&nbsp;a.m., California time, on July&nbsp;30,
2009, or such other time not later than ten business days after such date as shall be agreed upon
by the Representatives and the Company (such time and date of payment and delivery of the
Securities being herein called &#147;<U>Closing Time</U>&#148;). Payment shall be made to the Company by
wire transfer of immediately available funds to a bank account designated by the Company, against
delivery to the Representatives for the respective accounts of the several Underwriters of
certificates for the Securities to be purchased by them. Certificates for the Securities shall be
in such denominations and registered in such names as the Representatives may request in writing at
least one full business day before Closing Time. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to purchase. Citigroup,
individually and not as a representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for any Securities to be purchased by any Underwriter whose
payment therefor has not been received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder. The certificates for the Securities will be made
available for examination and packaging by the Representatives not later than 10:00&nbsp;a.m. (New York
City time) on the last business day prior to Closing Time in New York, New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3. <U>Covenants of the Company</U>. The Company and each Guarantor, jointly and
severally, covenant with each Underwriter as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the provisions of Sections 3(b) hereof, during the period beginning on
the date of this Agreement through and including the date (the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<U>Termination Date</U>&#148;), which date shall not be earlier than the Closing Time, as
evidenced by a notice from Citigroup to the Company (which notice from Citigroup may be in
writing or oral), on which all of the Securities shall have been sold by the Underwriters
and the Prospectus is no longer required to be delivered or made available on request to
investors under the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations, the Company will notify the Representatives immediately, and confirm the notice
in writing, (i)&nbsp;of the effectiveness of any post-effective amendment to the Registration
Statement, (ii)&nbsp;of the mailing, the delivery or transmittal to the Commission for filing of
any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any
amendment to the Registration Statement or amendment or supplement to any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any document
incorporated or deemed to be incorporated by reference in or otherwise deemed to be a part
of or included in any of the foregoing (including, without limitation, pursuant to
Rule&nbsp;430B) or any document to be filed pursuant to the 1934&nbsp;Act by the Company or any
Guarantor, (iii)&nbsp;of the receipt of any comments or inquiries from the Commission relating to
the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free
Writing Prospectus or the documents incorporated or deemed to be incorporated by reference
in or otherwise deemed to be a part of or included in any of the foregoing (including,
without limitation, pursuant to Rule&nbsp;430B), (iv)&nbsp;of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any documents
incorporated or deemed to be incorporated by reference in or otherwise deemed to be a part
of or included in any of the foregoing (including, without limitation, pursuant to
Rule&nbsp;430B) or for additional information, (v)&nbsp;of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or of any examination pursuant to Section&nbsp;8(e) of the 1933 Act
concerning the Registration Statement and (vi)&nbsp;if the Company or any of the Guarantors or
any of the Company&#146;s other subsidiaries becomes the subject of a proceeding under Section&nbsp;8A
of the 1933 Act in connection with the offering of the Securities or the Guarantees. The
Company will make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the period beginning on the date of this Agreement through and including the
Termination Date, the Company will give the Representatives notice of its intention to file
or prepare any post-effective amendment to the Registration Statement or any amendment or
supplement to any Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus (including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities which differs from the
Prospectus first provided to the Underwriters for use in connection with the offering of the
Securities (whether to meet requests of purchasers pursuant to Rule&nbsp;173 under the 1933 Act
Regulations or otherwise) or, if not furnished to the Underwriters, in the form first filed
pursuant to Rule&nbsp;424(b) of the 1933 Act Regulations), will furnish the Representatives with
copies of any such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and, except in the case of Current Reports on
Form 8-K that are deemed to have been &#147;furnished&#148; and not &#147;filed&#148; for purposes of the 1933
Act and the 1934 Act and are
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">therefore not incorporated or deemed to be incorporated by reference in the
Registration Statement, any Preliminary Prospectus or the Prospectus, will not file any such
amendment or supplement or use any such prospectus to which the Representatives or counsel
for the Underwriters shall reasonably object. The Company has given the Representatives
notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours
prior to the Applicable Time; the Company will give the Representatives notice of its
intention to make any such filing from the Applicable Time through the Termination Date and
will furnish the Representatives with copies of any such documents a reasonable amount of
time prior to such proposed filing and, except in the case of Current Reports on Form 8-K
that are deemed to have been &#147;furnished&#148; and not &#147;filed&#148; for purposes of the 1933 Act and
the 1934 Act and are therefore not incorporated or deemed to be incorporated by reference in
the Registration Statement, any Preliminary Prospectus or the Prospectus, will not file or
use any such document to which the Representatives or counsel for the Underwriters shall
reasonably object.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has delivered to the Representatives one copy of the Registration
Statement as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and will also deliver to the Representatives as many
conformed copies of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) as the Representatives may reasonably request.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company will furnish to each Underwriter, from time to time during the period
when the Prospectus is required to be delivered or furnished upon request to investors under
the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, such
number of copies of each Preliminary Prospectus, if any, the Prospectus (as amended or
supplemented, if applicable) and each Issuer Free Writing Prospectus as such Underwriter may
reasonably request, for the purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If, during the period beginning on the date of this Agreement through and including
the Termination Date, any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters or the Company, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will, subject to the
provisions of Section 3(b) hereof, forthwith amend or supplement the Prospectus (in form and
substance satisfactory to the Representatives and counsel for the Underwriters) so that, as
so amended or supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, and the Company will furnish to the Underwriters a reasonable
number of copies of such amendment or supplement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or the Statutory Prospectus or any other
Preliminary Prospectus, the Company will promptly
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">notify the Representatives and will promptly cease use of such Issuer Free Writing
Prospectus or, subject to the provisions of Section 3(b) hereof, amend or supplement, at its
own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict. If
at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus included or
would include an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company will promptly
notify the Representatives and the Underwriters and will promptly cease use of such Issuer
Free Writing Prospectus (and each of the Underwriters agrees, severally and not jointly,
that, upon receipt of such notice from the Company, such Underwriter will promptly cease use
of such Issuer Free Writing Prospectus) and, subject to the provisions of Section 3(b)
hereof, the Company will promptly amend or supplement, at its own expense, either (a)&nbsp;such
Issuer Free Writing Prospectus or (b)&nbsp;the Statutory Prospectus and the Prospectus to
eliminate or correct such conflict, untrue statement or omission.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company and the Guarantors will endeavor, in cooperation with the Underwriters,
to qualify the Securities and the Guarantees for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as the
Representatives may designate; <U>provided</U>, <U>however</U>, that neither the Company
nor any of the Guarantors shall be obligated to qualify as a foreign corporation or other
entity, as the case may be, in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities or the Guarantees have been so qualified, the Company
and the Guarantors will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as may be required by
applicable law. The Company will promptly advise the Representatives of the receipt by the
Company of any notification with respect to the suspension of qualification of the
Securities or the Guarantees for sale in any state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company will timely file such reports pursuant to the 1934 Act as are necessary
in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Company will use the net proceeds received by it from the sale of the
Securities in the manner to be specified in the Prospectus Supplement under &#147;Use of
Proceeds.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (1)&nbsp;Immediately following the execution of this Agreement, the Company will prepare
a final term sheet (the &#147;<U>Final Term Sheet</U>&#148;) reflecting the final terms of the
Securities, in the form set forth on Schedule&nbsp;C hereto, with such changes therein or
additions thereto as may be approved by the Representatives, and shall as promptly as
practicable file such Final Term Sheet as an &#147;issuer free writing prospectus&#148; pursuant to
Rule&nbsp;433; provided that the Company shall furnish the Representatives with copies of any
such Issuer Free Writing Prospectus a reasonable amount of time prior to
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">such proposed filing and will not use or file any such Issuer Free Writing Prospectus
to which the Representatives or counsel to the Underwriters shall reasonably object.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Immediately following the execution of this Agreement, the Company will prepare a
prospectus supplement, dated the date hereof (the &#147;<U>Prospectus Supplement</U>&#148;),
containing the terms of the Securities and the Guarantees, the plan of distribution thereof
and such other information as may be required by the 1933&nbsp;Act or the 1933&nbsp;Act Regulations or
as the Representatives and the Company deem appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company will effect the filings (including, without limitation, the filings of
the Statutory Prospectus, the Prospectus and each Issuer Free Writing Prospectus) required
under Rule&nbsp;424(b) and Rule&nbsp;433, as the case may be, in the manner and within the time period
required by Rule&nbsp;424(b) (without reliance on Rule&nbsp;424(b)(8)) and Rule&nbsp;433, as the case may
be, and, if applicable, will take such steps as it deems necessary to ascertain promptly
whether any such document transmitted for filing under Rule&nbsp;424(b) or Rule&nbsp;433 was received
for filing by the Commission and, in the event that it was not, will promptly file such
document.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company, during the period when the Prospectus is required to be delivered
under the 1933&nbsp;Act or the 1934&nbsp;Act (or would be required to be delivered upon request by a
purchaser pursuant to Rule&nbsp;173 under the 1934 Act), will file all documents required to be
filed with the Commission pursuant to Sections&nbsp;13, 14 or 15 of the 1934&nbsp;Act within the time
periods required by the 1934&nbsp;Act and the 1934&nbsp;Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) During a period from and including the date of this Agreement through and including
the day which is 30&nbsp;days after the date of this Agreement, the Company will not, without the
prior written consent of Citigroup, directly or indirectly, issue, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any debt securities or any
securities convertible into or exchangeable or exercisable for any debt securities (except
for the Securities sold to the Underwriters pursuant to this Agreement); provided that the
foregoing shall not prevent the Company or its subsidiaries from making borrowings under the
Revolving Loan Agreement (including, for the avoidance of doubt, obtaining and drawing on
letters of credit issued thereunder) and under existing bank credit facilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Company and the Guarantors agree, jointly and severally, that, unless they have
obtained or will obtain the prior written consent of the Representatives, and each
Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained
or will obtain, as the case may be, the prior written consent of the Company, it has not
made and will not make any offer relating to the Securities that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a &#147;free writing prospectus&#148; (as
defined in Rule&nbsp;405) required to be filed by the Company with the Commission or retained by
the Company under Rule&nbsp;433, other than the information contained in the Final Term Sheet
prepared and filed pursuant to Section 3(i) hereof; provided that the prior written consent
of the parties hereto shall be deemed to have been given in respect of any Issuer Free
Writing Prospectus included in Schedule&nbsp;D hereto. Any such free writing prospectus
consented to by the Representatives or the Company is
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">hereinafter referred to as a &#147;Permitted Free Writing Prospectus.&#148; The Company and the
Guarantors agree, jointly and severally, that (x)&nbsp;they have treated and will treat, as the
case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and
(y)&nbsp;they have complied and will comply, as the case may be, with the requirements of Rules
164 and 433 under the 1933 Act Regulations applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission, legending and record
keeping.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4. <U>Payment of Expenses</U>. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i)&nbsp;the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)&nbsp;the printing or
reproduction of this Agreement and the other Operative Documents, (iii)&nbsp;the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters, (iv)&nbsp;the fees and
disbursements of counsel and accountants to the Company and the Guarantors, (v)&nbsp;the qualification
of the Securities under securities laws in accordance with the provisions of Section&nbsp;3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky Survey, (vi)&nbsp;the
printing and delivery to the Underwriter of copies of the Registration Statement as originally
filed and of each amendment thereto, of any Permitted Free Writing Prospectus, any Preliminary
Prospectuses and of the Prospectus and any amendments or supplements thereto and any costs
associated with the electronic delivery of any of the foregoing by the Underwriters to investors,
(vii)&nbsp;the printing and delivery to the Underwriters of copies of the Blue Sky Survey, (viii)&nbsp;the
fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities, (ix)&nbsp;any fees payable in connection with the
rating of the Securities, and (x)&nbsp;any fees and expenses of a depositary in connection with holding
the Securities in book-entry form.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Agreement is terminated by the Representatives in accordance with the provisions of
Section&nbsp;5 or Section&nbsp;9(a)(i), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5. <U>Conditions of Underwriters&#146; Obligations</U>. The obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company and the Guarantors herein contained, to the performance by the Company and the Guarantors
of their respective obligations hereunder, and to the following further conditions:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933&nbsp;Act or proceedings therefor initiated or
threatened by the Commission. The Prospectus containing the 430B Information (including the
Prospectus Supplement referred to in Section&nbsp;3(i) hereof) shall have been filed with the
Commission pursuant to Rule&nbsp;424(b) of the 1933&nbsp;Act Regulations within the prescribed time
period (without reliance on Rule&nbsp;424(b)(8)) and an Issuer Free Writing Prospectus containing
the information in the Final Term Sheet shall have been filed with the Commission pursuant
to Rule&nbsp;433 within the prescribed time period, and prior to Closing Time the Company shall
have provided evidence
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">satisfactory to the Representatives of the timely filing or transmittal of each such
document.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At Closing Time the Representatives shall have received:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The favorable opinion, dated as of Closing Time, of Munger, Tolles&nbsp;&#038;
Olson&nbsp;LLP, counsel for the Company and the Guarantors, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit&nbsp;A
hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The favorable opinion, dated as of Closing Time, of Wendy C. Shiba,
Executive Vice President, General Counsel and Secretary of the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibit&nbsp;B hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The favorable opinion, dated as of Closing Time, of Jones Day, counsel
for the Underwriters, with respect to this Agreement, the Indenture, the Securities,
the Registration Statement, the Prospectus and such other matters as the
Underwriters may request.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In giving their opinions required by subsections&nbsp;(b)(i), (b)(ii) and
(b)(iii), respectively, of this Section, Munger, Tolles&nbsp;&#038; Olson&nbsp;LLP, Wendy C. Shiba
and Jones Day shall each additionally state that no facts have come to their
attention that have caused them to believe that
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Registration Statement (which term shall be defined to include
the Rule&nbsp;430B Information) (except for financial statements and schedules
and other financial and statistical data included or incorporated by
reference therein or omitted therefrom and any Form&nbsp;T-1, as to which counsel
need make no statement), at the time it first became effective, as of the
date that the Company&#146;s most recent Annual Report on Form&nbsp;10-K was filed
with the Commission or at the &#147;new effective date&#148; with respect to the
Underwriters pursuant to Rule&nbsp;430B(f)(2) of the 1933 Act Regulations,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Prospectus (except for financial statements and schedules and
other financial and statistical data included or incorporated by reference
therein or omitted therefrom, as to which counsel need make no statement),
at the Representation Date or at Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the General Disclosure Package (except for financial statements and
schedules and other financial and statistical data included or incorporated
by reference therein or omitted therefrom and any Form&nbsp;T-1,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">as to which counsel need make no statement), as of the Applicable
Time, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The favorable opinions, dated as of the Closing Time, of local counsels for
the Guarantors organized under the laws of the States of Arizona, Colorado, Nevada
and Texas, in form and substance satisfactory to counsel for the Underwriters, to
the effect set forth in Exhibit&nbsp;C hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At Closing Time, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package or Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i)&nbsp;there has been no such material
adverse change, (ii)&nbsp;the representations and warranties of the Company and the Guarantors in
Section&nbsp;1 are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii)&nbsp;the Company and each of the Guarantors has complied with all
agreements and satisfied all conditions set forth in this Agreement on its part to be
performed or satisfied at or prior to Closing Time, (iv)&nbsp;no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the best of such
officers&#146; knowledge and information, no proceedings for that purpose have been initiated or
threatened by the Commission, and (v)&nbsp;since the date of this Agreement, none of the ratings
assigned by any nationally recognized statistical rating organization to any debt securities
of the Company or any subsidiary of the Company has been lowered and no such rating agency
has publicly announced that it has placed any debt securities of the Company or of any
subsidiary of the Company on what is commonly termed a &#147;watch&nbsp;list&#148; for a possible
downgrading. As used in this Section&nbsp;5(c), the term &#147;Registration Statement&#148; means the
Registration Statement excluding any amendments or supplements thereto after the date of
this Agreement; the term &#147;General Disclosure Package&#148; means the General Disclosure Package
excluding any amendments or supplements thereto after the Applicable Time; and &#147;Prospectus&#148;
means the Prospectus excluding any amendments or supplements thereto after the date of this
Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i)&nbsp;At the Applicable Time, the Representatives shall have received from Ernst&nbsp;&#038;
Young&nbsp;LLP a letter dated such date, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily included in
accountants&#146; &#147;comfort letters&#148; to underwriters with respect to the financial statements and
financial information included and incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus (including, without limitation, any pro
forma financial statements), and (ii)&nbsp;at the Closing Time, the Representatives shall have
received from Ernst&nbsp;&#038; Young&nbsp;LLP a letter to the effect that they reaffirm the statements
made in the letter furnished pursuant to clause (i)&nbsp;of this
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">subsection (d)&nbsp;of this Section, provided that such letter shall use a &#147;cut-off date&#148;
not more than three business days prior to the Closing Time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) At Closing Time, the Securities shall have a rating of at least B1 from Moody&#146;s
Investor&#146;s Service&nbsp;Inc., BB- from Standard&nbsp;&#038; Poor&#146;s and BB- from Fitch Ratings, and the
Company shall have delivered to the Representatives a letter from each such rating agency or
other evidence satisfactory to the Representatives, confirming that the Securities have such
ratings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Prior to the Closing Time, if required by the 1933 Act, the 1933 Act Regulations,
the 1939 Act or the 1939 Act Regulations, the Trustee shall have filed with the Commission
an application for the purpose for determining the eligibility of the Trustee under the 1939
Act in accordance with the rules and regulations prescribed by the Commission under
Section&nbsp;305(b)(2) of the 1939 Act and the Commission shall not have issued an order refusing
to permit such application to become effective or taken any similar action.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) At Closing Time, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities and Guarantees as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Guarantors in connection with the issuance and sale
of the Securities and Guarantees as herein contemplated and in connection with the other
transactions contemplated by this Agreement shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any condition specified in this Section&nbsp;shall not have been fulfilled when and as required
to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section&nbsp;4 hereof. Notwithstanding any such
termination, the provisions of Sections&nbsp;4, 6, 7 and 8 shall remain in effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6. <U>Indemnification</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Company and the Guarantors, jointly and severally, agree to indemnify and hold
harmless each Underwriter, its directors and officers and each person, if any, who controls any
Underwriter within the meaning of Section&nbsp;15 of the 1933 Act as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereto (including, without
limitation, the Rule&nbsp;430B Information) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any Issuer Free
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment
or supplement to any of the foregoing) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with the written
consent of the Company; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) against any and all expense whatsoever, as incurred (including, subject to
Section&nbsp;6(c) hereof, the fees and disbursements of counsel chosen by Citigroup), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i)&nbsp;or
(ii)&nbsp;above;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>provided</U>, <U>however</U>, that the foregoing indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission (1)&nbsp;made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto) or any Preliminary
Prospectus any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or
any amendment or supplement to any of the foregoing), it being understood that such information is
limited to the Underwriter Information (as defined below) or (2)&nbsp;in the Form&nbsp;T-1.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Each Underwriter, severally and not jointly agrees to indemnify and hold harmless the
Company and its directors and each of its officers who signed the Registration Statement, each
Guarantor and its directors and each of its officers who signed the Registration Statement and each
person who signed the Registration Statement on behalf of KB HOME Orlando LLC, a Delaware limited
liability company (&#147;<U>KB Orlando</U>&#148;), and each person, if any, who controls the Company or any
Guarantor within the meaning of Section&nbsp;15 of the 1933&nbsp;Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection&nbsp;(a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement or any amendment thereto (including, without
limitation, the Rule&nbsp;430B Information) or any Preliminary Prospectus, any Issuer Free Writing
Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any
of the foregoing) in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus, such Issuer Free Writing
Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement to any
of the foregoing); provided that the Company acknowledges that the statements set forth (i)&nbsp;in the
first sentence of the fifth
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">paragraph on the cover page of the Statutory Prospectus and the Prospectus; (ii)&nbsp;in the first
sentence of the seventh paragraph on the cover page of the Statutory Prospectus and the Prospectus;
and (iii)&nbsp;under the caption &#147;Underwriting&#148; in the Statutory Prospectus and the Prospectus (a)&nbsp;in
the table; (b)&nbsp;in the first sentence of the second paragraph; (c)&nbsp;in the third sentence of the
fifth paragraph; and (d)&nbsp;in the sixth paragraph (such statements, the &#147;<U>Underwriter
Information</U>&#148;) constitute the only such information furnished in writing by or on behalf of each
Underwriter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Each indemnified party shall give written notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel), separate from their own counsel (i)&nbsp;in the case of
indemnity pursuant to Section&nbsp;6(a), for the Underwriters, the directors and officers of any
Underwriter, and each person, if any, who controls any Underwriter within the meaning of Section&nbsp;15
of the 1933 Act and (ii)&nbsp;in the case of indemnity pursuant to Section&nbsp;6(b), for the Company and its
directors and each of its officers who signed the Registration Statement, each Guarantor and its
directors and each of its officers who signed the Registration Statement and each person who signed
the Registration Statement on behalf of KB Orlando and each person, if any, who controls the
Company or any Guarantor within the meaning of Section&nbsp;15 of the 1933 Act, in each case in
connection with any one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is a party and indemnity is
provided hereunder, unless such settlement (x)&nbsp;includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such proceeding and
(y)&nbsp;does not include a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7. <U>Contribution</U>. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Sections&nbsp;6(a) or (b)&nbsp;is for any
reason held to be unenforceable by the indemnified parties although applicable in accordance with
its terms, the Company and the Guarantors, on the one hand, and the Underwriters, on the other
hand, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred by the Company and the Guarantors and one
or more of the Underwriters, as incurred, in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the Underwriters on the other from
the offering of the Securities; provided, however, that in no case shall any Underwriters be
responsible for any amount in excess of the purchase discount or commission applicable to the
Securities purchased by such Underwriters hereunder. For purposes of this Section&nbsp;7, the benefits
received by the Company and the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total purchase discounts and commissions;
<U>provided</U>, <U>however</U>, that no person guilty of fraudulent misrepresentation (within
the meaning of Section&nbsp;11(f) of the 1933 Act) shall be entitled to contribution from any
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">person who was not guilty of such fraudulent misrepresentation. For purposes of this Section,
each director and officer of any Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section&nbsp;15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company or any Guarantor, each officer of the Company or any
Guarantor who signed the Registration Statement and each person who signed the Registration
Statement on behalf of KB Orlando, and each person, if any, who controls the Company or any
Guarantor within the meaning of Section&nbsp;15 of the 1933 Act shall have the same rights to
contribution as the Company or such Guarantor, as the case may be. The Underwriters&#146; respective
obligations to contribute pursuant to this Section&nbsp;7 are several in proportion to aggregate
principal amount of Securities set forth opposite their respective names in Schedule&nbsp;B hereto and
not joint. The obligations of the Company and the Guarantors to contribute pursuant to this
Section&nbsp;7 are joint and several.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8. <U>Representations, Warranties and Agreements to Survive Delivery</U>. All
representations, warranties and agreements contained in this Agreement, or contained in
certificates of officers of the Company or any of the Guarantors or any of the Company&#146;s other
subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of the Company or any of the Guarantors, and shall survive delivery of the
Securities to the Underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9. <U>Termination of Agreement</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Representatives may terminate this Agreement, by notice to the Company, at any time at
or prior to Closing Time (i)&nbsp;if there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package or the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii)&nbsp;if there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii)&nbsp;if trading in the securities of the Company has been suspended
or materially limited by the Commission or a national securities exchange, or if trading generally
on the New York Stock Exchange or the Nasdaq Global Select Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by either federal, New
York or California authorities, or (iv)&nbsp;if the rating assigned by any nationally recognized
statistical rating organization to any debt securities of the Company or of any subsidiary of the
Company shall have been lowered or if any such rating agency shall have publicly announced that it
has placed any debt securities of the Company or any trust preferred securities, capital securities
or similar securities of any subsidiary of the Company on what is commonly termed a &#147;watch list&#148;
for a possible downgrading. As used in this Section&nbsp;9(a), the term &#147;Registration Statement&#148; means
the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Registration Statement excluding any amendments or supplements thereto after the date of this
Agreement; the term &#147;General Disclosure Package&#148; means the General Disclosure Package excluding any
amendments or supplements thereto after the Applicable Time; and &#147;Prospectus&#148; means the Prospectus
excluding any amendments or supplements thereto subsequent to the date of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If this Agreement is terminated pursuant to this Section, such termination shall be
without liability of any party to any other party except as provided in Section&nbsp;4 hereof.
Notwithstanding any such termination, the provisions of Sections&nbsp;4, 6, 7 and 8 shall remain in
effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10. <U>Default by One or More of the Underwriters</U>. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the &#147;<U>Defaulted Securities</U>&#148;), the Representatives shall
have the right, within 24&nbsp;hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters or any other underwriters to purchase all, but not less than all, of
the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth;
if, however, the Representatives shall not have completed such arrangements within such 24&nbsp;hour
period, then:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if the aggregate principal amount of the Defaulted Securities does not exceed 10%
of the aggregate principal amount of Securities to be purchased at Closing Time, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if the aggregate principal amount of the Defaulted Securities exceeds 10% of the
aggregate principal amount of Securities to be purchased at Closing Time, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No action taken pursuant to this Section&nbsp;shall relieve any defaulting Underwriter from
liability in respect of its default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any such default which does not result in a termination of this Agreement,
either the Representatives or the Company shall have the right to postpone the Closing Time for a
period not exceeding seven days in order to effect any required changes in the General Disclosure
Package, the Prospectus or in any other documents or arrangements. As used herein, the term
&#147;Underwriter&#148; includes any person substituted for an Underwriter under this Section&nbsp;10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 11. <U>Notices</U>. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to them at c/o Citigroup
Global Markets Inc., 388 Greenwich Street, New York, New York 10013 (fax number: 212-816-7912),
Attention: General Counsel; and notices to the Company and the Guarantors shall be directed to them
at 10990&nbsp;Wilshire Boulevard, Los&nbsp;Angeles, California&nbsp;90024, (fax
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">number: 310-231-4047) Attention: Wendy C. Shiba, Executive Vice President, General Counsel and
Secretary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 12. <U>Parties</U>. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Guarantors and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters, the Guarantors and the Company and their respective
successors and the controlling persons and officers and directors and other persons referred to in
Sections&nbsp;6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein. This Agreement and
all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Guarantors and their respective successors and said controlling
persons and officers and directors and other persons and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 13. <U>No Advisory or Fiduciary Responsibility</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each of the Company and the Guarantors hereby (i)&nbsp;acknowledges that the purchase and sale
of the Securities pursuant to this Agreement is an arm&#146;s-length commercial transaction between the
Company and the Guarantors, on the one hand, and the Underwriters and any affiliate through which
any of them may be acting, on the other hand, (ii)&nbsp;acknowledges that the Underwriters are acting as
principal and not as agent or fiduciary of the Company or the Guarantors, (iii)&nbsp;acknowledges that
the Company&#146;s engagement of the Underwriters in connection with the offering and the process
leading up to the offering is as independent contractors and not in any other capacity, (iv)&nbsp;agrees
that it is solely responsible for making its own judgments in connection with the offering
(irrespective of whether any of the Underwriters has advised or is currently advising the Company
or any of the Guarantors on related or other matters); and (v)&nbsp;agrees that it will not claim that
the Underwriters have rendered advisory services of any nature or respect, or owe an agency,
fiduciary or similar duty to the Company or any Guarantor, in connection with such transaction or
the process leading thereto. Each of the Company and the Guarantors further acknowledge that
(i)&nbsp;the several Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and the Guarantors and
the several Underwriters have no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (ii)&nbsp;the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company and the Guarantors have consulted their own legal, accounting, regulatory and tax advisors
to the extent they deemed appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 14. <U>Submission to Jurisdiction; Waiver of Jury Trial.</U> No proceeding related
to this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued
in any court other than the courts of the State of New York located in the City and County of New
York or in the United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company and the Guarantors
hereby jointly and severally consent to the jurisdiction of such
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">courts and personal service with respect thereto. The Company and the Guarantors hereby
jointly and severally waive all right to trial by jury in any proceeding (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company
and the Guarantors jointly and severally agree that a final judgment in any such proceeding brought
in any such court shall be conclusive and binding upon the Company and the Guarantors and may be
enforced in any other courts to whose jurisdiction the Company or any of the Guarantors is or may
be subject, by suit upon such judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 15. <U>Governing Law and Time</U>. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to agreements made and to
be performed in said State. Unless otherwise set forth herein, specified times of day refer to New
York City time.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;SIGNATURE PAGE FOLLOWS&#093;
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company and the Guarantors a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters, the Company and the
Guarantors in accordance with its terms.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
<BR>
KB HOME<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Senior Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME PHOENIX&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME COASTAL&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME SACRAMENTO INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME SOUTH BAY&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME GREATER LOS ANGELES&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME COLORADO&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME NEVADA&nbsp;INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME ORLANDO&nbsp;LLC<BR>

<BR>
By: KB HOME Florida LLC, its sole member<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ WILLIAM R. HOLLINGER
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">William R. Hollinger&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Assistant Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">KB HOME LONE STAR INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ KELLY MASUDA
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Kelly Masuda&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Vice President and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">CONFIRMED AND ACCEPTED</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">&nbsp;&nbsp;&nbsp;as of the date first above written:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">CITIGROUP GLOBAL MARKETS INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ BRIAN BEDNARSKI
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Name: Brian Bednarski
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Managing Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

    <TD align="left" valign="top" colspan="3" >On behalf of each the Underwriters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SCHEDULE A<BR><BR style="font-size: 6pt">
List of Guarantors
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Phoenix&nbsp;Inc., an Arizona corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Coastal&nbsp;Inc., a California corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Sacramento Inc., a California corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME South Bay&nbsp;Inc., a California corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Greater Los Angeles&nbsp;Inc., a California corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Colorado&nbsp;Inc., a Colorado corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Nevada&nbsp;Inc., a Nevada corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Lone Star Inc., a Texas corporation</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>KB HOME Orlando LLC, a Delaware limited liability company</TD>
</TR>

</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SCHEDULE B
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Aggregate</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Principal</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amount</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Names of Underwriters</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">of Securities</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Citigroup Global Markets Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">231,875,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Barclays Capital Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,250,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Credit Suisse Securities (USA)&nbsp;LLC.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,250,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deutsche Bank Securities Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,625,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">265,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SCHEDULE C
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U>Pricing Term Sheet</U>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">9.100% Senior Notes due 2017

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Issuer:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">KB Home</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Security:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">9.100% Senior Notes due 2017</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Size:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$265,000,000&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Maturity Date:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;15, 2017</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Coupon:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">9.100%&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Interest Payment Dates:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;15 and March&nbsp;15, commencing March&nbsp;15,
2010</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Price to Public:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Variable Price Re-offer</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Benchmark Treasury:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.125% due May&nbsp;15, 2019</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Benchmark Treasury Yield:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3.695%&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Spread to Benchmark Treasury:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#043;575.5 basis points</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Net Price to KB Home:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">96.639%&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Net Proceeds to KB Home:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$256,093,350&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Make-whole call:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At any time at a discount rate of T&#043;50 basis points</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Change of Control Offer:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">101% of principal amount plus accrued interest</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Expected Settlement Date:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;30, 2009 (T&#043;5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>CUSIP:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">48666K AP4</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Anticipated Ratings:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">B1 by Moody&#146;s Investors Service, Inc., BB- by
Standard &#038; Poor&#146;s Ratings Services and BB- by
Fitch Ratings, each with a negative outlook</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Sole Bookrunning Manager:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Citigroup Global Markets Inc.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Co-Managers:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Barclays Capital Inc., Credit Suisse Securities
(USA)&nbsp;LLC, Deutsche Bank Securities Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll-free at
1-877-858-5407.
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SCHEDULE D
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U>Issuer General Use Free Writing Prospectuses</U>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">1. Pricing Term Sheet set forth on Schedule&nbsp;C

</DIV>




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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.26
<SEQUENCE>3
<FILENAME>v53289exv4w26.htm
<DESCRIPTION>EX-4.26
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-4.26</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">EXHIBIT 4.26
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>THIS NOTE IS A GLOBAL SECURITY REFERRED TO IN THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE IS EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN DEFINITIVE CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (&#147;DTC&#148;), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &#038; CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE &#038; CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &#038; CO., HAS AN INTEREST HEREIN.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="39%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="56%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">No.&nbsp;R-01<br>
CUSIP No.&nbsp;48666K AP4<br>
ISIN No.&nbsp;US48666KAP49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Principal Amount: $265,000,000<br>
(or such other principal amount<br>
as is set forth on Schedule&nbsp;A hereto)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">KB Home
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">9.100% Senior Notes due 2017

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KB Home, a Delaware corporation (hereinafter called the &#147;Company&#148;, which term includes any
successor corporation under the Indenture referred to below), for value received, hereby promises
to pay to Cede &#038; Co., or registered assigns, the principal sum of TWO HUNDRED SIXTY-FIVE MILLION
DOLLARS ($265,000,000) or such other principal amount as is set forth on Schedule&nbsp;A hereto on
September&nbsp;15, 2017, and to pay interest thereon from July&nbsp;30, 2009, or from the most recent date to
which interest has been paid or duly provided for, semiannually in arrears on March&nbsp;15 and
September&nbsp;15 of each year (each, an &#147;Interest Payment Date&#148;), commencing March&nbsp;15, 2010, and at
Maturity, at the rate of 9.100% per annum, until the principal hereof is paid or duly made
available for payment. Interest on this Note shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The interest so payable and punctually paid or duly provided
for on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the March 1 or September 1 (whether or
not a Business Day), as the case may be, immediately preceding such Interest Payment Date. Any such
interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment
Date shall forthwith cease to be payable to the Person who was the Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Note not less than 10&nbsp;days prior to such Special
Record Date, or may be paid at any time 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, all as more fully provided in such Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of the principal of and premium, if any, and interest on this Note will be made at the
Office or Agency of the Company maintained for that purpose in the Borough of Manhattan, The City
of New York, in such
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; <I>provided, however</I>, that, at the option of the Company,
interest may be paid by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by transfer to an account maintained by the payee with a
bank located in the United States; and <I>provided, further</I>, that if this Note is a global Note
registered in the name of a Depository or its nominee, then, anything in the Indenture or the Notes
to the contrary notwithstanding, payments of the principal of and premium, if any, and interest on
this Note shall be made by wire transfer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is one of a duly authorized issue of Securities of the Company (herein called the
&#147;Notes&#148;) issued and to be issued in one or more series under an Indenture dated as of January&nbsp;28,
2004 (the &#147;Original Indenture&#148;), as amended and supplemented by the First Supplemental Indenture
dated as of January&nbsp;28, 2004 (the &#147;First Supplemental Indenture&#148;), by the Second Supplemental
Indenture dated as of June&nbsp;30, 2004 (the &#147;Second Supplemental Indenture&#148;), by the Third
Supplemental Indenture dated as of May&nbsp;1, 2006 (the &#147;Third Supplemental Indenture&#148;); by the Fourth
Supplemental Indenture dated as of November&nbsp;9, 2006 (the &#147;Fourth Supplemental Indenture&#148;); and by
the Fifth Supplemental Indenture dated as of August&nbsp;17, 2007 (the &#147;Fifth Supplemental Indenture&#148;;
the Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the
Fifth Supplemental Indenture and all other indentures supplemental thereto, is herein called the
&#147;Indenture&#148;), each among the Company, the Guarantors and U.S. Bank National Association (successor
in interest to SunTrust Bank), as trustee (herein called the &#147;Trustee&#148;, which term includes any
successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Notes,
and the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, initially limited (subject to exceptions provided
in the Indenture and subject to the right of the Company to reopen such series for issuance of
additional Securities of such series upon the terms and subject to the conditions specified in the
Indenture) in aggregate principal amount to $265,000,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of principal of and premium, if any, and interest on the Notes are fully, irrevocably
and unconditionally guaranteed, jointly and severally, by the Guarantors on the terms and subject
to the limitations set forth in the Indenture. A Guarantor may be released from its obligations
under the Indenture and those obligations may be reinstated, all on the terms and subject to the
conditions set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes may be redeemed, in whole at any time or from time to time in part, at the Company&#146;s
option on any date (each, a &#147;Redemption Date&#148;) at a Redemption Price equal to the greater of: (a)
100% of the principal amount of the Notes to be redeemed, and (b)&nbsp;the sum of the present values of
the remaining scheduled payments of principal and interest on the Notes to be redeemed (exclusive
of interest accrued to the applicable Redemption Date) discounted to such Redemption Date on a
semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate
plus 50 basis points, plus, in the case of both clause (a)&nbsp;and (b)&nbsp;above, accrued and unpaid
interest on the principal amount of the Notes being redeemed to such Redemption Date.
Notwithstanding the foregoing, installments of interest on Notes whose Stated Maturity is on or
prior to the relevant Redemption Date will be payable to the Holders of such Notes (or one or more
Predecessor Securities) registered as such at the close of business on the relevant Regular Record
Date according to their terms and the provisions of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Note, the following terms have the meanings set forth below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Treasury Rate&#148; </I>means, with respect to any Redemption Date for the Notes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the yield, under the heading that represents the average for the immediately
preceding week, appearing in the most recently published statistical release designated
&#147;H.15(519)&#148; or any successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the caption
&#147;Treasury Constant Maturities,&#148; for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the Final
Maturity Date for the Notes, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the Treasury
Rate shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month); or</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per annum
equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such Redemption
Date.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Treasury Rate shall be calculated on the third Business Day preceding the applicable Redemption
Date. As used in the immediately preceding sentence and in the definition of &#147;Reference Treasury
Dealer Quotations&#148; below, the term &#147;Business Day&#148; means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New York are authorized
or obligated by law, regulation or executive order to close.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Comparable Treasury Issue&#148; </I>means, with respect to any Redemption Date for the Notes, the
United States Treasury security selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes to be redeemed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Independent Investment Banker&#148; </I>means, with respect to any Redemption Date for the Notes,
Citigroup Global Markets Inc. and its successors or, if such firm or any successor to such firm, as
the case may be, is unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee after consultation
with the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Comparable Treasury Price&#148; </I>means, with respect to any Redemption Date for the Notes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the average of four Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations,
or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Reference Treasury Dealer&#148; </I>means Citigroup Global Markets Inc. and its successors (<I>provided,
however</I>, that if such firm or any such successor, as the case may be, shall cease to be a primary
U.S. Government securities dealer in New York City (a &#147;Primary Treasury Dealer&#148;), the Trustee,
after consultation with the Company, will substitute therefor another Primary Treasury Dealer) and
three other Primary Treasury Dealers selected by the Trustee after consultation with the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Reference Treasury Dealer Quotations&#148; </I>means, with respect to each Reference Treasury Dealer
and any Redemption Date for the Notes, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Final Maturity Date&#148; </I>means September&nbsp;15, 2017.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice of any redemption by the Company will be mailed at least 30&nbsp;days but not more than 60
days before any Redemption Date to each Holder of Notes to be redeemed. If less than all the Notes
are to be redeemed at the option of the Company, the Trustee will select, in such manner as it
deems fair and appropriate, the Notes (or portions thereof) to be redeemed. Unless the Company
defaults in payment of the Redemption Price (including, without limitation, interest, if any,
accrued to the applicable Redemption Date), on and after the applicable Redemption Date interest
will cease to accrue on the Notes or portions thereof called for redemption on such Redemption
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Change of Control Triggering Event occurs, unless the Company has exercised its option to
redeem the Notes by notifying the Holders of Notes to that effect as described above, the Company
will be required to make an
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">offer (a &#147;Change of Control Offer&#148;) to each Holder of Notes to repurchase all or any part (equal to
$1,000 or any integral multiples of $1,000 in excess thereof) of that Holder&#146;s Notes on the terms
set forth herein. In a Change of Control Offer, the Company will be required to offer payment in
cash equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and
unpaid interest, if any, on the Notes repurchased up to, but not including, the date of repurchase
(a &#147;Change of Control Payment&#148;).Within 30&nbsp;days following any Change of Control Triggering Event or,
at the Company&#146;s option, prior to any Change of Control, but after public announcement of the
transaction that constitutes or may constitute the Change of Control, notice will be given to
Holders of the Notes describing the transaction that constitutes or may constitute the Change of
Control Triggering Event and offering to repurchase the Notes on the date specified in the notice,
which date will be no earlier than 30&nbsp;days and no later than 60&nbsp;days from the date that notice is
given or, if the notice is given prior to the Change of Control, no earlier than 30&nbsp;days and no
later than 60&nbsp;days from the date on which the Change of Control Triggering Event occurs, other than
in each case as may be required by law (a &#147;Change of Control Payment Date&#148;). The notice will, if
mailed prior to the date of consummation of the Change of Control, state that the Change of Control
Offer is conditioned on the Change of Control Triggering Event occurring on or prior to the
applicable Change of Control Payment Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On each Change of Control Payment Date, the Company will, to the extent lawful, accept for
payment all Notes or portions of Notes properly tendered and not withdrawn pursuant to the terms of
the Change of Control Offer; deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions of Notes properly tendered; and deliver or cause to be
delivered to the Trustee the Notes properly tendered and accepted together with an Officers&#146;
Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased.
The Company will not be required to make a Change of Control Offer upon the occurrence of a Change
of Control Triggering Event if a third party makes such an offer in the manner, at the times and
price and otherwise substantially in compliance with the requirements for an offer made by the
Company and the third party promptly purchases all Notes properly tendered and not withdrawn under
its offer. In addition, the Company will not repurchase any Notes if there has occurred and is
continuing on the Change of Control Payment Date an Event of Default under the Indenture, other
than a default in the payment of the Change of Control Payment upon a Change of Control Triggering
Event.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that the provisions of Rule&nbsp;14e-1 under the Securities Exchange Act of 1934, as
amended (the &#147;Exchange Act&#148;), or any other securities laws and regulations that are applicable in
connection with the repurchase of the Notes as a result of a Change of Control Triggering Event
conflict with the Change of Control Offer provisions of the Notes, the Company may comply with
those securities laws and regulations and will not be deemed to have breached its obligations under
the Change of Control Offer provisions of the Notes by virtue of any such conflict.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Change of Control Offer provisions of the Notes, the following terms will
be applicable:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Change of Control</I>&#148; means the occurrence of any of the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the Company&#146;s assets and the assets of its subsidiaries, taken as a
whole, to any person, other than to the Company or one of its subsidiaries;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any &#147;person&#148; becomes the beneficial owner (as
defined in Rules&nbsp;13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more
than 50% of the Company&#146;s outstanding Voting Stock or other Voting Stock into which the
Company&#146;s Voting Stock is reclassified, consolidated, exchanged or changed, measured by
voting power rather than number of shares;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Company&#146;s consolidation with, or the Company&#146;s merger with or into, any person,
or any person consolidates with, or merges with or into, the Company, in either case,
pursuant to a transaction in which any of the Company&#146;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 pursuant to a transaction in which shares of the Company&#146;s Voting
Stock outstanding immediately prior to such transaction constitute,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">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, measured by voting power rather than number of shares;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the first day on which a majority of the members of the Company&#146;s Board of
Directors are not Continuing Directors; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the adoption by the Company&#146;s Board of Directors of a plan relating to the
Company&#146;s liquidation or dissolution.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding the foregoing, a transaction (or series of related transactions) will not be deemed
to involve a Change of Control under clauses (1)&nbsp;or (2)&nbsp;above if the Company becomes a direct or
indirect wholly-owned subsidiary of a holding company and (a)&nbsp;the direct or indirect holders of a
majority of the Voting Stock of such holding company immediately following that transaction are
substantially the same as the holders of a majority of the Company&#146;s Voting Stock immediately prior
to that transaction or (b)&nbsp;the shares of the Company&#146;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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The term &#147;<I>person</I>&#148; is used in this definition as that term is used in Section&nbsp;13(d)(3) of the
Exchange Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Change of Control Triggering Event</I>&#148; means the occurrence of both a Change of Control and a
Rating Event.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Continuing Director</I>&#148; means, as of any date of determination, any member of the Company&#146;s
Board of Directors who (1)&nbsp;was a member of the Company&#146;s Board of Directors on the date the Notes
were issued, (2)&nbsp;was nominated for election to the Company&#146;s Board of Directors with the approval
of a committee of the Board of Directors consisting of a majority of independent Continuing
Directors or (3)&nbsp;was nominated for election, elected or appointed to the Company&#146;s Board of
Directors with the approval of a majority of the Continuing Directors who were members of the
Company&#146;s Board of Directors at the time of such nomination, election or appointment (either by a
specific vote or by approval of a proxy statement in which such member was named as a nominee for
election as a director, without objection by such member to such nomination).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Investment Grade Rating</I>&#148; means a rating equal to or higher than &#147;Baa3&#148; (or the equivalent) by
Moody&#146;s and &#147;BBB-&#148; (or the equivalent) by S&#038;P, or, if applicable, the equivalent investment grade
credit rating by any Substitute Rating Agency or Substitute Rating Agencies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Moody&#146;s</I>&#148; means Moody&#146;s Investors Service, Inc., or any successor thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Rating Agencies</I>&#148; means (1)&nbsp;each of Moody&#146;s and S&#038;P and (2)&nbsp;if any of Moody&#146;s or S&#038;P ceases to
rate the applicable Notes or fails to make a rating of the applicable Notes publicly available for
reasons outside of the Company&#146;s control, a Substitute Rating Agency in lieu thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Rating Event</I>&#148; means the rating on the Notes is lowered independently by each of the Rating
Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies,
in each case on any day during the period (which period will be extended so long as either of the
Rating Agencies has publicly announced that, as a result of the Change of Control, the rating of
the Notes is under consideration for a possible downgrade) commencing 60&nbsp;days prior to the first
public announcement of the occurrence of a Change of Control or of the Company&#146;s intention to
effect a Change of Control and ending 60&nbsp;days following consummation of such Change of Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>S&#038;P</I>&#148; means Standard &#038; Poor&#146;s Rating Services, a Standard &#038; Poor&#146;s Financial Services LLC
business, or any successor thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Substitute Rating Agency</I>&#148; means a &#147;nationally recognized statistical rating organization&#148;
within the meaning of Rule&nbsp;15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company (as
certified by a resolution
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the Company&#146;s Board of Directors) as a replacement agency for Moody&#146;s or S&#038;P, or both of them,
as the case may be.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<I>Voting Stock</I>&#148; means, with respect to any specified &#147;person&#148; (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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default with respect to the Notes shall occur and be continuing, the principal
of and accrued and unpaid interest on the Notes may be declared due and payable in the manner and
with the effect provided in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the Guarantors and the rights of
the Holders of the Securities of each series issued under the Indenture at any time by the Company,
the Guarantors and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of each series affected
thereby. The Indenture also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities of any series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company and the Guarantors
with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Notes issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 of and premium, if any, and interest on this Note, at the time, place and rate, and in
the coin or currency, herein and in the Indenture prescribed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As provided in the Indenture and subject to certain limitations set forth therein, the
transfer of this Note may be registered on the Security Register upon surrender of this Note for
registration of transfer at the Office or Agency of the Company maintained for the purpose in any
place where the principal of and interest on this Note are payable, duly endorsed, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the Security Registrar
duly executed by the Holder hereof or by his attorney duly authorized in writing, and thereupon one
or more new Notes, of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are issuable only in fully registered form without coupons in the denominations of
$1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations set forth therein, the Notes are exchangeable for a like aggregate principal
amount of Notes of authorized denominations as requested by the Holders surrendering the same.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith, other than in certain cases provided in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to due presentment of this Note for registration of transfer, the Company, the
Guarantors, the Trustee and any agent of the Company, any Guarantor or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and none of the Company, the Guarantors or the Trustee nor any such
agent shall be affected by notice to the contrary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture contains provisions whereby (i)&nbsp;the Company and the Guarantors may be discharged
from their obligations with respect to the Notes (subject to certain exceptions) or (ii)&nbsp;the
Company may be released from its obligations under specified covenants and agreements in the
Indenture, in each case if the Company irrevocably deposits with the Trustee money and/or
Government Obligations sufficient to pay and discharge the entire indebtedness on all Notes, and
satisfies certain other conditions, all as more fully provided in the Indenture. In addition, the
Indenture shall cease to be of further effect (subject to certain exceptions) with respect to the
Notes
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">when (1)&nbsp;either (A)&nbsp;all Notes previously authenticated and delivered have been delivered (subject
to certain exceptions) to the Trustee for cancellation, or (B)&nbsp;all Notes (i)&nbsp;have become due and
payable or (ii)&nbsp;will become due and payable at their Stated Maturity within one year or (iii)&nbsp;are
to be called for redemption within one year and, in the case of (i), (ii)&nbsp;or (iii)&nbsp;above, the
Company has irrevocably deposited with the Trustee money in an amount sufficient to pay and
discharge the entire indebtedness on all such Notes not theretofore delivered to the Trustee for
cancellation in respect of principal, premium, if any, and interest to the date of such deposit (if
such Notes have become due and payable) or to the Stated Maturity or Redemption Date thereof, as
the case may be, and (2)&nbsp;the Company satisfies certain other conditions, all as more fully provided
in the Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note shall be governed by and construed in accordance with the laws of the State of New
York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All terms used in this Note which are defined in the Indenture and not defined herein shall
have the meanings assigned to them in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee under the Indenture by the manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefits under the Indenture (including, without limitation, the
Guarantees) or be valid or obligatory for any purpose.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REMAINDER OF PAGE INTENTIONALLY LEFT BLANK&#093;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual
or facsimile signatures of its duly authorized officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dated: July&nbsp;30, 2009
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">KB HOME</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SPECIMEN
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SPECIMEN</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wendy C. Shiba
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Kelly Masuda</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice
President, General Counsel
and Secretary
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and
Treasurer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">TRUSTEE&#146;S CERTIFICATE OF <BR>
AUTHENTICATION<BR>
This is one of the Securities of the series designated therein referred to in<BR>
the within-mentioned Indenture.<BR><BR style="font-size: 6pt">
U.S. BANK NATIONAL ASSOCIATION, as Trustee

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SPECIMEN
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ABBREVIATIONS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 16%; margin-top: 6pt">TEN COM&#151;as tenants in common<BR>
TEN ENT&#151;as tenants by the entireties<BR>
JT TEN&#151;as joint tenants with right of survivorship and not as tenants in common<BR>
UNIF GIFT MIN ACT&#151; <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Custodian<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 1pt">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Cust)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Minor)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="center" nowrap>under the Uniform Gift to Minors Act</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="center">(State)<BR></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" nowrap>Additional abbreviations may also be used though not in the above list.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s) and transfer(s)
unto
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
</DIV>

<P>
<DIV style="width: 50%; border: 1px solid black; padding: 11px;">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</DIV>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
the within security and all rights thereunder, hereby irrevocably constituting and appointing
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attorney</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">to transfer said security on the books of the Company with full power of substitution in the premises.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signed: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U
></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice: The signature to this assignment must correspond with the name as it appears
upon the face of the within security in every particular, without alteration or enlargement
or any change whatever.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SCHEDULE A
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial principal amount of this global Note is Two Hundred Sixty-Five Million Dollars
($265,000,000). The following increases or decreases in the principal amount of this global Note
have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Principal amount of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Amount of increase</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Amount of decrease</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">this global Note</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Signature of</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">in principal amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">in principal amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">following such</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">authorized signatory</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Date made</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">of this global Note</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">of this global Note</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">decrease or increase</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">of Trustee</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
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<DOCUMENT>
<TYPE>EX-4.27
<SEQUENCE>4
<FILENAME>v53289exv4w27.htm
<DESCRIPTION>EX-4.27
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-4.27</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;4.27</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Officers&#146; Certificate and Guarantors&#146; Officers&#146; Certificate<BR>
Pursuant to Sections&nbsp;201 and 301 of the Indenture</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: July&nbsp;30, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wendy C. Shiba, Executive Vice President, General Counsel and Secretary, and Kelly Masuda,
Senior Vice President and Treasurer (together, the &#147;Company Officers&#148;), of KB Home, a Delaware
corporation (the &#147;Company&#148;), and Tony Richelieu, Secretary, and Kelly Masuda, the Vice President
and Treasurer (together, the &#147;Guarantor Officers&#148;), of KB HOME Phoenix Inc., an Arizona
corporation, KB HOME Coastal Inc., a California corporation, KB HOME Sacramento Inc., a California
corporation, KB HOME South Bay Inc., a California corporation, KB HOME Greater Los Angeles Inc., a
California corporation, KB HOME Colorado Inc., a Colorado corporation, KB HOME Nevada Inc., a
Nevada corporation, KB HOME Lone Star Inc., a Texas corporation, and KB HOME Florida LLC, a
Delaware limited liability company (the &#147;Member&#148;), as sole member of KB HOME Orlando LLC, a
Delaware limited liability company (the &#147;LLC&#148; and collectively, but excluding the Member, the
&#147;Guarantors&#148;), hereby certify as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, having read the appropriate provisions of the Indenture dated as of January
28, 2004 (the &#147;Original Indenture&#148;), as amended and supplemented by the First Supplemental
Indenture dated as of January&nbsp;28, 2004 (the &#147;First Supplemental Indenture&#148;), the Second
Supplemental Indenture dated as of June&nbsp;30, 2004 (the &#147;Second Supplemental Indenture&#148;), the Third
Supplemental Indenture (the &#147;Third Supplemental Indenture&#148;) thereto dated as of May&nbsp;1, 2006, the
Fourth Supplemental Indenture (the &#147;Fourth Supplemental Indenture&#148;) thereto dated as of November&nbsp;9,
2006, and the Fifth Supplemental Indenture (the &#147;Fifth Supplemental Indenture&#148;) thereto dated as of
August&nbsp;17, 2007; the Original Indenture, as amended and supplemented by the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture and the Fifth Supplemental Indenture, is hereinafter called the
&#147;Indenture&#148;), each among the Company, the Guarantors and U.S. Bank National Association, as
successor to SunTrust Bank, as trustee (the &#147;Trustee&#148;), including Sections&nbsp;103, 201, 301 and 303
thereof and the definitions in such Indenture relating thereto, and certain other corporate and
limited liability company documents and records, and having made such examination and investigation
as, in the opinion of the undersigned, each considers necessary to enable the undersigned to
express an informed opinion as to whether or not the conditions set forth in the Indenture relating
to the establishment of the terms of the Company&#146;s 9.100% Senior Notes due 2017 (the &#147;Notes&#148;) and
the form of certificate evidencing the Notes have been complied with, and whether the conditions in
the Indenture relating to the authentication and delivery by the Trustee of the Notes have been
complied with, certify that
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;the terms of the Notes were established by resolutions duly adopted by the Board of
Directors of the Company on July&nbsp;9, 2009 and by the Company Officers pursuant to authority
delegated to them by such resolutions (collectively, the &#147;Company Resolutions&#148;) and such terms are
as set forth in Annex I hereto, and the issuance, form and terms of the Notes were approved and the
guarantees of the Notes and all related Guaranteed Obligations (as defined in the Indenture) by the
Guarantors were approved and confirmed by resolutions duly adopted by the Board of Directors of
each Guarantor (other than the LLC) and by the Member and the Company on July&nbsp;13, 2009
(collectively, the &#147;Guarantors&#146; Resolutions&#148;) and by the Guarantor Officers pursuant to authority
delegated to them by the Guarantors&#146; Resolutions,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;the form of certificate evidencing the Notes was established and approved by the
undersigned pursuant to authority delegated to them by the Company Resolutions and the Guarantors&#146;
Resolutions and shall be in substantially the form attached as Annex II hereto,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;a true, complete and correct copy of the Company Resolutions and the Guarantors&#146;
Resolutions, which were duly adopted by the Board of Directors of the Company and by each
Guarantor&#146;s Board of Directors (other than the LLC) and by the Member and the Company, as the case
may be, and are in full force and effect on the date hereof, are attached as exhibits to the
Certificate of the Secretary of the Company of even date herewith, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;the form and terms of the Notes have been established pursuant to Sections&nbsp;201 and 301 of
the Indenture and comply with the Indenture and, in the opinion of the undersigned, all conditions
provided for in the Indenture (including, without limitation, those set forth in Sections&nbsp;103, 201,
301 and 303 of the Indenture) relating to the establishment of the terms of the Notes and the form
of certificate evidencing the Notes, and relating to the authentication and delivery of the Notes,
have been complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This certificate may be executed by the parties hereto in counterparts, each of which when so
executed shall be deemed to be an original, with the same effect as if the signatures thereto and
hereto were on the same instrument, but all such counterparts shall together constitute but one and
the same instrument.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;SIGNATURE PAGE FOLLOWS&#093;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, we have hereunto set our hands as of the date first written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ WENDY
C. SHIBA<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Wendy
C. Shiba
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, General Counsel and<br>
Secretary of KB Home</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ KELLY
MASUDA<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Kelly
Masuda
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Treasurer of KB Home</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ TONY
RICHELIEU<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Tony
Richelieu<br>
Secretary of each of the Guarantors (other than
the LLC) and of the Member (as such terms are
defined in the foregoing Officers&#146; Certificate)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ KELLY
MASUDA<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Kelly
Masuda<BR>
Vice President and Treasurer of each
of the Guarantors (other than the LLC)
and of the Member (as such terms are
defined in the foregoing Officers&#146;
Certificate)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ANNEX I
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms used in this Annex I and not otherwise defined herein have the same
definitions as in the Indenture referred to in the Officers&#146; Certificate and Guarantors&#146; Officers&#146;
Certificate of which this Annex I constitutes a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;The Securities of the series established hereby shall be known and designated as the
9.100% Senior Notes due 2017 and are sometimes hereinafter called the &#147;Notes.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;The aggregate principal amount of the Notes which may be authenticated and delivered under
the Indenture is limited to $265,000,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections
304, 305, 306, 905 or 1107 of the Indenture; <I>provided</I>, <I>however</I>, such series may be re-opened by the
Company for the issuance of additional Notes of such series, so long as any such additional Notes
have the same form and terms (other than date of issuance and the date from which interest thereon
shall begin to accrue), and carry the same right to receive accrued and unpaid interest, as the
Notes theretofore issued; provided, however, that, notwithstanding the foregoing, such series may
not be reopened if the Company has effected defeasance or covenant defeasance with respect to the
Notes pursuant to Section&nbsp;402(2) or 402(3), respectively, of the Indenture or has effected
satisfaction and discharge with respect to the Notes pursuant to Section&nbsp;401 of the Indenture; and
<I>provided</I>, <I>further</I>, that no additional Notes may be issued at a price that would cause such
additional Notes to have &#147;original issue discount&#148; within the meaning of Section&nbsp;1273 of the
Internal Revenue Code of 1986, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;The Notes are to be issuable only as Registered Securities without Coupons. The Notes
shall be initially issued in book-entry form and represented by one or more permanent global Notes
deposited with or on behalf of and registered in the name of the Depositary or its nominee (the
&#147;Global Notes&#148;). The initial depositary (the &#147;Depositary&#148;) for the Global Notes shall be The
Depository Trust Company, the depositary arrangements shall be those employed by whoever shall be
the Depositary with respect to the Global Notes from time to time, and the Trustee shall be
entitled to make endorsements on any Global Notes to reflect any increases or decreases in the
principal amount thereof. Notwithstanding the foregoing, certificated Notes in definitive form
(&#147;Certificated Notes&#148;) may be issued in exchange for Global Notes under the circumstances
contemplated by the seventh paragraph of Section&nbsp;305 of the Original Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;The Notes shall be sold to the Underwriter at a price of 96.639% of the principal amount
thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;The Stated Maturity of the Notes on which the principal thereof is due and payable shall
be September&nbsp;15, 2017.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;The principal of the Notes shall bear interest at the rate of 9.100% per annum from July
30, 2009 or from the most recent date to which interest has been paid or duly provided for, payable
semiannually in arrears on March&nbsp;15 and September&nbsp;15 (each, an &#147;Interest Payment Date&#148;) of each
year, commencing March&nbsp;15, 2010, to the Persons in whose names such Notes (or one or more
Predecessor Securities) are registered at the close of business on the March 1 or September&nbsp;1,
respectively, immediately prior to such Interest Payment Dates (each, a &#147;Regular Record Date&#148;)
regardless of whether such Regular Record Date is a Business Day. Interest on the Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months. No Additional Amounts
shall be payable on the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)&nbsp;The Notes are redeemable, as a whole at any time or from time to time in part, at
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the option of the Company on the terms and subject to the conditions set forth in the
Indenture and in the form of Note which appears as Annex II to the Officers&#146; Certificate and
Guarantors&#146; Officers&#146; Certificate of which this Annex I constitutes a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)&nbsp;The Notes shall not be repayable or redeemable at the option of the Holders prior to the
Stated Maturity of the principal thereof (except in the event of a Change of Control Triggering
Event as specified in the form of Note which appears as Annex II to the Officers&#146; Certificate and
Guarantors&#146; Officers&#146; Certificate of which this Annex I constitutes a part and as provided in
Article&nbsp;Five of the Indenture) and shall not be subject to a sinking fund or analogous provision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)&nbsp;The Borough of Manhattan, The City of New York is hereby designated as a Place of Payment
for the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)&nbsp;The Company hereby appoints the Trustee, acting through the office of the Trustee located
at U.S. Bank National Association 100 Wall Street, 16th Floor, New York, NY 10005, Attn: Corporate
Trust Services, in the Borough of Manhattan, The City of New York, as the Company&#146;s Office or
Agency for the purposes specified in Section&nbsp;1002 of the Indenture; <I>provided</I>, <I>however</I>, subject to
Section&nbsp;1002 of the Indenture, the Company may at any time remove the Trustee as its Office or
Agency in the Borough of Manhattan, The City of New York designated for such purposes and may from
time to time designate one or more other Offices or Agencies for such purposes and may from time to
time rescind such designation, so long as the Company shall at all times maintain an Office or
Agency for such purposes in the Borough of Manhattan, The City of New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)&nbsp;The Notes shall be issued in denominations of $1,000 and integral multiples of $1,000 in
excess thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)&nbsp;The principal of, premium, if any, and interest on the Notes shall be payable in Dollars.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13)&nbsp;Sections&nbsp;402(2) and 402(3) of the Indenture shall apply to the Notes; <I>provided </I>that (i)
the Company may effect defeasance and covenant defeasance pursuant to Sections&nbsp;402(2) and 402(3),
respectively, only with respect to all (and not less than all) of the Outstanding Notes, and (ii)
the only covenants that shall be subject to covenant defeasance shall be those expressly referred
to in Section&nbsp;402(3) of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)&nbsp;The Notes shall not be convertible into or exchangeable for other securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15)&nbsp;Anything in the Indenture or the Notes to the contrary notwithstanding, payments of the
principal of and premium, if any, and interest on the Global Notes shall be made by wire transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16)&nbsp;To the extent that any provision of the Indenture or the Notes provides for the payment
of interest on overdue principal of, or premium, if any, or interest on, the Notes, then, to the
extent permitted by law, interest on such overdue principal, premium, if any, and interest shall
accrue at the rate of interest borne by the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17)&nbsp;The Notes shall have such other terms and provisions as are set forth in the form of Note
attached as Annex II to the Officers&#146; Certificate and Guarantors&#146; Officers&#146; Certificate of which
this Annex I constitutes a part, all of which terms and provisions are incorporated by reference in
and made a part of this Annex I as if set forth in full herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18)&nbsp;As used in the Indenture with respect to the Notes and in the certificates
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">evidencing the Notes, all references to &#147;premium&#148; on the Notes shall mean any amounts (other
than accrued interest) payable upon the redemption of any Notes in excess of 100% of the principal
amount of such Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19)&nbsp;The Notes shall have the benefit of the Guarantees and the Guarantors hereby confirm that
the principal of and premium, if any, and interest on the Notes and all related Guaranteed
Obligations shall be guaranteed pursuant to the Guarantees and otherwise in accordance with and
subject to the limitations set forth in Article&nbsp;Sixteen of the Indenture.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ANNEX II
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Form of Certificate Evidencing the Notes

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;See Exhibit&nbsp;4.26 to this Current Report on Form 8-K&#093;

</DIV>


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<SEQUENCE>5
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">EXHIBIT&nbsp;5.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">July&nbsp;30, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KB Home<BR>
10990 Wilshire Blvd.<BR>
Los Angeles, California 90024

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re: <U>Registration Statement on Form S-3 (333-154432)</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as special counsel to (i)&nbsp;KB Home, a Delaware corporation (the &#147;Company&#148;), and
(ii)&nbsp;KB HOME Coastal Inc., a California corporation, KB HOME Colorado Inc., a Colorado corporation,
KB HOME Greater Los Angeles Inc., a California corporation, KB HOME Lone Star Inc., a Texas
corporation, KB HOME Nevada Inc., a Nevada corporation, KB HOME Sacramento Inc., a California
corporation, KB HOME Phoenix Inc., an Arizona corporation, KB HOME South Bay Inc., a California
corporation and KB HOME Orlando LLC, a Delaware limited liability company (collectively, the
&#147;Guarantors&#148;), in connection with the Company&#146;s and the Guarantors&#146; Registration Statement on Form
S-3 (No.&nbsp;333-120458) (the &#147;Registration Statement&#148;), filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the &#147;Act&#148;), for the registration of the
offer and sale by the Company and the Guarantors from time to time of the securities listed
therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This opinion is intended to update the opinion we previously delivered in connection with the
initial filing of the Registration Statement and is being delivered to you in connection with the
proposed issuance of $265,000,000 in aggregate principal amount of the Company&#146;s 9.100% Senior
Notes due 2017 (the &#147;Notes&#148;) offered pursuant to the Underwriting Agreement, dated July&nbsp;23, 2009
(the &#147;Underwriting Agreement&#148;), among the Company, the Guarantors and Citigroup Global Markets Inc.
The Notes and the Guarantees are to be issued pursuant to the Indenture dated as of January&nbsp;28,
2004 (the &#147;Original Indenture&#148;) as amended and supplemented by the First Supplemental Indenture
dated as of January&nbsp;28, 2004 (the &#147;First Supplemental Indenture&#148;), the Second Supplemental
Indenture dated as of June&nbsp;30, 2004 (the &#147;Second Supplemental Indenture&#148;), the Third Supplemental
Indenture (the &#147;Third Supplemental Indenture&#148;) thereto dated as of May&nbsp;1, 2006, the Fourth
Supplemental Indenture (the &#147;Fourth
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KB Home<BR>
July&nbsp;30, 2009<BR>
Page 2

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Supplemental Indenture&#148;) thereto dated as of November&nbsp;9, 2006, and the Fifth Supplemental
Indenture (the &#147;Fifth Supplemental Indenture&#148;) thereto dated as of August&nbsp;17, 2007; the Original
Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental
Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth
Supplemental Indenture, is hereinafter called the &#147;Indenture&#148;), each among the Company, the
Guarantors and U.S. Bank National Association, as successor to SunTrust Bank, as trustee (the
&#147;Trustee&#148;), and the Officers&#146; Certificate and Guarantors&#146; Officers&#146; Certificate dated July&nbsp;30,
2009, establishing the form and terms of the Notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have examined originals or copies, certified or otherwise identified to our satisfaction,
of such documents, corporate records, certificates of public officials and other instruments as we
have deemed necessary or advisable for purposes of this opinion.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this opinion, we have assumed the authenticity of all documents submitted to
us as originals, the conformity to the originals of all documents submitted to us as copies and the
authenticity of the originals of all documents submitted to us as copies. We have also assumed the
genuineness of the signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the parties thereto (other
than persons signing on behalf of the Company or the Guarantors) and the due authorization,
execution and delivery of all documents by the parties thereto (other than by the Company and the
Guarantors). As to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and representations of
officers and other representatives of the Company, the Guarantors and others.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our opinion expressed below is subject to the qualifications that we express no opinion as to
the applicability of, compliance with, or effect of (i)&nbsp;any bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium or other similar law affecting the
enforcement of creditors&#146; rights generally, (ii)&nbsp;general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law) and (iii)&nbsp;public policy
considerations which may limit the rights of parties to obtain certain remedies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon and subject to the assumptions, qualifications, exclusions and other limitations
contained in this letter, we are of the opinion that when the Notes have been duly executed and
authenticated as provided by the Indenture and shall have been delivered against payment therefor
pursuant to the terms of the Underwriting Agreement, the Notes will constitute the valid and
binding obligation of the Company and the Guarantees will constitute the valid and binding
obligations of the Guarantors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby confirm, based on the assumptions and subject to the qualifications and limitations
set forth therein, that the statements in the section captioned &#147;Material United States Federal
Income Tax Considerations&#148; in the Prospectus Supplement, dated July&nbsp;23, 2009, relating to the
offering of the Notes pursuant to the Registration Statement, to the extent that such statements
constitute statements of law, reflect our opinion of the material federal income
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KB Home<BR>
July&nbsp;30, 2009<BR>
Page 3

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">tax considerations discussed therein. No opinion is expressed on matters other than those
specifically referred to herein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the use of this opinion as Exhibit&nbsp;5.2 and Exhibit&nbsp;8.1 to the
Registration Statement and to the reference to our name in the Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons whose consent is
required under Section&nbsp;7 of the Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Very truly yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ MUNGER, TOLLES &#038; OLSON LLP

</DIV>


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