Exhibit 10.2

Citibank, N.A.

AGREEMENT FOR LETTER OF CREDIT
dated as of October 11, 2006

Unless otherwise defined in this Agreement, capitalized terms used in this
Agreement shall have the meanings set forth in Section 25.

Citibank, N.A. (“Citibank”) agrees to issue at the request and for the account
of the undersigned (“Applicant”) one or more irrevocable letters of credit, each
in a form satisfactory to Applicant and Citibank (each a “Credit”, and
collectively, the “Credits”), up to an aggregate maximum amount not to exceed
the amount of the Security Letter of Credit, substantially in accordance with
the terms and conditions hereof.  In consideration of your issuing, from time to
time, one or more Credits substantially in accordance with the terms and
conditions provided by Applicant, Applicant unconditionally agrees with Citibank
as follows:

1.             Condition to Issuance of any Credit.  The obligation of Citibank
to issue a Credit hereunder, on any Business Day, is subject to (a) the Security
Letter of Credit having an available amount not less than the sum of (i) the
aggregate amount of the Credits outstanding on such date, plus (ii) the
aggregate amount of Drafts, if any, not reimbursed by or on behalf of Applicant
on such date, plus (iii) the amount of the Credit that Applicant has requested
Citibank to issue on such date, (b) any such Credit having a maturity date that
is no later than five Business Days prior to the expiration date of the Security
Letter of Credit and (c) Citibank having received at least one Business Day’s
prior written notice at its office specified below requesting such Credit in the
form attached as Annex I.

2.             Reimbursement. Applicant will pay Citibank the amount of each
draft or other request for payment (each, a “Draft”) drawn under any Credit,
whether drawn before, on or, if in accordance with applicable law, after the
expiry date stated in any such Credit. Each such payment shall be made,
following payment by Citibank, on demand.

3.             Commissions, Fees, Charges and Expenses. Applicant will pay
Citibank within ten Business Days of demand therefor, all expenses, charges and
other amounts which Citibank may actually pay or actually incur in connection
with the Credits, it being agreed that Applicant is not obligated to pay to
Citibank any commitment commission, facility fee or letter of credit fee in
respect of the Credits.

4.             Payments; Interest on Past Due Amounts; Computations. All amounts
due from Applicant shall be paid to Citibank at 399 Park Avenue, New York, New
York 10043 (or such other address notified to Applicant in writing), with-out
defense, set-off, cross-claim, or counterclaim of any kind, in U.S. dollars and
in same day funds, provided, however, that if any such amount is denominated in
a currency other than U.S. Dollars, Applicant will pay the equivalent of such
amount in U.S. Dollars computed at Citibank’s selling rate for cable transfers
to the place where and in the currency in which such amount is payable, or such
other currency, place, form and manner acceptable to Citibank in its sole
discretion. Any amount not paid when due shall bear interest until paid in full
at a daily fluctuating interest rate per annum equal to two percent per annum
above the rate of interest announced publicly from time to time by Citibank in
New York as Citibank’s Base Rate. Applicant authorizes Citibank to charge any
account of Applicant for any amount when due.  Unless otherwise agreed in
writing as to any Credit, all computations of commissions, fees and interest
shall be based on a 360-day year and actual days elapsed.

5.             Increased Costs or Reduced Return.  If any Law, guideline or
interpretation or any change in any Law, guideline or interpretation or
application thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive (whether or
not having the force of Law) of any central bank or other Official Body:  (a)
subjects Citibank to any tax or changes the basis of taxation (including in both
cases withholding taxes) with respect to this Agreement or the Credits (except
for taxes on the overall net income of Citibank, franchise taxes, any branch
profits taxes, and any taxes attributable to a failure of Citibank to withhold
United States federal income taxes

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under the due diligence requirements imposed upon a withholding agent under
§1.1441 7(b) of the income tax regulations); (b) imposes, modifies or deems
applicable any reserve, special deposit or similar requirement against credits
or commitments to extend credit extended by, or assets (funded or contingent)
of, deposits with or for the account of, or other acquisitions of funds by,
Citibank; or (c) imposes, modifies or deems applicable any capital adequacy or
similar requirement (i) against assets (funded or contingent) of, or letters of
credit, other credits or commitments to extend credit extended by, Citibank, or
(ii) otherwise applicable to the obligations of Citibank under this Agreement or
the Credits, and the result of any of the foregoing is to increase the cost to,
reduce the income receivable by, or impose any expense upon Citibank with
respect to this Agreement or the Credits, or the issuance or maintenance of any
Credit (or, in the case of any capital adequacy or similar requirement, to have
the effect of reducing the rate of return on Citibank’s capital, taking into
consideration Citibank’s customary policies with respect to capital adequacy) by
an amount which Citibank in its sole discretion deems to be material, Citibank
shall from time to time notify Applicant of the amount determined in good faith
(using any averaging and attribution methods employed in good faith) by Citibank
to be necessary to compensate Citibank for such increase in cost, reduction of
income, additional expense or reduced rate of return.  Such notice shall set
forth in reasonable detail the basis for such determination, provided, however,
that any such determination shall be conclusive and binding absent manifest
error.  Such amount shall be due and payable by Applicant to Citibank ten
Business Days after such notice is given.  If Citibank receives a refund in
respect of any amounts paid by Applicant pursuant to this Section 5, which
refund in good faith judgment of Citibank is allocable to such payment, it shall
notify Applicant of such refund and repay such refund to Applicant net of all
out-of-pocket expenses of Citibank, provided, however, that Applicant, upon the
request of Citibank, agrees to repay the amount paid over to Applicant to
Citibank in the event Citibank is required to repay such refund.

6.             Indemnification.  (a) Applicant agrees to pay (i) all reasonable
out-of-pocket expenses incurred by the Citibank and its Affiliates, including
the reasonable fees, charges and disbursements of counsel for Citibank, in
connection with the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof (whether or not
the transactions contemplated hereby or thereby shall be consummated) and
(ii) all reasonable out-of-pocket expenses incurred by Citibank, including the
reasonable fees, charges and disbursements of one firm of counsel for Citibank,
in connection with the enforcement or protection of its rights in connection
with this Agreement, including its rights under this Section, or in connection
with the Credits, including in connection with any workout, restructuring or
negotiations in respect thereof.

(b) Applicant agrees to indemnify Citibank, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the transactions contemplated
hereby, (ii) any Credit or the use of the proceeds thereof (including any
refusal by Citibank to honor a demand for payment under any Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Applicant or
any of its Subsidiaries, or any Environmental Liability related in any way to
Applicant or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final

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and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or its Affiliates or from a breach of this
Agreement by such Indemnitee.

(c) To the extent permitted by applicable law, no party hereto shall assert and
each party hereto waives, any claim against any Indemnitee, on any theory of
liability, for special, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, any Credit or the
use of the proceeds thereof.

(d) All amounts due under this Section shall be payable promptly after written
demand therefor accompanied by the appropriate invoice or other detail
supporting such amount.

7.             Obligations Absolute: Limitations of Liability. (a) Applicant’s
obligation to repay the Drafts and to make the other payments provided herein
(the “Obligations”) shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement under any
and all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of the Credits or this Agreement, or any term or provision
therein, (ii) the existence of any claim, set-off, defense or other right that
Applicant, or any Affiliate of Applicant may have at any time against the
beneficiary or any transferee of the Credits (or any Persons or entities for
whom such beneficiary or transferee may be acting), Citibank or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction; (iii) without limiting Section 7(b) below,
any Draft, demand certificate or any other document presented under the Credits
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iv) payment by Citibank
under the Credits against presentation of a Draft or other document that does
not comply with the terms of the Credits, (v) the surrender or impairment of any
security for the performance or observance of any of the terms of this Agreement
or any Credit; (vi) any non-application or misapplication by the beneficiary of
the Credits of the proceeds of any drawing under the Credits; (vii) the fact
that a Default shall have occurred and be continuing; or (viii) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, Applicant’s obligations
hereunder.

(b) Neither Citibank nor any of its Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
the Credits or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
subsection (a)), or any error, omission, interruption, loss or delay in
transmission or delivery of any Draft, notice or other communication under or
relating to the Credits (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of Citibank; provided that the foregoing
shall not be construed to excuse Citibank from liability to Applicant to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by Applicant to the extent permitted by
applicable law) suffered by Applicant that are caused by Citibank’s failure to
exercise care when determining whether Drafts and other documents presented
under the Credits comply with the terms thereof.  The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of Citibank (as finally determined by a court of competent jurisdiction),
Citibank shall be deemed to have exercised care in each such determination.  In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of the Credits, Citibank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary (other than a valid injunction issued by a court of
competent jurisdiction), or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of the
Credits.

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8.             Independence. Applicant acknowledges that the rights and
obligations of Citibank under the Credits are independent of the existence,
performance or nonperformance of any contract or arrangement underlying the
Credits, including contracts or arrangements between Citibank and Applicant and
between Applicant and the beneficiary of any Credit. Citibank shall have no duty
to notify Applicant of its receipt of a Draft, certificate or other document
presented under any Credit or of its decision to honor any such Credit. Citibank
may, without incurring any liability to Applicant or impairing its entitlement
to reimbursement under this Agreement, honor any Credit despite notice from
Applicant of, and without any duty to inquire into, any defense to payment or
any adverse claims or other rights against the beneficiary of any Credit or any
other Person. Citibank shall have no duty to request or require the presentation
of any document, including any default certificate, not required to be presented
under the terms and conditions of any Credit. Citibank shall have no duty to
seek any waiver of discrepancies from Applicant, nor any duty to grant any
waiver of discrepancies which Applicant approves or requests. Citibank shall
have no duty to extend the expiration date or term of any Credit or to issue a
replacement letter of credit on or before the expiration date of any Credit or
the end of such term.

9.             Non-Documentary Conditions. Citibank is authorized (but shall not
be required) to disregard any non-documentary conditions stated in any Credit.

10.           Transfers. If, at Applicant’s request, any Credit is issued in
transferable form, Citibank shall have no duty to determine the proper identity
of anyone appearing in any transfer request, Draft, or other document as
transferee, nor shall Citibank be responsible for the validity or correctness of
any transfer.

11.           Extensions and Modifications of the Credit. This Agreement shall
be binding upon Applicant with respect to any extension or modification of any
Credit made at Applicant’s request or with Applicant’s consent. Applicant’s
Obligations shall not be reduced or impaired in any way by any agreement by
Citibank and the beneficiary of any Credit extending Citibank’s time to honor or
to give notice of discrepancies and any such agreement shall be binding upon
Applicant.

12.           Covenants of Applicant. Applicant will, so long as any Credit or
any reimbursement or other payment obligation of Applicant under this Agreement
remains outstanding, comply with the covenants set forth below:

(a) Applicant will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence in accordance with its
organizational documents, and the material rights, licenses and franchises of
Applicant; provided that Applicant is not required to preserve any such right,
license or franchise, or the existence of any Subsidiary, if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of
Applicant and its Subsidiaries taken as a whole; and provided further that this
Section does not prohibit any transaction otherwise permitted by Section 5.05 of
the of the Credit Agreement.

(b) Applicant will pay or discharge, and cause each of its Subsidiaries to pay
or discharge before the same become delinquent (i) all material taxes,
assessments and governmental charges levied or imposed upon Applicant or any of
its Subsidiaries or its income or profits or property, and (ii) all material
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon the property of Applicant or any of its Subsidiaries, other
than any such tax, assessment, charge or claim the amount, applicability or
validity of which is being contested in good faith by appropriate proceedings
and for which adequate reserves have been established.

(c) Applicant will cause all properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working order
as in the judgment of Applicant may be necessary so that the business of
Applicant may be properly and advantageously conducted at all times; provided
that nothing in this Section prevents Applicant from discontinuing the use,
operation or maintenance of any of such properties or disposing of any of them,
if such discontinuance or disposal is, in the judgment of Applicant, desirable
in the conduct of the business of Applicant.

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(d) Applicant will provide or cause to be provided, for itself and its
Subsidiaries, insurance (including appropriate self-insurance) against loss or
damage of the kinds customarily insured against by corporations similarly
situated and owning like properties, including, but not limited to, products
liability insurance and public liability insurance, with reputable insurers, in
such amounts, with such deductibles and by such methods as are customary for
corporations similarly situated in the industry in which Applicant and its
Subsidiaries are then conducting business.

(e) Applicant will not, and will not cause or permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens, other than Permitted Liens
(as defined in the Credit Agreement) on any of its or their Property, or on any
shares of Capital Stock unless permitted by or secured in accordance with the
terms of the Credit Agreement.

(f) Applicant will not consolidate or merge with or into, or sell, lease, convey
or otherwise dispose of all or substantially all of its assets (including,
without limitation, by way of liquidation or dissolution), or assign any of its
obligations under this Agreement (as an entirety or substantially as an entirety
in one transaction or in a series of related transactions), to any Person (in
each case other than in a transaction permitted pursuant to Section 5.05 of the
Credit Agreement.

(g) Applicant shall deliver or cause to be delivered to Citibank as soon as
available and in any event within 55 calendar days after the end of each of the
first three fiscal quarters in each fiscal year of Hovnanian, financial
statements of Hovnanian, consisting of a consolidated balance sheet as of the
end of such fiscal quarter and related consolidated statements of income,
stockholders’ equity and cash flows for the fiscal quarter then ended and the
fiscal year through that date, all in reasonable detail and certified (subject
to normal year-end audit adjustments) by the Chief Executive Officer, President,
Treasurer or Chief Financial Officer or principal accounting officer of
Hovnanian as having been prepared in accordance with GAAP, consistently applied,
and setting forth in comparative form the respective financial statements for
the corresponding date and period in the previous fiscal year.  Applicant will
be deemed to have complied with the delivery requirements of this Section 12(g)
if within 55 days after the end of Hovnanian’s fiscal quarter, Applicant
delivers to Citibank a copy of Hovnanian’s Form 10-Q as filed with the SEC and
the financial statements contained therein meet the requirements described in
this Section 12(g).

(h) Applicant shall deliver or cause to be delivered to Citibank as soon as
available and in any event within 90 days after the end of each fiscal year of
Hovnanian, financial statements of Hovnanian consisting of a consolidated
balance sheet as of the end of such fiscal year, and related consolidated
statements of income, stockholders’ equity and cash flows for the fiscal year
then ended, all in reasonable detail and setting forth in comparative form the
financial statements as of the end of and for the preceding fiscal year, and
certified by independent certified public accountants of nationally recognized
standing reasonably satisfactory to Citibank. The certificate or report of
accountants delivered pursuant to this Section 12(h) shall be free of
qualifications (other than any consistency qualification that may result from a
change in the method used to prepare the financial statements as to which such
accountants concur) and shall not indicate the occurrence or existence of any
event, condition or contingency that would materially impair the prospect of
payment or performance of any covenant, agreement or duty of Applicant under
this Agreement or cause or constitute an Event of Default.  Applicant will be
deemed to have complied with the delivery requirements of this Section 12(h) if
within 90 days after the end of Hovnanian’s fiscal year, Applicant delivers to
Citibank a copy of Hovnanian’s Annual Report and Form 10-K as filed with the SEC
and the financial statements and separately delivers the above-referenced
certification of public accountants.

(i) Promptly after any officer of Applicant has learned of the occurrence of a
Default, a certificate signed by the Chief Executive Officer, President or Chief
Financial Officer or principal accounting officer of Applicant setting forth the
details of such Default and the action that Applicant proposes to take with
respect thereto.

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(m) Promptly upon their becoming available to Applicant and not otherwise
provided to Citibank under clause (g), (h) or (i) of this Section 12 (A) any
reports, notices or proxy statements generally distributed by Hovnanian to its
stockholders and (B) regular or periodic reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses, filed by Hovnanian with the SEC.

(n) Such other reports and information as Citibank may from time to time
reasonably request.

13.           Representations and Warranties of Applicant.  Applicant represents
and warrants that:

(a) it is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization; (b) it has the lawful power
to own or lease its properties and to engage in the business it presently
conducts or proposes to conduct; (c) it is duly licensed or qualified and in
good standing in each jurisdiction where the failure to do so could not,
individually or in the aggregate, reasonably be expected to cause a Material
Adverse Change; (d) it has full power to enter into, execute, deliver and carry
out this Agreement, and to perform its obligations under this Agreement, and all
such actions have been duly authorized by all necessary proceedings on its part;
(e) this Agreement has been duly and validly executed and delivered by
Applicant; (f)  this Agreement constitutes, legal, valid and binding obligation
of Applicant, enforceable against Applicant in accordance with its terms, except
to the extent that enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization moratorium or other similar laws
affecting the enforceability of creditor’s rights generally or limiting the
right of specific performance; (g) neither the execution and delivery of this
Agreement by Applicant nor the consummation of the transactions herein or
compliance with the terms and provisions hereof by Applicant will conflict with,
constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of formation
or other organizational documents of Applicant or (ii) any Law or any material
agreement or instrument or order, writ, judgment, injunction or decree to which
Applicant is a party or by which it is bound or to which it is subject, or
result in the creation or enforcement of any Lien, charge or encumbrance
whatsoever upon any property (now or hereafter acquired) of Applicant (other
than Liens granted under the Credit Agreement) that could, individually or in
the aggregate, reasonably be expected to cause a Material Adverse Change; (h)
there are no actions, suits, proceedings or investigations pending or, to the
knowledge of Applicant, threatened against Applicant at law or equity before any
Official Body that individually or in the aggregate may result in any Material
Adverse Change; (i) it is not in violation of any order, writ, injunction or any
decree of any Official Body that may result in any Material Adverse Change; (j)
(i) Applicant has delivered to Citibank copies of Hovnanian’s  audited and
consolidated year-end financial statements for and as of the end of the fiscal
year ended October 31, 2005 (the “Annual Statements”) and unaudited consolidated
quarter-end statements for and as of the end of the fiscal quarters ended
January 31, 2006, April 30, 2006 and July 31, 2006 (the “Quarterly Statements”,
and, together with the Annual Statements, the “Historical Statements”), (ii) the
Historical Statements were compiled from the books and records maintained by
Hovnanian’s management, are correct and complete in all material respects and
fairly represent (subject, in the case of Quarterly Statements, to year-end
adjustments) in all material respects the consolidated financial conditions of
Hovnanian and its Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, (iii) the Historical Statements accurately reflect the
liabilities in all material respects of Hovnanian and its Subsidiaries as of the
respective dates of the Historical Statements, (iv)  as of the date hereof,
neither Hovnanian nor any Subsidiary of Hovnanian has any liabilities,
contingent or otherwise, or forward or long-term commitments that are required
by GAAP to be, but are not, disclosed in the Historical Statements or in the
notes thereto, and except as disclosed therein there are no unrealized or
anticipated losses from any commitments of Hovnanian or any Subsidiary of
Hovnanian that may cause a Material Adverse Change and (v) except as disclosed
in reports filed by Applicant or Hovnanian with the SEC prior to the date
hereof, since October 31, 2005, no Material Adverse Change has occurred; (k)
each of the reports required to be filed by Applicant under

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Section 13(a) of the Exchange Act on or prior to the date hereof has been filed
and, as of the respective dates thereof and the date hereof, such reports, taken
as a whole,  did not contain and do not contain an untrue statement of a
material fact and did not omit and do not 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 in any material
respect; (l) neither Applicant nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock and (m) neither
Applicant nor any of the Subsidiaries is an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940.

14.           Default. Each of the following shall be an “Event of Default”
under this Agreement: (a) Applicant’s failure to pay within three (3) Business
Days when due, any interest on any obligation to Citibank or any fee or other
amount payable to Citibank under this Agreement; (b) Applicant’s failure to pay
when due, any principal of any obligation to Citibank under this Agreement; (c)
Applicant’s failure to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clauses (a) and (b)
of this Section), and such failure shall continue unremedied for a period of 30
days after written notice thereof from Citibank to Applicant (except in the case
of a default under Section 12(f) of this Agreement, which will constitute Events
of Default without notice or the passage of time), (d) any representation or
warranty made in this Agreement or any document delivered by it under this
Agreement, shall prove to have been incorrect in any material respect when made,
deemed made or delivered or (e) any “Event of Default” under and as defined in
the Credit Agreement, shall have occurred and be continuing; provided, however,
any Event of Default hereunder (other than the Event of Default described in
clause (e) above) shall be deemed waived by Citibank if and for so long as the
amount available to be drawn under the Security Letter of Credit or the amount
of Security Letter of Credit Proceeds then held by Citibank equals of exceeds
the aggregate amount of the Credits plus the aggregate outstanding principal
amount of reimbursement obligations under Section 2 at the time of
determination.

15.           Remedies; Security Letter of Credit Proceeds. (a) To the extent
the Obligations are not fully satisfied pursuant to the last sentence of Section
15(b), if any Event of Default shall have occurred and be continuing, the amount
of each Credit as well as any or all Obligations shall, at Citibank’s option,
become due and payable immediately without presentment, demand, protest, or
notice of any kind, all of which are hereby expressly waived by Applicant;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to Applicant under the U.S. Federal Bankruptcy Code, the
amount of the Credit and all Obligations shall automatically become due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Applicant. In addition, Citibank may (i) if any
Credit shall not have been issued, by notice to Applicant declare its obligation
to issue any Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) send notice to Applicant of the occurrence of an Event of
Default thereby resulting in (I) the termination of the Credits on the tenth
Business Day following receipt by Applicant of such notice and (II) pursue all
other remedies available at law, by contract, in equity or otherwise.

(B) CITIBANK AGREES, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) TO APPLY THE
PROCEEDS OF EACH DRAW UNDER THE SECURITY LETTER OF CREDIT DIRECTLY TO THE
SATISFACTION OF THE OBLIGATIONS DUE AND PAYABLE AT THE TIME OF SUCH DRAW AND
(II) TO APPLY ANY REMAINING AMOUNT OF SUCH DRAW (AND ANY PROCEEDS OR INVESTMENTS
THEREOF) DIRECTLY TO THE OTHER OBLIGATIONS, WHEN AND AS SUCH OBLIGATIONS BECOME
DUE AND PAYABLE (SUCH DRAWN AMOUNTS AND ANY PROCEEDS OR INVESTMENTS THEREOF,
“SECURITY LETTER OF CREDIT PROCEEDS”).  RECEIPT OR APPLICATION OF THE SECURITY
LETTER OF CREDIT PROCEEDS TO THE OBLIGATIONS IN ACCORDANCE WITH THE FOREGOING
SHALL CONSTITUTE FOR ALL PURPOSES OF THIS AGREEMENT (INCLUDING REINSTATEMENT, IF
APPLICABLE, OF AMOUNTS AVAILABLE TO BE DRAWN UNDER ANY CREDIT) SATISFACTION OF
THE OBLIGATIONS TO THE EXTENT OF THE AMOUNTS SO APPLIED.

(C)  SUBJECT TO SECTION 15(B), APPLICANT AGREES THAT CITIBANK WILL HAVE THE SOLE
RIGHT TO SELL, PLEDGE, REHYPOTHECATE, ASSIGN, INVEST, USE, COMMINGLE OR
OTHERWISE DISPOSE OF, OR OTHERWISE USE IN ITS BUSINESS ANY SECURITY

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LETTER OF CREDIT PROCEEDS IT HOLDS, FREE FROM ANY CLAIM OR RIGHT OF ANY NATURE
WHATSOEVER OF APPLICANT, INCLUDING ANY EQUITY OR RIGHT OF REDEMPTION BY
APPLICANT.  FOR PURPOSES OF ANY RIGHTS OR REMEDIES AUTHORIZED UNDER THIS
AGREEMENT, CITIBANK WILL BE DEEMED TO CONTINUE TO HOLD ALL SECURITY LETTER OF
CREDIT PROCEEDS, REGARDLESS OF WHETHER CITIBANK HAS EXERCISED ANY RIGHTS WITH
RESPECT TO ANY SECURITY LETTER OF CREDIT PROCEEDS PURSUANT TO THE PRECEDING
SENTENCE.

(D) CITIBANK AGREES THAT PROMPTLY FOLLOWING THE TERMINATION DATE, CITIBANK WILL
RETURN TO APPLICANT ALL SECURITY LETTER OF CREDIT PROCEEDS, IF ANY, THEN HELD BY
CITIBANK. CITIBANK AND APPLICANT AGREE THAT, FOR THE AVOIDANCE OF DOUBT, (I) THE
SECURITY LETTER OF CREDIT PROCEEDS ARE THE PROPERTY OF CITIBANK AND NOT OF
APPLICANT, (II) APPLICANT HAS NO INTEREST IN THE SECURITY LETTER OF CREDIT OR
ANY SECURITY LETTER OF CREDIT PROCEEDS OTHER THAN THE RIGHT TO RECEIVE ANY
REMAINING SECURITY LETTER OF CREDIT PROCEEDS FOLLOWING THE TERMINATION DATE AS
DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE, AND (III) THIS AGREEMENT DOES
NOT CONSTITUTE A TRANSFER OF THE PROPERTY OF APPLICANT.

(E) APPLICANT AGREES THAT, FROM TIME TO TIME UPON THE WRITTEN REQUEST OF
CITIBANK, APPLICANT WILL EXECUTE AND DELIVER SUCH FURTHER DOCUMENTS AND DO SUCH
OTHER ACTS AND THINGS AS CITIBANK MAY REASONABLY REQUEST IN ORDER FULLY TO
EFFECT THE PURPOSES OF THIS SUBSECTION.  CITIBANK MAY EMPLOY AGENTS AND
ATTORNEYS IN FACT IN CONNECTION WITH THIS SECTION AND SHALL NOT BE RESPONSIBLE
FOR THE NEGLIGENCE OR MISCONDUCT OF ANY SUCH AGENTS OR ATTORNEYS IN FACT
SELECTED BY IT IN GOOD FAITH.

16.           Set-off. If any Event of Default shall occur and be continuing,
Citibank may set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Citibank to or for the credit or the account of Applicant
(“Deposits”) against any and all of the past-due Obligations to the extent that
such Obligations have not been fully satisfied pursuant to the last sentence of
Section 15(b) or otherwise, irrespective of whether or not Citibank shall have
made any demand under this Agreement and although such Deposits or Obligations
may be unmatured or contingent. Citibank’s rights under this Section are in
addition to other rights and remedies (including other rights of set-off) which
Citibank may have under this Agreement or applicable law.

17.           Waiver of Immunity. Applicant acknowledges that this Agreement is,
and each Credit will be, entered into for commercial purposes and, to the extent
that Applicant now or later acquires any immunity from jurisdiction of any court
or from any legal process with respect to itself or its property, Applicant now
irrevocably waives its immunity with respect to the Obligations.

18.           Notices; Interpretation; Severability. Notices shall be effective,
if to Applicant, when sent to its address indicated below the signature line
and, if to Citibank, when received at Two Penns Way, Suite 110, New Castle,
Delaware 19720, Attention: Patricia D. Stewart, facsimile number: 212-994-0847,
or as to either, such other address as either may notify the other in writing.
Headings are included only for convenience and are not interpretative. The term
“including” means “including without limitation.” If any provision of this
Agreement is held illegal or unenforceable, the validity of the remaining
provisions shall not be affected.

19.           Successors and Assigns. This Agreement shall be binding upon
Applicant and its successors and permitted assigns, and shall inure to the
benefit of and be enforceable by Citibank, its successors and assigns. Applicant
shall not voluntarily transfer or otherwise assign any of its obligations under
this Agreement. Citibank, subject, if the transferee is not an Affiliate, to
Applicant’s consent if no Event of Default exists, may transfer or otherwise
assign its rights and obligations under this Agreement, in whole or in part, and
shall be forever relieved from any liability with respect to the portion of
Citibank’s rights or obligations transferred or assigned. Applicant acknowledges
that information pertaining to Applicant as it relates to this Agreement or the
Credits may be disclosed to (actual or potential) transferees or assignees so
long as such actual or potential transferee agrees to be bound by the
confidentiality provisions hereof. This Agreement shall not be construed to
confer any right or benefit upon any Person other than Applicant and Citibank
and their respective successors and permitted assigns.

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20.           Modification; No Waiver. None of the terms of this Agreement may
be waived or amended except in a writing signed by the party against whose
interest the term is waived or amended. Forbearance, failure or delay by
Citibank in the exercise of a remedy shall not constitute a waiver, nor shall
any exercise or partial exercise of any remedy preclude any further exercise of
that or any other remedy. Any waiver or consent by Citibank shall be effective
only in the specific instance and for the specific purpose for which it is given
and shall not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent.

21.           Multiple Role Disclosure. Citibank and its Affiliates offer a wide
range of financial services, including back-office letter of credit processing
services on behalf of financial institutions and letter of credit beneficiaries.
Our services are provided internationally to a wide range of customers, some of
whom may be Applicant’s counter-parties or competitors. Applicant acknowledges
and accepts that Citibank and its Affiliates may perform more than one role in
relation to any particular Credit.

22.           Integration; Remedies Cumulative; Delivery by Facsimile. This
Agreement constitutes the entire agreement between the parties concerning
Citibank’s issuance of a Credit or Credits for Applicant’s account and
supersedes all prior or simultaneous agreements, written or oral. All rights and
remedies of Citibank under this Agreement and other documents delivered in
connection with this Agreement are cumulative and in addition to any other right
or remedy under this Agreement, the Credits or applicable law. Delivery of a
signed signature page to this Agreement by facsimile transmission shall be
effective as, and shall constitute physical delivery of, a signed original
counterpart of this Agreement.

23.           Termination; Surviving Provisions. This Agreement shall be
terminated only upon payment in full to Citibank of all Obligations hereunder.
The indemnity, tax, immunity, and jurisdiction provisions shall survive
termination of this Agreement. If any Credit is issued in favor of any bank or
other financial or commercial entity in support of an undertaking issued by such
bank or entity on behalf of Applicant or Citibank, Applicant shall remain liable
under this Agreement (even after expiry of any such Credit) for amounts paid and
expenses incurred by Citibank with respect to any such Credits or the
undertaking until Citibank is released by such other bank or entity.

24.           Governing Law; Submission to Jurisdiction; Confidentiality. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.  Applicant hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby.  Applicant irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.

(b) Applicant agrees that Citibank may issue Credits subject to the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, International
Chamber of Commerce Publication No. 500 (the “UCP”) or the International Standby
Practices, International Chamber of Commerce No. 590 (the “ISP”) or, at
Citibank’s option, such later revision thereof in effect at the time of issuance
of any Credit. The UCP or the ISP, as applicable, shall serve, in the absence of
proof to the contrary, as evidence of general banking usage with respect to the
subject matter thereof.

(c) Applicant agrees that for matters not addressed by the UCP or the ISP, the
Credits shall be subject to and governed by the laws of the state of New York
and applicable U.S. Federal laws. If, at Applicant’s request, any Credit
expressly chooses a state or country law other than New York, U.S.A., or is
silent with respect to UCP, ISP or governing law, Citibank shall not be liable
for any payment, cost, expense or loss resulting from any action or inaction
taken by Citibank if such action or inaction is justified under UCP, ISP, New
York law or the law governing any such Credit.

9

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(d) Citibank agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (i) to Citibank and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisers (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential) on a “need to
know” basis solely in connection with the transactions contemplated by this
Agreement, (ii) to the extent requested by any regulatory authority, provided,
however, that, to the extent legally permitted, Applicant is promptly notified
in order that it may seek a protective order or take other appropriate action,
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to the extent reasonably required or
reasonably deemed advisable in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (v) subject to an agreement containing
provisions substantially the same as those of this subsection (d), to (A) any
assignee of or participant in, or any prospective assignee of or participant in,
any of its rights or obligations under this Agreement or (B) any actual or
prospective counterparty (or its advisors) to any securitization, swap or
derivatives transaction relating to Applicant, any Subsidiaries and the
obligations hereunder, (vi) with the consent of Applicant or (vii) to the extent
such Information (A) becomes publicly available other than as a result of a
breach of this subsection (d) or (B) becomes available to Citibank on a
nonconfidential basis from a source other than Applicant.  For the purposes of
this subsection (d), “Information” means all information received from Applicant
in connection with this Agreement relating to Applicant or its business, other
than any such information that is available to Citibank on a nonconfidential
basis prior to disclosure by Applicant.  Any Person required to maintain the
confidentiality of Information as provided in this subsection (d) shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

25.           Defined Terms.  Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement shall have the following meanings:

“Affiliate” means, when used with reference to a specified Person, any Person
directly or indirectly controlling, or controlled by or under direct or indirect
common control with the Person specified.

“Applicant” shall have the meaning set forth in the Preamble hereto.

“Attributable Debt” means, with respect to any Capitalized Lease Obligations,
the capitalized amount thereof determined in accordance with GAAP.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed.

“Capital Stock” means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person’s capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the date hereof.

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

“control” when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

“Credit” shall have the meaning set forth in the Preamble hereto.

“Credit Agreement” means the Credit Agreement, dated as of October 11, 2006,

10

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among Applicant, as borrower, Hovnanian and certain subsidiaries thereof as
guarantors, the lenders named therein, Citicorp USA, Inc., as issuing bank and
administrative agent, and The Bank of New York, not in its individual capacity,
but solely as paying agent, as amended, supplemented, modified, amended and
restated or refinanced from time to time.

“Credit Agreement Parties” means Applicant and each guarantor of the Credit
Agreement.

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

“Default” means any event or condition that constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

“Deposits”  shall have the meaning set forth in Section 16 hereto.

“Draft” shall have the meaning set forth in Section 2 hereto.

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or the release of any
materials into the environment.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Applicant or any of its Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Event of Default”  shall have the meaning set forth in Section 14 hereto.

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

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession
of the United States, as in effect on May 4, 1999.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hovnanian” means Hovnanian Enterprises, Inc., a Delaware corporation.

“Indebtedness” “Indebtedness” of any Person means, without duplication, (i) any
liability of such Person (A) for borrowed money or under any reimbursement
obligation relating to a letter of credit or other similar instruments (other
than standby letters of credit or similar instrument issued for the benefit of
or surety, performance, completion or payment bonds, earnest money notes or
similar purpose undertakings or indemnifications issued by, such Person in the
ordinary course of business), (B) evidenced by a bond, note, debenture or
similar instrument (including a purchase money obligation) given in connection
with the acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures (other than any
obligation to pay a contingent purchase price which, as of the date of
incurrence thereof is not required to be recorded as a liability in accordance
with GAAP), or (C) in respect of Capitalized Lease Obligations (to the extent of
the Attributable Debt in respect thereof); (ii) any Indebtedness of others that
such Person has guaranteed to

11

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the extent of the guarantee, provided, however, that Indebtedness of Applicant
will not include obligations under warehouse lines of credit of Mortgage
Subsidiaries to repurchase mortgages at prices no greater than 98% of the
principal amount thereof; (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP; and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, that Indebtedness shall not include accounts payable,
liabilities to trade creditors of such Person or other accrued expenses arising
in the ordinary course of business. The amount of Indebtedness of any Person at
any date shall be (A) the outstanding balance at such date of all unconditional
obligations as described above, net of any unamortized discount to be accounted
for as Interest Expense, in accordance with GAAP, (B) the maximum liability of
such Person for any contingent obligations under clause (i) above at such date,
net of an unamortized discount to be accounted for as Interest Expense in
accordance with GAAP, and (C) in the case of clause (iv) above, the lesser of
(x) the fair market value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (y) the amount of
the Indebtedness secured.

“Indemnitee” shall have the meaning ascribed to it in Section 6.

“Interest Expense” of any Person for any period means, without duplication, the
aggregate amount of (i) interest that, in conformity with GAAP, would be set
opposite the caption “interest expense” or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest and other charges amortized to cost of sales), and
(ii) all interest actually paid by a Credit Agreement Party under any guarantee
of Indebtedness (including, without limitation, a guarantee of principal,
interest or any combination thereof) of any Person other than a Credit Agreement
Party during such period; provided, that Interest Expense shall exclude any
expense associated with the complete write-off of financing fees and expenses in
connection with the repayment of any Indebtedness.

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

“ISP” shall have the meaning set forth in Section 24 hereto.

“Law” means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree, bond, judgment, authorization, or approval, lien or award of or
settlement agreement with any Official Body.

“Lien” means, with respect to any Property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property.  For
purposes of this definition, a Person shall be deemed to own, subject to a Lien,
any Property that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such Property.

“Material Adverse Change” means a set of circumstances or events that (i) has or
could reasonably be expected to have any material adverse effect whatsoever upon
the validity or enforceability of this Agreement, (ii) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or business prospects of the Security
Letter of Credit Parties taken as a whole, (iii) impairs

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materially or could reasonably be expected to impair materially the ability of
Applicant to duly and punctually pay or perform its material Indebtedness for
borrowed money, or (iv) impairs materially or could reasonably be expected to
impair materially the ability of Citibank, to the extent permitted, to enforce
its legal remedies pursuant to this Agreement.

“Mortgage Subsidiary” means any Subsidiary of Hovnanian substantially all of the
operations of which consist of the mortgage lending business.

“Obligations” shall have the meaning set forth in Section 7 hereto.

“Official Body” means any national, federal, state, local or other government or
political subdivision or any agency, authority, board, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case, whether foreign or domestic.

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

“Property” of any Person means all types of real, personal, tangible, intangible
or mixed property owned by such Person, whether or not included in the most
recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“SEC”  means the Securities and Exchange Commission.

“Security Letter of Credit”  means a Letter of Credit issued by Citicorp USA,
Inc. naming Citibank as beneficiary to support the payment by Applicant of the
Obligations.

“Security Letter of Credit Proceeds” shall have the meaning set forth in Section
15 hereto.

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

“Termination Date” means the later to occur of (a) the termination of the
Security Letter of Credit and (b) the date of the termination or expiry of all
Credits and the payment in full (including, without limitation, by application
of Security Letter of Credit Proceeds in accordance with this Agreement) of all
Obligations that are or may become payable.

“U.S.” means the United States of America.

“UCP” shall have the meaning set forth in Section 24 hereto.

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
amended, supplemented, amended and restated or otherwise modified from time to
time.

27. JURY TRIAL WAIVER. APPLICANT AND CITIBANK EACH IRREVOCABLY WAIVES ITS RIGHT
TO A JURY TRIAL OF ANY CLAIM, COUNTERCLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE CREDIT, OR ANY DEALINGS WITH ONE ANOTHER
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

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Very truly yours,

 

 

 

 

 

Applicant: K. Hovnanian Enterprises, Inc.

 

 

 

 

 

By: (Authorized Signer):

 

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

 

 

 

(Print Name)

 

 

 

 

 

 

 

 

 

 

 

(Title)

 

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

Relationship Manager (Signature & Stamp)

 

 

 

 

 

 

 

 

(Print Name)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Title)

 

 

(Other required Signature & Stamp)

 

 

 

 

 

 

 

 

 

Address:

110 West Front Street

 

 

 

Red Bank, NJ 07701

 

 

 

 

 

 

Co-Applicant (if any):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By (Authorized Signer):

 

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

 

 

 

(Print Name)

 

 

 

 

 

 

 

 

 

 

 

(Title)

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(For Citibank Use Only)

 

 

Approvals to Issue

 

 

 

 

 

 

 

 

 

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Annex I

Application for Standby Letter of Credit

 

 

Citibank, N.A., New York, NY 10043

 

 

Attn: Standby Letter of Credit Dept.,

 

Letter of Credit Reference No.

 

Advising Bank (Name and
Address)

 

 

 

Applicant (Name and
Address)

 

K. Hovnanian Enterprises, Inc.

 

 

 

 

 

 

 

Beneficiary (Name and Address)

 

 

 

Expiry Date and Place:

 

[NOT LATER THAN FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION DATE OF THE SECURITY
LETTER OF CREDIT]

 

 

 

 

 

 

 

 

 

 

 

Amount (In specific

 

$

 

 

 

 

currency):

 

 

 

This Application is for the issuance of a standby letter of credit under and
subject to the terms and conditions of (select one):

x           The Agreement for Standby Letter of Credit attached hereto:

o            The Continuing Agreement for Commercial and / or Standby Letters of
Credit dated                  . *

Other (describe):

 

 

Subject to the following terms and conditions, please issue your irrevocable
Letter of Credit (hereinafter called the “Credit”) to be available by the
beneficiary’s draft(s):

Drawn at sight on:

o            Citibank, N.A., New York, NY

o            Other:

(Name and Address of Paying Bank, if any)

 

Accompanied by Beneficiary’s written statement that the amount of any drafts(s)
drawn hereunder represent funds due and payable because of the following reasons
(select one):

o            Applicant of the Credit has failed to comply with terms or
conditions of a contract described as:

 

 

 

 

 

o            Applicant of the Credit has been awarded a contract under an offer
to bid and has failed to become a party to the contract related thereto

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describe):

 

 

 

 

o            It has become necessary for the Beneficiary bank or other financial
entity to make payment under its undertaking issued on behalf of Applicant of
this Credit, with an expiration date of                        , at its
counters, in favor of
                                                                                                                         ,
in relation to

 

o            Description of transaction if other than described

above:

See attached

 

 

 

(If a sample of the wording is attached, insert “See Attached” above)

 

*              If a Continuing Agreement is already in place, submit only this
Application, with customer’s signature and account manager’s approvals on page 2
of this form.

o            Credit to be issued in transferable form.

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o

Any transfer(s) to this Credit to be effective by

Citibank, N.A., at its Tampa, FL offices

 

 

(Indicate an appropriate transferring bank name and location)

 

o            Attachments hereto impose additional terms and conditions on
Applicant and / or Citibank and are incorporated into this Application and
Agreement as if fully set forth herein.

o            All banking charges, other than Citibank, N.A. charges, are for
account of:  Beneficiary  Applicant

Transmit the Credit by:

 

o Cable / SWIFT

 

o Airmail

 

o Courier Service.

 

All drafts and documents called for under the Credit are to be delivered by the
negotiating or paying bank to Citibank, N.A. New York by Airmail in a single
mailing.

 

 

 

Applicant’s Signature

 

Date

 

 

 

 

 

 

 

 

 

Account Manager’s Signature and Stamp

 

Date

 

 

The undersigned Co-Applicant hereby agrees to all terms and conditions contained
in any “CONTINUING AGREEMENT FOR STANDBY AND COMMERCIAL LETTERS OF CREDIT” that
may be in place between Citibank, N.A. and the primary Applicant.

 

 

 

 

 

Co-Applicant Signature (if any)

 

Co-Applicant Name

 

 

 

 

 

 

Co-Applicant Address

 

Date

 

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