Exhibit 10.2

 

AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDMENT NO. 1 (this “Amendment”) is dated as of May  16, 2008, and amends
that Seventh Amended and Restated Credit Agreement, dated as of March 7, 2008
(as described herein the “Credit Agreement”), by and among K. HOVNANIAN
ENTERPRISES, INC., a California corporation (the “Borrower”), HOVNANIAN
ENTERPRISES, INC., a Delaware corporation (“Hovnanian” and a “Guarantor”), the
LENDERS (as defined therein), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as administrative agent for the Lenders under the Credit Agreement
(hereinafter referred to in such capacity as the “Agent”).

 

BACKGROUND

 

The parties hereto desire to amend the Credit Agreement to (i) reduce the
principal amount of the Revolving Credit Commitments, (ii) provide for
additional real and personal property collateral security, (iii) permit
additional indebtedness and subordinate liens, (iv) change the Applicable
Margin, and (iv) make other amendments which are set forth below.

 

Subject to the terms and conditions set forth below, the parties hereto desire
to amend the Credit Agreement as set forth herein.

 

OPERATIVE PROVISIONS

 

NOW THEREFORE, the parties hereto, in consideration of their mutual covenants
and agreements herein contained and incorporating herein the definitions above,
hereby agree as follows:

 

1.              DEFINITIONS.

 

(A)          CAPITALIZED TERMS, REFERENCES.  CAPITALIZED TERMS NOT OTHERWISE
DEFINED HEREIN (INCLUDING IN THE FOREGOING BACKGROUND AND PREAMBLE SET FORTH
ABOVE) SHALL HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THE CREDIT
AGREEMENT.  AS USED IN THIS AMENDMENT, “INCLUDING” IS NOT A TERM OF LIMITATION
AND MEANS “INCLUDING WITHOUT LIMITATION.”  EACH REFERENCE TO “HEREOF,”
“HEREUNDER,” “HEREIN,” AND “HEREBY” AND SIMILAR REFERENCES CONTAINED IN THE
CREDIT AGREEMENT AND EACH REFERENCE TO “THIS AGREEMENT” AND SIMILAR REFERENCES
CONTAINED IN THE CREDIT AGREEMENT SHALL, ON AND AFTER THE EFFECTIVE DATE
(DEFINED BELOW), REFER TO THE CREDIT AGREEMENT AS AMENDED HEREBY.  REFERENCES
HEREIN TO SECTION OR SUBSECTION NUMBERS ARE REFERENCES TO SECTIONS OR
SUBSECTIONS OF THE CREDIT AGREEMENT UNLESS OTHERWISE STATED.

 

(B)         DELETED DEFINITIONS.  THE DEFINITIONS OF THE FOLLOWING TERMS IN
SECTION 1.1 [CERTAIN DEFINITIONS] OF THE CREDIT AGREEMENT ARE DELETED AS OF THE
EFFECTIVE DATE:

 

Adjusted Leverage Ratio

 

Interim Value

Consolidated Tangible Net Worth

 

Sold Dwelling Units

Deferred Tax Valuation Allowance

 

Sold Homes

Finished Lots and Land Under Development

 

Unsecured Borrowing Base

Fixed Charge Coverage Ratio

 

Unsold Dwelling Units

Interim Additional Mortgaged Collateral

 

Unsold Homes

 

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(C)          EXISTING DEFINITIONS.  THE FOLLOWING EXISTING DEFINITIONS IN
SECTION 1.1 [CERTAIN DEFINITIONS] OF THE CREDIT AGREEMENT ARE AMENDED AND
RESTATED IN THEIR ENTIRETY AS FOLLOWS AS OF THE EFFECTIVE DATE:

 

Applicable Margin shall mean, as applicable:

 

(A)                              the percentage spread to be added to Base Rate
under the Base Rate Option according to the Pricing Grid below the heading “Base
Rate Margin”,

 

(B)                                the percentage spread to be added to LIBOR
Rate under the LIBOR Rate Option according to the Pricing Grid below the heading
“LIBOR Margin”, and

 

(C)                                the percentage spread to be added to the
Index Rate under the Index Rate Option according to the Pricing Grid below the
heading “Index Rate Margin”.

 

The Applicable Margin with respect to the Base Rate Option, LIBOR Rate Option,
and Index Rate Option shall be determined in accordance with the Pricing Grid
set forth on Schedule 1.1(A)(1) for the Base Rate Margin, the LIBOR Margin and
Index Rate Margin, respectively.

 

Applicable Commitment Fee Rate shall mean the percentage rate per annum
according to the Pricing Grid below the heading “Commitment Fee.”

 

Borrowing Base and Secured Borrowing Base shall have the same meaning and each
shall mean, at any time, the Dollar amount equal to the sum of the following
items, each owned free and clear of all Liens (except Limited Permitted Liens)
by the Borrower, Hovnanian or a Restricted Subsidiary:

 

(a)                              100% of cash and cash equivalents maintained in
the Cash Collateral Accounts; and

 

(b)                             33.33% of the aggregate amount of the Adjusted
Appraised Values of all of the Mortgaged Collateral, less the amount by which
the Collateral Reserves exceeds $25,000,000; and

 

(c)                              25% of the book value of Interim Mortgaged
Collateral

 

provided however that the Borrowing Base shall exclude in all events (i) the
Dollar amount of all Excluded Property and (ii) the amount by which the value of
the Borrowing Base attributable to Mortgages on real estate (other than the
Existing Mortgaged Collateral) located in Mortgage Tax States exceeds 25% of the
Borrowing Base (after giving effect to any such exclusion).

 

The determination by the Agent in respect of the Secured Borrowing Base shall be
conclusive absent manifest error.

 

Borrowing Base Certificate shall mean the Borrowing Base Certificate
substantially in the form of Exhibit 7.3.3.2, duly completed and delivered by
the Borrower pursuant to Section 7.3.3.2 [Borrowing Base Certificate].

 

Cash Collateral Account shall mean one or more deposit or securities

 

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accounts or money market mutual fund investments at or maintained by the Agent
or any of the Lenders or any one or more Affiliates of Agent or any of the
Lenders in which the Agent holds for the benefit of the Lenders a first priority
perfected security interest securing the payment and performance of the
Obligations.

 

Due Diligence Period shall mean with respect to: (i) Existing Mortgaged
Collateral that is comprised of approximately 170 properties the list of which
was provided to Agent on or about March 19, 2008, that period from the Closing
Date through July 31, 2008 (as such date may be extended for an additional 30
days by Agent in its reasonable discretion), (ii)Existing Mortgaged Collateral
that is comprised of approximately 28 properties the list of which was provided
to Agent on or about March 27, 2008, that period from the Closing Date through
September 30, 2008, and (iii) the Proposed Initial Mortgaged Collateral, the
period commencing on the Effective Senior Secured Five Year Notes Date, and
continuing through the date on which Agent confirms in writing to Borrower that
the Due Diligence Tasks have been completed with respect to the Initial
Mortgaged Collateral as reasonably determined by the Agent.

 

Mortgaged Collateral shall mean the Existing Mortgaged Collateral for which all
Due Diligence Tasks have been completed, Initial Mortgaged Collateral and
Additional Mortgaged Collateral.

 

Obligation shall mean any obligation, indebtedness or liability of any of the
Loan Parties to the Agent or any of the Lenders or any Affiliate of any Lender,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with this Agreement, any Notes, the Guaranty Agreement, the Letters
of Credit, the Fee Letter, any other Loan Document, or any Hedge Agreement.

 

Purchase Money Mortgage shall mean any mortgage on real property granted to
secure Indebtedness of a Loan Party to a seller the proceeds of which were used
to acquire such property.

 

Secured Borrowing Base shall mean Borrowing Base.

 

Swing Loan Commitment shall mean PNC Bank’s commitment to make Swing Loans to
the Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an
aggregate principal amount of up to $10,000,000.

 

(D)         MODIFICATION TO EXISTING DEFINITIONS.

 

(1)                                        THE PERIOD AT THE END OF CLAUSE
(VI) OF THE DEFINITION OF “LIMITED PERMITTED LIENS” IS REPLACED WITH “; AND”,
AND THE FOLLOWING CLAUSE (VII) IS ADDED TO SUCH DEFINITION AS OF THE EFFECTIVE
DATE:

 

(vii)                           The Liens securing the Senior Secured Five Year
Notes and the Liens securing the Third Lien Debt so long as such Liens shall be
subordinate to the Liens of the Agent and Lenders in the Collateral and remain
second and third in priority, respectively, to the first priority perfected
Liens of the Agent and Lenders in the Collateral.

 

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(2)                                  Clause (vi)(A) of the definition of
“Permitted Liens” is replaced as of the Effective Date with: (A) Purchase Money
Mortgages, provided that the aggregate principal amount of Indebtedness secured
by Purchase Money Mortgages that are recourse to any one or more Loan Parties
does not exceed $20,000,000.

 

(E)          NEW DEFINITIONS.  THE FOLLOWING DEFINITIONS ARE HEREBY INSERTED IN
THE APPROPRIATE ALPHABETICAL ORDER IN SECTION 1.1 [CERTAIN DEFINITIONS] OF THE
CREDIT AGREEMENT AS OF THE EFFECTIVE DATE:

 

Borrowing Base Start Date shall mean July 31, 2008, as such date may be extended
by up to sixty (60) days by the Agent in its reasonable discretion (but in no
event shall the Borrowing Base Start Date occur before that date to which the
Due Diligence Period has been extended for the Existing Mortgaged Collateral
comprised of approximately 170 properties the list of which was provided to
Agent on or about March 19, 2008).

 

Effective Senior Secured Five Year Notes Date shall mean that date on which the
Senior Secured Five Year Notes have been issued and purchased.

 

Excluded Accounts shall mean at any time those deposit, checking or securities
accounts of any of the Loan Parties (i) that individually have an average
monthly balance (over the most recently ended 3-month period) less than $250,000
and which together do not have an average monthly balance (for such 3-month
period) in excess of $2,000,000 in the aggregate, (ii) all escrow accounts (in
which funds are held for or of others by virtue of customary real estate
practice or contractual or legal requirements), and (iii) such other accounts
with respect to which the Agent reasonably determines that the cost of
perfecting a Lien thereon is excessive in relation to the benefit thereof.

 

Excluded Property shall mean any real property that is

 

(i)                                     located outside of the United States of
America,

 

(ii)                                  subject to a Purchase Money Mortgage,

 

(iii)                               Unentitled Land,

 

(iv)                              located in a community under development with
a dollar amount of investment as of the most recent month-end (determined in
accordance with GAAP) less than $2.0 million or which property has less than 10
lots remaining, or

 

(v)                                 any residential or commercial property owned
by Hovnanian or any Subsidiary which is leased or held for purposes of leasing
primarily to unaffiliated third parties.

 

Existing Mortgaged Collateral shall mean all real property of each of the Loan
Parties on which the Agent holds for the benefit of the Lenders a first priority
recorded Mortgage , subject only to Limited Permitted Liens, which was recorded
in the appropriate real estate records on or before the Effective Senior Secured
Five Year Notes Date.

 

Intercreditor Agreement shall mean the Intercreditor Agreement substantially in
the form of Exhibit 1.1(I) among, inter alia, the Agent on behalf of the Lenders
and the Trustee on behalf of the

 

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holders of the Senior Secured Five Year Notes.

 

Interim Mortgaged Collateral shall mean real property owned by any Loan Party
subject to a first priority recorded Mortgage as to which the Due Diligence
Tasks (including an Acceptable Appraisal) are being diligently pursued and which
is not otherwise excludable from the Borrowing Base.

 

Mortgage Tax States shall mean Florida, Minnesota, Maryland, Washington, D.C.,
Virginia, New York, and Georgia, and any other state(s) which requires a
significant payment of mortgage recording taxes or other fees or taxes of a
comparable nature and magnitude as that of any of the foregoing Mortgage Tax
States.

 

Permitted Dividends shall mean dividends paid upon Qualified Preferred Equity in
an amount in any fiscal year not to exceed $10,000,000.

 

Permitted Refinancings shall mean (A) the issuance or sale of equity, including
Qualified Preferred Equity, to the extent such proceeds thereof are utilized in
the refinancing of Subordinated Debt or unsecured Senior Debt (and consisting of
the repayment of such debt with the net proceeds of such issuance or sale of
equity, including Qualified Preferred Equity, of Hovnanian to any Person in
substantially the same amount before or after 90 days of such repayment),
(B) the repayment of Subordinated Debt and/or unsecured Senior Debt at any time
subsequent to the Effective Date with up to $145,000,000 of net proceeds
received by Hovnanian from the offering of up to 16,100,000 Class A common
shares on May 8, 2008, including any shares issued within 30 days thereof in
conjunction with the overallotment, (C) the issuance of secured debt having a
maturity at least one year beyond the Expiration Date and secured by collateral
that is junior and subordinate to the Liens of the Agent and Lenders on the
Collateral and to the Liens securing payment of the Senior Secured Five Year
Notes, to the extent the proceeds of such secured debt are utilized in exchange
for or to refinance unsecured Subordinated Debt or unsecured Senior Debt (and
consisting of the repayment of such unsecured debt with the net proceeds of such
secured debt by Hovnanian in substantially the same amount before or after 90
days of such repayment), and (D) the refinancing of Subordinated Debt with
similarly subordinated debt subject to similar terms that are not materially
more restrictive on the debtor, in the reasonable determination of the Agent,
than those for the Subordinated Debt being refinanced.

 

Revolving Loan Limit shall mean (i) during the period commencing on the
Effective Senior Secured Five Year Notes Date, and continuing through the
Borrowing Base Start Date, $25,000,000, and (ii) thereafter $100,000,000.

 

Senior Secured Five Year Notes shall mean that indebtedness in a principal
amount of $600,000,000 issued by Hovnanian in May or June, 2008, and secured by
second priority Liens which are subordinate and junior to those of the Agent and
Lenders on substantially all of the Collateral and which Liens are further
subject to the Intercreditor Agreement.

 

Third Lien Debt shall mean that debt to be issued by Hovnanian after the
Effective Senior Secured Five Year Notes Date, in exchange for or to refinance
Subordinated Debt or Senior Notes in existence prior to the Effective Senior
Secured Five Year Notes Date, in an aggregate principal amount not in excess of
$700,000,000, upon terms not materially more restrictive on Hovnanian than the
unsecured debt being refinanced (other than the pledging of collateral) in the
reasonable determination of the Agent, with an out-of-pocket interest cost not
greater than 120% of the interest cost on the debt being refinanced and secured
by third priority Liens, which are subordinate and junior to those of the Agent
and Lenders and to those securing the Senior Secured Five Year Notes ,on
substantially all of the

 

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Collateral and which Liens are further subject to the Intercreditor Agreement or
otherwise an intercreditor agreement which is reasonably satisfactory to Agent.

 

2.              SCHEDULES, EXHIBITS.

 

(A)          SCHEDULES.  AS OF THE EFFECTIVE DATE, THE FOLLOWING SCHEDULES TO
THE CREDIT AGREEMENT ARE AMENDED AND RESTATED IN THEIR ENTIRETY RESPECTIVELY BY
SCHEDULES OF THE SAME DESIGNATION ACCOMPANYING THIS AMENDMENT:

 

(i)                                     Schedule 1.1(A)(1)  -  Applicable
Margin, and

 

(ii)                                  Schedule 1.1(B)    -    Commitments of
Lenders and Addresses for Notices

 

(B)         EXHIBITS.  AS OF THE EFFECTIVE DATE: EXHIBIT 7.3.3.2(A) IS DELETED;
EXHIBIT 7.3.3.2(B) IS REDESIGNATED AS EXHIBIT 7.3.3.2; EXHIBIT 1.1(I) -
INTERCREDITOR AGREEMENT IS ADDED; AND, THE FOLLOWING EXHIBITS TO THE CREDIT
AGREEMENT ARE AMENDED AND RESTATED IN THEIR ENTIRETY, OR HEREBY ADDED TO THE
CREDIT AGREEMENT, AS THE CASE MAY BE, RESPECTIVELY BY EXHIBITS OF THE SAME
DESIGNATION ACCOMPANYING THIS AMENDMENT:

 

(i)                                     Exhibit 1.1(I)     -     Intercreditor
Agreement

 

(ii)                                  Exhibit 1.1(S)(1)  -  Security Agreement

 

(iii)                               Exhibit 7.3.3.1    -    Quarterly Compliance
Certificate, and

 

(iv)                              Exhibit 7.3.3.2  -  Borrowing Base Certificate

 

3.              AMENDMENT OF SECTION 2.

 

(A)          SECTION 2.1.1 [REVOLVING CREDIT LOANS] IS AMENDED AND RESTATED IN
ITS ENTIRETY AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

2.1.1 Revolving Credit Loans

 

Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, each Lender severally agrees to make Revolving
Credit Loans to the Borrower at any time or from time to time on or after the
date hereof to the Expiration Date provided that after giving effect to such
Loan (a) the aggregate amount of Revolving Credit Loans from such Lender shall
not exceed such Lender’s Revolving Credit Commitment minus such Lender’s Ratable
Share of the Letter of Credit Outstandings and its Ratable Share of the
outstanding Swing Loans, (b) Revolving Facility Usage shall not exceed the
lesser of the Revolving Credit Commitments and the Borrowing Base at such time,
and (c) in no event shall the aggregate amount of Revolving Credit Loans and
Swing Loans outstanding at any time (other than Revolving Credit Loans or Swing
Loans utilized pursuant to Section 2.9.3.3 in connection with Letters of Credit)
exceed the Revolving Loan Limit at such time.  Within such limits of time and
amount and subject to the other provisions of this Agreement, the Borrower may
borrow, repay and reborrow pursuant to this Section 2.1.  Revolving Credit
Loans, as defined in and outstanding under the Prior Credit Agreement, are
hereby deemed to be Revolving Credit Loans hereunder.

 

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The Borrower promises to repay the aggregate outstanding principal amount of the
Revolving Credit Loans in full on the Expiration Date and to discharge and
fulfill when required all other of the Obligations.

 

(B)         THE PENULTIMATE SENTENCE OF SECTION 2.9.1 [ISSUANCE OF LETTERS OF
CREDIT] IS AMENDED AND RESTATED IN ITS ENTIRETY AS OF THE EFFECTIVE DATE AS
FOLLOWS:

 

In no event shall the aggregate amount of Letter of Credit Outstandings and
Revolving Credit Loans exceed, at any one time, the Revolving Credit
Commitments.

 

(C)          THE FIRST SENTENCE OF SECTION 2.9.11 [CASH COLLATERAL] IS AMENDED
AND RESTATED IN ITS ENTIRETY AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

If there exist any Letter of Credit Outstandings on the date which is 30 days
prior to the Expiration Date, the Borrower shall immediately pledge and deposit
with or deliver to Agent, for the benefit of each Letter of Credit Lender and
the Lenders, as collateral for all outstanding Letters of Credit, Reimbursement
Obligations and Letter of Credit Borrowings, cash or deposit account balances in
an amount equal to 105% of the amount of all Letter of Credit Outstandings as of
such date (or as of the Expiration Date if greater) pursuant to documentation in
form and substance reasonably satisfactory to Agent and each Letter of Credit
Lender (which documents are hereby consented to by the Lenders).

 

(D)         SECTION 2.11.2 [DESIGNATION OF NON-RESTRICTED PERSON]. 
SECTION 2.11.2 IS AMENDED AND RESTATED IN ITS ENTIRETY AS OF THE EFFECTIVE DATE
AS FOLLOWS:

 

2.11.2                  Designation of Non-Restricted Person.

 

The Borrower may, by written notice delivered to the Agent, designate as a
Non-Restricted Person a Subsidiary formerly designated a Restricted Subsidiary
or a newly formed or acquired Subsidiary, subject to:  (i) the provisions of
subsection 2.11.1 hereof in relation to Guaranties, (ii) the requirements of
Section 7; and (iii) the requirement that such designation not cause an Event of
Default or Potential Default.  Such designation shall be effective on the date
specified by the Borrower which shall not be earlier than five (5) Business Days
after the receipt by the Agent of such notice.

 

4.              AMENDMENT OF SECTION 4.

 

(A)          SECTION 4.5.1 [REVOLVING FACILITY USAGE IN EXCESS OF COMMITMENTS]. 
SECTION 4.5.1 IS AMENDED AND RESTATED IN ITS ENTIRETY AS OF THE EFFECTIVE DATE
AS FOLLOWS:

 

4.5.1                        Revolving Facility Usage in Excess of Commitments.

 

The Borrower shall make mandatory payments of principal on the Revolving Credit
Loans (together with accrued interest thereon) to the Agent to the extent by
which Revolving Facility Usage exceeds at any time the Commitments (as they may
be reduced pursuant to Section 2.1. [Voluntary Reduction of Commitment],
Section 2.10.2 [Approval by 66-2/3% Lenders] or otherwise) and the Borrower
shall make mandatory payments of principal on the Revolving Credit Loans
(together with accrued interest thereon) to the Agent to the extent by which
Revolving Credit Loans exceeds at any time the Revolving Loan Limit, in each
case

 

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within three (3) Business Days after such excess is calculated.

 

(B)         SECTION 4.5.2 [CASH IN EXCESS OF $100 MILLION].    SECTION 4.5.2 IS
DELETED AND REPLACED WITH “[RESERVED]” AS OF THE EFFECTIVE DATE.

 

(C)          SECTION 4.5.3 [ISSUANCE OF CAPITAL STOCK,; INCURRENCE OF
INDEBTEDNESS - INITIAL PREFERENCE PERIOD].    SECTION 4.5.3 IS DELETED AND
REPLACED WITH “[RESERVED]” AS OF THE EFFECTIVE DATE.

 

5.              AMENDMENT OF SECTION 7.

 

(A)          SECTION 7.1.12 [EXCESS CASH DURING PREFERENCE PERIOD]. 
SECTION 7.1.12 IS DELETED AND REPLACED WITH “[RESERVED]” AS OF T HE EFFECTIVE
DATE.

 

(B)         SECTION 7.1.13 [POST-CLOSING COLLATERAL MATTERS].  CLAUSES
(I) THROUGH (VII) OF SECTION 7.1.13 ARE AMENDED AND RESTATED IN THEIR ENTIRETY
AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

(i)                                     Delivery of Mortgage Information.  As
soon as reasonably practical after the Effective Senior Secured Five Year Notes
Date, the Borrower shall provide to the Agent a list of all real property (that
is not Existing Mortgaged Collateral and which is not Excluded Property) of each
of the Loan Parties (the “Proposed Initial Mortgaged Collateral”) specifying the
state and county for each parcel of real estate and the related legal
description thereof, satisfactory evidence of the book value thereof, details of
any PAPA affecting any such real estate, names of the owners of record thereof,
copies of any owner’s policies of title insurance relating thereto, and existing
surveys (to the extent requested by the Agent) with respect to the same; unless
rejected or otherwise excluded in accordance with the terms hereof, all such
property shall be added to the Secured Borrowing Base.  As soon as practical
after receipt of the list of Proposed Initial Mortgaged Collateral, the Agent
shall order appraisals on such Proposed Initial Mortgaged Collateral.

 

(ii)                                  Initial Mortgages - Execution and
Delivery, Value.  No later than July 31, 2008 (which date may be extended by up
to 60 days by the Agent in its reasonable discretion but in no event beyond any
date for the taking of Liens on such property required by the terms applicable
to the Senior Secured Five Year Notes or any other permitted indebtedness
hereunder), the Borrower and Restricted Subsidiaries shall execute in favor of
the Agent for the benefit of the Lenders first priority recorded Mortgages on
the Proposed Initial Mortgaged Collateral (subject only to Limited Permitted
Liens) (subject (1) to an amount of additional time for real estate of de
minimus value or for real estate as to which unanticipated complications of
taking a Mortgage have arisen and are being diligently addressed to the
satisfaction of the Agent so long as the recording of mortgages on such real
estate securing the Senior Secured Five Year Notes or any other permitted
indebtedness hereunder has not yet occurred and (2) to exclusion or rejection
from the due diligence and other qualification requirements hereof and from the
Secured Borrowing Base, including in the case of real estate of de minimus value
or real estate as to which unanticipated complications of completing Due
Diligence Tasks or becoming Qualified Real Property have arisen after being
diligently pursued and the cost of achieving such status significantly outweighs
the benefit to the Lenders of including such real estate in the Secured
Borrowing Base, as determined in the reasonable judgment of the Agent); the
Agent shall cause the recording of such Mortgages as soon as practical
thereafter and prior to the recording of mortgages on such real estate securing
the other Permitted Secured Debt.

 

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(iii)                               Initial Mortgages, Existing Mortgages -
Completion of Due Diligence.  On or prior to the last day of the Due Diligence
Period with respect to the Proposed Initial Mortgaged Collateral, the Loan
Parties shall have completed all such actions and satisfied all requirements
necessary to enable the Proposed Initial Mortgaged Collateral to qualify as
Qualified Real Property (all such actions and all such requirements shall be
referred to herein as “Due Diligence Tasks”).  All Proposed Initial Mortgaged
Collateral, unless rejected or otherwise excluded in accordance with the terms
hereof, which meets the requirements of Qualified Real Property and which is
subject to a first priority recorded Lien (subject only to Limited Permitted
Liens) in favor of the Agent for the benefit of the Lenders pursuant to a
Mortgage shall be included in the Secured Borrowing Base (and is referred to
herein as the “Initial Mortgaged Collateral”).  All Due Diligence Tasks shall
have been completed with respect to the Existing Mortgaged Collateral on or
prior to the last day of the Due Diligence Period with respect to such Existing
Mortgaged Collateral and all Existing Mortgaged Collateral, unless rejected or
otherwise excluded in accordance with the terms hereof, which meets the
requirements of Qualified Real Property and which is subject to a first priority
recorded Lien (subject only to Limited Permitted Liens) in favor of the Agent
for the benefit of the Lenders pursuant to a Mortgage shall be included in the
Secured Borrowing Base.

 

(iv)                              Additional Mortgaged Collateral.  As soon as
practical after its acquisition or after it is no longer Excluded Property or
otherwise, all real property of any Loan Party (other than Excluded Property)
that is not Mortgaged Collateral shall be made subject to a first priority
recorded Mortgage (subject only to Limited Permitted Liens) given by the
appropriate Loan Party in favor of the Agent for the benefit of the Lenders and
the Agent, and all Due Diligence Tasks shall, unless any such property is
rejected or otherwise not included in accordance with the terms hereof, be
satisfactorily completed and all such real property shall become Qualified Real
Property, whereupon such real property shall be included in the Secured
Borrowing Base and referred to herein as “Additional Mortgaged Collateral”
(subject, however, to exclusion or rejection from the due diligence and other
qualification requirements hereof and from the Secured Borrowing Base, including
in the case of real estate of de minimus value or real estate as to which
unanticipated complications of completing Due Diligence Tasks or becoming
Qualified Real Property have arisen after being diligently pursued and the cost
of achieving such status significantly outweighs the benefit to the Lenders of
including such real estate in the Secured Borrowing Base, as determined in the
reasonable judgment of the Agent).  Notwithstanding that any such real estate
that is rejected or otherwise not included during Due Diligence may not be
included in the Secured Borrowing Base, it shall nevertheless be subject to a
first priority recorded Mortgage (subject only to Limited Permitted Liens) in
favor of the Agent for the benefit of the Lenders unless Agent expressly rejects
such Mortgage or unless such real estate is Excluded Property.

 

(v)                                 Mortgaged Collateral in Mortgage Tax
Jurisdictions, Limitation.  Interim Mortgaged Collateral, Initial Mortgaged
Collateral and Additional Mortgaged Collateral located in the Mortgage Tax
States shall secure payment of indebtedness in favor of the Lenders, the holders
of the Senior Secured Five Year Notes and holders of Third Lien Debt in an
aggregate amount equal to the most recent book value of such real property and
each such Mortgage shall be a single document which secures the Obligations and
the Senior Secured Five-Year Notes and which, upon the request of Borrower, will
be modified to secure the Third Lien Debt, provided however that each such
Mortgage shall provide for the first priority payment of the Obligations until
the Obligations are paid in full.

 

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(vi)                              Accounts, Ownership Certificates.  As soon as
reasonably practicable after the Effective Senior Secured Five Year Notes Date,
Borrower shall have provided to Agent for the benefit of the Lenders such
control agreements with respect to all concentration, aggregation, and operating
deposit, checking and securities accounts of any of the Loan Parties, other than
Excluded Accounts, as the Agent shall reasonably request, and shall have the
ongoing obligation to provide to Agent for the benefit of the Lenders possession
of all certificated shares of stock and other certificated equity interests in
Restricted Subsidiaries held by any Loan Party, together with such assignments
or stock powers executed in blank by the owner thereof as Agent shall reasonably
request.

 

(vii)                           Collateral Agent.  The Agent may at any time and
from time to time appoint a sub-agent or collateral agent, to maintain and
administer any of the Collateral, maintain books and records regarding any
Collateral, release Collateral, and assist in any aspect arising in connection
with the Collateral as Agent may desire, including a Mortgage Tax Collateral
Agent, as defined in the Intercreditor Agreement; and, the Lenders acknowledge
and agree that such sub-agent or collateral agent shall be an agent of the
Lenders and of Agent and the Lenders agree that such sub-agent or collateral
agent shall be subject to the obligations, rights and benefits of Article 9
hereof to the same extent as Agent.  The Agent may appoint itself, an affiliate
(including Midland Loan Services, Inc.), or third party as such sub-agent or
collateral agent.  All reasonable costs of such sub-agent or collateral agent
shall be born by the Borrower.

 

(C)          SECTION 7.2.2. [LIENS].  SECTION 7.2.2 IS AMENDED AND RESTATED IN
ITS ENTIRETY AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

Each of the Loan Parties shall not at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens; provided, however, that the Cash Collateral Accounts shall be
subject to no Liens other than the first priority perfected security interest of
the Agent for the benefit of the Lenders, the second priority perfected security
interest in favor of the holders of the Senior Secured Five Year Notes, and the
third priority perfected security interest in favor of the holders of the Third
Lien Debt.

 

(D)         SECTION 7.2.5. [DISPOSITIONS OF ASSETS OR SUBSIDIARIES].  CLAUSE
(V) OF SECTION 7.2.5 IS AMENDED AND RESTATED IN ITS ENTIRETY AS OF THE EFFECTIVE
DATE AS FOLLOWS:

 

(v)                                 any other sale, transfer or lease of assets
not included in clauses (i) through (iv) above provided that (1) after giving
effect to such sale the Loan Parties are in compliance with the covenants under
this Agreement (including the financial covenant at Section 7.2.13 [Operating
Cash Flow Coverage, Liquidity])  and no Potential Default or Event of Default
exists or would result therefrom, and (2) any such sale does not constitute all
or substantially all of the assets of the Loan Parties taken as a whole.

 

(E)          SECTION 7.2.6. [RESTRICTED PAYMENTS; RESTRICTED INVESTMENTS;
INVESTMENTS IN RELATED BUSINESSES].  SECTION 7.2.6.1 IS AMENDED AND RESTATED IN
ITS ENTIRETY AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

7.2.6.1               The Loan Parties shall not pay or make Restricted
Payments, Restricted Investments or Investments by Loan Parties in other Loan
Parties engaged in Related Businesses (“Investments in Related Businesses”) from
and after January 31, 2008, which exceed in the

 

10

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aggregate the sum of:

 

(i)                                     $50,000,000 or, after such time that the
aggregate Adjusted Appraised Values of the Mortgaged Collateral as reflected in
the most recent Borrowing Base Certificate are at least two times the sum of the
Commitments and the aggregate principal amount outstanding under the Senior
Secured Five Year Notes, $400,000,000;

 

(ii)                                  50% of net income of Hovnanian (calculated
and consolidated in accordance with GAAP) for all fiscal quarters, commencing on
February 1, 2008, and thereafter, to the extent such income is positive on a
quarterly basis; and

 

(iii)                               50% of the proceeds (less costs of issuance)
of any issuance or sale of equity, including Qualified Preferred Equity, of
Hovnanian to any Person other than a Loan Party during all fiscal quarters
commencing on the Effective Senior Secured Five Year Notes Date, and thereafter
(but excluding any Permitted Refinancings and Permitted Dividends).

 

For the purposes of this Section 7.2.6.1, Restricted Payments shall not include
Permitted Refinancings or Permitted Dividends.

 

(F)            SECTION 7.2.10 [BORROWING BASE].  CLAUSES (A) THROUGH (C) AND
CLAUSES (F) AND (H) OF SECTION 7.2.10 ARE AMENDED AND RESTATED IN THEIR ENTIRETY
AS OF THE EFFECTIVE DATE AS FOLLOWS:

 

(a)                                  [Reserved]

 

(b)                                 Limitation, Maintenance of Secured Borrowing
Base.  Upon and after the Borrowing Base Start Date, the Loan Parties shall not
permit the Revolving Facility Usage to exceed the Secured Borrowing Base at any
time.  At any time that the Revolving Facility Usage exceeds the Secured
Borrowing Base, Borrower shall do any one or more of the following in order to
reduce to zero ($0) any such excess: (i) add cash or cash equivalents to any of
the Cash Collateral Accounts or (ii) reduce the Revolving Facility Usage.

 

(c)                                  [Reserved]

 

(f)                                    [Reserved]

 

(h)                                 Releases.  Agent on behalf of the Lenders
shall provide a release in recordable form of their Liens on any real property
of any of the Loan Parties which is rejected or removed by the Agent from being
subject to a Mortgage; and, in connection with any release given by Agent in
connection with any of the foregoing or in connection with any other provision
of this Section 7.2.10, each Lender hereby consents thereto without the
necessity of any further action on the part of Agent or any Loan Party, and the
Agent shall execute and deliver to Borrower, Hovnanian or such other Loan Party
all documents that Borrower, Hovnanian or such other Loan Party shall reasonably
request to evidence such release and the Agent and Borrower shall administer the
logistics thereof in any manner as may be reasonably acceptable to Borrower and
Agent.  The Loan Parties may withdraw cash and cash equivalents from the Cash
Collateral Accounts and the other deposit, checking and securities accounts of
any of the Loan Parties and close Cash Collateral Accounts and the other
deposit, checking and securities accounts of any of the Loan Parties, at any
time and from time to time, so long as there exists no Potential Default or
continuing Event of Default and no Event of Default or Potential Default would
result after

 

11

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giving effect to such withdrawal or closure; and, all such cash and cash
equivalents withdrawn and all such Cash Collateral Accounts closed in compliance
therewith are hereby released without any further action of Agent or any of the
Lenders.

 

(G)         SECTION 7.2.11 [MINIMUM CTNW].    SECTION 7.2.11 IS DELETED AND
REPLACED WITH “[RESERVED]” AS OF THE EFFECTIVE DATE.

 

(H)         SECTION 7.2.12 [LEVERAGE RATIO].    SECTION 7.2.12 IS DELETED AND
REPLACED WITH “[RESERVED]” AS OF THE EFFECTIVE DATE.

 

(I)             SECTION 7.2.13 [FIXED CHARGE COVERAGE RATIO TRIGGERS].   
SECTION 7.2.13 IS AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS AS OF THE
EFFECTIVE DATE:

 

Section 7.2.13.  Operating Cash Flow Coverage, Liquidity.

 

The Loan Parties shall not permit the Operating Cash Flow Coverage Ratio as of
the last day of each fiscal quarter commencing with the fiscal quarter ending on
July 31, 2008, to be less than 1.50 to 1.0 unless Liquidity as of such date is
equal to or greater than $100,000,000.

 

(J)             SECTION 7.2.14 [INVENTORY LIMITS].    SECTION 7.2.14 IS DELETED
AND REPLACED WITH “[RESERVED]” AS OF THE EFFECTIVE DATE.

 

(K)          SECTION 7.3.3.2(A) [BORROWING BASE CERTIFICATE; INVENTORY
UPDATES].  SECTION 7.3.3.2(A) IS AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS
AS OF THE EFFECTIVE DATE:

 

(a)                                  As soon as available, but not later than
fifty-five (55) days after the end of each month, a Borrowing Base Certificate
as of the end of such month, appropriately completed, executed and delivered by
an Authorized Officer, together with a certificate of the Borrower signed by the
Chief Executive Officer, President, Treasurer or Chief Financial Officer or
principal accounting officer of the Borrower, substantially in the form of
Exhibit 7.3.3.2, reflecting the Borrowing Base to the effect that, except as
described pursuant to Section 7.3.4 [Notice of Default], no Event of Default or
Potential Default exists and is continuing on the date of such Borrowing Base
Certificate; provided, however, the Borrowing Base Certificate delivered with
respect to the month of October, in any year, may be in draft form, subject to
change as a result of the year-end audit, but in no event shall be executed and
delivered in final form later than ninety (90) days after the end of such fiscal
year.

 

6.              AMENDMENT OF SECTION 8.

 

(A)          SECTION 8.1.3 [BREACH OF CERTAIN NEGATIVE COVENANTS]. 
SECTION 8.1.3 IS AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS AS OF THE
EFFECTIVE DATE:

 

Any of the Loan Parties shall default in the observance or performance of any
covenant contained in  Sections 7.2.10 [Borrowing Base], or 7.2.13 [Operating
Cash Flow Coverage, Liquidity];

 

(B)         SECTION 8.2.3 [SET-OFF].  SECTION 8.2.3 IS AMENDED AND RESTATED IN
ITS ENTIRETY AS FOLLOWS AS OF THE EFFECTIVE DATE:

 

12

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8.2.3                        Set-Off.

 

If an Event of Default shall occur and be continuing, any Lender to whom any
Obligation is owed by any Loan Party hereunder or under any other Loan Document
or any participant of such Lender which has agreed in writing to be bound by the
provisions of Section 9.13 [Equalization of Lenders] and any branch, Subsidiary
or Affiliate of such Lender or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to it, without
notice to such Loan Party, but solely after notice to, consultation with and
obtaining the written consent of Agent or the Required Lenders, to set-off
against and apply to the then unpaid balance of all past-due Loans and all other
past-due Obligations of the Borrower and the other Loan Parties hereunder or
under any other Loan Document any debt owing to, and any other funds held in any
manner for the account of, the Borrower or such other Loan Party by such Lender
or participant or by such branch, Subsidiary or Affiliate, including all funds
in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by the Borrower or such other Loan Party for its own account (but not
including funds held in custodian or trust accounts) with such Lender or
participant or such branch, Subsidiary or Affiliate; and

 

7.              REPRESENTATIONS AND WARRANTIES.  TO INDUCE THE LENDERS TO
EXECUTE AND DELIVER THIS AMENDMENT, THE LOAN PARTIES JOINTLY AND SEVERALLY
REPRESENT AND WARRANT TO THE LENDERS (WHICH REPRESENTATIONS AND WARRANTIES SHALL
SURVIVE THE EXECUTION AND DELIVERY OF THIS AMENDMENT) THAT AS OF THE DATE
HEREOF: (A) THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AMENDMENT AND ANY
AND ALL OTHER DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION HEREWITH (I) HAVE
BEEN AUTHORIZED BY ALL REQUISITE CORPORATE OR LIMITED LIABILITY COMPANY ACTION,
AS THE CASE MAY BE, ON THE PART OF THE LOAN PARTIES (II) DO NOT REQUIRE THE
CONSENT OR APPROVAL OF ANY OFFICIAL BODY OR ANY MATERIAL CREDITOR OF ANY OF THE
LOAN PARTIES, AND (III) WILL NOT CONTRAVENE, CONFLICT WITH, VIOLATE NOR RESULT
IN THE BREACH OF ANY LAW, CHARTER, CERTIFICATE OR ARTICLES OF ORGANIZATION OR
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, OR ANY PROVISION OF ANY MATERIAL
INDENTURE, AGREEMENT OR OTHER INSTRUMENT TO WHICH ANY LOAN PARTY IS A PARTY OR
BY WHICH ANY PROPERTIES OR ASSETS OF ANY LOAN PARTY ARE OR MAY BE BOUND, (B) THE
CREDIT AGREEMENT AND ALL OTHER LOAN DOCUMENTS ARE AND REMAIN LEGAL, VALID,
BINDING AND ENFORCEABLE OBLIGATIONS IN ACCORDANCE WITH THE TERMS THEREOF AND
THERE ARE NO SET-OFFS, CLAIMS, DEFENSES, COUNTERCLAIMS, CAUSES OF ACTION, OR
DEDUCTIONS OF ANY NATURE AGAINST ANY OF THE OBLIGATIONS, (C) NO EVENT OF DEFAULT
OR POTENTIAL DEFAULT HAS OCCURRED OR WOULD RESULT FROM THE EXECUTION, DELIVERY
AND PERFORMANCE OF THIS AMENDMENT, AND (D) THE REPRESENTATIONS AND WARRANTIES OF
THE LOAN PARTIES CONTAINED IN THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
ARE TRUE AND CORRECT ON AND AS OF THE DATE HEREOF WITH THE SAME FORCE AND EFFECT
AS THOUGH MADE BY THE LOAN PARTIES ON SUCH DATE (EXCEPT REPRESENTATIONS AND
WARRANTIES WHICH RELATE SOLELY TO AN EARLIER DATE OR TIME).

 

8.              CLOSING DATE.  ON MAY 16, 2008 (FOR PURPOSES SOLELY OF THIS
AMENDMENT, THE “CLOSING DATE”) THE FOLLOWING CONDITIONS SHALL HAVE BEEN MET (THE
“CLOSING CONDITIONS”):

 

(A)          ALL OF THE LOAN PARTIES AND THE REQUIRED LENDERS, AS APPLICABLE,
SHALL HAVE EXECUTED THIS AGREEMENT;

 

(B)         THE REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES CONTAINED IN
SECTION 5 [REPRESENTATIONS AND WARRANTIES] OF THE CREDIT AGREEMENT AS AMENDED
HEREBY AND IN THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS WITH THE SAME EFFECT AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES HAD
BEEN MADE ON AND AS OF THE CLOSING DATE (EXCEPT REPRESENTATIONS AND WARRANTIES
WHICH EXPRESSLY RELATE SOLELY TO AN EARLIER DATE OR TIME, WHICH REPRESENTATIONS
AND WARRANTIES

 

13

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SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE SPECIFIC
DATES OR TIMES REFERRED TO THEREIN); NO EVENT OF DEFAULT OR POTENTIAL DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING OR SHALL EXIST;

 

(C)          NO MATERIAL ADVERSE CHANGE SHALL HAVE OCCURRED SINCE MARCH 7, 2008;

 

(D)         THE DESCRIPTION OF NOTES IN THE PRELIMINARY OFFERING MEMORANDUM WITH
RESPECT TO THE SENIOR SECURED FIVE YEAR NOTES SHALL BE SATISFACTORY TO THE
LENDERS AND SHALL CONFORM IN ALL MATERIAL RESPECTS TO THE SUMMARY OF TERMS
ACCOMPANYING THIS AMENDMENT AS EXHIBIT A; AND

 

(E)          THE LOAN PARTIES SHALL HAVE PAID OR CAUSED TO BE PAID ALL FEES,
COSTS AND EXPENSES FOR WHICH THE AGENT OR ANY OF THE LENDERS IS ENTITLED TO BE
PAID OR REIMBURSED.

 

9.              CONDITIONS TO EFFECTIVENESS OF AMENDMENT.

 

This Amendment shall become effective upon that date (the “Effective Date”) when
each of the following conditions has been met:

 

(A)          THE SENIOR SECURED FIVE YEAR NOTES AND RELATED DOCUMENTS SHALL
PROVIDE FOR THE PAYMENT OF A PORTION OF THE PROCEEDS OF THE ISSUANCE OF THE
SENIOR SECURED FIVE YEAR NOTES DIRECTLY BY THE TRUSTEE FOR THE NOTEHOLDERS
THEREOF TO THE AGENT AS A PREPAYMENT IN SUCH AMOUNT OF THE REVOLVING CREDIT
LOANS AND SWING LOANS, IF ANY, OUTSTANDING, AND THE SENIOR SECURED FIVE YEAR
NOTES AND RELATED DOCUMENTS SHALL SUBSTANTIALLY CONFORM TO THE SUMMARY OF TERMS
ACCOMPANYING THIS AMENDMENT AS EXHIBIT A AND THE DESCRIPTION OF NOTES IN THE
PRELIMINARY OFFERING MEMORANDUM FOR THE SENIOR SECURED FIVE YEAR NOTES; PROVIDED
THAT ANY CHANGES OR ADDITIONS TO COVENANTS, TERMS OR CONDITIONS OF THE SENIOR
SECURED FIVE YEAR NOTES FROM THOSE SET FORTH IN SUCH EXHIBIT OR PRELIMINARY
DESCRIPTION OF NOTES SHALL NOT BE MATERIALLY MORE RESTRICTIVE TO ANY OF THE LOAN
PARTIES THAN THOSE OF THE CREDIT AGREEMENT AS AMENDED HEREBY (AS DETERMINED BY
THE AGENT IN ITS REASONABLE DISCRETION);

 

(B)         THE SENIOR SECURED FIVE YEAR NOTES SHALL HAVE BEEN ISSUED IN A
PRINCIPAL AMOUNT NOT LESS THAN $600,000,000 AND A PORTION OF THE PROCEEDS OF THE
SENIOR SECURED FIVE YEAR NOTES SHALL BE PAID DIRECTLY BY THE ISSUER THEREOF TO
THE AGENT AS A PREPAYMENT IN SUCH AMOUNT OF THE REVOLVING CREDIT LOANS AND SWING
LOANS, IF ANY, OUTSTANDING.

 

(C)          THE LOAN PARTIES, AGENT AND LENDERS, AS APPROPRIATE SHALL HAVE
EXECUTED AND DELIVERED REPLACEMENT PROMISSORY NOTES SUBSTANTIALLY IN THE FORM OF
EXHIBITS 1.1(R) AND 1.1(S)(2) (REFLECTING THE REVISED COMMITMENTS), AND AN
AMENDED AND RESTATED SECURITY AGREEMENT IN SUBSTANTIALLY THE FORM ATTACHED
HERETO AS EXHIBIT 1.1(S)(1).

 

(D)         THERE SHALL HAVE BEEN DELIVERED TO THE AGENT FOR THE BENEFIT OF EACH
LENDER WRITTEN OPINIONS OF (I) PETER REINHART, ESQUIRE, IN HOUSE COUNSEL TO THE
LOANS PARTIES AND (II) SIMPSON THACHER & BARTLETT LLP, NEW YORK COUNSEL TO THE
LOAN PARTIES, IN EACH CASE DATED AS OF THE DATE OF ISSUANCE OF THE SENIOR
SECURED FIVE YEAR NOTES SUBSTANTIALLY SIMILAR IN SCOPE TO THE OPINION LETTER
RECEIVED IN CONNECTION WITH THE CREDIT AGREEMENT, INCLUDING NO CONFLICT OF THIS
AMENDMENT WITH THE TERMS OF EXISTING OR NEW INDEBTEDNESS OF THE LOAN PARTIES AND
NO CONFLICT BETWEEN THE TERMS OF THE SENIOR SECURED FIVE-YEAR NOTES AND EXISTING
INDEBTEDNESS OF THE LOAN PARTIES, AND OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE AGENT AND ITS COUNSEL AND COVERING SUCH MATTERS RELATING TO
THE LOAN PARTIES AND THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT, AS THE AGENT
SHALL REASONABLY REQUEST.

 

(E)          THE REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES CONTAINED IN
SECTION 5

 

14

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[REPRESENTATIONS AND WARRANTIES] OF THE CREDIT AGREEMENT AS AMENDED HEREBY AND
IN THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
WITH THE SAME EFFECT AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES HAD BEEN MADE
ON AND AS OF THE EFFECTIVE SENIOR SECURED FIVE YEAR NOTES DATE (SUCH TERM BEING
USED IN THIS CLAUSE (E) AS DEFINED AT SECTION 1(E) HEREOF) (EXCEPT
REPRESENTATIONS AND WARRANTIES WHICH EXPRESSLY RELATE SOLELY TO AN EARLIER DATE
OR TIME, WHICH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS ON AND AS OF THE SPECIFIC DATES OR TIMES REFERRED TO THEREIN);
NO EVENT OF DEFAULT OR POTENTIAL DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING
OR SHALL EXIST; AND, BORROWER AND HOVNANIAN MAKE THE FOLLOWING ADDITIONAL
REPRESENTATIONS AND WARRANTIES EACH OF WHICH SHALL BE TRUE AND CORRECT AS OF THE
EFFECTIVE SENIOR SECURED FIVE YEAR NOTES DATE:

 

(i)                                     First Quarter Statements.  The Borrower
has delivered to the Agent copies of Hovnanian’s consolidated financial
statements for and as of the end of the first fiscal quarter ended January 31,
2008 (the “First Quarter Statements”).  The First Quarter Statements were
compiled from the books and records maintained by Hovnanian’s management, are
correct and complete in all material respects and fairly represent in all
material respects the consolidated financial condition of Hovnanian and its
Subsidiaries as of their dates and the results of operations for the fiscal
period then ended and have been prepared in accordance with GAAP consistently
applied (subject to normal year-end audit adjustments).  The Historical
Statements accurately reflect the liabilities in all material respects of
Hovnanian and its Subsidiaries.

 

(ii)                                  Accuracy of Financial Statements.  As of
the Effective Senior Secured Five Year Notes Date, 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 First Quarter 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 which may cause a Material Adverse
Change.

 

(iii)                               Solvency.  As of the Effective Senior
Secured Five Year Notes Date, the Loan Parties are, taken as a whole and after
giving effect to the incurrence of all Indebtedness and obligations incurred in
connection herewith and in connection with the Senior Secured Five Year Notes as
of such date, will be and will continue to be Solvent.

 

(F)            NO MATERIAL ADVERSE CHANGE SHALL HAVE OCCURRED SINCE MARCH 7,
2008;

 

(G)         THE CLOSING CONDITIONS SHALL HAVE BEEN MET AND ALL CONSENTS, IF ANY,
REQUIRED TO EFFECTUATE THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE BEEN
OBTAINED;

 

(H)         OTHER THAN AS ADDRESSED AT PARAGRAPH 10 BELOW, ALL LEGAL DETAILS AND
PROCEEDINGS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT
SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT, AND THE
AGENT SHALL HAVE RECEIVED ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED OR OTHER
COPIES OF SUCH DOCUMENTS AND PROCEEDINGS IN CONNECTION WITH SUCH TRANSACTIONS,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT; AND

 

(I)             THE LOAN PARTIES SHALL HAVE PAID OR CAUSED TO BE PAID ALL FEES,
COSTS AND EXPENSES FOR WHICH THE AGENT OR ANY OF THE LENDERS IS ENTITLED TO BE
PAID OR REIMBURSED.

 

10.       POST EFFECTIVENESS REQUIREMENTS.  WITHIN 45 DAYS OF THE EFFECTIVE
SENIOR SECURED FIVE YEAR NOTES DATE (OR SUCH LATER DATE AS EXTENDED BY AGENT IN
ITS REASONABLE DISCRETION), THE LOAN PARTIES, AGENT AND LENDERS, AS APPROPRIATE
SHALL HAVE EXECUTED AND DELIVERED SUCH MODIFICATIONS TO THE SECURITY

 

15

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DOCUMENTS TOGETHER WITH ANY ADDITIONAL CONTROL AND OTHER DOCUMENTS, INSTRUMENTS
AND AGREEMENTS, OR MODIFICATIONS THERETO, AS THE AGENT SHALL REASONABLY REQUEST
IN ORDER TO GRANT OR PERFECT THE LIENS CREATED OR REQUIRED TO BE CREATED
PURSUANT TO THE CREDIT AGREEMENT (AS AMENDED HEREBY).

 

11.       FORCE AND EFFECT.

 

Upon the Effective Date, the Credit Agreement is hereby amended in accordance
with the terms hereof and any reference to the Credit Agreement in any Loan
Document or any document, instrument, or agreement shall hereafter mean and
include the Credit Agreement, as amended hereby.  No novation is intended or
shall occur by or as a result of this Amendment.  The Loan Parties reconfirm,
restate, and ratify the Credit Agreement, each of the other Loan Documents and
all other documents executed in connection therewith except to the extent any
such documents are expressly modified or amended by this Amendment.  This
Amendment is not intended to constitute, nor does it constitute, an
interruption, suspension of continuity, satisfaction, discharge of prior duties,
novation, or termination of the liens, security interests, indebtedness, loans,
liabilities, expenses, or obligations under the Credit Agreement or the other
Loan Documents.  The Loan Parties, the Agent and each of the Lenders acknowledge
and agree that (i) the Collateral and other liens and security interests in
favor of the Agent and the Lenders under the Loan Documents have continued to
secure the indebtedness, loans, liabilities, expenses, and obligations under the
Credit Agreement since the date of execution of each applicable Loan Document,
and (ii) all liens and security interests in the Collateral and all other liens
and security interests which were granted pursuant to any of the Loan Documents
shall remain in full force and effect from and after the date hereof.

 

12.       JOINDER OF GUARANTORS.  EACH OF THE GUARANTORS HEREBY JOINS IN THIS
AMENDMENT TO EVIDENCE ITS CONSENT HERETO, AND EACH GUARANTOR HEREBY REAFFIRMS
ITS OBLIGATIONS SET FORTH IN THE CREDIT AGREEMENT, AS HEREBY AMENDED, AND IN THE
GUARANTY AGREEMENT AND EACH OTHER LOAN DOCUMENT GIVEN BY IT.

 

13.       LENDERS’ CONSENT TO AMENDMENT AND INTERCREDITOR AGREEMENT.  EACH
LENDER, BY ITS EXECUTION HEREOF, HEREBY CONSENTS TO (I) THIS AMENDMENT PURSUANT
SECTION 10.1 OF THE CREDIT AGREEMENT, (II) THE EXECUTION OF THE INTERCREDITOR
AGREEMENT BY THE AGENT ON BEHALF OF SUCH LENDER, (III) THE EXECUTION BY THE
AGENT ON BEHALF OF SUCH LENDER OF AN AMENDMENT OR MODIFICATION TO THE
INTERCREDITOR AGREEMENT (OR OF A NEW INTERCREDITOR AGREEMENT) GOVERNING, INTER
ALIA, THE PRIORITY OF THE LIENS SECURING THE THIRD LIEN DEBT AND WHICH SHALL BE
IN SUBSTANTIALLY THE FORM OF THE INTERCREDITOR AGREEMENT AND WHICH SHALL PROVIDE
THAT THE LIENS IN FAVOR OF THE HOLDERS OF THIRD-LIEN DEBT ARE SUBORDINATED TO
THE LIENS OF THE AGENT AND LENDERS AND TO THE LIENS OF THE HOLDERS OF THE SENIOR
SECURED FIVE YEAR NOTES SUCH THAT THE HOLDERS OF THIRD-LIEN DEBT WILL BE TREATED
WITH REGARD TO THE HOLDERS OF THE SENIOR SECURED FIVE YEAR NOTES IN A MANNER
SUBSTANTIALLY THE SAME AS THE MANNER IN WHICH THE HOLDERS OF THE SENIOR SECURED
FIVE YEAR NOTES ARE TREATED UNDER THE INTERCREDITOR AGREEMENT WITH RESPECT TO
THE LIENS OF THE AGENT AND LENDERS, AND (IV) SUCH MECHANICAL, LOGISTICAL, OR
MINISTERIAL AGENCY AMENDMENT OR MODIFICATION, IF ANY, TO THE INTERCREDITOR
AGREEMENT TO ACCOMMODATE THE REASONABLE AND CUSTOMARY NEEDS OF A
TO-BE-DETERMINED COLLATERAL AGENT FOR ANY OF THE MORTGAGES ON REAL ESTATE
LOCATED IN MORTGAGE TAX STATES.

 

14.       GOVERNING LAW.  THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT UNDER
THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

15.       COUNTERPARTS, TELECOPY SIGNATURES.  THIS AMENDMENT MAY BE SIGNED IN
ANY NUMBER OF

 

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COUNTERPARTS EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT; AND, DELIVERY OF EXECUTED
SIGNATURE PAGES HEREOF BY TELECOPY TRANSMISSION, OR OTHER ELECTRONIC
TRANSMISSION IN .PDF OR SIMILAR FORMAT, FROM ONE PARTY TO ANOTHER SHALL
CONSTITUTE EFFECTIVE AND BINDING EXECUTION AND DELIVERY OF THIS AMENDMENT BY
SUCH PARTY.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES]

 

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[SIGNATURE PAGE 1 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 on the
date first written.

 

 

K. HOVNANIAN ENTERPRISES, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name:

Kevin C. Hake

 

 

 

 

Title:

Senior Vice President and Treasurer

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 2 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

PNC BANK, NATIONAL ASSOCIATION

 

as Agent and as a Lender

 

 

 

 

 

By:

 

 

 

 

Name: Douglas G. Paul

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 3 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

 

Name: R. Scott Holtzapple

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 4 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

By:

 

 

 

 

Name: Stephen R. Carlson

 

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 5 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

 

 

 

 

Name: Kimberly L. Turner

 

 

 

Title: Executive Director

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 6 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

THE ROYAL BANK OF SCOTLAND plc

 

 

 

 

 

By:

 

 

 

 

Name: William McGinty

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 7 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

KEYBANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

 

Name: J. D. Gilbreath

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 8 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

GUARANTY BANK

 

 

 

 

 

By:

 

 

 

 

Name: Ross Evans

 

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 9 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

SUNTRUST BANK

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 10 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

 

Name: Michael Raarup

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 11 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

BNP PARIBAS

 

 

 

 

 

By:

 

 

 

 

Name: Monique Vialatou

 

 

 

Title: Managing Director

 

 

 

 

 

and

 

 

 

 

 

By:

 

 

 

 

Name: Michael Kowalczuk

 

 

 

Title: Vice-President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 12 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CALYON NEW YORK BRANCH

 

 

 

 

 

By:

 

 

 

 

Name: Robert Smith

 

 

 

Title: Managing Director

 

 

 

 

 

and

 

 

 

 

 

By:

 

 

 

 

Name: Brian Myers

 

 

 

Title: Managing Director

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 13 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

COMERICA BANK

 

 

 

 

 

By:

 

 

 

 

Name: David J. Campbell

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 14 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

WASHINGTON MUTUAL BANK, FA

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 15 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

NATIONAL CITY BANK

 

 

 

 

 

By:

 

 

 

 

Name: Sean Apicella

 

 

 

Title: Assistant Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 16 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CITICORP NORTH AMERICA, INC.

 

 

 

 

 

By:

 

 

 

 

Name: Mark Floyd

 

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 17 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

SOVEREIGN BANK

 

 

 

 

 

By:

 

 

 

 

Name: T. Gregory Donohue

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 18 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

REGIONS BANK

 

 

 

 

 

By:

 

 

 

 

Name: Daniel E. McClurkin

 

 

 

Title: Assistant Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 19 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

UNION BANK OF CALIFORNIA, N.A.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 20 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

 

 

 

 

 

By:

 

 

 

 

Name: Mikhail Faybusovich

 

 

 

Title: Vice President

 

 

 

and

 

 

 

By:

 

 

 

 

Name: Laurence Lapeyre

 

 

 

Title: Associate

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 21 OF 28 TO THE AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

UBS LOAN FINANCE LLC

 

 

 

 

 

By:

 

 

 

 

Name: Irja R. Otsa

 

 

 

Title: Associate Director

 

 

 

and

 

 

 

By:

 

 

 

 

Name: Richard L. Tavrow

 

 

 

Title: Director

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 22 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

 

Name: Stephen B. Carlson

 

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 23 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CITY NATIONAL BANK

 

 

 

 

 

By:

 

 

 

 

Name: Mary Bowman

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 24 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CALIFORNIA BANK & TRUST

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 25 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

COMPASS BANK

 

 

 

 

 

By:

 

 

 

 

Name: Helen L. Chase

 

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 26 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

NATIXIS

 

 

 

 

 

By:

 

 

 

 

Name: Marie-Edith Dugeny

 

 

 

Title: Managing Director

 

 

 

and

 

 

 

By:

 

 

 

 

Name: Zineb Bouazzaoui

 

 

 

Title: Associate

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 27 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

CAPITAL ONE, N.A.

 

 

 

 

 

By:

 

 

 

 

Name: Philip Davi

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

[SIGNATURE PAGE 28 OF 28 TO AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT]

 

ACCEPTED AND AGREED:

 

HOVNANIAN ENTERPRISES, INC.

 

as a Guarantor

 

 

 

 

 

By:

 

 

 

 

Name: Kevin C. Hake

 

 

 

Title: Senior Vice President and Treasurer

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 1.1(A)(1)

 

K. HOVNANIAN ENTERPRISES, INC.

PRICING GRID & FEES

 

(expressed in basis points)

 

Pricing Grid:

 

LIBOR
Margin

 

Base Rate
Margin

 

Index Rate
Margin

 

Commitment Fee

 

450

 

275

 

462.5

 

55

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 1.1(B)

 

K. HOVNANIAN ENTERPRISES, INC.

 

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

 

Part 1 — Addresses Commitments of Lenders and Addresses for Notices to Lenders

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

Lender Name (also Agent):
PNC Bank, National Association

 

$

19,600,000.00

 

6.533333333

%

Address for Notices:
Two Tower Center, 18th Floor
E. Brunswick, NJ 08816
Attention:              Douglas G. Paul
Telephone:            (732) 220-3566
Telecopy:              (732) 220-3744

 

 

 

 

 

Address of Lending Office:
PNC Firstside Center
500 First Avenue, 4th Floor
Pittsburgh, PA 15219
Attention:              Rini Davis
Telephone:            (412) 762-7638
Telecopy:              (412) 762-8672

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Bank of America, N.A.
Address for Notices:
231 S. LaSalle Street
Mail Code IL 1-231-10-35
Chicago, IL 60697
Attention:              Stephen B. Carlson
Telephone:            (312) 828-6405
Telecopy:              (312) 974-4970

 

$

25,000,000.00

 

8.333333333

%

Address of Lending Office:
901 Main Street
14th Floor
Dallas, TX 75202
Attention:              Eldred Sholars
Telephone:            (214) 209-3044
Telecopy:              (214) 290-9429

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

Lender Name:
Wachovia Bank, National Association
Address for Notices:
401 S. Tryon St., NC1193
Charlotte, NC  28288
Attention:  Scott Holtzapple
Telephone:  704-383-0474
Telecopy:  704-383-7146

 

$

25,000,000.00

 

8.333333333

%

Address of Lending Office:
401 S. Tryon St., NC1193
Charlotte, NC  28288
Attention:  Scott Holtzapple
Telephone:  704-383-0474
Telecopy:  704-383-7146

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
JPMorgan Chase Bank, N.A.
Address for Notices:
277 Park Avenue, Floor 3
New York, NY 10172
Attention:              Kimberly Turner
Telephone:            (212) 622-8177
Telecopy:              (646) 534-0574

 

$

19,300,000.00

 

$

 6.433333333

%

 

 

 

 

 

 

 

Address of Lending Office:
277 Park Avenue, Floor 3
New York, NY 10172
Attention:              Donald Shokrian
Telephone:            (212) 622-2166
Telecopy:              (646) 534-0574

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

Lender Name:
The Royal Bank of Scotland plc
Address for Notices:
101 Park Avenue
New York, NY 10178
Attention:              David Apps
Telephone:            (212) 401-3745
Telecopy:              (212) 401-3456

 

$

19,300,000.00

 

$

6.433333333

%

Address of Lending Office:
101 Park Avenue
New York, NY 10178
Attention:              Devia Anand
Telephone:            (212) 401-3552
Telecopy:              (212) 401-3456

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
KeyBank National Association
Address for Notices
1200 Abernathy Road, Suite 1550
Atlanta, GA 30328
Attention:              Jeff V. Aycock
Telephone:            (770) 510-2105
Telecopy:              (770) 510-2195

 

$

14,600,000.00

 

4.866666667

%

 

 

 

 

 

 

 

Address of Lending Office:
KeyBank Real Estate Capital
1200 Abernathy Road, Suite 1550
Atlanta, GA 30328
Attention:              Jacky Krieger
Telephone:            (770) 510-2109
Telecopy:              (770) 510-2195

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
SunTrust Bank
Address for Notices:
303 Peachtree Street, N.E.
9th Floor
Atlanta, GA 30308
Attention:              Lauren P. Carrigan
Telephone:            (404) 588-7082
Telecopy:              (404) 724-3875

 

$

14,600,000.00

 

4.866666667

%

 

 

 

 

 

 

 

Address of Lending Office:
America Center West 8330 Boone Blvd.
8th Floor   Vienna VA 22182
Attn: Connie Dores
Telephone:            (703) 442-1546
Telecopy:              (703) 442-1570

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Guaranty Bank
Address for Notices:
8333 Douglas Avenue
Dallas, TX 75225
Attention:              Dustin Ortmann
Telephone:            (214) 360-2672
Telecopy:              (214) 360-4892

 

$

11,400,000.00

 

3.800000000

%

 

 

 

 

 

 

 

Address of Lending Office:
8333 Douglas Avenue
Dallas, TX 75225
Attention:              Juanita Vidal
Telephone:            (214) 360-1632
Telecopy:              (214) 360-4852

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
U.S. Bank National Association
Address for Notices:
US Bancorp
Commercial Real Estate
800 Nicollet Mall, 3rd Floor
Minneapolis, MN 55402-7020
Attention:              Leslie Lynch
Telephone:            (612) 303-3595
Telecopy:              (612) 303-2270

 

$

10,000,000.00

 

3.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
U.S. Bank National Association
800 Nicollet Mall
Minneapolis, MN 55402
Attention:              Michael Raarup
Telephone:            (612) 303-3586
Telecopy:              (612) 303-2270

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
BNP PARIBAS
Address for Notices:
787 Seventh Avenue
New York, NY 10019
Attention:              Duane Helkowski
Telephone:            (212) 841-2940
Telecopy:              (212) 841-3830

 

$

14,600,000.00

 

4.866666667

%

 

 

 

 

 

 

 

Address of Lending Office:
787 Seventh Avenue
New York, NY 10019
Attention:              Wei Monaghan
Telephone:            (212) 841-2980
Telecopy:              (212) 841-2745

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
CALYON New York Branch
Address for Notices:
2200 Ross Avenue, Suite 4400 West
Dallas, TX 75201
Attention:              Robert Smith
Telephone:            (214) 220-2311
Telecopy:              (214) 220-2323

 

$

14,600,000.00

 

4.866666667

%

 

 

 

 

 

 

 

Address of Lending Office:
2200 Ross Avenue, Suite 4400 West
Dallas, TX 75201
Attention:              Darren Abrams
Telephone:            (214) 220-2312
Telecopy:              (214) 220-2323

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Comerica Bank
Address for Notices:
500 Woodward Avenue MC 3256
Detroit, MI 48226
Attention:              Charles Weddell
Telephone:            (313) 222-3323
Telecopy:              (313) 222-9295

 

$

10,000,000.00

 

3.333333333

%

Address of Lending Office:
500 Woodward Avenue MC 3256
Detroit, MI 48226
Attention:              Keshia Boone
Telephone:            (313) 222-9284
Telecopy:              (313) 222-3697

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
Washington Mutual Bank
Address for Notices:
3929 W. John Carpenter Freeway
Suite 100
Irving, TX 75063
Attention:              Brad Johnson
Telephone:            (214) 492-4377
Telecopy:              (972) 870-3603

 

$

9,000,000.00

 

3.000000000

%

 

 

 

 

 

 

 

Address of Lending Office:
620 W. Germantown Pike Suite 200
Plymouth Meeting, PA 19462
Attention:              Chris Heckman
Telephone:            (610) 238-6940
Telecopy:              (610) 828-9657

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Citicorp North America, Inc.
Address for Notices:
390 Greenwich Street
New York, NY 10013
Attention:              Jeanne M. Craig
Telephone:            (212) 723-9229
Telecopy:              (212) 723-8547

 

$

10,000,000.00

 

3.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
390 Greenwich Street
New York, NY 10013
Attention:              Michelle J. Liu
Telephone:            (212) 723-4709
Telecopy:              (646) 291-3705

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
National City Bank
Address for Notices:
One South Broad Street
14th Floor
Philadelphia, PA 19107-3304
Attention:              Brian Gallagher
Telephone:            (267) 256-4088
Telecopy:              (267) 256-4001

 

$

10,000,000.00

 

3.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
One South Broad Street,14th Floor
Philadelphia, PA 19107-3304
Attention:              William J Lloyd
Telephone:            (267) 256-4059
Telecopy:              (267) 256-4001

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Sovereign Bank
Address for Notices:
75 State Street
Mail Code MA1 SST 04-11
Boston, MA 02109
Attention:              T. Gregory Donohue
Telephone:            (617) 757-5578
Telecopy:              (617) 757-5653

 

$

7,000,000.00

 

2.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
75 State Street
Mail Code MA1 SST 04-11
Boston, MA 02109
Attention:              T. Gregory Donohue
Telephone:            (617) 757-5578
Telecopy:              (617) 757-5653

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
Regions Bank, formerly AmSouth Bank
Address for Notices:
1900 5th Avenue North
Mail Code BAC 15
Birmingham, AL 35203
Attention:              Ronny Hudspeth
Telephone:            (205) 307-4227
Telecopy:              (205) 801-0138

 

$

8,000,000.00

 

2.666666667

%

 

 

 

 

 

 

 

Address of Lending Office:
1900 5th Avenue North
Mail Code BAC 15
Birmingham, AL 35203
Attention:              Daniel McClurkin
Telephone:            (205) 264-4109
Telecopy:              (205) 801-0138

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Union Bank of California, N.A.
Address for Notices:
350 California Street, 7th Floor
San Francisco, CA 94104
Attention:              Gary Roberts
Telephone:            (415) 705-5035
Telecopy:              (415) 433-7438

 

$

6,000,000.00

 

2.000000000

%

 

 

 

 

 

 

 

Address of Lending Office:
350 California Street, 7th Floor
San Francisco, CA 94104
Attention:              Gary Roberts
Telephone:            (415) 705-5035
Telecopy:              (415) 433-7438

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
Credit Suisse, Cayman Islands Branch
Address for Notices:
Eleven Madison Avenue
New York, NY 10010
Attention:              William O’Daly
Telephone:            (212) 325-1986
Telecopy:              (212) 743-2254

 

$

10,000,000.00

 

3.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
One Madison Avenue
New York, NY 10010
Attention:              Ed Markowski
Telephone:            (212) 538-3380
Telecopy:              (212) 325-9049

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
UBS Loan Finance LLC
Address for Notices:
UBS AG, Stamford Branch
677 Washington Blvd., 6-South
Stamford, CT 06901
Attention:              Wilfred Saint
Telephone:            (203) 719-4330
Telecopy:              (203) 719-3888

 

$

10,000,000.00

 

3.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
UBS AG, Stamford Branch
677 Washington Blvd., 6-South
Stamford, CT 06901
Attention:              Anthony Finocchi
Telephone:            (203) 719-3377
Telecopy:              (203) 719-3888

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
LaSalle Bank National Association
Address for Notices:
135 S. LaSalle Street
Chicago, IL 60603
Attention:              Liz Matias
Telephone:            (312) 992-1473
Telecopy:              (312) 904-6392

 

$

7,000,000.00

 

2.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
Bank of America, N.A.
231 S. LaSalle Street
Chicago, Il 60604
Attention:              Stephen Carlson
Telephone:            (312) 828-6405
Telecopy:              (312) 974.4970

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
City National Bank
Address for Notices:
2001 N. Main Street, Suite 200
Walnut Creek, CA 94596
Attention:              Mary Bowman
Telephone:            (925) 274-2793
Telecopy:              (925) 274-2758

 

$

5,000,000.00

 

1.666666667

%

 

 

 

 

 

 

 

Address of Lending Office:
2001 N. Main Street, Suite 200
Walnut Creek, CA 94596
Attention:              Xavier Barrera
Telephone:            (925) 274-2783
Telecopy:              (925) 274-2758

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
California Bank & Trust
Address for Notices:
2929 N. Central Avenue Suite 1200
Phoenix, AZ 85012
Attention:              Stephanie L. Lantz
Telephone:            (602) 241-2227
Telecopy:              (602) 230-1345

 

$

4,000,000.00

 

1.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
2929 N. Central Avenue Suite 1200
Phoenix, AZ 85012
Attention:              Stephanie L. Lanty
Telephone:            (602) 241-2227
Telecopy:              (602) 230-1345

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Compass Bank
Address for Notices:
15 South 20th Street, 15th Floor
Birmingham, AL 35233
Attention:              Johanna Duke Paley
Telephone:            (205) 297-3851
Telecopy:              (205) 297-7994

 

$

4,000,000.00

 

1.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
15 South 20th Street
Birmingham, AL 35233
Attention:              Jamie McClure
Telephone:            (205) 297-3297
Telecopy:              (205) 297-3901

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Lender

 

Amount of Commitment for
Revolving Credit Loans

 

Ratable Share

 

 

 

 

 

 

 

 

Lender Name:
NATIXIS, formerly known as Natexis Banques
Populaires
Address for Notices:
1251 Avenue of the Americas - 34th Floor
New York, NY 10020
Attention:              Marie-Edith Dugeny
Telephone:            (212) 872-5132
Telecopy:              (212) 354-9095

 

$

7,000,000.00

 

2.333333333

%

 

 

 

 

 

 

 

Address of Lending Office:
1251 Avenue of the Americas - 34th Floor
New York, NY 10020
Attention:              Zineb Bouazzaoui
Telephone:            (212) 872-5081
Telecopy:              (212) 354-9095

 

 

 

 

 

 

 

 

 

 

 

Lender Name:
Capital One, N.A.
Address for Notices:
275 Broadhollow Road
Melville, NY 11747
Attention:              Philip A. Davi
Telephone:            (631) 531-2388
Telecopy:              (631) 531-2752

 

$

5,000,000.00

 

1.666666667

%

 

 

 

 

 

 

 

Address of Lending Office:
275 Broadhollow Road
Melville, NY 11747
Attention:              Enrico Panno
Telephone:            (631) 531-2395
Telecopy:              (631) 531-2752

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

300,000,000.00

 

100.00

%

 

--------------------------------------------------------------------------------

 

AGENT:

Name:

 

Douglas G. Paul, Senior Vice President

Address:

 

PNC Bank, National Association

 

 

Two Tower Center, 18th Floor

 

 

East Brunswick, NJ 08816

Telephone:

 

(732) 220-3566

Telecopy:

 

(732) 220-3744

 

 

 

BORROWER:

Name:

 

K. HOVNANIAN ENTERPRISES, INC.

Address:

 

110 West Front Street

 

 

Red Bank, NJ 07701

Attention:

 

Kevin C. Hake

Telephone:

 

(732) 747-7800

Telecopy:

 

(732) 747-6835

 

 

 

GUARANTORS:

Name:

 

[name of Guarantor]

Address:

 

c/o K. Hovnanian Enterprises, Inc.

 

 

110 West Front Street

 

 

Red Bank, NJ 07701

Attention:

 

Kevin C. Hake

Telephone:

 

(732) 747-7800

Telecopy:

 

(732) 747-6835

 

--------------------------------------------------------------------------------