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

  






 

















 


(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 


 


7

















 


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

















 


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

















 


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
















 


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

















 


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

















 


[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

















 


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 


 


16

















 


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]


 


17

















 


[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
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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
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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