exv4w1






     EXHIBIT 4.1



     EXECUTION VERSION



 





K. HOVNANIAN ENTERPRISES, INC.,

as Issuer




HOVNANIAN ENTERPRISES, INC.

and

the other Guarantors party hereto



and



WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee and Collateral Agent



 





Indenture



Dated as of November 1, 2011



 





2.00% Senior Secured Notes Due 2021
5.00% Senior Secured Notes Due 2021



 














 





CROSS-REFERENCE TABLE




	 	 	 	 	 	 
	TIA Sections	 	Indenture Sections
	310	(a) 	 	 	7.10
	 	(b) 	 	7.03, 7.08(a)(iii), 7.08(e)
	 	(c) 	 	Inapplicable
	311	 	 	 	7.03
	312	(a) 	 	 	13.02
	313	(a) 	 	 	7.06
	 	(c) 	 	 	5.10(b), 7.06
	314	(a) 	 	 	4.15(d), 4.16(c)
	 	(b) 	 	 	6.10, 11.05(a), 13.01
	 	(c) 	 	Inapplicable
	 	(d) 	 	 	6.10, 11.05(a), 11.05(b), 13.01
	 	(e) 	 	Inapplicable
	 	(f) 	 	Inapplicable
	315	(a) 	 	 	7.02
	 	(b) 	 	 	7.02
	 	(c) 	 	 	7.02
	 	(d) 	 	 	7.02
	 	(e) 	 	Inapplicable
	316	(a) 	 	Inapplicable
	 	(b) 	 	Inapplicable
	 	(c) 	 	 	13.02	(d)
	317	(a)(1) 	 	Inapplicable
	 	(a)(2) 	 	Inapplicable
	 	(b) 	 	Inapplicable
	318	 	 	Inapplicable






i









 






TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	RECITALS
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 1 

Definitions and Incorporation by Reference 
	 	 	 	 
	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	2	 
	Section 1.02. Rules of Construction
	 	 	35	 
	 
	 	 	 	 
	ARTICLE 2 

The Notes
	 	 	 	 
	 
	 	 	 	 
	Section 2.01. Form, Dating and Denominations; Legends
	 	 	35	 
	Section 2.02. Execution and Authentication; Exchange Notes; Additional Notes
	 	 	37	 
	Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust
	 	 	38	 
	Section 2.04. Replacement Notes
	 	 	39	 
	Section 2.05. Outstanding Notes
	 	 	39	 
	Section 2.06. Temporary Notes
	 	 	40	 
	Section 2.07. Cancellation
	 	 	40	 
	Section 2.08. CUSIP and ISIN Numbers
	 	 	41	 
	Section 2.09. Registration, Transfer and Exchange
	 	 	41	 
	Section 2.10. Restrictions on Transfer and Exchange
	 	 	44	 
	Section 2.11. Regulation S Temporary Global Notes
	 	 	46	 
	Section 2.12. Automatic Exchange from Restricted Global Notes to Unrestricted Global Notes
	 	 	47	 
	 
	 	 	 	 
	ARTICLE 3 

Redemption; Offer to Purchase 
	 	 	 	 
	 
	 	 	 	 
	Section 3.01. Optional Redemption
	 	 	49	 
	Section 3.02. Redemption with Proceeds of Equity Offering
	 	 	49	 
	Section 3.03. Sinking Fund; Mandatory Redemption
	 	 	50	 
	Section 3.04. Method and Effect of Redemption
	 	 	50	 
	Section 3.05. Offer to Purchase
	 	 	51	 






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	 	 	Page	 
	ARTICLE 4  

Covenants 
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Payment of Notes
	 	 	54	 
	Section 4.02. Maintenance of Office or Agency
	 	 	54	 
	Section 4.03. Existence
	 	 	55	 
	Section 4.04. Payment of Taxes and Other Claims
	 	 	55	 
	Section 4.05. Maintenance of Properties and Insurance
	 	 	55	 
	Section 4.06. Limitations on Indebtedness
	 	 	56	 
	Section 4.07. Limitations on Restricted Payments
	 	 	57	 
	Section 4.08. Limitations on Liens
	 	 	61	 
	Section 4.09. Limitations on Restrictions Affecting Restricted Subsidiaries
	 	 	61	 
	Section 4.10. Limitations on Dispositions of Assets
	 	 	63	 
	Section 4.11. Guarantees by Restricted Subsidiaries
	 	 	65	 
	Section 4.12. Repurchase of Notes upon a Change of Control
	 	 	66	 
	Section 4.13. Limitations on Transactions with Affiliates
	 	 	66	 
	Section 4.14. Limitations on Mergers, Consolidations and Sales of Assets
	 	 	68	 
	Section 4.15. Reports to Holders of Notes
	 	 	69	 
	Section 4.16. Reports to Trustee
	 	 	70	 
	Section 4.17. Notice of Other Defaults
	 	 	71	 
	Section 4.18. Further Assurances; Costs
	 	 	71	 
	Section 4.19. Limitation of Applicability of Certain Covenants if Notes Rated Investment Grade
	 	 	73	 
	 
	 	 	 	 
	ARTICLE 5  

Remedies 
	 	 	 	 
	 
	 	 	 	 
	Section 5.01. Events of Default
	 	 	73	 
	Section 5.02. Other Remedies
	 	 	77	 
	Section 5.03. Waiver of Defaults by Majority of Holders
	 	 	77	 
	Section 5.04. Direction of Proceedings
	 	 	77	 
	Section 5.05. Application of Moneys Collected by Trustee
	 	 	78	 
	Section 5.06. Proceedings by Holders
	 	 	79	 
	Section 5.07. Proceedings by Trustee
	 	 	80	 
	Section 5.08. Remedies Cumulative and Continuing
	 	 	80	 
	Section 5.09. Undertaking to Pay Costs
	 	 	80	 
	Section 5.10. Notice of Defaults
	 	 	80	 
	Section 5.11. Waiver of Stay, Extension or Usury Laws
	 	 	81	 
	Section 5.12. Trustee May File Proof of Claim
	 	 	81	 
	Section 5.13. Payment of Notes on Default; Suit Therefor
	 	 	82	 
	 
	 	 	 	 
	ARTICLE 6  

Guarantees; Release of Guarantor 
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Guarantee
	 	 	84	 






iii









 






	 	 	 	 	 
	 	 	Page	 
	Section 6.02. Obligations of each Guarantor Unconditional
	 	 	85	 
	Section 6.03. Release of a Guarantor
	 	 	85	 
	Section 6.04. Execution and Delivery of Guarantee
	 	 	86	 
	Section 6.05. Limitation on Guarantor Liability
	 	 	86	 
	Section 6.06. Article 6 not to Prevent Events of Default
	 	 	87	 
	Section 6.07. Waiver by the Guarantors
	 	 	87	 
	Section 6.08. Subrogation and Contribution
	 	 	87	 
	Section 6.09. Stay of Acceleration
	 	 	87	 
	Section 6.10. Guarantors as “obligors” for Provisions Included in this Indenture Pursuant to the Trust Indenture Act
	 	 	88	 
	 
	 	 	 	 
	ARTICLE 7 

The Trustee 
	 	 	 	 
	 
	 	 	 	 
	Section 7.01. General
	 	 	88	 
	Section 7.02. Certain Rights of the Trustee
	 	 	88	 
	Section 7.03. Individual Rights of the Trustee
	 	 	90	 
	Section 7.04. Trustee’s Disclaimer
	 	 	90	 
	Section 7.05. Reserved
	 	 	90	 
	Section 7.06. Reports by Trustee to Holders
	 	 	90	 
	Section 7.07. Compensation and Indemnity
	 	 	91	 
	Section 7.08. Replacement of Trustee
	 	 	91	 
	Section 7.09. Successor Trustee by Merger
	 	 	92	 
	Section 7.10. Eligibility
	 	 	93	 
	Section 7.11. Money Held in Trust
	 	 	93	 
	 
	 	 	 	 
	ARTICLE 8  

Defeasance and Discharge 
	 	 	 	 
	 
	 	 	 	 
	Section 8.01. Legal Defeasance and Discharge
	 	 	93	 
	Section 8.02. Covenant Defeasance
	 	 	94	 
	Section 8.03. Conditions to Legal or Covenant Defeasance
	 	 	94	 
	Section 8.04. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions
	 	 	96	 
	Section 8.05. Repayment to Issuer
	 	 	96	 
	Section 8.06. Reinstatement
	 	 	97	 
	Section 8.07. Survival
	 	 	97	 
	Section 8.08. Satisfaction and Discharge of Indenture
	 	 	97	 
	 
	 	 	 	 
	ARTICLE 9  

Amendments, Supplements and Waivers 
	 	 	 	 
	 
	 	 	 	 
	Section 9.01. Amendments Without Consent of Holders
	 	 	98	 
	Section 9.02. Amendments with Consent of Holders
	 	 	100	 
	Section 9.03. Effect of Consent
	 	 	101	 






iv









 






	 	 	 	 	 
	 	 	Page	 
	Section 9.04. Trustee’s Rights and Obligations
	 	 	101	 
	Section 9.05. Conformity with Trust Indenture Act
	 	 	102	 
	Section 9.06. Payments for Consents
	 	 	102	 
	 
	 	 	 	 
	ARTICLE 10  

[Reserved] 
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 11  

Collateral and Security 
	 	 	 	 
	 
	 	 	 	 
	Section 11.01. Security Documents
	 	 	102	 
	Section 11.02. Collateral Agent
	 	 	103	 
	Section 11.03. Authorization of Actions to be Taken
	 	 	104	 
	Section 11.04. Release of First-Priority Liens
	 	 	105	 
	Section 11.05. Filing, Recording and Opinions
	 	 	106	 
	 
	 	 	 	 
	ARTICLE 12  

Release of Issuer 
	 	 	 	 
	 
	 	 	 	 
	Section 12.01. Release of Issuer
	 	 	107	 
	 
	 	 	 	 
	ARTICLE 13  

Miscellaneous 
	 	 	 	 
	 
	 	 	 	 
	Section 13.01. Trust Indenture Act of 1939
	 	 	108	 
	Section 13.02. Holder Communications; Holder Actions
	 	 	108	 
	Section 13.03. Notices
	 	 	109	 
	Section 13.04. Certificate and Opinion as to Conditions Precedent
	 	 	110	 
	Section 13.05. Statements Required in Certificate or Opinion
	 	 	110	 
	Section 13.06. Payment Date Other Than a Business Day
	 	 	111	 
	Section 13.07. Governing Law
	 	 	111	 
	Section 13.08. No Adverse Interpretation of Other Agreements
	 	 	111	 
	Section 13.09. Successors
	 	 	111	 
	Section 13.10. Duplicate Originals
	 	 	112	 
	Section 13.11. Separability
	 	 	112	 
	Section 13.12. Table of Contents and Headings
	 	 	112	 
	Section 13.13. No Liability of Directors, Officers, Employees, Partners, Incorporators and Stockholders
	 	 	112	 
	Section 13.14. Provisions of Indenture for the Sole Benefit of Parties and Holders of Notes
	 	 	112	 






v









 






EXHIBITS




	 	 	 

	EXHIBIT A

	 	Form of Note
	EXHIBIT B

	 	Form of Supplemental Indenture
	EXHIBIT C

	 	Restricted Legend
	EXHIBIT D

	 	DTC Legend
	EXHIBIT E

	 	Regulation S Certificate
	EXHIBIT F

	 	Rule 144A Certificate
	EXHIBIT G

	 	Institutional Accredited Investor Certificate
	EXHIBIT H

	 	Certificate of Beneficial Ownership
	EXHIBIT I

	 	Regulation S Temporary Global Note Legend
	EXHIBIT J

	 	Unrestricted Subsidiaries







vi











 





     INDENTURE, dated as of November 1, 2011, among K. HOVNANIAN ENTERPRISES, INC., a
California corporation (the “Issuer”), HOVNANIAN ENTERPRISES, INC., a Delaware corporation (the
“Company”), each of the other Guarantors (as defined hereafter) and WILMINGTON TRUST, NATIONAL
ASSOCIATION, a national banking association, as Trustee (the “Trustee”) and Collateral Agent (the
“Collateral Agent”).



RECITALS




     The Issuer has duly authorized the execution and delivery of the Indenture to provide for the
issuance of the Issuer’s 2.00% Senior Secured Notes Due 2021 (the “2.00% Notes”) and the Issuer’s
5.00% Senior Secured Notes Due 2021 (the “5.00% Notes” and together with the 2.00% Notes, each of
which constitutes a separate series hereunder, the “Notes”). All things necessary to make this
Indenture a valid agreement of the Issuer, in accordance with its terms, have been done, and the
Issuer has done all things necessary to make the Notes (in the case of any Additional Notes, when
duly authorized), when duly issued and executed by the Issuer and authenticated and delivered by
the Trustee, the valid obligations of the Issuer as hereinafter provided. The Issuer now wishes to
issue Initial Notes for original issue in the aggregate principal amount of $53,203,000 for the
2.00% Notes and $141,797,000 for the 5.00% Notes.



     In addition, the Guarantors party hereto have duly authorized the execution and delivery of
this Indenture as guarantors of the Notes. All things necessary to make this Indenture a valid
agreement of each Guarantor, in accordance with its terms, have been done, and each Guarantor has
done all things necessary to make the Guarantees (in the case of the Guarantee of any Additional
Notes, when duly authorized), when duly issued and executed by each Guarantor and when the Notes
have been authenticated and delivered by the Trustee, the valid obligation of such Guarantor as
hereinafter provided.



     This Indenture is subject to, and shall be governed by, the provisions of the Trust Indenture
Act that are required to be a part of, and govern indentures qualified under, the Trust Indenture
Act, provided that in each case the provisions of TIA §314(b) and §314(d) shall only apply
following qualification of this Indenture under the TIA.



THIS INDENTURE WITNESSETH




     For and in consideration of the premises and the purchase of the Notes by the Holders thereof,
the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as
follows:



1









 





ARTICLE 1

Definitions and Incorporation by Reference




     Section 1.01. Definitions.



     “Acquired Indebtedness” means (a) with respect to any Person that becomes a Restricted
Subsidiary (or is merged into the Company, the Issuer or any Restricted Subsidiary) after the Issue
Date, Indebtedness of such Person or any of its Subsidiaries existing at the time such Person
becomes a Restricted Subsidiary (or is merged into the Company, the Issuer or any Restricted
Subsidiary) that was not incurred in connection with, or in contemplation of, such Person becoming
a Restricted Subsidiary (or being merged into the Company, the Issuer or any Restricted Subsidiary)
and (b) with respect to the Company, the Issuer or any Restricted Subsidiary, any Indebtedness
expressly assumed by the Company, the Issuer or any Restricted Subsidiary in connection with the
acquisition of any assets from another Person (other than the Company, the Issuer or any Restricted
Subsidiary), which Indebtedness was not incurred by such other Person in connection with or in
contemplation of such acquisition. Indebtedness incurred in connection with or in contemplation of
any transaction described in clause (a) or (b) of the preceding sentence shall be deemed to have
been incurred by the Company or a Restricted Subsidiary, as the case may be, at the time such
Person becomes a Restricted Subsidiary (or is merged into the Company, the Issuer or any Restricted
Subsidiary) in the case of clause (a) or at the time of the acquisition of such assets in the case
of clause (b), but shall not be deemed Acquired Indebtedness.



     “Additional Interest” means all additional interest then owing pursuant to the Registration
Rights Agreement or, with respect to any Additional Notes, a registration rights agreement related
thereto.



     “Additional Notes” means any Notes of either series of the Issuer issued under this Indenture
in addition to the Original Notes, including any Exchange Notes issued in exchange for such
Additional Notes, having the same terms in all respects as the Original Notes of the same series,
except for the issue date, the issue price and, in some cases, the initial interest payment date.



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



     “Affiliate Transaction” has the meaning ascribed to it in Section 4.13 hereof.



     “Agent” means any Registrar, Paying Agent or Authenticating Agent.



2









 





     “Agent Member” means a member of, or a participant in, the Depositary.



     “Applicable Debt” means all Indebtedness of the Company or any of its Restricted Subsidiaries
(i) under Credit Facilities or (ii) that is publicly traded (including in the Rule 144A market),
including, without limitation, the Issuer’s senior notes and senior subordinated notes outstanding
on the Issue Date.



     “Asset Acquisition” means (a) an Investment by the Company, the Issuer or any Restricted
Subsidiary in any other Person if, as a result of such Investment, such Person shall become a
Restricted Subsidiary or shall be consolidated or merged with or into the Company, the Issuer or
any Restricted Subsidiary or (b) the acquisition by the Company, the Issuer or any Restricted
Subsidiary of the assets of any Person, which constitute all or substantially all of the assets or
of an operating unit or line of business of such Person or which is otherwise outside the ordinary
course of business.



     “Asset Disposition” means any sale, transfer, conveyance, lease or other disposition
(including, without limitation, by way of merger, consolidation or sale and leaseback or sale of
shares of Capital Stock in any Subsidiary) (each, a “transaction”) by the Company, the Issuer or
any Restricted Subsidiary to any Person of any Property having a Fair Market Value in any
transaction or series of related transactions of at least $5.0 million. The term “Asset
Disposition” shall not include:



     (a) a transaction between the Company, the Issuer and any Restricted Subsidiary or a
transaction between Restricted Subsidiaries (other than a transaction involving a disposition of
Collateral or any Capital Stock of a Permitted Joint Venture or JV Holding Company from a member of
the Secured Group to a Person that is not a member of the Secured Group),



     (b) a transaction in the ordinary course of business, including, without limitation, sales
(directly or indirectly), dedications and other donations to governmental authorities, leases and
sales and leasebacks of (i) homes, improved land and unimproved land and (ii) real estate
(including related amenities and improvements),



     (c) a transaction involving the sale of Capital Stock of, or the disposition of assets in, an
Unrestricted Subsidiary (other than a JV Holding Company),



     (d) any exchange or swap of assets of the Company, the Issuer or any Restricted Subsidiary for
assets (including Capital Stock of any Person that is or will be a Restricted Subsidiary following
receipt thereof) that (i) are to be used by the Company, the Issuer or any Restricted Subsidiary in
the ordinary course of its Real Estate Business and (ii) have a Fair Market Value not less than the
Fair



3









 




Market Value of the assets exchanged or swapped (provided that (except as permitted by clause
(c) under the definition of “Permitted Investment”) to the extent that the assets exchanged or
swapped were Collateral, the assets (i) are received by a member of the Secured Group and (ii) are
pledged as Collateral under the Security Documents substantially simultaneously with such exchange
or swap, with the Lien on such assets received being of the same priority with respect to the Notes
as the Lien on the assets disposed of),




     (e) any sale, transfer, conveyance, lease or other disposition of assets and properties that
is governed by Section 4.14 hereof,



     (f) dispositions of mortgage loans and related assets and mortgage-backed securities in the
ordinary course of a mortgage lending business,



     (g) the creation of a Permitted Collateral Lien or Permitted Lien and dispositions in
connection with Permitted Collateral Liens or Permitted Liens, or



     (h) any Restricted Payment or Permitted Investment.



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



     “Authenticating Agent” refers to a Person engaged to authenticate the Notes in the stead of
the Trustee.



     “Automatic Exchange” has the meaning ascribed to it in Section 2.12 hereof.



     “Automatic Exchange Notice” has the meaning ascribed to it in Section 2.12 hereof.



     “Bankruptcy Law” means title 11 of the United States Code, as amended, or any similar federal
or state law for the relief of debtors.



     “Board of Directors” means, when used with reference to the Issuer or the Company, as the case
may be, the board of directors or any duly authorized committee of that board or any director or
directors and/or officer or officers to whom that board or committee shall have duly delegated its
authority.



     “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in New York City or in the city where the Corporate Trust Office of the Trustee is located are
authorized or required by law or regulation to close.



4









 





     “Capital Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person’s capital stock or
other equity interests, and options, rights or warrants to purchase such capital stock or other
equity interests, whether now outstanding or issued after the Issue Date, including, without
limitation, all Disqualified Stock and Preferred Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.



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



     “Cash Equivalents” means



     (a) U.S. dollars;



     (b) securities issued or directly and fully guaranteed or insured by the U.S. government or
any agency or instrumentality thereof having maturities of one year or less from the date of
acquisition;



     (c) certificates of deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any domestic commercial bank having capital and surplus
in excess of $500.0 million;



     (d) repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) of this definition entered into with any financial
institution meeting the qualifications specified in clause (c) of this definition;



     (e) commercial paper rated P-1, A-1 or the equivalent thereof by Moody’s or S&P, respectively,
and in each case maturing within six months after the date of acquisition; and



     (f) investments in money market funds substantially all of the assets of which consist of
securities described in the foregoing clauses (a) through (e) of this definition.



     “cash transaction” has the meaning ascribed to it in Section 7.03 hereof.



     “Certificate of Beneficial Ownership” means a certificate substantially in the form of Exhibit
H.



5









 





     “Certificated Note” means a Note in registered individual form without interest coupons.



     “Change of Control” means



     (a) any sale, lease or other transfer (in one transaction or a series of transactions) of all
or substantially all of the consolidated assets of the Company and its Restricted Subsidiaries to
any Person (other than a Restricted Subsidiary); provided, however, that a transaction where the
holders of all classes of Common Equity of the Company immediately prior to such transaction own,
directly or indirectly, more than 50% of all classes of Common Equity of such Person immediately
after such transaction shall not be a Change of Control;



     (b) a “person” or “group” (within the meaning of Section 13(d) of the Exchange Act (other than
(x) the Company or (y) the Permitted Hovnanian Holders)) becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act) of Common Equity of the Company representing more than 50% of
the voting power of the Common Equity of the Company;



     (c) Continuing Directors cease to constitute at least a majority of the Board of Directors of
the Company;



     (d) the stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; provided, however, that a liquidation or dissolution of the Company
which is part of a transaction that does not constitute a Change of Control under the proviso
contained in clause (a) of this definition shall not constitute a Change of Control; or



     (e) a change of control shall occur as defined in the instrument governing any publicly traded
debt securities of the Company or the Issuer which requires the Company or the Issuer to repay or
repurchase such debt securities.



     “Clearstream” means Clearstream Banking, société anonyme, Luxembourg.



     “Collateral” means all property and assets of the members of the Secured Group (whether now
owned or hereafter arising or acquired) other than Excluded Property, that secures First-Priority
Lien Obligations under the Security Documents.



     “Collateral Agency Agreement” has the meaning given to such term in the Security Agreement.



     “Collateral Agent” means the party named as such in the preamble of this Indenture, as the
collateral agent for the holders of the First-Priority Lien



6









 




Obligations under the Security
Documents, and any successor acting in such capacity.




     “Collateralized Debt” means (i) the aggregate principal amount of all Indebtedness and letters
of credit secured by Liens on the Collateral, but excluding Indebtedness and letters of credit
secured by Liens on the Collateral that rank junior to the Liens on the Collateral securing the
Notes plus (ii) without duplication, the aggregate principal amount of Indebtedness that at such
time would be permitted to be incurred under the Indenture and secured by Liens on the Collateral
pursuant to clauses (1) and (2)(a) of the definition of “Permitted Secured Indebtedness.”



     “Collateral Ratio” means the ratio, calculated as a percentage, of (i) the aggregate fair
market value, (as determined in good faith by the chief financial officer of the Company), as of
the date of determination, of the Collateral (excluding any Capital Stock of any Person that is not
a member of the Secured Group but including the book value of any Permitted Joint Ventures or JV
Holding Companies owned by members of the Secured Group) to (ii) the aggregate principal amount of
Collateralized Debt as of the date of determination; provided that, to the extent that at the date
of determination such Collateral includes any real property, the aggregate fair market value of
such real property Collateral shall be determined based on an appraisal by an independent appraiser
within the preceding 18 months, as adjusted by the chief financial officer in good faith to reflect
changes since the date of such appraisal.



     “Commission” means the Securities and Exchange Commission.



     “Common Equity” of any Person means Capital Stock of such Person that is generally entitled to
(a) vote in the election of directors of such Person or (b) if such Person is not a corporation,
vote or otherwise participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.



     “Company” has the meaning ascribed to it in the preamble hereof and shall also refer to any
successor obligor under this Indenture and its Guarantee(s).



     “Consolidated Cash Flow Available for Fixed Charges” means, for any period, Consolidated Net
Income for such period plus (each to the extent deducted in calculating such Consolidated Net
Income and determined in accordance with GAAP) the sum for such period, without duplication, of:



     (a) income taxes,



     (b) Consolidated Interest Expense,



7









 





     (c) depreciation and amortization expenses and other non-cash charges to earnings, and



     (d) interest and financing fees and expenses which were previously capitalized and which are
amortized to cost of sales, minus


all other non-cash items (other than the receipt of notes receivable) increasing such Consolidated
Net Income.




     “Consolidated Fixed Charge Coverage Ratio” means, with respect to any determination date, the
ratio of (x) Consolidated Cash Flow Available for Fixed Charges for the prior four full fiscal
quarters (the “Four Quarter Period”) for which financial results have been reported immediately
preceding the determination date (the “Transaction Date”), to (y) the aggregate Consolidated
Interest Incurred for the Four Quarter Period. For purposes of this definition, “Consolidated Cash
Flow Available for Fixed Charges” and “Consolidated Interest Incurred” shall be calculated after
giving effect on a pro forma basis for the period of such calculation to:



     (a) the incurrence or the repayment, repurchase, defeasance or other discharge or the
assumption by another Person that is not an Affiliate (collectively, “repayment”) of any
Indebtedness of the Company, the Issuer or any Restricted Subsidiary (and the application of the
proceeds thereof) giving rise to the need to make such calculation, and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), at any time on or after the
first day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence
or repayment, as the case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period, except that Indebtedness under revolving credit facilities
shall be deemed to be the average daily balance of such Indebtedness during the Four Quarter Period
(as reduced on such pro forma basis by the application of any proceeds of the incurrence of
Indebtedness giving rise to the need to make such calculation);



     (b) any Asset Disposition or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the Company, the Issuer
or any Restricted Subsidiary (including any Person that becomes a Restricted Subsidiary as a result
of any such Asset Acquisition) incurring Acquired Indebtedness at any time on or after the first
day of the Four Quarter Period and on or prior to the Transaction Date), as if such Asset
Disposition or Asset Acquisition (including the incurrence or repayment of any such Indebtedness)
and the inclusion, notwithstanding clause (b) of the definition of “Consolidated Net Income,” of
any Consolidated Cash Flow Available for Fixed Charges associated with such Asset Acquisition as if
it occurred on the first day of the Four Quarter Period; provided, however, that the Consolidated
Cash Flow Available for Fixed Charges associated with any Asset



8









 




Acquisition shall not be included
to the extent the net income so associated would be excluded pursuant to the definition of
“Consolidated Net Income,” other than clause (b) thereof, as if it applied to the Person or assets
involved before they were acquired; and




     (c) the Consolidated Cash Flow Available for Fixed Charges and the Consolidated Interest
Incurred attributable to discontinued operations, as determined in accordance with GAAP, shall be
excluded.



     Furthermore, in calculating “Consolidated Cash Flow Available for Fixed Charges” for purposes
of determining the denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage
Ratio,”



     (a) interest on Indebtedness in respect of which a pro forma calculation is required that is
determined on a fluctuating basis as of the Transaction Date (including Indebtedness actually
incurred on the Transaction Date) and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness
in effect on the Transaction Date, and



     (b) notwithstanding the immediately preceding clause (a), interest on such Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by agreements relating to
Interest Protection Agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.



     “Consolidated Interest Expense” of the Company for any period means the Interest Expense of
the Company, the Issuer and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.



     “Consolidated Interest Incurred” for any period means the Interest Incurred of the Company,
the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.



     “Consolidated Net Income” for any period means the aggregate net income (or loss) of the
Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with
GAAP; provided, that there will be excluded from such net income (loss) (to the extent otherwise
included therein), without duplication:



     (a) the net income (or loss) of (x) any Unrestricted Subsidiary (other than a Mortgage
Subsidiary) or (y) any Person (other than a Restricted Subsidiary or a Mortgage Subsidiary) in
which any Person other than the Company, the Issuer or any Restricted Subsidiary has an ownership
interest, except, in each case, to the extent that any such income has actually been received by
the



9









 




Company, the Issuer or any Restricted Subsidiary in the form of cash dividends or similar cash
distributions during such period, which dividends or distributions are not in excess of the
Company’s, the Issuer’s or such Restricted Subsidiary’s (as applicable) pro rata share of such
Unrestricted Subsidiary’s or such other Person’s net income earned during such period,




     (b) except to the extent includable in Consolidated Net Income pursuant to clause (a) of this
definition, the net income (or loss) of any Person that accrued prior to the date that (i) such
Person becomes a Restricted Subsidiary or is merged with or into or consolidated with the Company,
the Issuer or any of its Restricted Subsidiaries (except, in the case of an Unrestricted Subsidiary
that is redesignated a Restricted Subsidiary during such period, to the extent of its retained
earnings from the beginning of such period to the date of such redesignation) or (ii) the assets of
such Person are acquired by the Company or any Restricted Subsidiary,



     (c) the net income of any Restricted Subsidiary to the extent that (but only so long as) the
declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that
income is not permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted
Subsidiary during such period,



     (d) the gains or losses, together with any related provision for taxes, realized during such
period by the Company, the Issuer or any Restricted Subsidiary resulting from (i) the acquisition
of securities, or extinguishment of Indebtedness, of the Company or any Restricted Subsidiary or
(ii) any Asset Disposition by the Company or any Restricted Subsidiary, and



     (e) any extraordinary gain or loss together with any related provision for taxes, realized by
the Company, the Issuer or any Restricted Subsidiary;


provided, further, that for purposes of calculating Consolidated Net Income solely as it relates to
clause (iii) of Section 4.07(a) hereof, clause (d)(ii) of this definition shall not be applicable.




     “Continuing Director” means a director who either was a member of the Board of Directors of
the Company on the Issue Date or who became a director of the Company subsequent to such date and
whose election or nomination for election by the Company’s stockholders was duly approved by a
majority of the Continuing Directors on the Board of Directors of the Company at the time of such
approval, either by a specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such individual is named as nominee
for director.



10









 





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



     “Corporate Trust Office” means the office of the Trustee at which the corporate trust business
of the Trustee is principally administered, which at the date of this Indenture is located at
Rodney Square North, 1100 North Market Street, Wilmington, DE 19801.



     “Covenant Defeasance” has the meaning ascribed to it in Section 8.02 hereof.



     “Credit Facilities” means, with respect to the Issuer or any of its Restricted Subsidiaries,
one or more debt facilities or other financing arrangements (including, without limitation,
commercial paper facilities or indentures) providing for revolving credit loans, term loans,
letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees,
collateral documents, instruments and agreement executed in connection therewith, and any
amendments, supplements, modifications, extensions, renewals, restatements or refunding thereof and
any indentures or credit facilities or commercial paper facilities that exchange, replace, refund,
refinance, extend, renew, restate, amend, supplement or modify any part of the loans, notes, other
credit facilities or commitments thereunder, including any such exchanged, replacement, refunding,
refinancing, extended, renewed, restated, amended, supplemented or modified facility or indenture
that increases the amount permitted to be borrowed thereunder or alters the maturity thereof
(provided that such increase in borrowings is permitted under Section 4.06) or adds Restricted
Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other
agent, lender or group of lenders.



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



     “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.



     “Dealer Managers” means Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and
J.P. Morgan Securities LLC.



     “Dealer Managers Agreement” means the Dealer Managers Agreement dated September 28, 2011 by
and among the Dealer Managers, the Issuer and the



11









 




Guarantors party thereto relating to the offer to
exchange Initial Notes for certain of the Issuer’s then outstanding senior notes.




     “Default” means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.



     “Depositary” means the depositary of each Global Note, which shall initially be DTC.



     “Designation Amount” has the meaning ascribed to it in the definition of “Unrestricted
Subsidiary.”



     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon the happening of
any event, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior
to the final maturity date of the Notes or (b) is convertible into or exchangeable or exercisable
for (whether at the option of the issuer or the holder thereof) (i) debt securities or (ii) any
Capital Stock referred to in (a) above, in each case, at any time prior to the final maturity date
of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof (or the holders of any security into or for
which such Capital Stock is convertible, exchangeable or exercisable) the right to require the
Company to repurchase or redeem such Capital Stock upon the occurrence of a change in control or
asset disposition occurring prior to the final maturity date of the Notes shall not constitute
Disqualified Stock if the change in control or asset disposition provision applicable to such
Capital Stock are no more favorable to such holders than the provisions of Section 4.10 or Section
4.12 hereof (as applicable) and such Capital Stock specifically provides that the Company will not
repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company’s
repurchase of the Notes as are required pursuant to the provisions of Section 4.10 or Section 4.12
hereof (as applicable).



     “DTC” means The Depository Trust Company, a New York corporation.



     “DTC Legend” means the legend set forth in Exhibit D.



     “Equity Offering” means any public or private sale, after the Issue Date, of Qualified Stock
of the Company, other than (i) an Excluded Contribution, (ii) public offerings registered on Form
S-4 or S-8 or any successor form thereto or (iii) any issuance pursuant to employee benefit plans
or otherwise in compensation to officers, directors or employees.



12









 





     “Euroclear” means Euroclear Bank S.A./N.V. and its successors or assigns, as operator of the
Euroclear System.



     “Event of Default” has the meaning ascribed to it in Section 5.01 hereof.



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



     “Exchange Notes” means new Notes issued pursuant to the Registration Rights Agreement having
terms substantially identical in all material respects to those of the Initial Notes of the
applicable series.



     “Exchange Offer” means an offer by the Issuer to the Holders of the Initial Notes or any
Initial Additional Notes to exchange such Notes for Exchange Notes, as provided for in the
applicable Registration Rights Agreement.



     “Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as
defined in the applicable Registration Rights Agreement.



     “Excluded Contribution” means cash or Cash Equivalents received by the Company as capital
contributions to its equity (other than through the issuance of Disqualified Stock) or from the
issuance or sale (other than to a Subsidiary) of Qualified Stock of the Company, in each case,
after January 31, 2008 (provided that the amount of Excluded Contributions under the Indenture
shall be reduced by the amount of, without duplication, (i) any restricted payments made with
Excluded Contributions prior to the Issue Date pursuant to the Senior Secured Notes Indenture and
(ii) any such cash or Cash Equivalents received by the Company prior to the Issue Date that were
contributed to or invested in JV Holdings or any of its Subsidiaries) and to the extent designated
as an Excluded Contribution pursuant to an Officers’ Certificate of the Company.



     “Excluded Fee Payments” means cash or Cash Equivalents received as payment of management fees
received by any member of the Secured Group on or after the Issue Date pursuant to management
agreements existing on the Issue Date with respect to joint ventures.



     “Excluded Property” means (a) any pledges of stock of a Guarantor to the extent that Rule 3-16
of Regulation S-X under the Securities Act requires or would require (or is replaced with another
rule or regulation, or any other law, rule or regulation is adopted, that would require) the filing
with the Commission of separate financial statements of such Guarantor that are not otherwise
required to be filed, but only to the extent necessary to not be subject to such requirement, (b)
up to $10.0 million of assets received in connection with Asset Dispositions and asset swaps or
exchanges as permitted by clause (c) of the definition of “Permitted Investment,” (c) real property
subject to a Lien securing Indebtedness



13









 




incurred for the purpose of financing the acquisition
thereof, (d) real property located outside the United States, (e) Unentitled Land, (f) real
property that is leased or held for the purpose of leasing to unaffiliated third parties, (g)
equity interests in Unrestricted Subsidiaries, including JV Holding Companies and (h) assets, with
respect to which any applicable law or contract prohibits the creation or perfection of security
interests therein.




     “Existing Notes” means the Issuer’s existing notes being repurchased pursuant to the terms of
the Issuer’s exchange offers as described in the Offering Memorandum.



     “expiration date” has the meaning ascribed to it in Section 3.05(b) hereof.



     “Fair Market Value” means, with respect to any asset, the price (after taking into account any
liabilities relating to such assets) that would be negotiated in an arm’s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction, as such price is determined in good faith by the Board of
Directors of the Company or a duly authorized committee thereof, as evidenced by a resolution of
such Board or committee.



     “First-Priority Lien Obligations” means all Indebtedness secured pursuant to clause (a) of
the definition of “Permitted Collateral Liens”, and all Obligations in respect thereof.



     “First-Priority Liens” means all Liens that secure the First-Priority Lien Obligations.



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



     “Global Note” means a Note in registered, global form without interest coupons.



     “Guarantee” means the guarantee of the Notes by each Guarantor under this Indenture.



     “guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect,



14









 




contingent or otherwise, of such Person: (a)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof, in whole or in part; provided, that the term “guarantee” does not
include endorsements for collection or deposit in the ordinary course of business. The term
“guarantee” used as a verb has a corresponding meaning.




     “Guarantors” means (a) initially, the Company and each of the other Guarantors signatory
hereto as set forth on Schedule A hereto, which includes each of the Company’s Restricted
Subsidiaries in existence on the Issue Date, other than the Issuer and (b) each of the Company’s
Subsidiaries that becomes a Guarantor of the Notes pursuant to the provisions of this Indenture,
and their successors, in each case until released from its respective Guarantee pursuant to this
Indenture.



     “Holder” or “Holder of Notes” means the Person in whose name a Note is registered in the books
of the Registrar for the Notes.



     “incurrence” has the meaning ascribed to it in Section 4.06(a) hereof.



     “Indebtedness” of any Person means, without duplication,



     (a) any liability of such Person (i) for borrowed money or under any reimbursement obligation
relating to a letter of credit or other similar instruments (other than standby letters of credit
or similar instruments issued for the benefit of, or surety, performance, completion or payment
bonds, earnest money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business), (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the acquisition of any
businesses, properties or assets of any kind or with services incurred in connection with capital
expenditures (other than any obligation to pay a contingent purchase price which, as of the date of
incurrence thereof, is not required to be recorded as a liability in accordance with GAAP), or
(iii) in respect of Capitalized Lease Obligations (to the extent of the Attributable Debt in
respect thereof),



     (b) any Indebtedness of others that such Person has guaranteed to the extent of the guarantee;
provided, however, that Indebtedness of the Company and its Restricted Subsidiaries will not
include the obligations of the Company or a Restricted Subsidiary under warehouse lines of credit
of Mortgage Subsidiaries to repurchase mortgages at prices no greater than 98% of the principal
amount



15









 




thereof, and upon any such purchase the excess, if any, of the purchase price thereof over
the Fair Market Value of the mortgages acquired, will constitute Restricted Payments subject to
Section 4.07 hereof,




     (c) to the extent not otherwise included, the obligations of such Person under Currency
Agreements or Interest Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such agreements, in accordance
with GAAP, and



     (d) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person;


provided, that Indebtedness shall not include accounts payable, liabilities to trade creditors of
such Person or other accrued expenses arising in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be (i) the outstanding balance at such date of all
unconditional obligations as described above, net of any unamortized discount to be accounted for
as Interest Expense, in accordance with GAAP, (ii) the maximum liability of such Person for any
contingent obligations under clause (a) of this definition at such date, net of an unamortized
discount to be accounted for as Interest Expense in accordance with GAAP, and (iii) in the case of
clause (d) of this definition, the lesser of (x) the fair market value of any asset subject to a
Lien securing the Indebtedness of others on the date that the Lien attaches and (y) the amount of
the Indebtedness secured.




     “Indenture” means this indenture, as amended or supplemented from time to time.



     “Initial Additional Notes” means Additional Notes of the Issuer issued under this Indenture in
an offering not registered under the Securities Act and any Notes issued in replacement therefor,
but not including any Exchange Notes issued in exchange therefor.



     “Initial Notes” means the Notes of the Issuer issued under this Indenture on the Issue Date
and any Notes issued in replacement thereof, but not including any Exchange Notes issued in
exchange therefor.



     “Initial Purchasers” means the initial purchasers party to a purchase agreement with the
Issuer, the Company and the Guarantors party thereto relating to the sale of any Additional Notes
by the Issuer.



     “Institutional Accredited Investor Certificate” means a certificate substantially in the form
of Exhibit G hereto.



     “Interest Expense” of any Person for any period means, without duplication, the aggregate
amount of (a) interest which, in conformity with



16









 




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




     “Interest Incurred” of any Person for any period means, without duplication, the aggregate
amount of (a) Interest Expense and (b) all capitalized interest and amortized debt issuance costs.



     “Interest Payment Date” means each May 1 and November 1 of each year, commencing May 1, 2012.



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



     “Investment Grade” means, with respect to a debt rating of any series of the Notes, a rating
of Baa3 or higher by Moody’s together with a rating of BBB- or higher by S&P or, in the event S&P
or Moody’s or both shall cease rating any series of the Notes (for reasons outside the control of
the Company or the Issuer) and the Company shall select any other Rating Agency, the equivalent of
such ratings by such other Rating Agency.



     “Investments” of any Person means (a) all investments by such Person in any other Person in
the form of loans, advances or capital contributions, (b) all guarantees of Indebtedness or other
obligations of any other Person by such Person, (c) all purchases (or other acquisitions for
consideration) by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (d) all other items that would be classified as investments in any other Person
(including, without limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP.



17









 





     “Issue Date” means November 1, 2011.



     “Issuer” has the meaning ascribed to it in the preamble hereof and shall also refer to any
successor obligor under the Indenture.



     “JV Holding Company” means a Subsidiary of JV Holdings, the only material asset of which
constitutes Capital Stock of one or more joint ventures owned on the Issue Date or Permitted Joint
Ventures in existence on the Issue Date or acquired or formed after the Issue Date; provided that
none of JV Holdings, K. Hovnanian JV Services Company, L.L.C., K. Hovnanian HovWest Holdings
L.L.C., HovWest Land Acquisition LLC, Heritage Pines, LLC and K. Hovnanian at Cobblestone Square
Condominiums, L.L.C. shall be deemed JV Holding Companies.



     “JV Holdings” means K. Hovnanian JV Holdings, L.L.C.



     “Legal Defeasance” has the meaning ascribed to it in Section 8.01 hereof.



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



     “Make-Whole Amount” has the meaning ascribed to it in Section 3.01 hereof.



     “Marketable Securities” means (a) equity securities that are listed on the New York Stock
Exchange, the NYSE Amex or The Nasdaq Stock Market and (b) debt securities that are rated by a
nationally recognized rating agency, listed on the New York Stock Exchange or the NYSE Amex or
covered by at least two reputable market makers.



     “Moody’s” means Moody’s Investors Service, Inc. or any successor to its debt rating business.



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



     “Net Cash Proceeds” means with respect to an Asset Disposition, payments received in cash
(including any such payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise (including any cash received upon sale or disposition of such
note or receivable), but only as and when received), excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or



18









 




other obligations relating to the
Property disposed of in such Asset Disposition or received in any other non-cash form unless and
until such non-cash consideration is converted into cash therefrom, in each case, net of all legal,
title and recording tax expenses, commissions and other fees and expenses incurred, and all
federal, state and local taxes required to be accrued as a liability under GAAP as a consequence of
such Asset Disposition, and in each case net of a reasonable reserve for the after-tax cost of any
indemnification or other payments (fixed and contingent) attributable to the seller’s indemnities
or other obligations to the purchaser undertaken by the Company, the Issuer or any of its
Restricted Subsidiaries in connection with such Asset Disposition, and net of all payments made on
any Indebtedness which is secured by or relates to such Property (other than Indebtedness secured
by Liens on the Collateral) in accordance with the terms of any Lien or agreement upon or with
respect to such Property or which such Indebtedness must by its terms or by applicable law be
repaid out of the proceeds from such Asset Disposition, and net of all contractually required
distributions and payments made to minority interest holders in Restricted Subsidiaries or joint
ventures as a result of such Asset Disposition.




     “Non-Recourse Indebtedness” with respect to any Person means Indebtedness of such Person for
which (a) the sole legal recourse for collection of principal and interest on such Indebtedness is
against the specific property identified in the instruments evidencing or securing such
Indebtedness and such property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property and (b) no other
assets of such Person may be realized upon in collection of principal or interest on such
Indebtedness. Indebtedness which is otherwise Non-Recourse Indebtedness will not lose its
character as Non-Recourse Indebtedness because there is recourse to the borrower, any guarantor or
any other Person for (i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment of rents, profits,
insurance and condemnation proceeds and other sums actually received by the borrower from secured
assets to be paid to the lender, waste and mechanics’ liens.



     “Non-U.S. Person” means a Person that is not a “U.S. person,” as such term is defined in
Regulation S.



     “Notes” has the meaning ascribed to it in the Recitals hereof.



     “offer” has the meaning ascribed to it in Section 3.05(a) hereof.



     “Obligations” means with respect to any Indebtedness, all obligations (whether in existence on
the Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect
of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase
pursuant



19









 




to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees,
indemnification, reimbursement and other amounts payable and liabilities with respect to such
Indebtedness, including all interest accrued or accruing after the commencement of any bankruptcy,
insolvency or reorganization or similar case or proceeding at the contract rate (including, without
limitation, any contract rate applicable upon default) specified in the relevant documentation,
whether or not the claim for such interest is allowed as a claim in such case or proceeding.




     “Offer to Purchase” has the meaning ascribed to it in Section 3.05(a) hereof.



     “Offering Memorandum” means the Issuer’s Confidential Offering Memorandum and Consent
Solicitation Statement dated September 28, 2011 (as amended and supplemented as of the Issue Date).



     “Officer,” when used with respect to the Issuer or the Company, means the chairman of the
Board of Directors, the president or chief executive officer, any vice president, the chief
financial officer, the treasurer, any assistant treasurer, the controller, any assistant
controller, the secretary or any assistant secretary of the Issuer or the Company, as the case may
be.



     “Officers’ Certificate,” when used with respect to the Issuer or the Company, means a
certificate signed by the chairman of the Board of Directors, the president or chief executive
officer, or any vice president and by the chief financial officer, the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any assistant secretary of
the Issuer or the Company, as the case may be.



     “Opinion of Counsel” means a written opinion signed by legal counsel of the Issuer or the
Company, who may be an employee of, or counsel to, the Issuer or the Company, and who shall be
reasonably satisfactory to the Trustee.



     “Original Notes” means the Initial Notes and any Exchange Notes issued in exchange therefor.



     “Paying Agent” refers to a Person engaged to perform the obligations of the Trustee in respect
of payments made or funds held hereunder in respect of the Notes.



     “Permanent Regulation S Global Note” means a Regulation S Global Note that does not bear the
Regulation S Temporary Global Note Legend.



     “Permitted Collateral Liens” means Liens on the Collateral



     (a) securing (i) the Notes (other than Additional Notes) and Exchange Notes, the Guarantees
thereof and other Obligations under the Indenture and the



20









 




Security Documents and in respect thereof
and any obligations owing to the Trustee or the Collateral Agent under the Indenture or the
Security Documents, (ii) any Refinancing Indebtedness in respect thereof and (iii) Permitted
Secured Indebtedness, and Obligations in respect thereof;




     (b) of a type described in clauses (a), (b), (c), (e), (f), (g), (h), (j), (k), (m), (n), (o),
(p), (r), (u), (v), (w) or (x) of the definition of “Permitted Liens”;



     (c) of a type described in clauses (d), (q) or (t) of the definition of “Permitted Liens”,
provided that such Liens and the related obligations are for the benefit of the Secured Group; and



     (d) any Liens securing Indebtedness permitted to be incurred under the Indenture, which Liens
rank junior to the Liens on the Collateral securing the Indebtedness described in clause (a) of
this definition pursuant to a customary intercreditor agreement.



     “Permitted Hovnanian Holders” means, collectively, Ara K. Hovnanian, the members of his
immediate family and the members of the immediate family of the late Kevork S. Hovnanian, the
respective estates, spouses, heirs, ancestors, lineal descendants, legatees and legal
representatives of any of the foregoing and the trustee of any bona fide trust of which one or more
of the foregoing are the sole beneficiaries or the grantors thereof, or any entity of which any of
the foregoing, individually or collectively, beneficially own more than 50% of the Common Equity.



     “Permitted Indebtedness” means



     (a) Indebtedness under Credit Facilities incurred after the Issue Date in an aggregate amount
incurred under this clause (a) that, together with the principal amount then outstanding of Senior
Secured Notes (and any Refinancing Indebtedness in respect thereof), does not exceed $1,500.0
million principal amount outstanding at any one time; provided that no member of the Secured Group
incurs, or guarantees, such Indebtedness;



     (b) Indebtedness under the Notes (and Exchange Notes and Guarantees thereof), other than
Additional Notes;



     (c) Indebtedness outstanding on the Issue Date, including the Senior Secured Notes, but
excluding Indebtedness constituting Permitted Indebtedness pursuant to clauses (d), (e), (f), (h)
or (j) of this definition, which shall instead be incurred under such clauses;



     (d) Indebtedness in respect of obligations of the Company and its Subsidiaries to the trustees
under indentures for debt securities;



21









 





     (e) intercompany debt obligations of (i) the Company to the Issuer, (ii) the Issuer to the
Company, (iii) the Company or the Issuer to any Restricted Subsidiary other than a member of the
Secured Group and (iv) any Restricted Subsidiary to the Company or the Issuer or any other
Restricted Subsidiary (other than intercompany debt obligations owed by a Restricted Subsidiary
that is not a member of the Secured Group to any member of the Secured Group); provided, however,
that any Indebtedness of any Restricted Subsidiary or the Issuer or the Company owed to any
Restricted Subsidiary or the Issuer that ceases to be a Restricted Subsidiary shall be deemed to be
incurred and shall be treated as an incurrence for purposes of Section 4.06(a) hereof at the time
the Restricted Subsidiary in question ceases to be a Restricted Subsidiary;



     (f) Indebtedness of the Company or the Issuer or any Restricted Subsidiary under any Currency
Agreements or Interest Protection Agreements in a notional amount no greater than the payments due
(at the time the related Currency Agreement or Interest Protection Agreement is entered into) with
respect to the Indebtedness or currency being hedged;



     (g) Purchase Money Indebtedness and Capitalized Lease Obligations in an aggregate principal
amount outstanding at any one time not to exceed $25.0 million;



     (h) obligations for, pledge of assets in respect of, and guaranties of, bond financings of
political subdivisions or enterprises thereof in the ordinary course of business;



     (i) Indebtedness secured only by office buildings owned or occupied by the Company or any
Restricted Subsidiary, which Indebtedness does not exceed $10.0 million aggregate principal amount
outstanding at any one time;



     (j) Indebtedness under warehouse lines of credit, repurchase agreements and Indebtedness
secured by mortgage loans and related assets of mortgage lending Subsidiaries in the ordinary
course of a mortgage lending business; and



     (k) Indebtedness of the Company or any Restricted Subsidiary which, together with all other
Indebtedness under this clause (k), does not exceed $50.0 million aggregate principal amount
outstanding at any one time.



     “Permitted Investment” means



     (a) Cash Equivalents;



     (b) any Investment in the Company, the Issuer or any Restricted Subsidiary or any Person that
becomes a Restricted Subsidiary as a result of such



22









 




Investment or that is consolidated or merged
with or into, or transfers all or substantially all of the assets of it or an operating unit or
line of business to, the Company or a Restricted Subsidiary, other than any Investment by any
member of the Secured Group in the Company, the Issuer or any Restricted Subsidiary that is not a
member of the Secured Group;




     (c) any receivables, loans or other consideration taken by the Company, the Issuer or any
Restricted Subsidiary in connection with any asset sale otherwise permitted by this Indenture;
provided that, to the extent the assets subject to an Asset Disposition or exchange or swap of
assets constituted Collateral, any non-cash consideration received in such Asset Disposition or
such exchange or swap of assets shall be (a) Replacement Assets owned by a member of the Secured
Group and (b) pledged as Collateral under the Security Documents, with the Lien on such Collateral
securing the Guarantees being of the same priority with respect to the Guarantees as the Lien on
the assets disposed of; provided further that notwithstanding the foregoing clause, up to an
aggregate of $10.0 million of (x) non-cash consideration and consideration received as referred to
in Section 4.10(b)(ii), (y) assets invested in pursuant to Section 4.10(c) and (z) assets received
pursuant to clause (d) under the definition of “Asset Disposition” may be designated by the Company
or the Issuer as Excluded Property not required to be pledged as Collateral, so long as the
Collateral Ratio is at least 100% after giving effect thereto;



     (d) Investments received in connection with any bankruptcy or reorganization proceeding, or as
a result of foreclosure, perfection or enforcement of any Lien or any judgment or settlement of any
Person in exchange for or satisfaction of Indebtedness or other obligations or other property
received from such Person, or for other liabilities or obligations of such Person created, in
accordance with the terms of this Indenture;



     (e) Investments in Currency Agreements or Interest Protection Agreements described in the
definition of “Permitted Indebtedness”;



     (f) any loan or advance to an executive officer, director or employee of the Company or any
Restricted Subsidiary made in the ordinary course of business or in accordance with past practice;
provided, however, that any such loan or advance exceeding $1.0 million shall have been approved by
the Board of Directors of the Company or a committee thereof consisting of disinterested members;



     (g) Investments in interests in issuances of collateralized mortgage obligations, mortgages,
mortgage loan servicing, or other mortgage related assets;



     (h) obligations of the Company or a Restricted Subsidiary under warehouse lines of credit of
Mortgage Subsidiaries to repurchase mortgages;



23









 





     (i) Investments in an aggregate amount outstanding not to exceed $10.0 million; and



     (j) any Investment arising from the incurrence of Indebtedness by any member of the Secured
Group that constitutes Refinancing Indebtedness permitted to be incurred under Section 4.06
(including a Guarantee by any such member of such Refinancing Indebtedness), which Refinancing
Indebtedness is refinancing Indebtedness of the Company or any other Restricted Subsidiary, and the
related repayment of the Indebtedness of the Company or such other Restricted Subsidiary; provided
that (i) any such Indebtedness incurred by members of the Secured Group is Permitted Secured
Indebtedness and (ii) this clause (j) shall not permit any Guarantee of any other Indebtedness of
the Company or any other Restricted Subsidiary by any member of the Secured Group.



     “Permitted Joint Venture” means any joint venture between any member of the Secured Group and
any other person that is not an affiliate of the Company; provided that (i) such joint venture is
solely engaged in the business of the development, construction and sale of homes and has no
assets, liabilities or operations other than those reasonably related to such business, (ii) such
Person owns no Capital Stock or other equity interests in, or Indebtedness of, the Company or any
of its Restricted Subsidiaries and makes no Investments in the Company or any of its Restricted
Subsidiaries and (iii) any management services agreement with such Permitted Joint Venture is
entered into by a member of the Secured Group and not with the Company or any of its other
Restricted Subsidiaries; provided that HovWest Land Acquisition LLC shall not be deemed a Permitted
Joint Venture.



     “Permitted Liens” means



     (a) Liens for taxes, assessments or governmental or quasi-governmental charges or claims that
(i) are not yet delinquent, (ii) are being contested in good faith by appropriate proceedings and
as to which appropriate reserves have been established or other provisions have been made in
accordance with GAAP, if required, or (iii) encumber solely property abandoned or in the process of
being abandoned,



     (b) statutory Liens of landlords and carriers’, warehousemen’s, mechanics’, suppliers’,
materialmen’s, repairmen’s or other Liens imposed by law and arising in the ordinary course of
business and with respect to amounts that, to the extent applicable, either (i) are not yet
delinquent or (ii) are being contested in good faith by appropriate proceedings and as to which
appropriate reserves have been established or other provisions have been made in accordance with
GAAP, if required,



24









 





     (c) Liens (other than any Lien imposed by the Employer Retirement Income Security Act of 1974,
as amended) incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security,



     (d) Liens incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, development obligations, progress payments,
government contacts, utility services, developer’s or other obligations to make on-site or off-site
improvements and other obligations of like nature (exclusive of obligations for the payment of
borrowed money but including the items referred to in the parenthetical in clause (a)(i) of the
definition of “Indebtedness”), in each case incurred in the ordinary course of business of the
Company, the Issuer and the Restricted Subsidiaries,



     (e) attachment or judgment Liens not giving rise to a Default or an Event of Default,



     (f) easements, dedications, assessment district or similar Liens in connection with municipal
or special district financing, rights-of-way, restrictions, reservations and other similar charges,
burdens, and other similar charges or encumbrances not materially interfering with the ordinary
course of business of the Company, the Issuer and the Restricted Subsidiaries,



     (g) zoning restrictions, licenses, restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair the use of such real property in
the ordinary course of business of the Company, the Issuer and the Restricted Subsidiaries,



     (h) Liens securing Indebtedness incurred pursuant to clause (i) or (j) of the definition of
“Permitted Indebtedness”,



     (i) Liens securing Indebtedness incurred pursuant to clause (a) of the definition of
“Permitted Indebtedness” and other Obligations (including Refinancing Indebtedness in respect
thereof incurred pursuant to such clause),



     (j) Liens securing Non-Recourse Indebtedness of the Company, the Issuer or any Restricted
Subsidiary; provided that such Liens apply only to (i) the property financed out of the net
proceeds of such Non-Recourse Indebtedness within 90 days after the incurrence of such Non-Recourse
Indebtedness, or (ii) licenses, permits, authorizations, consent forms or contracts related to the
acquisition, development, use or improvement of such property,



     (k) Liens securing Purchase Money Indebtedness; provided that such Liens apply only to (i) the
property acquired, constructed or improved with the proceeds of such Purchase Money Indebtedness
within 90 days after the



25









 




incurrence of such Purchase Money Indebtedness, or (ii) licenses, permits,
authorizations, consent forms or contracts related to the acquisition, development, use or
improvement of such property,




     (l) Liens on property or assets of the Company, the Issuer or any Restricted Subsidiary
securing Indebtedness of the Company, the Issuer or any Restricted Subsidiary owing to the Company,
the Issuer or one or more Restricted Subsidiaries,



     (m) leases or subleases granted to others not materially interfering with the ordinary course
of business of the Company and the Restricted Subsidiaries,



     (n) purchase money security interests (including, without limitation, Capitalized Lease
Obligations); provided that such Liens apply only to the Property acquired and the related
Indebtedness is incurred within 90 days after the acquisition of such Property,



     (o) any right of first refusal, right of first offer, option, contract or other agreement to
sell an asset; provided that such sale is not otherwise prohibited under this Indenture,



     (p) any right of a lender or lenders to which the Company, the Issuer or a Restricted
Subsidiary may be indebted to offset against, or appropriate and apply to the payment of such,
Indebtedness any and all balances, credits, deposits, accounts or money of the Company, the Issuer
or a Restricted Subsidiary with or held by such lender or lenders or its Affiliates,



     (q) any pledge or deposit of cash or property in conjunction with obtaining surety,
performance, completion or payment bonds and letters of credit or other similar instruments or
providing earnest money obligations, escrows or similar purpose undertakings or indemnifications in
the ordinary course of business of the Company, the Issuer and the Restricted Subsidiaries,



     (r) Liens for homeowner and property owner association developments and assessments,



     (s) Liens securing Refinancing Indebtedness; provided, that such Liens extend only to the
assets securing the Indebtedness being refinanced and have the same or junior priority as the
initial Liens; provided further that no Liens may be incurred under this clause (s) in respect of
Refinancing Indebtedness incurred to refinance Indebtedness that is secured by Liens incurred under
clause (i) of this definition,



26









 





     (t) Liens incurred in the ordinary course of business as security for the obligations of the
Company, the Issuer and the Restricted Subsidiaries with respect to indemnification in respect of
title insurance providers,



     (u) Liens on property of a Person existing at the time such Person is merged with or into or
consolidated with the Company or any Subsidiary of the Company or becomes a Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation of such merger or
consolidation or acquisition and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Subsidiary or acquired by the Company or its
Subsidiaries,



     (v) Liens on property existing at the time of acquisition thereof by the Company or any
Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of
such acquisition,



     (w) Liens existing on the Issue Date (including Liens securing the Senior Secured Notes) and
any extensions, renewals or replacements thereof, and



     (x) Liens on specific items of inventory or other goods and proceeds of any Person securing
such Person’s obligations in respect of bankers’ acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such inventory or other goods.



     “Permitted Secured Indebtedness” means Indebtedness (including Additional Notes) that is
permitted to be incurred under this Indenture and is secured by a Lien on the Collateral in an
aggregate amount not exceeding (1) $195 million less the principal amount of Notes issued on the
Issue Date, plus (2) the greater of (a)(i) 100% of the aggregate net cash proceeds of any capital
contributions from the Company or any Restricted Subsidiary that is not a member of the Secured
Group to the common equity capital of JV Holdings after the Issue Date (to the extent that such
proceeds are pledged as Collateral) minus (ii) the aggregate amount of Restricted Payments made by
members of the Secured Group on or after the Issue Date (other than Restricted Payments permitted
pursuant to Section 4.07(b)(vi)) and excluding any such contribution received from the Company or
any Restricted Subsidiary that constitutes an Excluded Contribution or (b) an aggregate principal
amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness,
the Collateral Ratio is at least 100%.



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



27









 





     “Pledge Agreement” means the First Lien Pledge Agreement dated as of the Issue Date among the
members of the Secured Group and the Collateral Agent, as amended, amended and restated,
supplemented (including by a joinder thereto) or otherwise modified from time to time.



     “Preferred Stock” of any Person means all Capital Stock of such Person which has a preference
in liquidation or with respect to the payment of dividends.



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



     “purchase amount” has the meaning ascribed to it in Section 3.05(b) hereof.



     “purchase date” has the meaning ascribed to it in Section 3.05(b) hereof.



     “Purchase Money Indebtedness” means Indebtedness of the Company, the Issuer or any Restricted
Subsidiary incurred for the purpose of financing all or any part of the purchase price, or the cost
of construction or improvement, of any property to be used in the ordinary course of business by
the Company, the Issuer and the Restricted Subsidiaries; provided, however, that (a) the aggregate
principal amount of such Indebtedness shall not exceed such purchase price or cost and (b) such
Indebtedness shall be incurred no later than 90 days after the acquisition of such property or
completion of such construction or improvement.



     “Qualified Stock” means Capital Stock of the Company other than Disqualified Stock.



     “Rating Agency” means a statistical rating agency or agencies, as the case may be, nationally
recognized in the United States and selected by the Company (as certified by a resolution of the
Board of Directors of the Company) which shall be substituted for S&P or Moody’s, or both, as the
case may be.



     “Real Estate Business” means homebuilding, housing construction, real estate development or
construction and the sale of homes and related real estate activities, including the provision of
mortgage financing or title insurance.



     “Record Date” for the interest payable on any Interest Payment Date means the April 15 or
October 15 (whether or not a Business Day) immediately preceding such Interest Payment Date.



     “Refinancing Indebtedness” means Indebtedness (to the extent not Permitted Indebtedness) that
refunds, redeems, defeases, repurchases, exchanges, refinances or extends any Indebtedness of the
Company, the Issuer or any



28









 




Restricted Subsidiary (to the extent not Permitted Indebtedness
described under clauses (a) and (d) through (k) of the definition thereof) outstanding on the Issue
Date or other Indebtedness (to the extent not Permitted Indebtedness) permitted to be incurred by
the Company, the Issuer or any Restricted Subsidiary pursuant to the terms of the Indenture after
the Issue Date, but only to the extent that:




     (a) the Refinancing Indebtedness is subordinated, if at all, to the Notes or the Guarantees,
as the case may be, to the same extent as the Indebtedness being refunded, refinanced or extended,



     (b) the Refinancing Indebtedness is scheduled to mature either (i) no earlier than the
Indebtedness being refunded, refinanced or extended or (ii) after the maturity date of the Notes,



     (c) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or
prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to
Maturity of the portion of the Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the Notes,



     (d) such Refinancing Indebtedness is in an aggregate principal amount (or accreted value, if
applicable) that is equal to or less than the aggregate principal amount then outstanding under the
Indebtedness being refunded, refinanced or extended, plus any accrued and unpaid interest on such
Indebtedness (plus (i) fees and expenses and (ii) the amount of any defeasance costs and any
premiums (including tender premiums), in each case incurred in connection with the refinancing
thereof), and



     (e) the Refinancing Indebtedness is not incurred or guaranteed by any member of the Secured
Group unless (i) such Refinancing Indebtedness is Permitted Secured Indebtedness or (ii) the
Indebtedness being refinanced was incurred or guaranteed by a member of the Secured Group;


provided, that for purposes of determining the principal amount outstanding under clause (a) of the
definition of “Permitted Indebtedness” and clause (i) under the definition of “Permitted Liens”,
the principal amount of any Refinancing Indebtedness referred to in such clause shall be calculated
excluding any principal amount that was incurred in respect of amounts set forth in the
parenthetical in clause (d) of this definition and such principal amount shall nonetheless be
permitted under such clause.




     “Register” has the meaning ascribed to it in Section 2.09 hereof.



     “Registrar” means a Person engaged to maintain the Register.



29









 





     “Registration Rights Agreement” means the registration rights agreement among the Company, the
Issuer, the Guarantors and the Dealer Managers, dated the Issue Date, pursuant to which the
Company, the Issuer and the Guarantors agree, under certain conditions, to file a registration
statement with the Commission with respect to an offer to exchange the Notes for Exchange Notes or,
under specified circumstances, to file a shelf registration statement with the Commission covering
resales of the Notes.



     “Regulation S” means Regulation S under the Securities Act.



     “Regulation S Certificate” means a certificate substantially in the form of Exhibit E hereto.



     “Regulation S Global Note” means a Global Note representing Notes issued and sold pursuant to
Regulation S.



     “Regulation S Temporary Global Note” means an Regulation S Global Note that bears the
Regulation S Temporary Global Note Legend.



     “Regulation S Temporary Global Note Legend” means the legend set forth in Exhibit I.



     “Repurchase Date” has the meaning ascribed to it in Section 4.12(a) hereof.



     “Resale Restriction Termination Date” has the meaning ascribed to it in Section 2.12 hereof.



     “Responsible Officer,” when used with respect to the Trustee, means any officer of the Trustee
with direct responsibility for the administration of the trust created by this Indenture.



     “Restricted Global Note” has the meaning ascribed to it in Section 2.12 hereof.



     “Restricted Investment” means any Investment other than a Permitted Investment.



     “Restricted Legend” means the legend set forth in Exhibit C.



     “Restricted Payment” means any of the following:



     (a) the declaration or payment of any dividend or any other distribution on Capital Stock of
the Company, the Issuer or any Restricted Subsidiary or any payment made to the direct or indirect
holders (in their capacities as such) of Capital Stock of the Company, the Issuer or any Restricted



30









 




Subsidiary (other than (i) dividends or distributions payable solely in Qualified Stock, (ii) in
the case of the Issuer or Restricted Subsidiaries other than members of the Secured Group,
dividends or distributions payable to the Company, the Issuer or a Restricted Subsidiary and (iii)
in the case of members of the Secured Group, (A) dividends or distributions payable to any member
of the Secured Group and (B) dividends or distributions to the Company, the Issuer or any other
Restricted Subsidiary, which dividends or distributions are in an amount not in excess of, and are
used to pay, interest on the Notes and are made as and when such interest payments are due);




     (b) the purchase, redemption or other acquisition or retirement for value of any Capital Stock
of the Company, the Issuer or any Restricted Subsidiary (other than a payment made by (i) any
person that is not a member of the Secured Group to the Company, the Issuer or any Restricted
Subsidiary or (ii) any member of the Secured Group to any member of the Secured Group); and



     (c) any Investment (other than any Permitted Investment), including any Investment in an
Unrestricted Subsidiary (including by the designation of a Subsidiary of the Company as an
Unrestricted Subsidiary) and any amounts paid in accordance with clause (b) of the definition of
“Indebtedness”.



     “Restricted Period” means the relevant 40-day “distribution compliance period” as such term is
defined in Regulation S, which, for each relevant Note, commences on the date such Note is issued.



     “Restricted Subsidiary” means any Subsidiary of the Company which is not an Unrestricted
Subsidiary.



     “Rule 144A” means Rule 144A under the Securities Act.



     “Rule 144A Certificate” means a certificate substantially in the form of Exhibit F hereto.



     “Rule 144A Global Note” means a Global Note that bears the Restricted Legend representing
Notes issued, transferred or exchanged pursuant to Rule 144A.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.,
a New York corporation, or any successor to its debt rating business.



     “Secured Group” means JV Holdings and its Subsidiaries that are not Permitted Joint Ventures
or JV Holding Companies. On the Issue Date, JV Holdings, K. Hovnanian JV Services Company, L.L.C.,
K. Hovnanian HovWest Holdings, L.L.C., HovWest Land Acquisition, LLC, Heritage Pines, LLC and K.



31









 




Hovnanian at Cobblestone Square Condominiums, L.L.C. shall be the initial members of the Secured
Group.




     “Securities Act” means the Securities Act of 1933, as amended.



     “Security Agreement” means the First Lien Security Agreement dated as of the Issue Date among
the members of the Secured Group and the Collateral Agent, as amended, amended and restated,
supplemented (including by a joinder thereto) or otherwise modified from time to time.



     “Security Documents” means the Security Agreement, the Pledge Agreement, any Collateral Agency
Agreement and any other security documents (including control agreements) granting a security
interest in any assets of any Person to secure the Indebtedness and related Obligations under the
Notes and the Guarantees as each may be amended, restated, supplemented or otherwise modified from
time to time.



     “self-liquidating paper” has the meaning ascribed to it in Section 7.03 hereof.



     “Senior Secured Notes” means the Issuer’s 105/8% Senior Secured Notes due 2016.



     “Senior Secured Notes Indenture” means the indenture dated as of October 20, 2009 among the
Issuer, Hovnanian, the other guarantors party thereto and Wilmington Trust Company, as trustee, as
amended and supplemented, relating to the Senior Secured Notes.



     “Significant Subsidiary” means any Subsidiary of the Company which would constitute a
“significant subsidiary” as defined in Rule 1-02(w)(1) or (2) of Regulation S-X under the
Securities Act and the Exchange Act as in effect on the Issue Date.



     “Subordinated Indebtedness” means Indebtedness subordinated in right of payment to the Notes
pursuant to a written agreement.



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



     “Successor” has the meaning ascribed to it in Section 4.14 hereof.



     “Treasury Rate” means, in connection with the calculation of any Make-Whole Amount with
respect to any Note, the yield to maturity at the time of computation of United States Treasury
securities with a constant maturity, as



32









 




compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at least two business
days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data), equal to the then remaining maturity of the Note
being prepaid. If no maturity exactly corresponds to such maturity as determined by the Issuer in
its sole discretion, the Issuer shall calculate yields for the published maturities occurring prior
to and after such maturity most closely corresponding to such maturity pursuant to the immediately
preceding sentence and shall interpolate or extrapolate the Treasury Rate from such yields on a
straight-line basis, rounding in each of such relevant periods to the nearest month.




     “Trustee” means the party named as such in the preamble of this Indenture until such time, if
any, a successor replaces such party in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.



     “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended.



     “U.S. Government Obligations” means non-callable, non-payable bonds, notes, bills or other
similar obligations issued or guaranteed by the United States government or any agency thereof the
full and timely payment of which are backed by the full faith and credit of the United States.



     “Unentitled Land” means land owned by the Issuer or a Guarantor which has not been granted
preliminary approvals ((i) in New Jersey, as defined in the Municipal Land Use Law (N.J.S.A.
40:55D-1 et seq.) and (ii) for states other than New Jersey, a point in time equivalent thereto)
for residential development.



     “Unrestricted Global Note” has the meaning ascribed to it in Section 2.12 hereof.



     “Unrestricted Subsidiary” means any Subsidiary of the Company so designated by a resolution
adopted by the Board of Directors of the Company or a duly authorized committee thereof as provided
below; provided that (a) the holders of Indebtedness thereof do not have direct or indirect
recourse against the Company, the Issuer or any Restricted Subsidiary, and neither the Company, the
Issuer nor any Restricted Subsidiary otherwise has liability for, any payment obligations in
respect of such Indebtedness (including any undertaking, agreement or instrument evidencing such
Indebtedness), except, in each case, to the extent that the amount thereof constitutes a Restricted
Payment permitted by this Indenture, in the case of Non-Recourse Indebtedness, to the extent such
recourse or liability is for the matters discussed in the last sentence of the definition of
“Non-Recourse Indebtedness,” or to the extent such Indebtedness is a guarantee



33









 




by such Subsidiary
of Indebtedness of the Company, the Issuer or a Restricted Subsidiary and (b) no holder of any
Indebtedness of such Subsidiary shall have a right to declare a default on such Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated maturity as a result of
a default on any Indebtedness of the Company, the Issuer or any Restricted Subsidiary. As of the
Issue Date, the Unrestricted Subsidiaries will be the subsidiaries of the Company named in Exhibit
J hereto.




     Subject to the foregoing, the Board of Directors of the Company or a duly authorized committee
thereof may designate any Subsidiary in addition to those named above to be an Unrestricted
Subsidiary other than any member of the Secured Group that is not a Permitted Joint Venture or JV
Holding Company; provided, however, that (a) the net amount (the “Designation Amount”) then
outstanding of all previous Investments by the Company and the Restricted Subsidiaries in such
Subsidiary will be deemed to be a Restricted Payment at the time of such designation and will
reduce the amount available for Restricted Payments under Section 4.07 hereof to the extent
provided therein, (b) the Company must be permitted under Section 4.07 hereof to make the
Restricted Payment deemed to have been made pursuant to clause (a) of this paragraph, and (c) after
giving effect to such designation, no Default or Event of Default shall have occurred or be
continuing. In accordance with the foregoing, and not in limitation thereof, Investments made by
any Person in any Subsidiary of such Person prior to such Person’s merger with the Company or any
Restricted Subsidiary (but not in contemplation or anticipation of such merger) shall not be
counted as an Investment by the Company or such Restricted Subsidiary if such Subsidiary of such
Person is designated as an Unrestricted Subsidiary.



     The Board of Directors of the Company or a duly authorized committee thereof may also
redesignate an Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that (a)
the Indebtedness of such Unrestricted Subsidiary as of the date of such redesignation could then be
incurred under Section 4.06 hereof and (b) immediately after giving effect to such redesignation
and the incurrence of any such additional Indebtedness, the Company and the Restricted Subsidiaries
could incur $1.00 of additional Indebtedness under Section 4.06(a) hereof. Any such designation or
redesignation by the Board of Directors of the Company or a committee thereof will be evidenced to
the Trustee by the filing with the Trustee of a certified copy of the resolution of the Board of
Directors of the Company or a committee thereof giving effect to such designation or redesignation
and an Officers’ Certificate certifying that such designation or redesignation complied with the
foregoing conditions and setting forth the underlying calculations of such Officers’ Certificate.
The designation of any Person as an Unrestricted Subsidiary shall be deemed to include a
designation of all Subsidiaries of such Person (other than any member of the Secured Group) as
Unrestricted Subsidiaries; provided, however, that the ownership of the general partnership
interest (or a similar member’s interest in a limited liability company)



34









 




by an Unrestricted
Subsidiary shall not cause a Subsidiary of the Company of which more than 95% of the equity
interest is held by the Company or one or more Restricted Subsidiaries to be deemed an Unrestricted
Subsidiary.




     “Weighted Average Life to Maturity” means, when applied to any Indebtedness or portion thereof
at any date, the number of years obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or
other required payment of principal, including, without limitation, payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment by (b) the sum of all such payments
described in clause (a)(i) of this definition.



     “$” means U.S. dollars.



     Section 1.02. Rules of Construction. Unless the context otherwise requires or except as
otherwise expressly provided,



     (a) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;



     (b) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Section, Article other subdivision;



     (c) all references to Sections or Articles or Exhibits refer to Sections or Articles or
Exhibits of or to this Indenture unless otherwise indicated;



     (d) references to agreements or instruments, or to statutes or regulations, are to such
agreements or instruments, or statutes or regulations, as amended from time to time (or to
successor statutes and regulations); and



     (e) in the event that a transaction meets the criteria of more than one category of permitted
transactions or listed exceptions, the Issuer may classify such transaction as it, in its sole
discretion, determines.



ARTICLE 2

The Notes




     Section 2.01. Form, Dating and Denominations; Legends. (a) The Notes shall be issued in two
separate series, designated as the “2.00% Senior Secured Notes Due 2021” and the “5.00% Senior
Secured Notes Due 2021”. The Holders of the Notes of each series shall vote together as a single
class for all purposes under this Indenture. The Notes and the Trustee’s certificate of
authentication shall be substantially in the form attached as Exhibit A. The terms



35









 




and provisions
contained in the form of the Note annexed as Exhibit A constitute and are hereby expressly made a
part of this Indenture. The Notes may have notations, legends or endorsements required by this
Indenture, law, rules of or agreements with national securities exchanges to which the Issuer is
subject, or usage. Each Note shall be dated the date of its authentication. The Notes shall be
issuable in denominations of $2,000 in principal amount and any multiple of $1,000 in excess
thereof.




     (b) (i) Except as otherwise provided in clause (c) of this Section 2.01, Section 2.09(b)(iv),
Section 2.10(b)(iii), Section 2.10(b)(v), or Section 2.10(c), each Initial Note or Initial
Additional Note shall bear the Restricted Legend.




     (ii) Each Global Note, whether or not an Original Note or Additional Note, shall bear
the DTC Legend.




     (iii) Each Regulation S Temporary Global Note shall bear the Regulation S Temporary
Global Note Legend.




     (iv) Initial Notes and Initial Additional Notes offered and sold (or issued in an
exchange transaction) in reliance on Regulation S shall be issued as provided in Section
2.11(a).




     (v) Initial Notes and Initial Additional Notes offered and sold (or issued in an
exchange transaction) in reliance on any exception under the Securities Act other than
Regulation S and Rule 144A shall be issued, and upon the request of the Issuer to the
Trustee, Initial Notes and Initial Additional Notes offered and sold (or issued in an
exchange transaction) in reliance on Rule 144A may be issued, in the form of Certificated
Notes.




     (vi) Exchange Notes shall be issued, subject to Section 2.09(b), in the form of one or
more Global Notes.



     (c) (i) If the Issuer determines (upon the advice of counsel and after consideration of other
certifications and evidence as the Issuer may reasonably require) that a Note is eligible for
resale pursuant to Rule 144 under the Securities Act (or a successor provision) without being
subject to any conditions as provided in such Rule and that the Restricted Legend is no longer
necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial
interest therein) are effected in compliance with the Securities Act, or




     (ii) after an Initial Note or any Initial Additional Note of a series of Notes is



36









 






     (A) sold pursuant to an effective registration statement under the
Securities Act, filed pursuant to a Registration Rights Agreement or otherwise,
or




     (B) is validly tendered for an Exchange Note of such series pursuant to an
Exchange Offer


then, the Issuer may instruct the Trustee to cancel the Note and issue to the Holder thereof (or to
its transferee) a new Note of like tenor and amount of the same series, registered in the name of
the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee
shall comply with such instruction.




     (d) By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in
such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the
restrictions on transfer of such Note (and any such beneficial interest) set forth in this
Indenture and in the Restricted Legend and agrees that it shall transfer such Note (and any such
beneficial interest) only in accordance with this Indenture and such legend.



     Section 2.02. Execution and Authentication; Exchange Notes; Additional Notes. (a) An
Officer shall execute the Notes for the Issuer by facsimile or manual signature in the name and on
behalf of the Issuer. If an Officer whose signature is on a Note no longer holds that office at
the time the Note is authenticated, the Note shall still be valid.



     (b) A Note shall not be valid until the Trustee manually signs the certificate of
authentication on the Note, with the signature conclusive evidence that the Note has been
authenticated under this Indenture.



     (c) At any time and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Notes executed by the Issuer to the Trustee for authentication. The Trustee
shall authenticate and deliver:




     (i) Initial Notes for original issue in the aggregate principal amount of $53,203,000
for the 2.00% Notes and $141,797,000 for the 5.00% Notes,




     (ii) Initial Additional Notes of a series of Notes from time to time for original
issue for such series and in the aggregate principal amounts specified by the Issuer, and




     (iii) Exchange Notes of a series of Notes from time to time for issue in exchange for
a like principal amount of Initial Notes or Initial Additional Notes for such series



37









 





     after the following conditions have been met:




     (A) Receipt by the Trustee of a certificate, executed by an Officer
specifying




     (1) the series and amount of Notes to be authenticated and the
date on which the Notes are to be authenticated,




     (2) whether the Notes are to be Initial Notes, Initial Additional
Notes or Exchange Notes for such series,




     (3) in the case of Initial Additional Notes, that the issuance of
such Notes does not contravene any provision of Article 4,




     (4) whether the Notes are to be issued as one or more Global
Notes or Certificated Notes, and




     (5) other information the Issuer may determine to include or the
Trustee may reasonably request.




     (B) In the case of Initial Additional Notes of a series of Notes, receipt
by the Trustee of an Opinion of Counsel confirming that the beneficial owners of
the outstanding Notes of such series shall be subject to United States federal
income tax in the same amounts, in the same manner and at the same times as
would have been the case if such Initial Additional Notes of such series were
not issued.




     (C) In the case of Exchange Notes of a series of Notes, effectiveness of an
Exchange Offer Registration Statement and Consummation (as defined in the
applicable Registration Rights Agreement) of the exchange offer thereunder (and
receipt by the Trustee of an Officers’ Certificate to that effect). Initial
Notes or Initial Additional Notes of such series exchanged for Exchange Notes of
such series shall be cancelled by the Trustee, who shall dispose of them in
accordance with its normal procedures or the written instructions of the Issuer.



     Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in
Trust. (a) The Issuer may appoint one or more Registrars and one or more Paying Agents, and the
Trustee may appoint an Authenticating



38









 




Agent, in which case each reference in this Indenture to the
Trustee in respect of the obligations of the Trustee to be performed by that Agent shall be deemed
to be references to the Agent. The Issuer may act as Registrar or (except for purposes of Article
8) Paying Agent. In each case, the Issuer and the Trustee shall enter into an appropriate
agreement with the Agent implementing the provisions of this Indenture relating to the obligations
of the Trustee to be performed by the Agent and the related rights.




     (b) The Issuer shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held
by the Paying Agent for the payment of principal of, premium, if any, and interest and Additional
Interest, if any, on, the Notes and shall promptly notify the Trustee of any default by the Issuer
in making any such payment. The Issuer at any time may require a Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying Agent, require the
Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed.
Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the
Trustee.



     Section 2.04. Replacement Notes. If a mutilated Note is surrendered to the Trustee or if a
Holder claims that its Note has been lost, destroyed or wrongfully taken, the Issuer shall issue
and the Trustee shall authenticate a replacement Note of like tenor and principal amount of the
same series and bearing a number not contemporaneously outstanding. Every replacement Note is an
additional obligation of the Issuer and entitled to the benefits of this Indenture. If required by
the Trustee or the Issuer, an indemnity must be furnished that is sufficient in the judgment of
both the Trustee and the Issuer to protect the Issuer and the Trustee from any loss they may suffer
if a Note is replaced. The Issuer and the Trustee may charge the Holder for the expenses of the
Issuer and the Trustee in replacing a Note. In case the mutilated, lost, destroyed or wrongfully
taken Note has become or is about to become due and payable, the Issuer in its discretion may pay
the Note instead of issuing a replacement Note.



     Section 2.05. Outstanding Notes. (a) Notes outstanding at any time are all Notes that have
been authenticated by the Trustee except for:




     (i) Notes cancelled by the Trustee or delivered to it for cancellation;




     (ii) any Note which has been replaced pursuant to Section 2.04 unless and until the
Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held
by a protected purchaser; and



39









 






     (iii) on or after the maturity date or any redemption date or date for purchase of
the Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or
purchased on that date for which the Trustee (or Paying Agent, other than the Issuer or an
Affiliate of the Issuer) holds money sufficient to pay all amounts then due.



     (b) A Note does not cease to be outstanding because the Issuer or one of its Affiliates holds
the Note; provided, that in determining whether the Holders of the requisite principal amount of
the outstanding Notes have given or taken any request, demand, authorization, direction, notice,
consent, waiver or other action hereunder, Notes owned by the Issuer or any Affiliate of the Issuer
shall be disregarded and deemed not to be outstanding (it being understood that in determining
whether the Trustee is protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Notes which a Responsible Officer of the
Trustee knows to be so owned shall be so disregarded). Notes so owned which have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the
Issuer or any Affiliate of the Issuer.



     Section 2.06. Temporary Notes. Until definitive Notes are ready for delivery, the Issuer may
prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially
in the form of definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officer executing the temporary Notes, as evidenced
by the execution of the temporary Notes. If temporary Notes are issued, the Issuer shall cause
definitive Notes to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the
temporary Notes at the office or agency of the Issuer designated for the purpose pursuant to
Section 4.02 without charge to the Holder. Upon surrender for cancellation of any temporary Notes,
the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of the same series in authorized denominations. Until so
exchanged, the temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes of the same series.



     Section 2.07. Cancellation. The Issuer at any time may deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes
previously authenticated hereunder which the Issuer has not issued and sold. Any Registrar or the
Paying Agent shall forward to the Trustee any Notes surrendered to it for transfer, exchange or
payment. The Trustee shall cancel all Notes surrendered for transfer, exchange, payment or
cancellation and dispose of them in accordance with its normal procedures or the written
instructions of the Issuer. The Issuer may not



40









 




issue new Notes to replace Notes that it has paid
in full or delivered to the Trustee for cancellation, except for Exchange Notes.




     Section 2.08. CUSIP and ISIN Numbers. The Issuer in issuing the Notes may use “CUSIP” and
“ISIN” numbers (provided that each series of Notes shall have unique numbers) and the Trustee shall
use CUSIP numbers or ISIN numbers in notices of redemption or exchange or in Offers to Purchase as
a convenience to Holders, the notice to state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of redemption or
exchange or Offer to Purchase. The Issuer shall promptly notify the Trustee in writing of any
change in the CUSIP or ISIN numbers. Any Additional Notes that are not fungible with the Original
Notes of the same series for United States federal income tax purposes shall be issued with CUSIP
and ISIN numbers different from the CUSIP and ISIN numbers assigned to the Original Notes of such
series.



     Section 2.09. Registration, Transfer and Exchange. (a) The Notes shall be issued in
registered form only, without coupons, and the Issuer shall cause the Trustee to maintain a
register (the “Register”) of the Notes, for registering the record ownership of the Notes by the
Holders and transfers and exchanges of the Notes.



     (b) (i) Each Global Note shall be registered in the name of the Depositary or its nominee and,
so long as DTC is serving as the Depositary thereof, shall bear the DTC Legend.




     (ii) Each Global Note shall be delivered to the Trustee as custodian for the
Depositary. Transfers of a Global Note (but not a beneficial interest therein) shall be
limited to transfers thereof in whole, but not in part, to the Depositary, its successors
or their respective nominees, except (A) as set forth in Section 2.09(b)(iv) and (B)
transfers of portions thereof in the form of Certificated Notes may be made upon request
of an Agent Member (for itself or on behalf of a beneficial owner) by 20 days’ prior
written notice given to the Trustee by or on behalf of the Depositary in accordance with
customary procedures of the Depositary and in compliance with this Section and Section
2.10.




     (iii) Agent Members shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary, and the Depositary may be treated by
the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner
and Holder of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any
Person (including any Agent Member and any Person that holds a beneficial interest in a
Global Note through an Agent Member) to take any



41









 






action which a Holder is entitled to take
under this Indenture or the Notes, and nothing herein shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any security.




     (iv) If (x) the Depositary (i) notifies the Issuer that it is unwilling or unable to
continue as Depositary for a Global Note and a successor depositary is not appointed by
the Issuer within 90 days of the notice or (ii) has ceased to be a clearing agency
registered under the Exchange Act, (y) the Issuer, at its option, notifies the Trustee in
writing that it elects to cause the issuance of Certificated Notes or (z) a Default or an
Event of Default with respect to any series of the Notes has occurred and is continuing,
the Trustee shall promptly exchange each beneficial interest in the Global Note for one or
more Certificated Notes of the same series in authorized denominations having an equal
aggregate principal amount registered in the name of the owner of such beneficial
interest, as identified to the Trustee by the Depositary, and thereupon the Global Note
shall be deemed canceled. If such Note does not bear the Restricted Legend, then the
Certificated Notes issued in exchange therefor shall not bear the Restricted Legend. If
such Note bears the Restricted Legend, then the Certificated Notes issued in exchange
therefor shall bear the Restricted Legend; provided, that any Holder of any such
Certificated Note issued in exchange for a beneficial interest in a Regulation S Temporary
Global Note shall have the right upon presentation to the Trustee of a duly completed
Certificate of Beneficial Ownership after the Restricted Period to exchange such
Certificated Note for a Certificated Note of the same series of like tenor and amount that
does not bear the Restricted Legend, registered in the name of such Holder.



     (c) Each Certificated Note shall be registered in the name of the holder thereof or its
nominee.



     (d) A Holder may transfer a Note (or a beneficial interest therein) to another Person or
exchange a Note (or a beneficial interest therein) for another Note or Notes of the same series of
any authorized denomination by presenting to the Trustee a written request therefor stating the
name of the proposed transferee or requesting such an exchange, accompanied by any certification,
opinion or other document required by Section 2.10. The Trustee shall promptly register any
transfer or exchange that meets the requirements of this Section and Section 2.10 noting the same
in the register maintained by the Trustee for the purpose; provided, that




     (i) no transfer or exchange shall be effective until it is registered in such
register, and



42









 






     (ii) the Trustee shall not be required (x) to issue, register the transfer of or
exchange any Note for a period of 15 days before a selection of Notes to be redeemed or
purchased pursuant to an Offer to Purchase, (y) to register the transfer of or exchange
any Note so selected for redemption or purchase in whole or in part, except, in the case
of a partial redemption or purchase, that portion of any Note not being redeemed or
purchased, or (z) if a redemption or a purchase pursuant to an Offer to Purchase is to
occur after a Record Date but on or before the corresponding Interest Payment Date, to
register the transfer of or exchange any Note on or after the Record Date and before the
date of redemption or purchase. Prior to the registration of any transfer, the Issuer,
the Trustee and their agents shall treat the Person in whose name the Note is registered
as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and
shall not be affected by notice to the contrary.



     From time to time the Issuer shall execute and the Trustee shall authenticate additional Notes
as necessary in order to permit the registration of a transfer or exchange in accordance with this
Section.



     No service charge shall be imposed in connection with any transfer or exchange of any Note,
but the Issuer or the Trustee may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than a transfer tax or other
similar governmental charge payable upon exchange pursuant to subsection (b)(iv)).




     (e) (i) Global Note to Global Note. If a beneficial interest in a Global Note is
transferred or exchanged for a beneficial interest in another Global Note of the same
series, the Trustee shall (x) record a decrease in the principal amount of the Global Note
being transferred or exchanged equal to the principal amount of such transfer or exchange
and (y) record a like increase in the principal amount of the other Global Note. Any
beneficial interest in one Global Note that is transferred to a Person who takes delivery
in the form of an interest in another Global Note, or exchanged for an interest in another
Global Note, shall, upon transfer or exchange, cease to be an interest in such Global Note
and become an interest in the other Global Note and, accordingly, shall thereafter be
subject to all transfer and exchange restrictions, if any, and other procedures applicable
to beneficial interests in such other Global Note for as long as it remains such an
interest.




     (ii) Global Note to Certificated Note. If a beneficial interest in a Global Note is
transferred or exchanged for a Certificated Note of the same series, the Trustee shall (x)
record a decrease in the principal amount of such Global Note equal to the principal
amount of such transfer or



43









 






exchange and (y) deliver one or more new Certificated Notes of
the same series in authorized denominations having an equal aggregate principal amount to
the transferee (in the case of a transfer) or the owner of such beneficial interest (in
the case of an exchange), registered in the name of such transferee or owner, as
applicable.




     (iii) Certificated Note to Global Note. If a Certificated Note is transferred or
exchanged for a beneficial interest in a Global Note of the same series, the Trustee shall
(x) cancel such Certificated Note, (y) record an increase in the principal amount of such
Global Note equal to the principal amount of such transfer or exchange and (z) in the
event that such transfer or exchange involves less than the entire principal amount of the
canceled Certificated Note, deliver to the Holder thereof one or more new Certificated
Notes of the same series in authorized denominations having an aggregate principal amount
equal to the untransferred or unexchanged portion of the canceled Certificated Note,
registered in the name of the Holder thereof.




     (iv) Certificated Note to Certificated Note. If a Certificated Note is transferred
or exchanged for another Certificated Note of the same series, the Trustee shall (x)
cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new
Certificated Notes of the same series in authorized denominations having an aggregate
principal amount equal to the principal amount of such transfer or exchange to the
transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in
the case of an exchange), registered in the name of such transferee or Holder, as
applicable, and (z) if such transfer or exchange involves less than the entire principal
amount of the canceled Certificated Note, deliver to the Holder thereof one or more
Certificated Notes of the same series in authorized denominations having an aggregate
principal amount equal to the untransferred or unexchanged portion of the canceled
Certificated Note, registered in the name of the Holder thereof.



     Section 2.10. Restrictions on Transfer and Exchange. (a) The transfer or exchange of any
Note (or a beneficial interest therein) may only be made in accordance with this Section and
Section 2.09 and, in the case of a Global Note (or a beneficial interest therein), the applicable
rules and procedures of the Depositary. The Trustee shall refuse to register any requested
transfer or exchange that does not comply with the preceding sentence.



     (b) Subject to paragraph (c) of this Section, the transfer or exchange of any Note (or a
beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial
interest therein) of the type set forth opposite in column B below may only be made in compliance
with the certification requirements (if



44









 




any) described in the clause of this paragraph set forth
opposite in column C below.




	 	 	 	 	 
	A	 	B	 	C
	Rule 144A Global Note

	 	Rule 144A Global Note
	 	(i)
	Rule 144A Global Note

	 	Regulation S Global Note
	 	(ii)
	Rule 144A Global Note

	 	Certificated Note
	 	(iii)
	Regulation S Global Note

	 	Rule 144A Global Note
	 	(iv)
	Regulation S Global Note

	 	Regulation S Global Note
	 	(i)
	Regulation S Global Note

	 	Certificated Note
	 	(v)
	Certificated Note

	 	Rule 144A Global Note
	 	(iv)
	Certificated Note

	 	Regulation S Global Note
	 	(ii)
	Certificated Note

	 	Certificated Note
	 	(iii)







     (i) No certification is required.




     (ii) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Regulation S Certificate; provided, that if the
requested transfer or exchange is made by the Holder of a Certificated Note that does not
bear the Restricted Legend, then no certification is required.




     (iii) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly completed
Regulation S Certificate or (z) a duly completed Institutional Accredited Investor
Certificate, and/or an opinion of counsel and such other certifications and evidence as
the Issuer or the Trustee may reasonably require in order to determine that the proposed
transfer or exchange is being made in compliance with the Securities Act and any
applicable securities laws of any state of the United States; provided, that if the
requested transfer or exchange is made by the Holder of a Certificated Note that does not
bear the Restricted Legend, then no certification is required. In the event that a Rule
144A Global Note or a Certificated Note that does not bear the Restricted Legend is
surrendered for transfer or exchange, upon transfer or exchange the Trustee shall deliver
a Certificated Note that does not bear the Restricted Legend.




     (iv) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Rule 144A Certificate and must comply with all
applicable securities laws of any state of the United States or any other jurisdiction.



45









 






     (v) If the requested transfer involves a beneficial interest in a Regulation S
Temporary Global Note, the Person requesting the registration of transfer must deliver or
cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y) a
duly completed Institutional Accredited Investor Certificate and/or an opinion of counsel
and such other certifications and evidence as the Issuer or the Trustee may reasonably
require in order to determine that the proposed transfer is being made in compliance with
the Securities Act and any applicable securities laws of any state of the United States.
If the requested transfer or exchange involves a beneficial interest in a Permanent
Regulation S Global Note, no certification is required and the Trustee shall deliver a
Certificated Note that does not bear the Restricted Legend. Notwithstanding anything to
the contrary contained herein, no such exchange is permitted if the requested exchange
involves a beneficial interest in a Regulation S Temporary Global Note.



     (c) No certification is required in connection with any transfer or exchange of any Note (or a
beneficial interest therein)




     (i) after such Note is eligible for resale pursuant to Rule 144 under the Securities
Act (or a successor provision) without being subject to any conditions as provided in such
Rule; provided, that the Issuer has provided the Trustee with a certificate to that
effect, and the Issuer or the Trustee may require from any Person requesting a transfer or
exchange in reliance upon this clause (i) an opinion of counsel and any other reasonable
certifications and evidence in order to support such certificate; or




     (ii) (A) sold pursuant to an effective registration statement under the Securities
Act, filed pursuant to a Registration Rights Agreement or otherwise or (B) which is
validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer.



     Any Certificated Note delivered in reliance upon this paragraph shall not bear the Restricted
Legend.



     (d) The Trustee shall retain copies of all certificates, opinions and other documents received
in connection with the registration of transfer or exchange of a Note (or a beneficial interest
therein), and the Issuer shall have the right to inspect and make copies thereof at any reasonable
time upon written notice to the Trustee.



     Section 2.11. Regulation S Temporary Global Notes. (a) Each Initial Note and Initial
Additional Note originally sold (or issued in an exchange transaction) in reliance upon Regulation
S shall be evidenced by one or more



46









 




Regulation S Global Notes that bear the Regulation S Temporary
Global Note Legend.




     (b) An owner of a beneficial interest in a Regulation S Temporary Global Note (or a Person
acting on behalf of such an owner) may provide to the Trustee (and the Trustee shall accept) a duly
completed Certificate of Beneficial Ownership at any time after the Restricted Period (it being
understood that the Trustee shall not accept any such certificate during the Restricted Period).
Promptly after acceptance of a Certificate of Beneficial Ownership with respect to such a
beneficial interest, the Trustee shall cause such beneficial interest to be exchanged for an
equivalent beneficial interest in a Permanent Regulation S Global Note of the same series, and
shall (x) permanently reduce the principal amount of such Regulation S Temporary Global Note by the
amount of such beneficial interest and (y) increase the principal amount of such Permanent
Regulation S Global Note by the amount of such beneficial interest.



     (c) Notwithstanding anything to the contrary contained herein, beneficial interests in a
Regulation S Temporary Global Note may be held through the Depositary only through Euroclear or
Clearstream and their respective direct and indirect participants.



     (d) Notwithstanding paragraph (b), if after the Restricted Period any Initial Purchaser owns a
beneficial interest in a Regulation S Temporary Global Note, such Initial Purchaser may, upon
written request to the Trustee accompanied by a certification as to its status as an Initial
Purchaser, exchange such beneficial interest for an equivalent beneficial interest in a Permanent
Regulation S Global Note of the same series, and the Trustee shall comply with such request and
shall (x) permanently reduce the principal amount of such Regulation S Temporary Global Note by the
amount of such beneficial interest and (y) increase the principal amount of such Permanent
Regulation S Global Note by the amount of such beneficial interest.



     Section 2.12. Automatic Exchange from Restricted Global Notes to Unrestricted Global Notes.
Beneficial interests in a Rule 144A Global Note that is subject to restrictions set out in the
Section 2.01, as applicable (including the legend set forth in Exhibit C) (the “Restricted Global
Note”), may be automatically exchanged into beneficial interests in an unrestricted Global Note
that is no longer subject to the restrictions set out in Section 2.01 (including removal of the
legend set forth in Exhibit C) (the “Unrestricted Global Note”), without any action required by or
on behalf of Holders, who are not “affiliates” (as defined in Rule 144 under the Securities Act) of
the Issuer (the “Automatic Exchange”). In order to effect such exchange, the Issuer may at least 15
days but not more than 30 days prior to the date which is at least one year after the last date of
the original issuance of the Notes (the “Resale Restriction Termination Date”), deliver a notice of
Automatic Exchange (an “Automatic Exchange



47









 




Notice”) to each Holder at such Holder’s address
appearing in the Register with a copy to the Trustee. The Automatic Exchange Notice shall identify
the Notes of each series subject to the Automatic Exchange, shall assume that each such Holder is
not an affiliate and has not purchased its Notes from an affiliate, shall result in each such
Holder being deemed to have made a representation to the Issuer that it is not an affiliate and
that it has not purchased its Notes from an affiliate and shall state: (1) the date of the
Automatic Exchange; (2) the “CUSIP” number of the Restricted Global Note from which such Holders’
beneficial interests shall be transferred and (3) the “CUSIP” number of the Unrestricted Global
Note into which such Holders’ beneficial interests shall be transferred. If such Holder is unable
to make the deemed representation set forth in the previous sentence, then such Holder shall be
required to so notify the Issuer or the Trustee at least one business day prior to the date of the
Automatic Exchange. At the Issuer’s request on no less than 5 days’ prior notice, the Trustee shall
deliver in the Issuer’s name and at its expense, the Automatic Exchange Notice to each Holder at
such Holder’s address appearing in the Register; provided, however, that the Issuer shall have
delivered to the Trustee a written order of the Issuer and an Officers’ Certificate requesting that
the Trustee give the Automatic Exchange Notice (in the name and at the expense of the Issuer) and
setting forth the information to be stated in the Automatic Exchange Notice as provided in the
preceding sentence. As a condition to any such exchange pursuant to this Section 2.12, the Trustee
shall be entitled to receive from the Issuer, and rely conclusively without any liability, upon an
Officers’ Certificate and an Opinion of Counsel to the Issuer, in form and in substance reasonably
satisfactory to the Trustee to the effect that no registration under the Securities Act is required
in connection with any re-sales by a holder of beneficial interests in the Unrestricted Global
Note. Any such Opinion of Counsel may include an assumption and/or a reliance provision as to the
non-affiliate status of the Holders of Notes subject to such Automatic Exchange. Upon such exchange
of beneficial interests pursuant to this Section 2.12, the Registrar shall reflect on its books and
records the date of such transfer and a decrease and increase, respectively, in the principal
amount of the applicable Restricted Global Note(s) and the Unrestricted Global Note, respectively,
equal to the principal amount of beneficial interests transferred. If an Unrestricted Global Note
is not then outstanding at the time of the Automatic Exchange, the Issuer shall execute and the
Trustee shall authenticate and deliver an Unrestricted Global Note to the Depositary. Following any
such transfer pursuant to this Section 2.12, provided that no Holder is an affiliate, the relevant
Restricted Global Note shall be cancelled.





48









 








ARTICLE 3

Redemption; Offer to Purchase




     Section 3.01. Optional Redemption. The Issuer may, at its option, redeem the Notes, in
whole, at any time, or in part, from time to time, at a redemption price equal to the sum of:




     (i) 100% of the principal amount thereof, plus accrued and unpaid interest thereon to
the redemption date, if any; plus




     (ii) the greater of (A) 1% of the principal amount thereof and (B) the Make-Whole
Amount.



     The term “Make-Whole Amount” shall mean, in connection with any optional redemption of any
Note and as determined by the Issuer in its sole discretion, the excess, if any, of:




     (i) the aggregate present value as of the date of such redemption of each dollar of
principal being redeemed and the amount of interest (exclusive of interest accrued to the
redemption date) that would have been payable in respect of such dollar if such prepayment
had not been made, determined by discounting, on a semiannual basis, such principal and
interest at the Treasury Rate (determined on the Business Day preceding the date of such
redemption) plus 0.50%, from the respective dates on which such principal and interest
would have been payable if such payment had not been made; over




     (ii) the principal amount of the Note being redeemed.



     Section 3.02. Redemption with Proceeds of Equity Offering. (a) At any time and from time to
time prior to November 1, 2014, the Issuer may redeem 2.00% Notes with the net cash proceeds
received by the Issuer from any Equity Offering at a redemption price equal to 102% of the
principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal
amount for all such redemptions not to exceed 35% of the original aggregate principal amount of the
2.00% Notes (including Additional Notes of such series), provided that:




     (i) in each case the redemption takes place not later than 60 days after the closing
of the related Equity Offering, and




     (ii) not less than 65% of the original aggregate principal amount of the 2.00% Notes
(including Additional Notes of such series) remains outstanding immediately thereafter.



49









 





     (b) At any time and from time to time prior to November 1, 2014, the Issuer may redeem 5.00%
Notes with the net cash proceeds received by the Issuer from any Equity Offering at a redemption
price equal to 105% of the principal amount plus accrued and unpaid interest to the redemption
date, in an aggregate principal amount for all such redemptions not to exceed 35% of the original
aggregate principal amount of the 5.00% Notes (including Additional Notes of such series), provided
that:




     (i) in each case the redemption takes place not later than 60 days after the closing
of the related Equity Offering, and




     (ii) not less than 65% of the original aggregate principal amount of the 5.00% Notes
(including Additional Notes of such series) remains outstanding immediately thereafter.



     Section 3.03. Sinking Fund; Mandatory Redemption. There is no sinking fund for, or mandatory
redemption of, the Notes.



     Section 3.04. Method and Effect of Redemption. (a) If the Issuer elects to redeem Notes, it
must notify the Trustee of the redemption date and the principal amount and series of Notes to be
redeemed by delivering an Officers’ Certificate at least 45 days before the redemption date (unless
a shorter period is satisfactory to the Trustee). If fewer than all of the Notes of a series are
being redeemed, the Officers’ Certificate must also specify a record date not less than 15 days
after the date of the notice of redemption is given to the Trustee, and the Trustee shall select
the Notes of such series to be redeemed pro rata, or as nearly a pro rata basis as is practicable
(subject to the procedures of DTC), unless such method is otherwise prohibited, in which case, by
lot or by any other method the Trustee in its sole discretion deems fair and appropriate, in
denominations of $2,000 principal amount or any multiple of $1,000 in excess thereof. The Trustee
shall notify the Issuer promptly of the Notes or portions of Notes to be called for redemption.
Notice of redemption must be sent by the Issuer or, at the Issuer’s request, by the Trustee in the
name and at the expense of the Issuer to Holders whose Notes are to be redeemed at least 30 days
but not more than 60 days before the redemption date. Notices of any redemption may be given prior
to the completion thereof, and may, at the Issuer’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of a related Equity Offering.



     (b) The notice of redemption shall identify the Notes of such series to be redeemed and shall
include or state the following:




     (i) the redemption date;



50









 






     (ii) the redemption price, including the portion thereof representing any accrued
interest or Additional Interest, if any;




     (iii) the place or places where Notes are to be surrendered for redemption (Notes
called for redemption must be so surrendered in order to collect the redemption price);




     (iv) that on the redemption date, the redemption price shall become due and payable
on Notes called for redemption, and interest on Notes called for redemption shall cease to
accrue on and after the redemption date;




     (v) that if any Note is redeemed in part, the portion of the principal amount thereof
to be redeemed, and that on and after the redemption date, upon surrender of such Note,
new Notes of the same series equal in principal amount to the unredeemed portion shall be
issued; and




     (vi) if any Note contains a CUSIP or ISIN number, no representation is being made as
to the correctness of the CUSIP or ISIN number either as printed on the Notes or as
contained in the notice of redemption and that the Holder should rely only on the other
identification numbers printed on the Notes.



     (c) Once notice of redemption is sent to the Holders, Notes called for redemption become due
and payable at the redemption price on the redemption date, and upon surrender of the Notes called
for redemption, the Issuer shall redeem such Notes at the redemption price. Commencing on the
redemption date, Notes redeemed shall cease to accrue interest. Upon surrender of any Note
redeemed in part, the Holder shall receive a new Note of the same series equal in principal amount
to the unredeemed portion of the surrendered Note.



     Section 3.05. Offer to Purchase. (a) An “Offer to Purchase” means an offer by the Issuer to
purchase Notes as required by this Indenture. An Offer to Purchase must be made by written offer
(the “offer”) sent to the Holders. The Issuer shall notify the Trustee at least 15 days (or such
shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its
obligation to make an Offer to Purchase, and the offer shall be sent by the Issuer or, at the
Issuer’s request, by the Trustee in the name and at the expense of the Issuer.



     (b) The offer must include or state the following as to the terms of the Offer to Purchase:




     (i) the provision of this Indenture pursuant to which the Offer to Purchase is being
made;



51









 






     (ii) the aggregate principal amount of the outstanding Notes offered to be purchased
by the Issuer pursuant to the Offer to Purchase (including, if less than 100%, the manner
by which such amount has been determined pursuant to this Indenture) (the “purchase
amount”);




     (iii) the purchase price, including the portion thereof representing accrued interest
and Additional Interest, if any;




     (iv) an expiration date (the “expiration date”) not less than 30 days or more than 60
days after the date of the offer, and a settlement date for purchase (the “purchase date”)
not more than five Business Days after the expiration date;




     (v) information concerning the business of the Company, the Issuer and its
Subsidiaries which the Issuer in good faith believes shall enable the Holders to make an
informed decision with respect to the Offer to Purchase, at a minimum to include:




     (A) the most recent annual and quarterly financial statements and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” for the Company,




     (B) a description of material developments in the Company’s business
subsequent to the date of the latest of the financial statements (including a
description of the events requiring the Issuer to make the Offer to Purchase),
and




     (C) if applicable, appropriate pro forma financial information concerning
the Offer to Purchase and the events requiring the Issuer to make the Offer to
Purchase;




     (vi) a Holder may tender all or any portion of its Notes, subject to the requirement
that any portion of a Note tendered must be in denominations of $2,000 principal amount
and any multiple of $1,000 in excess thereof;




     (vii) the place or places where Notes are to be surrendered for tender pursuant to
the Offer to Purchase;




     (viii) each Holder electing to tender a Note pursuant to the offer shall be required
to surrender such Note at the place or places specified in the offer prior to the close of
business on the expiration date (such Note being, if the Issuer or the Trustee so
requires, duly endorsed or accompanied by a duly executed written instrument of transfer);



52









 






     (ix) interest on any Note not tendered, or tendered but not purchased by the Issuer
pursuant to the Offer to Purchase, shall continue to accrue;




     (x) on the purchase date the purchase price shall become due and payable on each Note
accepted for purchase, and interest on Notes purchased shall cease to accrue on and after
the purchase date;




     (xi) Holders are entitled to withdraw Notes tendered by giving notice, which must be
received by the Issuer or the Trustee not later than the close of business on the
expiration date, setting forth the name of the Holder, the principal amount of the
tendered Notes, the certificate number of the tendered Notes and a statement that the
Holder is withdrawing all or a portion of the tender;




     (xii) (A) if Notes in an aggregate principal amount less than or equal to the
purchase amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the
Issuer shall purchase all such Notes, and (B) if the Offer to Purchase is for less than
all of the outstanding Notes and Notes in an aggregate principal amount in excess of the
purchase amount are tendered and not withdrawn pursuant to the offer, the Issuer shall
purchase Notes having an aggregate principal amount equal to the purchase amount on a pro
rata basis, with adjustments so that only Notes in denominations of $2,000 principal
amount and any multiples of $1,000 in excess thereof;




     (xiii) if any Note is purchased in part, new Notes equal in principal amount to the
unpurchased portion of the Note shall be issued; and




     (xiv) if any Note contains a CUSIP or ISIN number, no representation is being made as
to the correctness of the CUSIP or ISIN number either as printed on the Notes or as
contained in the offer and that the Holder should rely only on the other identification
numbers printed on the Notes.



     (c) Prior to the purchase date, the Issuer shall accept tendered Notes for purchase as
required by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an
Officers’ Certificate specifying which Notes have been accepted for purchase. On the purchase
date, the purchase price shall become due and payable on each Note accepted for purchase, and
interest on Notes of such purchased shall cease to accrue on and after the purchase date. The
Trustee shall promptly return to Holders any Notes not accepted for purchase and send to Holders
new Notes of the same series equal in principal amount to any unpurchased portion of any Notes
accepted for purchase in part.



53









 





     (d) The Issuer shall comply with Rule 14e-1 under the Exchange Act and all other applicable
laws in making any Offer to Purchase, and the above procedures shall be deemed modified as
necessary to permit such compliance.



ARTICLE 4

Covenants




     Section 4.01. Payment of Notes. (a) The Issuer agrees to pay the principal of, premium, if
any, and interest and Additional Interest, if any, on the Notes on the dates and in the manner
provided in the Notes and this Indenture. The Issuer shall pay Additional Interest, if any, in the
amounts set forth in the applicable Registration Rights Agreement. Not later than 9:00 A.M. (New
York City time) on the due date of any principal of, premium, if any, or interest and Additional
Interest, if any, on, any Notes, or any redemption or purchase price of the Notes, the Issuer shall
deposit with the Trustee (or Paying Agent) money in immediately available funds sufficient to pay
such amounts; provided, that if the Issuer or any Affiliate of the Issuer is acting as Paying
Agent, it shall, on or before each due date, segregate and hold in a separate trust fund for the
benefit of the Holders a sum of money sufficient to pay such amounts until paid to such Holders or
otherwise disposed of as provided in this Indenture. In each case, the Issuer shall promptly
notify the Trustee of its compliance with this paragraph.



     (b) An installment of principal, premium, if any, or interest and Additional Interest, if any,
shall be considered paid on the date due if the Trustee (or Paying Agent, other than the Issuer or
any Affiliate of the Issuer) holds on that date money designated for and sufficient to pay the
installment. If the Issuer or any Affiliate of the Issuer acts as Paying Agent, an installment of
principal, premium, if any, or interest and Additional Interest, if any, shall be considered paid
on the due date only if paid to the Holders.



     (c) The Issuer agrees to pay interest on overdue principal, and, to the extent lawful, overdue
installments of interest and Additional Interest, if any, at the rate per annum specified in the
Notes.



     (d) Payments in respect of the Notes represented by the Global Notes are to be made by wire
transfer of immediately available funds to the accounts specified by the Holders of the Global
Notes. With respect to Certificated Notes, the Issuer shall make all payments by wire transfer of
immediately available funds to the accounts specified by the Holders thereof or, if no such account
is specified, by mailing a check to each Holder’s registered address.



     Section 4.02. Maintenance of Office or Agency. The Company and the Issuer shall maintain an
office or agency where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where



54









 




notices and demands to or upon the Company and the Issuer in
respect of the Notes and this Indenture may be served. The Issuer and the Company hereby initially
designate the Corporate Trust Office of the Trustee as such office of the Issuer and the Company.
The Issuer shall give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuer and the Company fail to maintain any
such required office or agency or fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served to the Trustee.




     The Issuer may also from time to time designate one or more other offices or agencies where
the Notes may be surrendered or presented for any of such purposes and may from time to time
rescind such designations. The Issuer shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.



     Section 4.03. Existence. The Company and the Issuer shall each do or cause to be done all
things necessary to preserve and keep in full force and effect their existence and the existence of
each of the Restricted Subsidiaries in accordance with their respective organizational documents,
and the material rights, licenses and franchises of the Company, the Issuer and each Restricted
Subsidiary; provided, that the Company and the Issuer are not required to preserve any such right,
license or franchise, or the existence of any Restricted Subsidiary, if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole; and provided, further, that this Section not prohibit any
transaction otherwise permitted by Section 4.10 or Section 4.14.



     Section 4.04. Payment of Taxes and Other Claims. The Company shall pay or discharge, and
cause each of its Subsidiaries to pay or discharge before the same become delinquent (a) all
material taxes, assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or its income or profits or property, and (b) all material lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the property of the Company
or any Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.



     Section 4.05. Maintenance of Properties and Insurance. (a) The Company shall cause all
properties used or useful in the conduct of its business or the business of any of its Restricted
Subsidiaries to be maintained and kept in good condition, repair and working order as in the
judgment of the Company may be necessary so that the business of the Company and its Restricted
Subsidiaries may be properly and advantageously conducted at all times; provided, that nothing in
this Section prevents the Company or any Restricted Subsidiary from



55









 




discontinuing the use,
operation or maintenance of any of such properties or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company, desirable in the conduct of the
business of the Company and its Restricted Subsidiaries taken as a whole.




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



     Section 4.06. Limitations on Indebtedness. (a) The Company and the Issuer will not, and
will not cause or permit any Restricted Subsidiary, directly or indirectly, to create, incur,
assume, become liable for or guarantee the payment of (collectively, an “incurrence”) any
Indebtedness (including Acquired Indebtedness) unless, after giving effect thereto and the
application of the proceeds therefrom, the Consolidated Fixed Charge Coverage Ratio on the date
thereof would be at least 2.0 to 1.0.



     (b) Notwithstanding the foregoing, the provisions of this Indenture will not prevent the
incurrence of:




     (i) Permitted Indebtedness,




     (ii) Refinancing Indebtedness,




     (iii) Non-Recourse Indebtedness,




     (iv) any Guarantee of Indebtedness represented by the Notes,




     (v) any guarantee of Indebtedness incurred under Credit Facilities in compliance with
this Indenture; and




     (vi) any guarantee by the Issuer, the Company or any Guarantor of Indebtedness that
is permitted to be incurred in compliance with this Indenture; provided that in the event
such Indebtedness that is being guaranteed is subordinated to the Notes or a Guarantee, as
the case may be, then the related guarantee shall be subordinated in right of payment to
the Notes or such Guarantee, as the case may be.



     (c) No member of the Secured Group may guarantee any Indebtedness of the Company, the Issuer
or any Restricted Subsidiary that is not a member of



56









 




the Secured Group pursuant to clauses (v) and
(vi) of Section 4.06(b) unless such guarantee constitutes Permitted Secured Indebtedness.




     (d) For purposes of determining compliance with this covenant, in the event that an item of
Indebtedness may be incurred through the first paragraph of this covenant or by meeting the
criteria of one or more of the types of Indebtedness described in the second paragraph of this
covenant (or the definitions of the terms used therein), the Company, in its sole discretion,




     (i) may classify such item of Indebtedness under and comply with either of such
paragraphs (or any of such definitions), as applicable,




     (ii) may classify and divide such item of Indebtedness into more than one of such
paragraphs (or definitions), as applicable, and




     (iii) may elect to comply with such paragraphs (or definitions), as applicable, in
any order.



     (e) The Company and the Issuer will not, and will not cause or permit any Guarantor to,
directly or indirectly, in any event incur any Indebtedness that purports to be by its terms (or by
the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of
the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly subordinated to the
Notes or the Guarantee of such Guarantor, as the case may be, to the same extent and in the same
manner as such Indebtedness is subordinated to such other Indebtedness of the Company or such
Guarantor, as the case may be.



     (f) In addition to the foregoing, the Company and the Issuer will not cause or permit any
member of the Secured Group to, and no member of the Secured Group will, incur any Indebtedness to
finance an acquisition of Property if, at the time of incurrence, the acquisition of such Property
was more than 50% financed with Indebtedness.



     Section 4.07. Limitations on Restricted Payments. (a) The Company and the Issuer will not,
and will not cause or permit any Restricted Subsidiary to, directly or indirectly, make any
Restricted Payment unless:




     (i) no Default or Event of Default shall have occurred and be continuing at the time
of or immediately after giving effect to such Restricted Payment;




     (ii) immediately after giving effect to such Restricted Payment, the Company could
incur at least $1.00 of Indebtedness pursuant to Section 4.06(a) hereof; and



57









 






     (iii) immediately after giving effect to such Restricted Payment, the aggregate
amount of all Restricted Payments (including the Fair Market Value of any non-cash
Restricted Payment) declared or made on or after the Issue Date does not exceed the sum
of:




     (A) 50% of the Consolidated Net Income of the Company on a cumulative basis
during the period (taken as one accounting period) from and including February
1, 2011 and ending on the last day of the Company’s fiscal quarter immediately
preceding the date of such Restricted Payment (or in the event such Consolidated
Net Income shall be a deficit, minus 100% of such deficit), plus




     (B) 100% of the aggregate net cash proceeds of and the Fair Market Value of
Property received by the Company from (1) any capital contribution to the
Company after February 1, 2011 or any issue or sale after February 1, 2011 of
Qualified Stock (other than (x) to any Subsidiary of the Company or (y) any
Excluded Contribution) and (2) the issue or sale after February 1, 2011 of any
Indebtedness or other securities of the Company convertible into or exercisable
for Qualified Stock of the Company that have been so converted or exercised, as
the case may be, plus




     (C) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment (or if the Investment was made prior to
February 1, 2011, that would have constituted a Restricted Payment if made after
February 1, 2011, if such disposition or repayment results in cash received by
the Company, the Issuer or any Restricted Subsidiary), an amount (to the extent
not included in the calculation of Consolidated Net Income referred to in (A))
equal to the lesser of (x) the return of capital with respect to such Investment
(including by dividend, distribution or sale of Capital Stock) and (y) the
amount of such Investment that was treated (or would have been treated when
made) as a Restricted Payment, in either case, less the cost of the disposition
or repayment of such Investment (to the extent not included in the calculation
of Consolidated Net Income referred to in (A)), plus




     (D) with respect to any Unrestricted Subsidiary that is redesignated as a
Restricted Subsidiary after February 1, 2011, in accordance with the definition
of “Unrestricted Subsidiary” (so long as the designation of such Subsidiary as
an Unrestricted Subsidiary was treated as a Restricted Payment made after



58









 




February 1, 2011, and only to the extent not included in the calculation of
Consolidated Net Income referred to in (A)), an amount equal to the lesser of
(x) the proportionate interest of the Company or a Restricted Subsidiary in an
amount equal to the excess of (1) the total assets of such Subsidiary, valued on
an aggregate basis at the lesser of book value and Fair Market Value thereof,
over (2) the total liabilities of such Subsidiary, determined in accordance with
GAAP, and (y) the Designation Amount at the time of such Subsidiary’s
designation as an Unrestricted Subsidiary, plus





          (E) $10.0 million.



     (b) clauses (ii) and (iii) of Section 4.07(a) will not prohibit:




     (i) the payment of any dividend within 60 days of its declaration if such dividend
could have been made on the date of its declaration without violation of the provisions of
this Indenture;




     (ii) the purchase, redemption, or other acquisition, cancellation or retirement for
value of any shares of Capital Stock of the Company in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company
or constituting an Excluded Contribution) of, shares of Qualified Stock;




     (iii) the making of Restricted Investments in joint ventures in an aggregate amount
made under this clause (iii) not to exceed Excluded Contributions (after giving effect to
all subsequent reductions in the amount of any Restricted Investment in a joint venture
made pursuant to this clause (iii) as a result of the repayment or disposition thereof for
cash, not to exceed the amount of such Restricted Investment previously made pursuant to
this clause (iii);




     (iv) the payment of dividends on Preferred Stock and Disqualified Stock up to an
aggregate amount of $10.0 million in any fiscal year; provided that immediately after
giving effect to any declaration of such dividend, the Company could incur at least $1.00
of Indebtedness pursuant to Section 4.06(a);




     (v) the purchase, redemption or other acquisition, cancellation or retirement for
value of Capital Stock, or options, warrants, equity appreciation rights or other rights
to purchase or acquire Capital Stock, of the Company or any Subsidiary held by officers or
employees or former officers or employees of the Company or any Subsidiary (or their
estates



59









 






or beneficiaries under their estates) not to exceed $10.0 million in the aggregate
since the Issue Date;




     (vi) the making, by members of the Secured Group, of (A) Investments in any Permitted
Joint Venture (which Investment may be made via an Investment in the JV Holding Company,
if any, owning such Permitted Joint Venture) or (B) dividends to the Company or any of its
other Restricted Subsidiaries, in an aggregate amount under this clause (vi) not to exceed
the amount of cash and Cash Equivalents received by the Secured Group after the Issue Date
constituting Excluded Fee Payments; and




     (vii) Restricted Payments, if any, made in connection with the repurchase,
redemption, defeasance or other acquisition of the Existing Notes pursuant to the exchange
offers described in the Offering Memorandum;


provided, however, that each Restricted Payment described in clauses (i), (ii) and (vi)(A) of this
Section 4.07(b) shall be taken into account for purposes of computing the aggregate amount of all
Restricted Payments pursuant to clause (iii) of Section 4.07(a).




     (c) For purposes of determining the aggregate and permitted amounts of Restricted Payments
made, the amount of any guarantee of any Investment in any Person that was initially treated as a
Restricted Payment and which was subsequently terminated or expired, net of any amounts paid by the
Company or any Restricted Subsidiary in respect of such guarantee, shall be deducted.



     (d) In determining the “Fair Market Value of Property” for purposes of clause (iii) of Section
4.07(a), Property other than cash, Cash Equivalents and Marketable Securities shall be deemed to be
equal in value to the “equity value” of the Capital Stock or other securities issued in exchange
therefor. The equity value of such Capital Stock or other securities shall be equal to (i) the
number of shares of Common Equity issued in the transaction (or issuable upon conversion or
exercise of the Capital Stock or other securities issued in the transaction) multiplied by the
closing sale price of the Common Equity on its principal market on the date of the transaction
(less, in the case of Capital Stock or other securities which require the payment of consideration
at the time of conversion or exercise, the aggregate consideration payable thereupon) or (ii) if
the Common Equity is not then traded on the New York Stock Exchange, NYSE Amex or Nasdaq Stock
Market, or if the Capital Stock or other securities issued in the transaction do not consist of
Common Equity (or Capital Stock or other securities convertible into or exercisable for Common
Equity), the value (if more than $10.0 million) of such Capital Stock or other securities as
determined by a nationally recognized investment banking firm retained by the Board of Directors of
the Company.



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     Section 4.08. Limitations on Liens. (a) The Company and the Issuer will not, and will not
cause or permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens on
the Collateral, other than Permitted Collateral Liens.



     (b) The Company and the Issuer will not, and will not cause or permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Liens securing any obligation or
liability, other than Permitted Liens, on any of its Property, or on any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary (in each case, other than such Property, shares of
Capital Stock or Indebtedness constituting Collateral) unless contemporaneously therewith or prior
thereto all payments due under the Indenture and the Notes are secured on an equal and ratable
basis with the obligation or liability so secured until such time as such obligation or liability
is no longer secured by a Lien.



     (c) No member of the Secured Group will create, incur, assume or suffer to exist any Liens on
the Capital Stock of any Permitted Joint Venture or JV Holding Company owned by such member, other
than Liens securing Indebtedness or other obligations of such Permitted Joint Venture or JV Holding
Company, unless contemporaneously therewith or prior thereto all payments due under the Indenture
and the Notes are secured on an equal and ratable basis with the obligation or liability so secured
until such time as such obligation or liability is no longer secured by a Lien.



     Section 4.09. Limitations on Restrictions Affecting Restricted Subsidiaries. The Company and
the Issuer will not, and will not cause or permit any Restricted Subsidiary to, create, assume or
otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction
(other than encumbrances or restrictions imposed by law or by judicial or regulatory action or by
provisions of agreements that restrict the assignability thereof) on the ability of any Restricted
Subsidiary to:



     (a) pay dividends or make any other distributions on its Capital Stock or any other interest
or participation in, or measured by, its profits, owned by the Company or any other Restricted
Subsidiary, or pay interest on or principal of any Indebtedness owed to the Company or any other
Restricted Subsidiary,



     (b) make loans or advances to the Company or any other Restricted Subsidiary, or



     (c) transfer any of its property or assets to the Company or any other Restricted Subsidiary,



     except for:



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     (i) encumbrances or restrictions existing under or by reason of applicable law,




     (ii) contractual encumbrances or restrictions in effect at or entered into on the
Issue Date and any amendments, modifications, restatements, renewals, supplements,
refundings, replacements or refinancings thereof; provided, that such amendments,
modifications, restatements, renewals, supplements, refundings, replacements or
refinancings are no more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such contractual encumbrances or
restrictions, as in effect at or entered into on the Issue Date,




     (iii) any restrictions or encumbrances arising under Acquired Indebtedness; provided
that such encumbrance or restriction applies only to either the assets that were subject
to the restriction or encumbrance at the time of the acquisition or the obligor on such
Indebtedness and its Subsidiaries prior to such acquisition,




     (iv) any restrictions or encumbrances arising in connection with Refinancing
Indebtedness; provided, however, that any restrictions and encumbrances of the type
described in this clause (iv) that arise under such Refinancing Indebtedness shall not be
materially more restrictive or apply to additional assets than those under the agreement
creating or evidencing the Indebtedness being refunded, refinanced, replaced or extended,




     (v) any Permitted Collateral Lien, Permitted Lien or any other agreement restricting
the sale or other disposition of property, securing Indebtedness permitted by this
Indenture if such Permitted Collateral Lien, Permitted Lien, or agreement does not
expressly restrict the ability of a Subsidiary of the Company to pay dividends or make or
repay loans or advances prior to default thereunder,




     (vi) reasonable and customary borrowing base covenants set forth in agreements
evidencing Indebtedness otherwise permitted by the Indenture,




     (vii) customary non-assignment provisions in leases, licenses, encumbrances,
contracts or similar assets entered into or acquired in the ordinary course of business,




     (viii) any restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or
disposition,



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     (ix) encumbrances or restrictions existing under or by reason of this Indenture, the
Notes or the Guarantees and substantially similar encumbrances or restrictions existing
under Permitted Secured Indebtedness,




     (x) purchase money obligations that impose restrictions on the property so acquired
of the nature described in clause (c) of this Section 4.09,




     (xi) Liens permitted under the Indenture securing Indebtedness that limit the right
of the debtor to dispose of the assets subject to such Lien,




     (xii) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, assets sale agreements, stock sale agreements and
other similar agreements,




     (xiii) customary provisions of any franchise, distribution or similar agreements,




     (xiv) restrictions on cash or other deposits or net worth imposed by contracts
entered into in the ordinary course of business, and




     (xv) any encumbrance or restrictions of the type referred to in clauses (a), (b) or
(c) of this Section 4.09 imposed by any amendments, modifications, restatements, renewals,
supplements, refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiv) of this Section 4.09, provided, that
such amendments, modifications, restatements, renewals, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Company’s Board of
Directors, no more restrictive with respect to such dividend and other payment
restrictions than those contained in the dividend or other payment restrictions prior to
such amendment, modification, restatement, renewal, supplement, refunding, replacement or
refinancing.



     Section 4.10. Limitations on Dispositions of Assets. (a) The Company and the Issuer will
not, and will not cause or permit any Restricted Subsidiary to, make any Asset Disposition unless:
(x) the Company (or such Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Disposition at least equal to the Fair Market Value thereof, and (y) not less
than 70% of the consideration received by the Company (or such Restricted Subsidiary, as the case
may be) is in the form of cash, Cash Equivalents and Marketable Securities (which must be pledged
as Collateral if the assets disposed of constituted Collateral).



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     (b) The amount of (i) any Indebtedness (other than any Subordinated Indebtedness) of the
Company or any Restricted Subsidiary that is actually assumed by the transferee in such Asset
Disposition (other than a disposition of Collateral (unless the Indebtedness so assumed consists of
Indebtedness under the Notes or other Indebtedness secured by parity Liens on the Collateral)) and
(ii) the fair market value (as determined in good faith by the Board of Directors of the Company)
of any property or assets (including Capital Stock of any Person that will be a Restricted
Subsidiary following receipt thereof) received that are used or useful in a Real Estate Business
(provided that (except as permitted by clause (c) under the definition of “Permitted Investment”)
to the extent that the assets disposed of in such Asset Disposition were Collateral, such property
or assets (i) are received by a member of the Secured Group and (ii) are pledged as Collateral
under the Security Documents substantially simultaneously with such sale, with the Lien on such
Collateral securing the Guarantees being of the same priority with respect to the Guarantees as the
Lien on the assets disposed of), shall be deemed to be consideration required by clause (y) of
Section 4.10(a) for purposes of determining the percentage of such consideration received by the
Company or the Restricted Subsidiaries.



     (c) The Net Cash Proceeds of an Asset Disposition shall, within one year, at the Company’s
election, (1) be used by the Company or a Restricted Subsidiary to invest in assets (including
Capital Stock of any Person that is or will be a Restricted Subsidiary following investment
therein) used or useful in the business of the construction and sale of homes conducted by the
Company and the Restricted Subsidiaries (provided that (except as permitted by clause (c) under the
definition of “Permitted Investment” to the extent that the assets disposed of in such Asset
Disposition were Collateral, such assets are pledged as Collateral under the Security Documents
with the Lien on such Collateral securing the Guarantees being of the same priority with respect to
the Guarantees as the Lien on the assets disposed of), (2) be used to permanently prepay or
permanently repay any (i) Indebtedness which had been secured by the assets sold in the relevant
Asset Disposition, to the extent the assets sold were not Collateral or (ii) Indebtedness of a
Restricted Subsidiary that is not a Guarantor, to the extent the assets sold were not Collateral,
or (3) be applied to make an Offer to Purchase Notes and, if the Company or a Restricted Subsidiary
elects or is required to do so, to repay, repurchase or redeem any other Permitted Secured
Indebtedness (or cash collateralize letters of credit that constitute Permitted Secured
Indebtedness incurred in accordance with the Indenture in connection with a Credit Facility) and,
if the Company or a Restricted Subsidiary elects or is required to do so and the assets disposed of
were not Collateral, to repay, purchase or redeem any unsubordinated Indebtedness (on a pro rata
basis if the amount available for such repayment, purchase, redemption or cash collateralization is
less than the aggregate amount of (x) the principal amount of the Notes tendered in such Offer to
Purchase, (y) the lesser of the principal amount, or accreted value, of such other



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Permitted
Secured Indebtedness tendered or to be repaid, redeemed, repurchased or cash collateralized and (z)
the lesser of the principal amount, or accreted value, of such unsubordinated Indebtedness tendered
or to be repaid, repurchased or redeemed, plus, in each case accrued interest to the date of
repayment, purchase or redemption) at 100% of the principal amount or accreted value thereof, as
the case may be, plus accrued and unpaid interest, if any, to the date of repurchase, repayment or
redemption. Pending any such application under this Section 4.10(c), Net Cash Proceeds may be used
to temporarily reduce Indebtedness or otherwise be invested in any manner not prohibited by this
Indenture.




     (d) Notwithstanding the foregoing, (A) the Company will not be required to apply such Net Cash
Proceeds in accordance with clauses (2) or (3) of Section 4.10(c) except to the extent that such
Net Cash Proceeds, together with the aggregate Net Cash Proceeds of prior Asset Dispositions (other
than those so used) which have not been applied in accordance with this provision and as to which
no prior prepayments or repayments shall have been made and no Offer to Purchase shall have been
made, exceed $25 million and (B) in connection with an Asset Disposition, the Company and the
Restricted Subsidiaries will not be required to comply with the requirements of clause (y) of
Section 4.10(a) to the extent that the non-cash consideration received in connection with such
Asset Disposition, together with the sum of all non-cash consideration received in connection with
all prior Asset Dispositions that has not yet been converted into cash, Cash Equivalents or
Marketable Securities, does not exceed $25 million; provided, however, that when any non-cash
consideration is converted into cash, Cash Equivalents or Marketable Securities, such cash shall
constitute Net Cash Proceeds and be subject to Section 4.10(c). Notwithstanding anything to the
contrary in this Indenture, in connection with the making of an Offer to Purchase pursuant to
Section 4.10(c)(3), Net Cash Proceeds of an Asset Disposition in which the assets disposed of
constituted Collateral may be received by or transferred to the Issuer, solely for purposes of
funding such Offer to Purchase.



     Section 4.11. Guarantees by Restricted Subsidiaries. Each existing Restricted Subsidiary
(other than the Issuer (for so long as it remains the Issuer)) will be a Guarantor. The Company is
permitted to cause any Unrestricted Subsidiary to be a Guarantor. If the Issuer, the Company or
any of its Restricted Subsidiaries acquires or creates a Restricted Subsidiary after the Issue
Date, such Restricted Subsidiary shall execute a guarantee substantially in the form included in
Exhibit A, execute a supplemental indenture in the form of Exhibit B, and deliver an Opinion of
Counsel to the Trustee to the effect that the supplemental indenture has been duly authorized,
executed and delivered by the new Restricted Subsidiary and constitutes a valid and binding
obligation of the new Restricted Subsidiary, enforceable against the new Restricted Subsidiary in
accordance with its terms (subject to customary exceptions).



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     Section 4.12. Repurchase of Notes upon a Change of Control. (a) In the event that there
shall occur a Change of Control, each Holder of Notes shall have the right, at such Holder’s
option, to require the Issuer to purchase all or any part of such Holder’s Notes on a date (the
“Repurchase Date”) that is no later than 90 days after notice of the Change of Control, at 101% of
the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to
the Repurchase Date.



     (b) On or before the thirtieth day after any Change of Control, the Issuer is obligated to
mail, or cause to be mailed, to all Holders of record of Notes and the Trustee a notice regarding
the Change of Control and the repurchase right. The notice shall state the Repurchase Date, the
date by which the repurchase right must be exercised, the price for each series of the Notes and
the procedure which the Holder must follow to exercise such right. Substantially simultaneously
with mailing of the notice, the Issuer shall cause a copy of such notice to be published in a
newspaper of general circulation in the Borough of Manhattan, The City of New York. To exercise
such right, the Holder of such Note must deliver, at least ten days prior to the Repurchase Date,
written notice to the Issuer (or an agent designated by the Issuer for such purpose) of the
Holder’s exercise of such right, together with the Note with respect to which the right is being
exercised, duly endorsed for transfer; provided, however, that if mandated by applicable law, a
Holder may be permitted to deliver such written notice nearer to the Repurchase Date than may be
specified by the Issuer.



     (c) The Issuer will comply with applicable law, including Section 14(e) of the Exchange Act
and Rule 14e-1 thereunder, if applicable, if the Issuer is required to give a notice of a right of
repurchase as a result of a Change of Control.



     Section 4.13. Limitations on Transactions with Affiliates. (a) The Company and the Issuer
will not, and will not cause or permit any Restricted Subsidiary to, make any loan, advance,
guarantee or capital contribution to, or for the benefit of, or sell, lease, transfer or otherwise
dispose of any property or assets to or for the benefit of, or purchase or lease any property or
assets from, or enter into or amend any contract, agreement or understanding with, or for the
benefit of, any Affiliate of the Company or any Affiliate of any of the Company’s Subsidiaries or
any holder of 10% or more of the Common Equity of the Company (including any Affiliates of such
holders), in a single transaction or series of related transactions (each, an “Affiliate
Transaction”), except for any Affiliate Transaction the terms of which are at least as favorable as
the terms which could be obtained by the Company, the Issuer or such Restricted Subsidiary, as the
case may be, in a comparable transaction made on an arm’s-length basis with Persons who are not
such a holder, an Affiliate of such a holder or an Affiliate of the Company or any of the Company’s
Subsidiaries.



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     (b) In addition, the Company and the Issuer will not, and will not cause or permit any
Restricted Subsidiary to, enter into an Affiliate Transaction unless:




     (i) with respect to any such Affiliate Transaction involving or having a value of
more than $1.0 million, the Company shall have (x) obtained the approval of a majority of
the Board of Directors of the Company and (y) either obtained the approval of a majority
of the Company’s disinterested directors or obtained an opinion of a qualified independent
financial advisor to the effect that such Affiliate Transaction is fair to the Company,
the Issuer or such Restricted Subsidiary, as the case may be, from a financial point of
view, and




     (ii) with respect to any such Affiliate Transaction involving or having a value of
more than $10.0 million, the Company shall have (x) obtained the approval of a majority of
the Board of Directors of the Company and (y) delivered to the Trustee an opinion of a
qualified independent financial advisor to the effect that such Affiliate Transaction is
fair to the Company, the Issuer or such Restricted Subsidiary, as the case may be, from a
financial point of view.



     (c) Notwithstanding the foregoing, an Affiliate Transaction will not include:




     (i) any contract, agreement or understanding with, or for the benefit of, or plan for
the benefit of, employees of the Company or its Subsidiaries generally (in their
capacities as such) that has been approved by the Board of Directors of the Company,




     (ii) Capital Stock issuances to directors, officers and employees of the Company or
its Subsidiaries pursuant to plans approved by the stockholders of the Company,




     (iii) any Restricted Payment otherwise permitted under Section 4.07 hereof or any
Permitted Investment (other than a Permitted Investment referred to in clause (b) of the
definition thereof, except as permitted by clause (iv) below),




     (iv) any transaction between or among (A) the Company and one or more Restricted
Subsidiaries or between or among Restricted Subsidiaries, so long as no such Restricted
Subsidiaries are members of the Secured Group or (B) any members of the Secured Group
(provided, however, that in each case no such transaction shall involve any other
Affiliate of the Company (other than an Unrestricted Subsidiary to the extent the
applicable amount constitutes a Restricted Payment permitted by this Indenture)),



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     (v) any transaction between one or more Restricted Subsidiaries and one or more
Unrestricted Subsidiaries where all of the payments to, or other benefits conferred upon,
such Unrestricted Subsidiaries are substantially contemporaneously dividended, or
otherwise distributed or transferred without charge, to the Company or a Restricted
Subsidiary,




     (vi) issuances, sales or other transfers or dispositions of mortgages and
collateralized mortgage obligations in the ordinary course of business between Restricted
Subsidiaries and Unrestricted Subsidiaries of the Company, and




     (vii) the payment of reasonable and customary fees to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company, the Issuer or any
Restricted Subsidiary.



     Section 4.14. Limitations on Mergers, Consolidations and Sales of Assets. Neither the Issuer
nor any Guarantor will consolidate or merge with or into, or sell, lease, convey or otherwise
dispose of all or substantially all of its assets (including, without limitation, by way of
liquidation or dissolution), or assign any of its obligations under the Notes, the Guarantees or
this Indenture (as an entirety or substantially as an entirety in one transaction or in a series of
related transactions), to any Person (in each case other than in a transaction in which the
Company, the Issuer or a Restricted Subsidiary is the survivor of a consolidation or merger, or the
transferee in a sale, lease, conveyance or other disposition) unless:




     (i) the Person formed by or surviving such consolidation or merger (if other than the
Company, the Issuer or the Guarantor, as the case may be), or to which such sale, lease,
conveyance or other disposition or assignment will be made (collectively, the
“Successor”), is a corporation or other legal entity organized and existing under the laws
of the United States or any state thereof or the District of Columbia, and the Successor
assumes by supplemental indenture in a form reasonably satisfactory to the Trustee all of
the obligations of the Company, the Issuer or the Guarantor, as the case may be, under the
Notes or a Guarantee, as the case may be, and this Indenture and the Security Documents,




     (ii) immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing, and




     (iii) immediately after giving effect to such transaction, the Company (or its
Successor) could incur at least $1.00 of Indebtedness pursuant to Section 4.06(a) hereof.



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     The foregoing provisions shall not apply to: (i) a transaction involving the sale or
disposition of Capital Stock of a Guarantor, or the consolidation or merger of a Guarantor, or the
sale, lease, conveyance or other disposition of all or substantially all of the assets of a
Guarantor, that in any such case results in such Guarantor being released from its Guarantee
pursuant to Section 6.03, or (ii) a transaction the purpose of which is to change the state of
incorporation of the Company, the Issuer or any Guarantor.



     Notwithstanding the foregoing:




     (i) no member of the Secured Group may merge with or into the Company or any of its
other Subsidiaries or sell, lease, convey or otherwise dispose of all or substantially all
of its assets to any of them, and




     (ii) the Company may not sell, lease, convey or otherwise dispose of all or
substantially all of assets of the Secured Group (including, without limitation, by way of
liquidation or dissolution), or assign any of their obligations under the Notes, the
Guarantees or the Indenture (as an entirety or substantially as an entirety in one
transaction or in a series of related transactions), to any Person or Persons (in each
case other than in a transaction in which a member of the Secured Group is the survivor of
a consolidation or merger, or the transferee in a sale, lease, conveyance or other
disposition and the Liens on the Collateral securing the applicable Guarantees remain with
the same priority as prior to such transactions).



     Section 4.15. Reports to Holders of Notes. (a) The Company shall file with the Commission
the annual reports and the information, documents and other reports required to be filed pursuant
to Section 13 or 15(d) of the Exchange Act. The Company shall file with the Trustee and mail to
each Holder of record of Notes such reports, information and documents within 15 days after it
files them with the Commission. In the event that the Company is no longer subject to these
periodic reporting requirements of the Exchange Act, it will nonetheless continue to file reports
with the Commission and the Trustee and mail such reports to each Holder of Notes as if it were
subject to such reporting requirements. Regardless of whether the Company is required to furnish
such reports to its stockholders pursuant to the Exchange Act, the Company will cause its
consolidated financial statements and a “Management’s Discussion and Analysis of Results of
Operations and Financial Condition” written report, similar to those that would have been required
to appear in annual or quarterly reports, to be delivered to Holders of Notes. In each quarterly
and annual report filed or provided pursuant to this Section 4.15, the Company shall include
quantitative disclosure about the assets and liabilities of the Secured Group that is consistent
with the disclosure about such assets and liabilities included in the Offering Memorandum.



69









 





     (b) The posting of the reports, information and documents referred to above on the Company’s
website or one maintained on its behalf for such purpose shall be deemed to satisfy the Company’s
delivery obligations to the Trustee and the Holders. In addition, availability of the foregoing
materials on the Commission’s EDGAR service shall be deemed to satisfy the Company’s delivery
obligations to the Trustee and the Holders. The Trustee shall have no obligation to monitor whether
the Company posts such reports, information and documents on its website or the Commission’s EDGAR
service.



     (c) For so long as any of the Notes remain outstanding and constitute “restricted securities”
under Rule 144, the Company will furnish to the Holders of Notes and prospective investors, upon
their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.



     (d) All “obligors,” as that term is defined under the Trust Indenture Act, on the Notes,
including the Issuer and the Guarantors, will comply with Section 314(a) of the Trust Indenture
Act.



     (e) Delivery of these reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of them will not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the
Issuer’s and/or the Company’s compliance with any of its covenants in this Indenture (as to which
the Trustee is entitled to rely exclusively on Officers’ Certificates).



     Section 4.16. Reports to Trustee. (a) The Company will deliver to the Trustee within 120
days after the end of each fiscal year a written statement by the Company’s independent public
accountants stating (i) that their audit examination has included a review of the terms of this
Indenture and the Notes as they relate to accounting matters, and (ii) whether, in connection with
their audit examination, any Default has come to their attention and, if a Default has come to
their attention, specifying the nature and period of the existence thereof.



     (b) The Company shall deliver to the Trustee, on or prior to each Interest Payment Date, an
Officers’ Certificate setting forth the amount of Additional Interest, if any, the Issuer is
required to pay on that Interest Payment Date. If no Additional Interest is required to be paid on
a given Interest Payment Date, no such Officers’ Certificate is required to be delivered to the
Trustee for that Interest Payment Date.



     (c) All “obligors,” as that term is defined under the Trust Indenture Act, on the Notes,
including the Issuer and the Guarantors, will comply with Section 314(a) of the Trust Indenture
Act. The Company will notify the Trustee when any Notes are listed on any national securities
exchange and of any delisting.



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     Section 4.17. Notice of Other Defaults. In the event that any Indebtedness of the Issuer or
any Guarantor is declared due and payable before its maturity because of the occurrence of any
default under such Indebtedness, the Issuer or the relevant Guarantor, as the case may be, shall
promptly deliver to the Trustee an Officers’ Certificate stating such declaration; provided, that
the term “Indebtedness” as used in this Section 4.17 shall not include Non-Recourse Indebtedness.



     Section 4.18. Further Assurances; Costs.



     (a) On the Issue Date, the Secured Group Guarantors will grant Liens on all their property
(other than Excluded Property) and take all appropriate steps to cause such Liens to be perfected
first priority liens (subject to Permitted Collateral Liens), including through filing of UCC-1
financing statements or otherwise, pursuant to, and to the extent required by, the Security
Documents to be entered into on the Issue Date and this Indenture.



     (b) If any member of the Secured Group at any time after the Issue Date acquires any new
property (other than Excluded Property) that is not automatically subject to a perfected Lien under
the Security Documents or any member of the Secured Group acquires or creates a Subsidiary, then
such member of the Secured Group will, subject to the requirements of the Security Documents, as
soon as practical after such property’s acquisition or it no longer being Excluded Property or
after such Subsidiary is acquired or created:




     (i) grant a Lien on such property (or, in the case of such a newly acquired or
created Subsidiary, all of its assets other than Excluded Property) in favor of the
Collateral Agent for the benefit of the holders of First-Priority Lien Obligations (and,
to the extent such grant would require the execution and delivery of a Security Document,
such member of the Secured Group shall execute and deliver a Security Document (including
a joinder thereto) on substantially the same terms as the Security Documents executed and
delivered on the Issue Date);




     (ii) cause the Lien granted in such Security Document to be duly perfected in any
manner permitted by law to the same extent as the Liens granted on the Issue Date are
perfected; and




     (iii) cause any such newly acquired or created Subsidiary other than a Restricted
Subsidiary to become a Guarantor.


Such member of the Secured Group shall deliver an Opinion of Counsel to the Trustee in respect of
the validity, perfection or priority of any Lien grant referred to in this clause (a) by a new
guarantor addressing customary matters (and containing customary exceptions) consistent with the
Opinion of Counsel delivered on the Issue Date in respect of such matters.




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     (c) Notwithstanding anything to the contrary set forth in clause (a) of this Section 4.18 or
elsewhere in this Indenture or any Security Document:




     (i) the members of the Secured Group shall enter into control agreements with respect
to the Collateral constituting deposit, checking and securities accounts (other than
Excluded Accounts (as defined in the Security Agreement)) as soon as commercially
reasonable following the Issue Date, but in no event later than 90 days following the
Issue Date;




     (ii) no control agreements shall be required for Excluded Accounts (as defined in the
Security Agreement) and Excluded Fee Payments may be deposited therein; and




     (iii) in the event that Rule 3-16 of Regulation S-X under the Securities Act requires
or would require (or is replaced with another rule or regulation, or any other law, rule
or regulation is adopted, which would require) the filing with the Commission of separate
financial statements of a Guarantor that are not otherwise required to be filed, then the
capital stock or other securities of such Guarantor need not be pledged pursuant to clause
(a) of this Section 4.18 and shall automatically be deemed released and to not be and to
not have been part of the Collateral, but only to the extent necessary to not be subject
to such requirement. In such event, the Security Documents may be amended or modified,
without the consent of any Holder of Notes, to the extent necessary to evidence the
release of Liens securing the First-Priority Lien Obligations on the shares of capital
stock or other securities that are so deemed to no longer constitute part of the
Collateral.



     (d) The Issuer will bear and pay all legal expenses, collateral audit and valuation costs,
filing fees, insurance premiums and other costs associated with the performance of the obligations
of the members of the Secured Group set forth in this Section 4.18 and will also pay or reimburse
the Trustee and Collateral Agent for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee and Collateral Agent in connection therewith, including
the reasonable compensation and expenses of the Trustee and Collateral Agent’s agents and counsel.



     (e) Neither the Issuer nor any of the Guarantors will be permitted to take any action, or
knowingly or negligently omit to take any action, which action or omission might or would have the
result of materially impairing the security interest with respect to the Collateral for the benefit
of the Trustee and the Holders of the Notes.



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     Section 4.19. Limitation of Applicability of Certain Covenants if Notes Rated Investment
Grade.



     (a) Notwithstanding this Article 4, the Issuer’s, the Company’s and its Restricted
Subsidiaries’ obligations to comply with the provisions of this Indenture described above under
Sections 4.06, 4.07, 4.09, 4.10, 4.13 and clause (iii) of the first paragraph of Section 4.14 will
be suspended (such suspended covenants, the “Suspended Covenants”) and cease to have any further
effect from and after the first date when the Notes issued under this Indenture are rated
Investment Grade (the “Suspension Date”); provided, that if the Notes subsequently cease to be
rated Investment Grade, then, from and after the time the Notes cease to be rated Investment Grade,
the Issuer’s, the Company’s and its Restricted Subsidiaries’ obligation to comply with the
Suspended Covenants shall be reinstated.



     (b) With respect to Restricted Payments made after any such reinstatement, the amount of
Restricted Payments made after the Issue Date will be calculated as though Section 4.07 had been in
effect during the entire period after such date. Accordingly, Restricted Payments made after the
Suspension Date will reduce the amount available to be made as Restricted Payments under Section
4.07(a).



     (c) Notwithstanding clauses (a) and (b) of this Section 4.19, in the event of any such
reinstatement of the Obligation to comply with the Suspended Covenants, no action taken or omitted
to be taken by the Company or any of its Subsidiaries prior to such reinstatement, or action taken
by the Company or any of its Subsidiaries at any time pursuant to a contractual obligation arising
prior to such reinstatement (not entered into in contemplation of such reinstatement) shall give
rise to a Default or Event of Default under this Indenture upon reinstatement.



     (d) The Issuer shall promptly notify the Trustee of any suspension or reinstatement of the
above-mentioned covenants.



ARTICLE 5

Remedies




     Section 5.01. Events of Default. “Event of Default” with respect to any series of the Notes,
as applicable, means any one or more of the following events:




     (i) the failure by the Company, the Issuer and the Guarantors to pay interest on, or
Additional Interest, if any, with respect to, any Note of such series when the same
becomes due and payable and the continuance of any such failure for a period of 30 days;



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     (ii) the failure by the Company, the Issuer and the Guarantors to pay the principal
or premium of any Note of such series when the same becomes due and payable at maturity,
upon acceleration or otherwise;




     (iii) the failure by the Company, the Issuer or any Restricted Subsidiary to comply
with any of its agreements or covenants in, or provisions of, the Notes, the Guarantees or
this Indenture and such failure continues for the period and after the notice specified
below (except in the case of a default under Section 4.12 and 4.14, which will constitute
Events of Default with notice but without passage of time);




     (iv) the acceleration of any Indebtedness (other than Non-Recourse Indebtedness) of
the Company, the Issuer or any Restricted Subsidiary that has an outstanding principal
amount of $10.0 million or more, individually or in the aggregate, and such acceleration
does not cease to exist, or such Indebtedness is not satisfied, in either case within 30
days after such acceleration;




     (v) the failure by the Company, the Issuer or any Restricted Subsidiary to make any
principal or interest payment in an amount of $10.0 million or more, individually or in
the aggregate, in respect of Indebtedness (other than Non-Recourse Indebtedness) of the
Company or any Restricted Subsidiary within 30 days of such principal or interest becoming
due and payable (after giving effect to any applicable grace period set forth in the
documents governing such Indebtedness);




     (vi) a final judgment or judgments that exceed $10.0 million or more, individually or
in the aggregate, for the payment of money having been entered by a court or courts of
competent jurisdiction against the Company, the Issuer or any of its Restricted
Subsidiaries and such judgment or judgments is not satisfied, stayed, annulled or
rescinded within 60 days of being entered;




     (vii) the Company, the Issuer or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:




     (A) commences a voluntary case,




     (B) consents to the entry of an order for relief against it in an
involuntary case,




     (C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or



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     (D) makes a general assignment for the benefit of its creditors;




     (viii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:




     (A) is for relief against the Company, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an involuntary case,




     (B) appoints a Custodian of the Company, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary or a Custodian for all or
substantially all of the property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or




     (C) orders the liquidation of the Company, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary,



     and the order or decree remains unstayed and in effect for 60 days;




     (ix) any Guarantee of a Guarantor which is a Significant Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such Guarantee and this
Indenture) or is declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Guarantee (other than by reason of release of a
Guarantor from its Guarantee in accordance with the terms of this Indenture and the
Guarantee); or




     (x) the Liens created by the Security Documents shall at any time not constitute
valid and perfected Liens on any material portion of the Collateral intended to be covered
thereby (to the extent perfection by filing, registration, recordation or possession is
required by this Indenture or the Security Documents) other than in accordance with the
terms of the relevant Security Document and this Indenture and other than the satisfaction
in full of all Obligations under this Indenture or the release or amendment of any such
Lien in accordance with the terms of this Indenture or the Security Documents, or, except
for expiration in accordance with its terms or amendment, modification, waiver,
termination or release in accordance with the terms of this Indenture and the relevant
Security Document, any of the Security Documents shall for whatever reason be terminated
or cease to be in full force and effect, if in either case, such default continues for 30
days after notice, or the enforceability thereof shall be contested by the Issuer or any
Guarantor.



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     A Default as described in subclause (iii) of this Section 5.01 will not be deemed an Event of
Default until the Trustee notifies the Company, or the Holders of at least 25 percent in principal
amount of the then outstanding Notes notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Section 4.12 and 4.14 hereof) the Company does not cure
the Default within 60 days after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a “Notice of Default.” If such a Default
is cured within such time period, it ceases.



     If an Event of Default (other than an Event of Default with respect to the Company or the
Issuer resulting from subclauses (vii) or (viii) of this Section 5.01), shall have occurred and be
continuing under this Indenture, the Trustee by notice to the Company, or the Holders of at least
25 percent in principal amount of the Notes then outstanding by notice to the Company and the
Trustee, may declare all Notes to be due and payable immediately. Upon such declaration of
acceleration, the amounts due and payable on the Notes will be due and payable immediately. If an
Event of Default with respect to the Company or the Issuer specified in subclauses (vii) or (viii)
of this Section 5.01 occurs, such an amount will ipso facto become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee and the Company or
any Holder. This provision, however, is subject to the condition that, if at any time after the
unpaid principal amount (or such specified amount) of the Notes shall have been so declared due and
payable and before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured installments of interest and Additional Interest, if any, upon
all of the Notes and the principal of all the Notes which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest and Additional Interest, if any, to
the extent that payment of such interest is enforceable under applicable law and on such principal
at the applicable rate borne by the Notes of each series to the date of such payment or deposit)
and the reasonable compensation, disbursements, expenses and advances of the Trustee and all other
amounts due the Trustee under Section 7.07, and any and all defaults under this Indenture, other
than the nonpayment of such portion of the principal amount of and accrued interest and Additional
Interest, if any, on Notes which shall have become due by acceleration, shall have been cured or
shall have been waived in accordance with Section 5.03 or provision deemed by the Trustee to be
adequate shall have been made therefor, then and in every such case the Holders of a majority in
aggregate principal amount of the Notes then outstanding, by written notice to the Issuer and to
the Trustee, may rescind and annul such declaration and its consequences; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall impair any right
consequent thereon. Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice



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or lapse of time or both would be an
Event of Default with respect to any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Note affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other event.




     If the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission or annulment or
for any reason or shall have been determined to be adverse to the Trustee, then and in every such
case the Issuer, the Trustee and the Holders of Notes shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of the Issuer, the
Trustee and the Holders of Notes shall continue as though no such proceeding had been taken.



     Except with respect to an Event of Default pursuant to clauses (i) or (ii) of this Section
5.01, the Trustee shall not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Responsible Officer of the Trustee by the Issuer, a Paying Agent
or any Holder and such notice references the Notes and this Indenture.



     Section 5.02. Other Remedies. If an Event of Default occurs and is continuing, the Trustee
may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding
at law or in equity to collect the payment of principal of, premium, if any, and interest or
Additional Interest, if any, on the Notes or to enforce the performance of any provision of the
Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.



     Section 5.03. Waiver of Defaults by Majority of Holders. By written notice to the Trustee
and the Company, the Holders of a majority in aggregate principal amount of the Notes then
outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of
Default hereunder and its consequences, except a Default in the payment of interest and Additional
Interest, if any, on, or the principal of, the Notes. Upon any such waiver, the Issuer, the
Trustee and the Holders of Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder
shall have been waived as permitted by this Section 5.03, said Default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured and to be not
continuing.



     Section 5.04. Direction of Proceedings. The Holders of a majority in aggregate principal
amount of the Notes then outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy



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available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Notes; provided, however, that (subject to the
provisions of Section 7.01) the Trustee shall have the right to decline to follow any such
direction if the Trustee shall determine upon advice of counsel that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board of directors, its
executive committee, or a trust committee of directors or Responsible Officers or both shall
determine that the action or proceeding so directed would involve the Trustee in personal
liability.




     Section 5.05. Application of Moneys Collected by Trustee. Any moneys collected by the
Trustee pursuant to this Article (including any proceeds from Collateral received pursuant to the
terms of the Security Documents) with respect to outstanding Notes shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the Notes and stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:




     FIRST: To the payment of costs and expenses of collection and reasonable compensation
to the Trustee (including in its role as Collateral Agent under the Security Documents),
its agents, attorneys and counsel, and all other expenses and liabilities incurred, and
all advances made, by the Trustee pursuant to Section 7.07 except as a result of its
negligence or bad faith;




     SECOND: If the principal of the Notes shall not have become due and be unpaid, to the
payment of interest or Additional Interest, if any, on the Notes, in the order of the
maturity of the installments of such interest or Additional Interest, if any, with
interest (to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest and Additional Interest, if any, at the applicable rate
borne by the Notes of each series, such payment to be made ratably to the Persons entitled
thereto;




     THIRD: If the principal of the Notes shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid upon the Notes for
principal, interest and Additional Interest, if any, with interest on the overdue
principal and (to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest and Additional Interest, if any, at the applicable rate
borne by the Notes of each series, and in case such moneys shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and interest and Additional Interest, if any, without preference or priority of
principal over interest or Additional Interest, if any, or of interest or Additional
Interest, if any, over principal, or of interest over Additional



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Interest, if any, or of
any installment of interest, if any, or Additional Interest, if any, over any other
installment of interest or Additional Interest, if any, ratably to the aggregate of such
principal and accrued and unpaid interest and Additional Interest, if any; and




     FOURTH: To the payment of any surplus then remaining to the Issuer, its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same.



     No claim for interest which in any manner at or after maturity shall have been transferred or
pledged separate or apart from the Notes to which it relates, or which in any manner shall have
been kept alive after maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Notes), purchase, funding or
otherwise by or on behalf or with the consent or approval of the Issuer shall be entitled, in case
of a default hereunder, to any benefit of this Indenture, except after prior payment in full of the
principal of all Notes and of all claims for interest not so transferred, pledged, kept alive,
extended, purchased or funded.



     Section 5.06. Proceedings by Holders. No holder of any Notes shall have any right by virtue
of or by availing of any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture for the appointment of a receiver
or trustee or similar official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding shall have made written request to the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have neglected or refused to institute any such action, suit or proceeding, it
being understood and intended, and being expressly covenanted by the Holder of every Note with
every other Holder and the Trustee, that no one or more Holders of Notes shall have any right in
any manner whatever by virtue of or by availing of any provision of this Indenture or of the Notes
to affect, disturb or prejudice the rights of any other Holder of Notes, or to obtain or seek to
obtain priority over or preference as to any other such Holder, or to enforce any right under this
Indenture or the Notes, except in the manner herein provided and for the equal, ratable and common
benefit of all Holders of Notes.



     Notwithstanding any other provisions in this Indenture, however, the right of any Holder of
any Note to receive payment of the principal of, premium, if any, and interest and Additional
Interest, if any, on such Note, on or after the maturity thereof, or to institute suit for the
enforcement of any such payment on or after



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such respective dates shall not be impaired or affected
without the consent of such Holder.




     Section 5.07. Proceedings by Trustee. In case of an Event of Default hereunder, the Trustee
may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by proceedings in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.



     Section 5.08. Remedies Cumulative and Continuing. All powers and remedies given by this
Article 5 to the Trustee or to the Holders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies available to the
Trustee or the Holders, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no delay or omission of
the Trustee or of any Holder to exercise any right or power accruing upon any default occurring and
continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver
of any such default or an acquiescence therein; and, subject to the provisions of Section 5.06,
every power and remedy given by this Article 5 or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the
Holders.



     Section 5.09. Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder
of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, or in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the cost of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section 5.09 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the then outstanding Notes,
or to any suit instituted by any Holders for the enforcement of the payment of the principal of,
premium, if any, or interest or Additional Interest, if any, on any Note against the Issuer on or
after the due date of such Note.



     Section 5.10. Notice of Defaults. (a) The Company is required to deliver to the Trustee an
annual statement regarding compliance with this Indenture, and



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include in such statement, if any
officer of the Company is aware of any Default or Event of Default, a statement specifying such
Default or Event of Default and what action the Company is taking or proposes to take with respect
thereto. In addition, the Company shall deliver to the Trustee prompt written notice of the
occurrence of any Default or Event of Default.




     (b) The Trustee shall, within 90 days after the occurrence of a default known to the Trustee,
with respect to the Notes of any series, mail to all Holders of Notes of such series, as the names
and the addresses of such Holders appear upon the Register, notice of all defaults, unless such
defaults shall have been cured before the giving of such notice (the term “default” for the purpose
of this Section 5.10(b) being hereby defined to be the events specified in clauses (i), (ii),
(iii), (iv), (v), (vi), (vii), (viii), (ix) and (x) of Section 5.01, not including periods of
grace, if any, provided for therein and irrespective of the giving of the written notice specified
in said clause (iii) but in the case of any default of the character specified in said clause (iii)
no such notice to Holders shall be given until at least 60 days after the giving of written notice
thereof to the Company pursuant to said clause (iii)); provided, however, that, except in the case
of default in the payment of the principal of, premium, if any, or interest and Additional
Interest, if any, on any of the Notes, or in the payment or satisfaction of a purchase obligation,
the Trustee shall be protected in withholding such notice if and so long as the board of directors,
the executive committee, a trust committee of directors or a Responsible Officer of the Trustee in
good faith determines that the withholding of such notice is in the best interests of the Holders.
Notice to Holders under this Section shall be given in the manner and to the extent provided in
Trust Indenture Act Section 313(c).



     Section 5.11. Waiver of Stay, Extension or Usury Laws. The Company, the Issuer and each
Guarantor covenants, to the extent permitted by applicable law, that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the Company, the Issuer
or the Guarantor from paying all or any portion of the principal of, premium, if any, or interest
or Additional Interest, if any, on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or that may affect the covenants or the performance of this Indenture.
The Company, the Issuer and each Guarantor hereby expressly waives, to the extent that it may
lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.



     Section 5.12. Trustee May File Proof of Claim. The Trustee may file proofs of claim and
other papers or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the



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compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders
allowed in any judicial proceedings relating to the Company, the Issuer or any Guarantor or their
respective creditors or property, and is entitled and empowered to collect, receive and distribute
any money, securities or other property payable or deliverable upon conversion or exchange of the
Notes or upon any such claims. Any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, if the Trustee consents to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any
other amounts due the Trustee hereunder. Nothing in this Indenture will be deemed to empower the
Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.




     Section 5.13. Payment of Notes on Default; Suit Therefor. The Issuer covenants that (a) if
default shall be made in the payment of any installment of interest and Additional Interest, if
any, upon the Notes of any series as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days, or (b) if default shall be made in the
payment of the principal of, and premium, if any, on the Notes of any series as and when the same
shall have become due and payable, whether at maturity of the Notes or upon redemption or by
declaration or otherwise, then, upon demand of the Trustee, the Issuer will pay to the Trustee, for
the benefit of the Holders of the Notes of such series, the whole amount that then shall have
become due and payable on all such Notes for principal, and premium, if any, or interest and
Additional Interest, if any, or both, as the case may be, with interest upon the overdue principal
and (to the extent that payment of such interest is enforceable under applicable law) upon the
overdue installments of interest and Additional Interest, if any, at the applicable rate borne by
the Notes of such series; and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its
agent, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith.



     If the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its
own name and as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and
may prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any



82









 




other obligor on the Notes of such series and
collect in the manner provided by law out of the property of the Issuer or any other obligor on the
Notes of such series, wherever situated, the moneys adjudged or decreed to be payable.




     If there shall be pending proceedings for the bankruptcy or for the reorganization of the
Issuer or any other obligor on the Notes under any bankruptcy, insolvency or other similar law now
or hereafter in effect, or if a receiver or trustee or similar official shall have been appointed
for the property of the Issuer or such other obligor, or in the case of any other similar judicial
proceedings relative to the Issuer or other obligor on the Notes, or to the creditors or property
of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this
Section 5.13, shall be entitled and empowered by intervention in such proceedings or otherwise to
file and prove a claim or claims for the whole amount of principal, premium, if any, interest and
Additional Interest, if any, owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the Holders allowed in such judicial
proceedings relative to the Issuer or any other obligor on the Notes, its or their creditors, or
its or their property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction of its charges and
expenses, and any receiver, assignee or trustee or similar official in bankruptcy or reorganization
is hereby authorized by each of the Holders to make such payments to the Trustee, and, if the
Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee
any amount due it for compensation and expenses or otherwise pursuant to Section 7.07, including
counsel fees and expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses and counsel fees and expenses out of the estate
in any such proceedings shall be denied for any reason, payment of the same shall be secured by a
lien on, and shall be paid out of, any and all distributions, dividends, moneys, securities and
other property which the Holders of Notes may be entitled to receive in such proceedings, whether
in liquidation or under any plan of reorganization or arrangement or otherwise.



     All rights of action and of asserting claims under this Indenture, or under any of the Notes,
may be enforced by the Trustee without the possession of any of the Notes, or the production
thereof at any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the Holders of Notes in respect of which
such judgment has been recovered.



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ARTICLE 6

Guarantees; Release of Guarantor




     Section 6.01. Guarantee. Each of the Guarantors hereby unconditionally guarantees, jointly
and severally with each other Guarantor, to each Holder and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the
obligations of the Issuer hereunder or thereunder, that: (i) the due and punctual payment of the
principal of, premium, if any, and interest or Additional Interest, if any, on the Notes, whether
at maturity or on an interest payment date, by acceleration, pursuant to an Offer to Purchase or
otherwise, to the extent lawful, and all other obligations of the Issuer to the Holders or the
Trustee hereunder or thereunder shall be promptly paid in full when due, all in accordance with the
terms hereof and thereof, including all amounts payable to the Trustee under Section 7.07 hereof,
and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other
obligations, the same shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.



     If the Issuer fails to make any payment when due of any amount so guaranteed for whatever
reason, each Guarantor shall be obligated, jointly and severally with each other Guarantor, to pay
the same immediately. Each Guarantor hereby agrees that its obligations hereunder shall be
continuing, absolute and unconditional, irrespective of, and shall be unaffected by, the validity,
regularity or enforceability of the Notes, this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder or the Trustee with respect to any provisions hereof or
thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable discharge or defense of
such Guarantor. If any Holder or the Trustee is required by any court or otherwise to return to
the Issuer or any Guarantor, or any custodian, trustee, liquidator or other similar official acting
in relation to the Issuer or such Guarantor, any amount paid by the Issuer or any Guarantor to the
Trustee or such Holder, this Article 6, to the extent theretofore discharged with respect to any
Guarantee, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby by such Guarantor until payment in full of all such obligations. Each Guarantor
further agrees that, as between such Guarantor, on the one hand, and the Holders of Notes and the
Trustee on the other hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 5 hereof for the purposes of such Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (ii) in the event of any acceleration of such obligations as provided in
Article 5 hereof such obligations (whether or not due and payable) shall forthwith become due and
payable by such Guarantor, jointly



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and severally with each other Guarantor, for the purpose of this
Article 6. In addition, without limiting the foregoing, upon the effectiveness of an acceleration
under Article 5, the Trustee may make a demand for payment on the Notes under any Guarantee
provided hereunder and not discharged.




     The Guarantee set forth in this Section 6.01 and as annexed to any Note shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate of authentication on
such Note shall have been signed by the Trustee or any duly appointed agent.



     Section 6.02. Obligations of each Guarantor Unconditional. Nothing contained in this Article
6 or elsewhere in this Indenture or in any Note is intended to or shall impair, as between each
Guarantor and the Holders, the obligations of such Guarantor which are absolute and unconditional,
to pay to the Holders the principal of, premium, if any, and interest and Additional Interest, if
any, on the Notes as and when the same shall become due and payable in accordance with the
provisions of their Guarantee or is intended to or shall affect the relative rights of the Holders
and creditors of such Guarantor, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon any Default under
this Indenture in respect of cash, property or securities of such Guarantor received upon the
exercise of any such remedy.



     Upon any distribution of assets of a Guarantor referred to in this Article 6 the Trustee,
subject to the provisions of Article 7, the Holders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee
or agent or other person making any distribution to the Trustee or to such Holders for the purpose
of ascertaining the persons entitled to participate in such distribution, the holders of other
indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article 6.



     Section 6.03. Release of a Guarantor. (a) If (i) all or substantially all of the assets of
any Guarantor (other than (A) the Company or (B) any member of the Secured Group) or (ii) all of
the Capital Stock of any Guarantor (other than (A) the Company or (B) any member of the Secured
Group) is sold (including by consolidation, merger, issuance or otherwise) or disposed of
(including by liquidation, dissolution or otherwise) by the Company or any of its Subsidiaries, or,
unless the Company elects otherwise, if any Guarantor (other than (A) the Company or (B) any member
of the Secured Group that is not a Permitted Joint Venture or JV Holding Company) is designated an
Unrestricted Subsidiary in accordance with the terms of this Indenture, then such Guarantor (in the
event of a sale or other disposition of all of the Capital Stock of such Guarantor or a



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designation
as an Unrestricted Subsidiary) or the Person acquiring such assets (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall be deemed
automatically and unconditionally released and discharged from any of its obligations under this
Indenture without any further action on the part of the Trustee or any Holder of Notes.




     (b) Upon the release of a guarantee by a Guarantor other than the Company under all then
outstanding Applicable Debt, at any time after the suspension of the Suspended Covenants as
provided in Section 4.19, (i) the Guarantee of such Guarantor under the Indenture will be released
and discharged at such time; provided that the foregoing shall not apply to any release of any
Guarantor done in contemplation of, or in connection with, any cessation of the Notes being rated
Investment Grade, and (ii) no Restricted Subsidiary thereafter acquired or created will be required
to be a Guarantor. In the event that (i) any such released Guarantor thereafter guarantees any
Applicable Debt (or if any released guarantee under any Applicable Debt is reinstated or renewed)
then any such released Guarantor will Guarantee the Notes on the terms and subject to the
conditions set forth in this Indenture or (ii) the Suspended Covenants cease to be suspended as
described in Section 4.19 then all Restricted Subsidiaries of the Company then existing (other than
the Issuer (for so long as it remains the Issuer)) will Guarantee the Notes on the terms and
conditions set forth in this Indenture. For purposes of this Section 6.03(b), Applicable Debt
secured by a Lien on a Restricted Subsidiary’s Property or issued by a Restricted Subsidiary shall
be deemed guaranteed by such Restricted Subsidiary.



     (c) An Unrestricted Subsidiary that is a Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under its Guarantee upon notice from
the Company to the Trustee to such effect, without any further action required on the part of the
Trustee or any Holder.



     Section 6.04. Execution and Delivery of Guarantee. The execution by each Guarantor of this
Indenture (or a supplemental indenture in the form of Exhibit B) together with an executed
guarantee substantially in the form included in Exhibit A evidences the Guarantee of such
Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office
at the time of authentication of any Note. The delivery of any Note by the Trustee after
authentication constitutes due delivery of the Guarantee on behalf of each Guarantor.



     Section 6.05. Limitation on Guarantor Liability. Notwithstanding anything to the contrary in
this Article 6, each Guarantor, and by its acceptance of a Note, each Holder, hereby confirms that
it is the intention of all such parties that the Guarantee of such Guarantor not constitute a
fraudulent conveyance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the



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Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor under its Guarantee are limited to the maximum amount that would not render the
Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of
the United States Bankruptcy Code or any comparable provision of state law.




     Section 6.06. Article 6 not to Prevent Events of Default. The failure to make a payment on
account of principal, premium, if any, or interest or Additional Interest, if any, on the Notes by
reason of any provision in this Article 6 shall not be construed as preventing the occurrence of
any Event of Default under Section 5.01.



     Section 6.07. Waiver by the Guarantors. To the extent permitted by applicable law, each
Guarantor hereby irrevocably waives diligence, presentment, demand of payment, demand of
performance, filing of claims with a court in the event of insolvency of bankruptcy of the Issuer,
any right to require a proceeding first against the Issuer, the benefit of discussion, protest,
notice and all demand whatsoever and covenants that this Guarantee shall not be discharged except
by complete performance of the obligations contained in the Notes, in this Indenture and in this
Article 6.



     Section 6.08. Subrogation and Contribution. Upon making any payment with respect to any
obligation of the Issuer under this Article, the Guarantor making such payment shall be subrogated
to the rights of the payee against the Issuer with respect to such obligation; provided, that the
Guarantor may not enforce either any right of subrogation, or any right to receive payment in the
nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so
long as any amount payable by the Issuer hereunder or under the Notes remains unpaid.



     Each Guarantor that makes a payment under its Guarantee shall be entitled, upon payment in
full of all guaranteed obligations under this Indenture, to seek and receive contribution from and
against each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such
payment based on the respective net assets of all the Guarantors at the time of such payment
determined in accordance with GAAP.



     Section 6.09. Stay of Acceleration. If acceleration of the time for payment of any amount
payable by the Issuer under this Indenture or the Notes is stayed upon the insolvency, bankruptcy
or reorganization of the Issuer, all such amounts otherwise subject to acceleration under the terms
of this Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the
Trustee or the Holders.



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     Section 6.10. Guarantors as “obligors” for Provisions Included in this Indenture Pursuant to
the Trust Indenture Act. Each provision included in this Indenture which is required to be
included by any of Sections 310 to 317 of the Trust Indenture Act, inclusive, or is deemed
applicable to this Indenture by virtue of the provisions of the Trust Indenture Act, and which
applies to an “obligor,” as that term is defined under the Trust Indenture Act, shall apply to each
of the Guarantors; provided that in each case the provisions of TIA §314(b) and §314(d) shall only
apply following qualification of this Indenture under the TIA.



ARTICLE 7

The Trustee




     Section 7.01. General. (a) The duties and responsibilities of the Trustee are as provided by
the Trust Indenture Act and as set forth herein. Whether or not expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee is subject to this Article.



     (b) Except during the continuance of an Event of Default, the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee and the permissive rights of the
Trustee set forth herein shall not be construed as duties. In case an Event of Default has
occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.



     Section 7.02. Certain Rights of the Trustee. Subject to Trust Indenture Act Sections 315(a)
through (d):




     (a) The Trustee may rely, and shall be protected in acting or refraining from acting,
upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated in the
document, but the Trustee, in its discretion, may make further inquiry or investigation
into such facts or matters as it sees fit.




     (b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel conforming to Section 13.05 and the Trustee shall not
be liable for any action it takes or



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omits to take in good faith in reliance on such a
certificate or opinion. Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuer or the Company, as applicable, shall
be sufficient if signed by an Officer of the Issuer or the Company, as applicable.




     (c) The Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.




     (d) The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in compliance with such
request or direction.




     (e) The Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers or for any action
it takes or omits to take in accordance with the direction of the Holders in accordance
with Section 5.04 relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.




     (f) The Trustee may consult with counsel, and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.




     (g) No provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of its duties
hereunder, or in the exercise of its rights or powers, unless it receives indemnity
satisfactory to it against any loss, liability or expense.




     (h) The Trustee may request that the Company (on behalf of itself and the Issuer)
deliver an Officers’ Certificate setting forth the name of the individuals and/or titles
of Officers authorized at such time to take specific actions pursuant to this Indenture,
which Officers’ Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such Officers’
Certificate previously delivered and not superseded.



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     (i) In no event shall the Trustee be liable, directly or indirectly, for any special,
indirect or consequential damages, even if the Trustee has been advised of the possibility
of such damages.




     (j) The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and to each
agent, custodian and other Person employed to act hereunder.



     Section 7.03. Individual Rights of the Trustee. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and
311. For purposes of Trust Indenture Act Section 311(b)(4) and (6):




     (a) “cash transaction” means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and payable upon demand;
and




     (b) “self-liquidating paper” means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession of, or a
lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the creditor
relationship arising from the making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.



     Section 7.04. Trustee’s Disclaimer. The Trustee (a) makes no representation as to the
validity or adequacy of this Indenture or the Notes, (b) is not accountable for the Company’s use
or application of the proceeds from the Notes and (c) is not responsible for any statement in the
Notes other than its certificate of authentication.



     Section 7.05. Reserved.



     Section 7.06. Reports by Trustee to Holders. Within 60 days after each May 1, beginning with
May 1, 2012, the Trustee shall mail to each Holder, as



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provided in Trust Indenture Act Section
313(c) a brief report dated as of such May 1, if required by Trust Indenture Act Section 313(a).




     Section 7.07. Compensation and Indemnity. (a) The Company shall pay the Trustee compensation
as agreed upon in writing for its services. The compensation of the Trustee is not limited by any
law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by
the Trustee, including the reasonable compensation and expenses of the Trustee’s agents and
counsel.



     (b) In addition to any other indemnity provided to the Trustee hereunder, the Company shall
indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred
by it without negligence or bad faith on its part arising out of or in connection with the
acceptance or administration of this Indenture and its duties under this Indenture and the Notes,
including the costs and expenses of defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the Notes.



     (c) To secure the Company’s payment obligations in this Section or as otherwise provided in
this Indenture, the Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay
principal of, premium, if any, and interest or Additional Interest, if any, on particular Notes.



     (d) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 5.01(vii) or Section 5.01(viii) hereof occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and counsel) are intended to constitute
expenses of administration under any Bankruptcy Law.



     Section 7.08. Replacement of Trustee. (a) (i) The Trustee may resign at any time by written
notice to the Issuer.




     (ii) The Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by written notice to the Trustee.




     (iii) If the Trustee is no longer eligible under Section 7.10 or in the circumstances
described in Trust Indenture Act Section 310(b), any Holder that satisfies the
requirements of Trust Indenture Act Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



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     (iv) The Issuer may remove the Trustee if: (A) the Trustee is no longer eligible
under Section 7.10; (B) the Trustee is adjudged bankrupt or an insolvent; (C) a receiver
or other public officer takes charge of the Trustee or its property; or (D) the Trustee
becomes incapable of acting.


A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.




     (b) If the Trustee has been removed by the Holders, Holders of a majority in principal amount
of the Notes may appoint a successor Trustee with the consent of the Issuer. Otherwise, if the
Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the
Issuer shall promptly appoint a successor Trustee. If the successor Trustee does not deliver its
written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Issuer or the Holders of a majority in principal amount of the outstanding Notes may
petition, at the expense of the Issuer, any court of competent jurisdiction for the appointment of
a successor Trustee.



     (c) Upon delivery by the successor Trustee of a written acceptance of its appointment to the
retiring Trustee and to the Issuer, (i) the retiring Trustee shall transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07, (ii) the
resignation or removal of the retiring Trustee shall become effective, and (iii) the successor
Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. Upon
request of any successor Trustee, the Issuer shall execute any and all instruments for fully and
vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Issuer
shall give notice of any resignation and any removal of the Trustee and each appointment of a
successor Trustee to all Holders, and include in the notice the name of the successor Trustee and
the address of its Corporate Trust Office.



     (d) Notwithstanding replacement of the Trustee pursuant to this Section, Issuer’s obligations
under Section 7.07 shall continue for the benefit of the retiring Trustee.



     (e) The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust
Indenture Act Section 310(b).



     Section 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or transferee corporation or
national banking association without any further act shall be the successor Trustee with the same
effect as if the successor Trustee had been named as the Trustee in this Indenture.



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     Section 7.10. Eligibility. The Indenture must always have a Trustee that satisfies the
requirements of Trust Indenture Act Section 310(a) and has a combined capital and surplus of at
least $25,000,000 as set forth in its most recent published annual report of condition.



     Section 7.11. Money Held in Trust. The Trustee shall not be liable for interest on any money
received by it except as it may agree with the Issuer. Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law and except for money held in
trust under Article 8.



ARTICLE 8

Defeasance and Discharge




     Section 8.01. Legal Defeasance and Discharge. The Issuer, the Company and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.03 hereof, be deemed to
have been discharged from their respective obligations with respect to a series of the Notes, the
Guarantees for such series and under the Security Documents in respect of such series and cause the
release of all Liens on the Collateral granted under the Security Documents in respect of such
series, on the date the conditions set forth below are satisfied for such series of Notes
(hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer shall
be deemed to have paid and discharged the entire Indebtedness represented by the Notes of such
series, which shall thereafter be deemed to be outstanding only for the purposes of Section 8.04
hereof and the other Sections of this Indenture referred to in clauses (a) through (f) of this
Section 8.01, and the Issuer, the Company and the Guarantors shall be deemed to have satisfied all
of their respective obligations under the Notes of such series, the Guarantees for such series,
this Indenture in respect of such series and the Security Documents in respect of such series (and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments
delivered to it by the Issuer acknowledging the same), except of the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of
Notes of such series to receive payments in respect of the principal, premium, if any, and interest
and Additional Interest, if any, on the Notes of such series when such payments are due from the
trust referred to below; (b) the Issuer’s obligations with respect to the Notes of such series
concerning mutilated, destroyed, lost or stolen Notes of such series and the maintenance of an
office or agency for payment and money for security payments held in trust; (c) the rights, powers,
trusts, duties and immunities of the Trustee, and the Issuer’s and the Guarantors’ obligations in
connection therewith; (d) the Legal Defeasance provisions of this Indenture in respect of such
series; (e) the rights of registration of transfer and exchange of the Notes of such series; and
(f) the rights of Holders



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of Notes of such series that are beneficiaries with respect to property
so deposited with the Trustee payable to all or any of them.




     Section 8.02. Covenant Defeasance. The Issuer, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.03 hereof, be released from their
obligations with respect to a series of Notes and the Guarantees for such series under the
covenants contained in Sections 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13, clause (iii) of
Section 4.14, Section 4.18 and Article 6 (except for Section 6.03 and Section 6.10) and each
Guarantor’s obligation under its Guarantee for such series, on and after the date that the
conditions set forth in Section 8.03 are satisfied and the Liens on the Collateral granted under
the Security Documents shall be released in respect of such series (hereinafter, “Covenant
Defeasance”), and the Notes of such series shall thereafter be deemed not outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders of Notes of such series
(and the consequences of any thereof) in connection with such covenants, but shall continue to be
deemed outstanding for all other purposes hereunder (it being understood that the Notes of such
series shall not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the Notes of such series and the Guarantees for such series,
the Issuer, the Company and the Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under Section 5.01 hereof,
but, except as specified above, the remainder of this Indenture and the Notes shall be unaffected
thereby in respect of such series of Notes. Subject to the satisfaction of the conditions set
forth in Section 8.03 hereof, Sections 5.01(iii) (with respect to the covenants so defeased),
5.01(iv), 5.01(v), 5.01(vi), 5.01(ix) and 5.01(x) shall not constitute Events of Default or
Defaults hereunder.



     Section 8.03. Conditions to Legal or Covenant Defeasance. The following shall be the
conditions to the application of either Section 8.01 or Section 8.02 hereof to any series of Notes:



     In order to exercise either Legal Defeasance or Covenant Defeasance:



     (a) the Issuer must irrevocably deposit, or cause to be deposited, with the Trustee, in trust,
for the benefit of the Holders of Notes, cash in U.S. dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay, without reinvestment, the principal of,
premium, if any, and interest and Additional Interest, if any, on the Notes of such series on the
stated maturity thereof or on the applicable redemption date, as the case may be, and the



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Issuer
must specify whether the Notes of such series are being defeased to maturity or to a particular
redemption date;




     (b) in the case of Legal Defeasance, the Issuer must deliver to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the Issuer has received from, or there
has been published by, the Internal Revenue Service a ruling, or there has been a change in the
applicable United States federal income tax law after the date of this Indenture, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that, the beneficial
owners of Notes of such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such Legal Defeasance, and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;



     (c) in the case of Covenant Defeasance, the Issuer must deliver to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the beneficial owners of Notes of such
series will not recognize income, gain or loss for United States federal income tax purposes as a
result of such Covenant Defeasance, and such Holders of Notes of such Series will be subject to
United States federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;



     (d) no Default or Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of deposit;



     (e) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other than this Indenture) to
which the Issuer or any of its Restricted Subsidiaries is a party or by which the Issuer or any of
its Restricted Subsidiaries is bound;



     (f) the Issuer must deliver to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Issuer with the intent of preferring the Holders of Notes of such series over
other creditors of the Issuer, or with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer or others; and



     (g) the Issuer must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel
in the United States reasonably acceptable to the Trustee, each stating that the conditions
precedent provided for or relating to Legal



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Defeasance or Covenant Defeasance, as applicable, in
the case of the Officers’ Certificate, in clauses (a) through (f) and, in the case of the Opinion
of Counsel, in clauses (b) and (c) of this Section 8.03, have been complied with.




     Section 8.04. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 8.05 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively, and solely for purposes of this Section 8.04, the “Trustee”) pursuant to
Section 8.03 or Section 8.08 hereof in respect of a series of Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Notes of such series and this
Indenture, to the payment, either directly or indirectly or through any paying agent (including the
Issuer acting as paying agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, interest and
Additional Interest, if any, but such money need not be segregated from other funds except to the
extent required by law.



     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to
Section 8.03 or Section 8.08 hereof or the principal, premium, if any, interest and Additional
Interest, if any, received in respect thereof other than any such tax, fee or other charge which by
law is for the account of the Holders of Notes of such series.



     Subject to the preceding paragraph and Section 7.07 herein, anything in this Article 8 to the
contrary notwithstanding, the Trustee shall deliver or pay, solely to the extent available in such
trust, to the Issuer from time to time upon the request of the Issuer any money or non-callable
U.S. Government Obligations held by it as provided in Section 8.03 or Section 8.08 hereof which, in
the opinion of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.03(a) hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.



     Section 8.05. Repayment to Issuer. Any money deposited with the Trustee or any paying agent,
or then held by the Issuer, in trust for the payment of the principal, premium, if any, interest
and Additional Interest, if any, on a series of Notes and remaining unclaimed for two years after
such principal, premium, if any, interest and Additional Interest, if any, has become due and
payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of a Note of such series shall thereafter, as an
unsecured creditor, look only to the Issuer for payment thereof, and all liability of the Trustee
or such paying agent with respect to such trust money, and all liability of the Issuer as trustee
thereof, shall thereupon cease; provided, however, that the



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Trustee or such paying agent, before
being required to make any such repayment, may at the expense of the Issuer cause to be published
once, in The New York Times and The Wall Street Journal (national editions), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer.




     Section 8.06. Reinstatement. If the Trustee or paying agent is unable to apply any money or
non-callable U.S. Government Obligations in accordance with Section 8.01, Section 8.02 or Section
8.08 hereof, as the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s
obligations under this Indenture and the applicable series of Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01, Section 8.02 or Section 8.08 hereof
until such time as the Trustee or paying agent is permitted to apply all such money in accordance
with Section 8.01, Section 8.02 or Section 8.08 hereof, as the case may be; provided, however,
that, if the Issuer makes any payment of principal of, premium, if any, or interest or Additional
Interest, if any, on any Note of such series following the reinstatement of its obligations, the
Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from
the money held by the Trustee or paying agent.



     Section 8.07. Survival. The Trustee’s rights under Article 7 (including, but not limited to,
its right to indemnification) and this Article 8 shall survive termination of this Indenture and
the resignation or removal of the Trustee.



     Section 8.08. Satisfaction and Discharge of Indenture. If at any time (a) (i) the Issuer
shall have paid or caused to be paid the principal of, premium, if any, and interest and Additional
Interest, if any, on all the outstanding Notes (other than Notes which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.04) as and when the same shall
have become due and payable, or (ii) the Issuer shall have delivered to the Trustee for
cancellation all Notes theretofore authenticated (other than Notes which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.04), or (b) (i) the Notes
mature within one year, or all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of redemption, (ii) the Issuer
irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the
Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written
certificate delivered to the Trustee, without consideration of any reinvestment, to pay principal
of and premium, interest and Additional Interest, if any, on the Notes to maturity or redemption,
as the case may be, and to pay all other sums payable by it hereunder, (iii) no Default has
occurred and is



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continuing on the date of the deposit, (iv) the deposit will not result in a breach
or violation of, or constitute a default under, this Indenture or any other agreement or instrument
to which the Issuer is a party or by which it is bound, and (v) the Issuer delivers to the Trustee
an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of this Indenture have
been complied with; and if, in any such case, the Issuer shall also pay or cause to be paid all
other sums payable hereunder by the Issuer (including all amounts, payable to the Trustee pursuant
to Section 7.07), then, (x) after satisfying the conditions in clause (a), only the Company’s
obligations under Sections 7.07 and 8.04 will survive or (y) after satisfying the conditions in
clause (b), only the Issuer’s or the Company’s, as applicable, obligations in Article 2 and
Sections 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 will survive, and, in either case, the
Trustee, on demand of the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction and discharging of this Indenture and the
Security Documents and cause the release of all Liens on the Collateral granted under the Security
Documents. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred, and to compensate the Trustee for any services thereafter
reasonably and properly rendered, by the Trustee in connection with this Indenture or the Notes.




ARTICLE 9

Amendments, Supplements and Waivers




     Section 9.01. Amendments Without Consent of Holders. The Company, the Issuer, the Guarantors
and the Trustee and with respect to the Security Documents, the Collateral Agent, may amend,
supplement or waive this Indenture, the Notes, the Guarantees or the Security Documents without
notice to or the consent of any Holder:



     (a) to evidence the succession of another Person to the Issuer or the Company or successive
successions, and the assumption by the successor Person of the covenants, agreements and
obligations of the Issuer or the Company herein and in the Notes or the Guarantees;



     (b) to add to the covenants of the Issuer or the Company such further covenants, restrictions,
conditions or provisions for the protection of the Holders of Notes, or to surrender any right or
power herein conferred upon the Issuer or the Company, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants, restrictions, conditions
or provisions



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an Event of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in respect of any such
additional covenants, restrictions, conditions or provisions such amendment, supplemented indenture
or waiver may provide for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon
such an Event of Default or may limit the right of the Holders of a majority in aggregate principal
amount of the Notes to waive such an Event of Default;




     (c) to modify the existing covenants and events of default solely in respect of, or add new
covenants and events of default that apply solely to, debt securities not yet issued and
outstanding as of the Issue Date;



     (d) to cure any ambiguity, defect or inconsistency in this Indenture, the Notes, the
Guarantees or the Security Documents;



     (e) to comply with any requirements of the Commission in connection with the qualification of
this Indenture under the Trust Indenture Act;



     (f) to evidence and provide for the acceptance of appointment hereunder by a successor or
replacement Trustee or under the Security Documents of a successor or replacement Collateral Agent;



     (g) to provide for uncertificated Notes in addition to, or in place of, Certificated Notes;



     (h) to provide for any Guarantee of the Notes;



     (i) to add security to or for the benefit of the Notes and, in the case of the Security
Documents, to or for the benefit of the other secured parties named therein, or to confirm and
evidence the release, termination or discharge of any Guarantee of or Lien securing the Notes when
such release, termination or discharge is permitted by this Indenture and the Security Documents;



     (j) to evidence compliance with Section 4.14;



     (k) to make any other change that does not adversely affect the legal rights of any Holder;



     (l) to conform any provision of this Indenture, the Notes, the Guarantees or the Security
Documents to the “Description of New Secured Notes” contained in the Offering Memorandum to the
extent that the “Description of New Secured Notes” was intended to be a verbatim recitation of a
provision in this Indenture, the Notes, the Guarantees or the Security Documents; or



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     (m) to authorize the execution of intercreditor agreements on customary terms with respect to
liens on the Collateral ranking junior to the Liens securing the Guarantees (for the avoidance of
doubt, intercreditor agreements substantially consistent with those entered into in connection with
the Senior Secured Notes shall be deemed customary).



     Section 9.02. Amendments with Consent of Holders. (a) Except as otherwise provided in
Sections 5.01, 5.03 and 5.06 or Section 9.02(b) of this Section, the Company, the Issuer, the
Guarantors and the Trustee and (with respect to the Security Documents) the Collateral Agent may
amend or supplement this Indenture, the Notes, the Guarantees and the Security Documents with the
consent of the Holders of a majority in principal amount of the outstanding Notes (which may
include written consents obtained in connection with a tender offer or exchange offer for Notes),
and the Holders of a majority in principal amount of the outstanding Notes by written notice to the
Trustee may waive future compliance by the Company, the Issuer and the Guarantors with any
provision of this Indenture, the Notes, the Guarantees or the Security Documents (which may include
waivers obtained in connection with a tender offer or exchange offer for Notes).



     (b) Notwithstanding the provisions of paragraph (a) of this Section, without the consent of
each Holder affected, an amendment or waiver may not:




     (i) reduce the amount of Notes whose Holders must consent to an amendment, supplement
or waiver,




     (ii) reduce the rate of, or extend the time for payment of, any interest, including
default interest, on any Note,




     (iii) reduce principal of, or change the fixed maturity of, any Note or alter the
provisions (including related definitions) with respect to redemptions described under
Article 3 or with respect to mandatory offers to repurchase Notes described under Section
4.10 and Section 4.12,




     (iv) make any Note payable in money other than that stated in the Note,




     (v) modify the ranking or priority of the Notes or any Guarantee,




     (vi) make any change in Sections 5.03 or 5.04,




     (vii) release any Guarantor from any of its obligations under its Guarantee or this
Indenture otherwise than in accordance with this Indenture,



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     (viii) waive a continuing Default or Event of Default in the payment of principal of,
premium, if any, or interest or Additional Interest, if any, on the Notes, or




     (ix) effect a release of all or substantially all of the Collateral other than
pursuant to the terms of the Security Documents or as otherwise permitted under this
Indenture.



     (c) It is not necessary for Holders to approve the particular form of any proposed amendment,
supplement or waiver, but is sufficient if their consent approves the substance thereof.



     (d) An amendment, supplement or waiver under this Section shall become effective on receipt by
the Trustee of written consents from the Holders of the requisite percentage in principal amount of
the outstanding Notes. After an amendment, supplement or waiver under this Section becomes
effective, the Issuer (or the Trustee at the request and expense of the Issuer) will send to the
Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The
Issuer will send supplemental indentures to Holders upon request. Any failure of the Issuer to
send such notice, or any defect therein, will not, however, in any way impair or affect the
validity of any such supplemental indenture, amendment or waiver.



     Section 9.03. Effect of Consent. (a) After an amendment, supplement or waiver becomes
effective, it will bind every Holder unless it is of the type requiring the consent of each Holder
affected. If the amendment, supplement or waiver is of the type requiring the consent of each
Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it
and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting
Holder.



     (b) If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require
the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of
the changed terms on the Note and return it to the Holder, or exchange it for a new Note that
reflects the changed terms. The Trustee may also place an appropriate notation on any Note
thereafter authenticated. However, the effectiveness of the amendment, supplement or waiver shall
not be affected or impaired by any failure to annotate or exchange Notes in this fashion.



     Section 9.04. Trustee’s Rights and Obligations. The Trustee is entitled to receive, in
addition to the documents required by Section 13.04, and will be fully protected in relying upon,
an Opinion of Counsel stating (i) that the execution of any amendment, supplement or waiver
authorized pursuant to this Article is authorized or permitted by this Indenture or the applicable
Security Document



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and (ii) in the case of an amendment, supplement or waiver in connection with
Section 9.01(k) that such amendment, supplement or waiver does not adversely affect the legal
rights of any Holder of Notes affected by such change. If the Trustee has received such Opinion of
Counsel, it shall sign the amendment, supplement or waiver so long as the same does not adversely
affect the rights of the Trustee. The Trustee may, but is not obligated to, execute any amendment,
supplement or waiver that affects the Trustee’s own rights, duties or immunities under this
Indenture.




     Section 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed
pursuant to this Article shall conform to the requirements of the Trust Indenture Act.



     Section 9.06. Payments for Consents. Neither the Issuer, the Company nor any of its
Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of Notes that consent,
waive or agree to amend such term or provision within the time period set forth in the solicitation
documents relating to the consent, waiver or amendment.



ARTICLE 10

[Reserved]




ARTICLE 11

Collateral and Security



     Section 11.01. Security Documents. The payment of the principal of and interest and premium,
if any, on the Notes when due, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise and whether by the Issuer pursuant to the Notes or by any
Guarantor pursuant to its Guarantees, the payment of all other First-Priority Lien Obligations and
the performance of all other obligations of the Issuer and the Guarantors under this Indenture, the
Notes, the Guarantees and the Security Documents are secured by First-Priority Liens on the
Collateral, subject to Permitted Collateral Liens, as provided in the Security Documents which the
Issuer and the Guarantors have entered into simultaneously with the execution of this Indenture, or
in certain circumstances, subsequent to the Issue Date, and shall be secured as provided in the
Security Documents hereafter delivered as required or permitted by this Indenture.



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     Section 11.02. Collateral Agent.



     (a) The Issuer hereby appoints Wilmington Trust, National Association to act as Collateral
Agent, and the Collateral Agent shall have the privileges, powers and immunities as set forth
herein and in the Security Documents. The Issuer and the Guarantors hereby agree that the
Collateral Agent shall hold the Collateral in trust for the benefit of all of the Holders and the
Trustee, in each case, pursuant to the terms of the Security Documents and the Collateral Agent is
hereby authorized to execute and deliver the Security Documents. The Collateral Agent is
authorized and empowered to appoint one or more co-Collateral Agents as it deems necessary or
appropriate.



     (b) Neither the Trustee nor the Collateral Agent nor any of their respective officers,
directors, employees, attorneys or agents shall be responsible or liable for the existence,
genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness
or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any First-Priority Lien, or for any defect or deficiency as to any such matters, or
for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the
First-Priority Liens or Security Documents or any delay in doing so.



     (c) The Collateral Agent shall be subject to such directions as may be given it by the Trustee
from time to time (as required or permitted by this Indenture). Except as directed by the Trustee
as required or permitted by this Indenture or as required or permitted by the Security Documents,
the Collateral Agent shall not be obligated:




     (1) to act upon directions purported to be delivered to it by any other Person;




     (2) to foreclose upon or otherwise enforce any First-Priority Lien; or




     (3) to take any other action whatsoever with regard to any or all of the
First-Priority Liens, Security Documents or Collateral.



     (d) The Collateral Agent shall be accountable only for amounts that it actually receives as a
result of the enforcement of the First-Priority Liens or the Security Documents.



     (e) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each
co-Collateral Agent may rely upon and enforce for its own benefit each and all of the rights,
powers, immunities, indemnities and benefits of the Trustee under Article 7 hereof, each of which
shall also be deemed to be for the benefit of the Collateral Agent.



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     (f) At all times when the Trustee is not itself the Collateral Agent, the Issuer shall deliver
to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all
documents delivered to the Collateral Agent pursuant to the Security Documents.



     Section 11.03. Authorization of Actions to be Taken.



     (a) Each Holder of Notes, by its acceptance thereof, consents and agrees to the terms of each
Security Document, as originally in effect on the Issue Date and as amended, supplemented or
replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes
and directs the Trustee and the Collateral Agent to execute and deliver the Security Documents to
which it is a party and authorizes and empowers the Trustee and the Collateral Agent to bind the
Holders of Notes and other holders of First-Priority Lien Obligations as set forth in the Security
Documents to which it is a party and to perform its obligations and exercise its rights and powers
thereunder.



     (b) The Collateral Agent and the Trustee are authorized and empowered to receive for the
benefit of the Holders of Notes any funds collected or distributed under the Security Documents to
which the Collateral Agent or Trustee is a party and to make further distributions of such funds to
the Holders of Notes according to the provisions of this Indenture.



     (c) Subject to the provisions of Section 7.01 and Section 7.02, the Trustee may, in its sole
discretion and without the consent of the Holders of Notes, direct, on behalf of the Holders of
Notes, the Collateral Agent to take all actions it deems necessary or appropriate in order to:




     (1) foreclose upon or otherwise enforce any or all of the First-Priority Liens;




     (2) enforce any of the terms of the Security Documents to which the Collateral Agent
or Trustee is a party; or




     (3) collect and receive payment of any and all First-Priority Lien Obligations.



     Subject to Section 7.01 and Section 7.02, the Trustee is authorized and empowered to institute
and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings
as it may deem expedient to protect or enforce the First-Priority Liens or the Security Documents
to which the Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by
any acts that may be unlawful or in violation of the Security Documents to which the Collateral
Agent or Trustee is a party or this Indenture, and such suits and proceedings as the Trustee or the
Collateral Agent may deem expedient to



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preserve or protect its interests and the interests of the
Holders of Notes in the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other governmental enactment,
rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of Holders of Notes, the Trustee or the Collateral Agent.




     Section 11.04. Release of First-Priority Liens.



     (a) The First-Priority Liens shall be released, with respect to the Guarantees by the members
of the Secured Group:




     (1) in whole, upon payment in full of the principal of, accrued and unpaid interest
and premium, if any, on the Notes and payment in full of all other First-Priority Lien
Obligations in respect thereof that are due and payable at or prior to the time such
principal, accrued and unpaid interest and premium, if any, on the Notes are paid;




     (2) in whole, upon satisfaction and discharge of this Indenture pursuant to Section
8.08;




     (3) in whole, upon a legal defeasance or covenant defeasance of the Notes of all
series pursuant to Article 8;




     (4) in part, as to any property constituting Collateral that (a) is sold or otherwise
disposed of by a member of the Secured Group to any Person other than a member of the
Secured Group (but excluding any transaction subject to Section 4.14 where the recipient
is required to become the obligor on the Notes or a Guarantor) in a transaction permitted
by this Indenture, at the time of such sale or disposition, to the extent of the interest
sold or disposed of, (b) is owned or at any time acquired by a member of the Secured Group
that has been released from its Guarantee under this Indenture, concurrently with the
release of such Guarantee, or (c) consists of securities of a Guarantor of the Issuer to
be released as contemplated by Section 4.18(c); or




     (5) In accordance with and subject to the provisions of Article 9, with the consent
of Holders of a majority in principal amount of the outstanding Notes or each Holder
affected if required by Section 9.02(b)(ix) (including consents obtained in connection
with a tender offer or exchange offer).



     (b) If an instrument confirming the release of the First-Priority Liens pursuant to Section
11.04(a) is requested by the Issuer or a Guarantor, then upon



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delivery to the Trustee of an
Officers’ Certificate requesting execution of such an instrument, accompanied by:





     (1) an Opinion of Counsel confirming that such release is permitted by Section
11.04(a);




     (2) all instruments requested by the Issuer to effectuate or confirm such release;
and




     (3) such other certificates and documents as the Trustee or Collateral Agent may
reasonably request to confirm the matters set forth in Section 11.04(a) that are required
by this Indenture or the Security Documents,


the Trustee shall, if such instruments and documents are reasonably satisfactory to the Trustee and
Collateral Agent, instruct the Collateral Agent to execute and deliver, and the Collateral Agent
shall promptly execute and deliver, such instruments.




     (c) All instruments effectuating or confirming any release of any First-Priority Liens will
have the effect solely of releasing such First-Priority Liens as to the Collateral described
therein, on customary terms and without any recourse, representation, warranty or liability
whatsoever.



     (d) The Issuer shall bear and pay all costs and expenses associated with any release of
First-Priority Liens pursuant to this Section 11.04, including all reasonable fees and
disbursements of any attorneys or representatives acting for the Trustee or for the Collateral
Agent.



     Section 11.05. Filing, Recording and Opinions.



     (a) The Issuer shall comply with the provisions of TIA §313(b), and, following qualification
of this Indenture pursuant to the TIA, if applicable, TIA §314(d). Any certificate or opinion
required by TIA §314(d) may be made by an Officer of the Issuer except in cases where TIA §314(d)
requires that such certificate or opinion be made by an independent engineer, appraiser or other
expert, who shall be reasonably satisfactory to the Trustee. Notwithstanding anything to the
contrary herein, the Issuer and the Guarantors shall not be required to comply with all or any
portion of TIA §314(d) if they determine, in good faith based on advice of counsel (which may be
internal counsel), that under the terms of that section and/or any interpretation or guidance as to
the meaning thereof of the Commission and its staff, including “no action” letters or exemptive
orders, all or any portion of TIA §314(d) is inapplicable to the released Collateral. Following
the qualification of this Indenture pursuant to the TIA, to the extent the



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Issuer is required to
furnish to the Trustee an Opinion of Counsel pursuant to TIA §314(b)(2), the Issuer shall furnish
such opinion prior to each December 3.




     Any release of Collateral permitted by Section 11.04 hereof or the Security Documents will be
deemed not to impair the Liens under this Indenture and the Security Documents in contravention
thereof and any person that is required to deliver a certificate or opinion pursuant to Section
314(d) of the TIA or otherwise under this Indenture or the Security Documents, shall be entitled to
rely upon the foregoing as a basis for delivery of such certificate or opinion. The Trustee may,
to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained in such documents and
opinion.



     (b) If any Collateral is released in accordance with this Indenture or any Security Document
at a time when the Trustee is not itself also the Collateral Agent and if the Issuer has delivered
the certificates and documents required by the Security Documents and permitted to be delivered by
Section 11.04 (if any), the Trustee shall determine whether it has received all documentation
required by TIA §314(d) in connection with such release and, based on such determination and the
Opinion of Counsel delivered pursuant to Section 11.04, if any, shall, upon request, deliver a
certificate to the Collateral Agent setting forth such determination.



ARTICLE 12

Release of Issuer




     Section 12.01. Release of Issuer. (a) The Issuer shall be released from its obligations
under this Indenture and the Notes, without the consent of the Holders, if: (1) the Company or any
successor to the Company has assumed the obligations of the Issuer under this Indenture and the
Notes, by supplemental indenture executed and delivered to the Trustee and satisfactory in form to
the Trustee, (2) the Company delivers an Opinion of Counsel to the Trustee to the effect that
beneficial owners of Notes will not recognize income, gain or loss for United States federal income
tax purposes as a result of such release and such beneficial owners of Notes will be subject to
United States federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such release had not occurred and (3) the Issuer shall (w) become a
Guarantor at such time, subject to the provisions of Article 6 and Section 4.11 hereof, (x) execute
a Guarantee, (y) execute a supplemental indenture evidencing its Guarantee and (z) deliver an
Opinion of Counsel to the Trustee to the effect that the supplemental indenture has been duly
authorized, executed and delivered by the Issuer and constitutes a valid and binding obligation of
the Issuer, enforceable against the Issuer in accordance with its terms (subject to customary



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exceptions), until such time, if any, as such Guarantee may be released as described above under
Section 4.19 and Article 6.




ARTICLE 13

Miscellaneous




     Section 13.01. Trust Indenture Act of 1939. The Indenture shall incorporate and be governed
by the provisions of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act. To the extent permitted by applicable law, in
the event of any inconsistency between the terms of the Notes and the terms of this Indenture, the
terms of the Indenture shall control; provided however that provisions of TIA §314(b) and §314(d),
in each case, shall not apply until qualification of this Indenture under the TIA.



     Section 13.02. Holder Communications; Holder Actions. (a) The rights of Holders to
communicate with other Holders with respect to this Indenture or the Notes are as provided by the
Trust Indenture Act, and the Company and the Issuer shall comply with the requirements of Trust
Indenture Act § 312(a). Neither the Company, the Issuer nor the Trustee shall be held accountable
by reason of any disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.



     (b) (i) any request, demand, authorization, direction, notice, consent to amendment,
supplement or waiver or other action provided by this Indenture to be given or taken by a Holder
(an “act”) may be evidenced by an instrument signed by the Holder delivered to the Trustee. The
fact and date of the execution of the instrument, or the authority of the person executing it, may
be proved in any manner that the Trustee deems sufficient.




     (ii) The Trustee may make reasonable rules for action by or at a meeting of Holders,
which shall be binding on all the Holders.



     (c) Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note
that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears
on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the
Trustee receives the notice of revocation before the date the amendment or waiver or other
consequence of the act becomes effective.



     (d) The Issuer may, but is not obligated to, fix a record date (which need not be within the
time limits otherwise prescribed by Trust Indenture Act § 316(c)) for the purpose of determining
the Holders entitled to act with respect to any amendment or waiver or in any other regard, except
that during the



108









 




continuance of an Event of Default, only the Trustee may set a record date as to
notices of Default, any declaration or acceleration or any other remedies or other consequences of
the Event of Default. If a record date is fixed, those Persons that were Holders at such record
date and only those Persons shall be entitled to act, or to revoke any previous act, whether or not
those Persons continue to be Holders after the record date. No act shall be valid or effective for
more than 90 days after the record date.




     Section 13.03. Notices. (a) Any notice or communication to the Issuer or the Company shall
be deemed given if in writing (i) when delivered in person or (ii) five days after mailing when
mailed by first class mail or (iii) when sent by facsimile transmission, with transmission
confirmed. Notices or communications to a Guarantor shall be deemed given if given to the Company.
Any notice to the Trustee shall be effective only upon receipt. In each case the notice or
communication should be addressed as follows:



     if to the Issuer or the Company:


K. Hovnanian Enterprises, Inc.

110 West Front Street

Box 500

Red Bank, NJ 07701

Facsimile: (732) 383-2945

Attention: General Counsel




     if to the Trustee and/or Collateral Agent:


Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services



The Issuer or the Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.




     (b) Except as otherwise expressly provided with respect to published notices, any notice or
communication to a Holder shall be deemed given when mailed to the Holder at its address as it
appears on the Register by first class mail or, as to any Global Note registered in the name of DTC
or its nominee, as agreed by the Issuer, the Trustee and DTC. Copies of any notice or
communication to a Holder, if given by the Issuer or the Company, shall be mailed to the Trustee at
the same time. Defect in mailing a notice or communication to any particular Holder shall not
affect its sufficiency with respect to other Holders.



109









 





     (c) Where this Indenture provides for notice, the notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and the waiver will be
the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but
such filing is not a condition precedent to the validity of any action taken in reliance upon such
waivers.



     Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Issuer or the Company to the Trustee to take any action under this Indenture,
the Issuer or the Company shall furnish to the Trustee:




     (a) an Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and




     (b) an Opinion of Counsel stating that all such conditions precedent relating to the
proposed action have been complied with.




     Section 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture must
include:




     (a) a statement that each person signing the certificate or opinion has read the
covenant or condition and the related definitions;




     (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in the certificate or opinion is based;




     (c) a statement that, in the opinion of each such person, that person has made such
examination or investigation as is necessary to enable the person to express an informed
opinion as to whether or not such covenant or condition has been complied with; and




     (d) a statement as to whether or not, in the opinion of each such person, such
condition or covenant has been complied with, provided, that an Opinion of Counsel may
rely on an Officers’ Certificate or certificates of public officials with respect to
matters of fact.



     Any certificate, statement or opinion of an Officer of the Issuer or the Company, as
applicable, may be based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which such certificate, statement or opinion may
be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the
same are



110









 




erroneous. Any certificate, statement or Opinion of Counsel may be based, insofar as it
relates to factual matters on information with respect to which is in the possession of the Issuer,
or the Company, as applicable, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, or the Company, as applicable, unless such counsel knows that
the certificate, statement or opinion or representations with respect to the matters upon which
such certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.




     Any certificate, statement or opinion of an Officer of the Issuer or the Company, as
applicable, or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of accountants in the employ
of the Issuer or the Company, as applicable, unless such Officer or counsel, as the case may be,
knows that the certificate or opinion or representations with respect to the accounting matters
upon which such certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous.



     Any certificate or opinion of any independent firm of public accountants filed with and
directed to the Trustee shall contain a statement that such firm is independent.



     Section 13.06. Payment Date Other Than a Business Day. If any payment with respect to a
payment of any principal of, premium, if any, or interest or Additional Interest, if any, on any
Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is
due on a day which is not a Business Day, then the payment need not be made on such date, but may
be made on the next Business Day with the same force and effect as if made on such date, and no
interest shall accrue for the intervening period.



     Section 13.07. Governing Law. This Indenture, the Guarantees and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.



     Section 13.08. No Adverse Interpretation of Other Agreements. The Indenture may not be used
to interpret another indenture or loan or debt agreement of the Issuer, the Company or any
Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret
this Indenture.



     Section 13.09. Successors. All agreements of the Issuer, the Company or any Guarantor in
this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.



111









 





     Section 13.10. Duplicate Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.



     Section 13.11. Separability. To the extent permitted by applicable law, in case any
provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.



     Section 13.12. Table of Contents and Headings. The Table of Contents, Cross-Reference Table
and headings of the Articles and Sections of the Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and in no way modify or restrict
any of the terms and provisions of this Indenture.



     Section 13.13. No Liability of Directors, Officers, Employees, Partners, Incorporators and
Stockholders. No recourse under or upon any obligation, covenant or agreement contained in this
Indenture, or in the Notes, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder, officer, director or
employee, as such, of the Issuer, the Company or the Guarantors or any partner of the Issuer, the
Company or the Guarantors or of any successor, either directly or through the Issuer, the Company
or the Guarantors or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Notes by the Holders thereof
and as part of the consideration for the issue of the Notes.



     Section 13.14. Provisions of Indenture for the Sole Benefit of Parties and Holders of Notes.
Nothing in this Indenture or in the Notes, expressed or implied, shall give or be construed to give
to any Person, other than the parties hereto and their successors and the Holders of Notes, any
legal or equitable right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders of Notes.



[Signature page follows]





112









 









SIGNATURES




     IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the
date first written above.



	 	 	 	 	 
	 	K. HOVNANIAN ENTERPRISES, INC., as Issuer

 	 
	 	By:  	/s/ David G. Valiaveedan
 	 
	 	 	Name:  	David G. Valiaveedan 	 
	 	 	Title:  	Vice President Finance and Treasurer 	 
	 
	 	HOVNANIAN ENTERPRISES, INC.,

as the Company and a Guarantor

 	 
	 	By:  	/s/ David G. Valiaveedan
 	 
	 	 	Name:  	David G. Valiaveedan 	 
	 	 	Title:  	Vice President Finance and Treasurer 	 
	 
	 	On behalf of each entity named in Schedule A

hereto, as a Guarantor

 	 
	 	By:  	/s/ David G. Valiaveedan
 	 
	 	 	Name:  	David G. Valiaveedan 	 
	 	 	Title:  	Authorized Officer 	 
	 



	 	 	 	 	 
	 	WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee and Collateral Agent

 	 
	 	By:  	/s/ Joshua C. Jones
 	 
	 	 	Name:  	Joshua C. Jones 	 
	 	 	Title:  	Banking Officer 	 
	 



[Signature page to the Indenture]





 









 








SCHEDULE A




GUARANTORS



EXISTING GUARANTORS:




AUDDIE ENTERPRISES, L.L.C.

BUILDER SERVICES NJ, L.L.C.

BUILDER SERVICES NY, L.L.C.

BUILDER SERVICES PA, L.L.C.

DULLES COPPERMINE, L.L.C.

EASTERN NATIONAL TITLE AGENCY, LLC

EASTERN TITLE AGENCY, INC.

F&W MECHANICAL SERVICES, L.L.C.

FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.

FOUNDERS TITLE AGENCY, INC.

GLENRISE GROVE, L.L.C.

GOVERNOR’S ABSTRACT CO., INC.

HOMEBUYERS FINANCIAL SERVICES, L.L.C.

HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.

HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP, L.L.C.

K. HOV IP, INC.

K. HOV IP, II, INC.

K. HOVNANIAN ACQUISITIONS, INC.

K. HOVNANIAN AT 4S, LLC

K. HOVNANIAN AT ACQUA VISTA, LLC

K. HOVNANIAN AT ALISO, LLC

K. HOVNANIAN AT ALLENTOWN, L.L.C.

K. HOVNANIAN AT ANDALUSIA, LLC

K. HOVNANIAN AT ARBOR HEIGHTS, LLC

K. HOVNANIAN AT AVENUE ONE, L.L.C.

K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.

K. HOVNANIAN AT BARNEGAT I, L.L.C.

K. HOVNANIAN AT BARNEGAT II, L.L.C.

K. HOVNANIAN AT BELLA LAGO, LLC

K. HOVNANIAN AT BENSALEM, LLC

K. HOVNANIAN AT BERKELEY, L.L.C.

K. HOVNANIAN AT BLUE HERON PINES, L.L.C.

K. HOVNANIAN AT BRANCHBURG, L.L.C.

K. HOVNANIAN AT BRIDGEPORT, INC.

K. HOVNANIAN AT BRIDGEWATER I, L.L.C.

K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.

K. HOVNANIAN AT CAMERON CHASE, INC.

K. HOVNANIAN AT CAMP HILL, L.L.C.

K. HOVNANIAN AT CAPISTRANO, L.L.C.

K. HOVNANIAN AT CARLSBAD, LLC

K. HOVNANIAN AT CEDAR GROVE III, L.L.C.




 









 





K. HOVNANIAN AT CEDAR GROVE V, L.L.C.

K. HOVNANIAN AT CHARTER WAY, LLC

K. HOVNANIAN AT CHESTER I, L.L.C.

K. HOVNANIAN AT CHESTERFIELD, L.L.C.

K. HOVNANIAN AT CIELO, L.L.C.

K. HOVNANIAN AT CLIFTON, L.L.C.

K. HOVNANIAN AT COASTLINE, L.L.C.

K. HOVNANIAN AT CORTEZ HILL, LLC

K. HOVNANIAN AT CRANBURY, L.L.C.

K. HOVNANIAN AT DENVILLE, L.L.C.

K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.

K. HOVNANIAN AT DOMINGUEZ HILLS, INC.

K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.

K. HOVNANIAN AT EASTLAKE, LLC

K. HOVNANIAN AT EDGEWATER II, L.L.C.

K. HOVNANIAN AT EDGEWATER, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.

K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.

K. HOVNANIAN AT EL DORADO RANCH, L.L.C.

K. HOVNANIAN AT ENCINITAS RANCH, LLC

K. HOVNANIAN AT EVERGREEN, L.L.C.

K. HOVNANIAN AT FAIR OAKS, L.L.C.

K. HOVNANIAN AT FIDDYMENT RANCH, LLC

K. HOVNANIAN AT FIFTH AVENUE, L.L.C.

K. HOVNANIAN AT FLORENCE I, L.L.C.

K. HOVNANIAN AT FLORENCE II, L.L.C.

K. HOVNANIAN AT FOREST MEADOWS, L.L.C.

K. HOVNANIAN AT FRANKLIN, L.L.C.

K. HOVNANIAN AT FRANKLIN II, L.L.C.

K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.

K. HOVNANIAN AT FRESNO, LLC

K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.

K. HOVNANIAN AT GILROY, LLC

K. HOVNANIAN AT GREAT NOTCH, L.L.C.

K. HOVNANIAN AT GUTTENBERG, L.L.C.

K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.

K. HOVNANIAN AT HAMBURG, L.L.C.

K. HOVNANIAN AT HAWTHORNE, L.L.C.

K. HOVNANIAN AT HERSHEY’S MILL, INC.

K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.

K. HOVNANIAN AT HILLTOP, L.L.C.

K. HOVNANIAN AT HOWELL, L.L.C.

K. HOVNANIAN AT HUDSON POINTE, L.L.C.

K. HOVNANIAN AT JACKSON I, L.L.C.

K. HOVNANIAN AT JACKSON, L.L.C.

K. HOVNANIAN AT JAEGER RANCH, LLC

K. HOVNANIAN AT JERSEY CITY IV, L.L.C.

K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.

K. HOVNANIAN AT KEYPORT, L.L.C.

K. HOVNANIAN AT KING FARM, L.L.C.

K. HOVNANIAN AT LA COSTA GREENS, L.L.C.

K. HOVNANIAN AT LA COSTA, LLC




Sch. A-2




 









 








K. HOVNANIAN AT LA HABRA KNOLLS, LLC

K. HOVNANIAN AT LA LAGUNA, L.L.C.

K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC

K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.

K. HOVNANIAN AT LAWRENCE V, L.L.C.

K. HOVNANIAN AT LEE SQUARE, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND II, L.L.C.

K. HOVNANIAN AT MAHWAH VI, INC.

K. HOVNANIAN AT MALAN PARK, L.L.C.

K. HOVNANIAN AT MANALAPAN III, L.L.C.

K. HOVNANIAN AT MANSFIELD I, L.L.C.

K. HOVNANIAN AT MANSFIELD II, L.L.C.

K. HOVNANIAN AT MANSFIELD III, L.L.C.

K. HOVNANIAN AT MANTECA, LLC

K. HOVNANIAN AT MAPLE AVENUE, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.

K. HOVNANIAN AT MARLBORO VI, L.L.C.

K. HOVNANIAN AT MARLBORO VII, L.L.C.

K. HOVNANIAN AT MELANIE MEADOWS, LLC

K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.

K. HOVNANIAN AT MENIFEE, LLC

K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MIDDLETOWN II, L.L.C.

K. HOVNANIAN AT MILLVILLE I, L.L.C.

K. HOVNANIAN AT MILLVILLE II, L.L.C.

K. HOVNANIAN AT MONROE II, INC.

K. HOVNANIAN AT MONROE IV, L.L.C.

K. HOVNANIAN AT MONROE NJ, L.L.C.

K. HOVNANIAN AT MONTVALE, LLC

K. HOVNANIAN AT MONTVALE II, L.L.C.

K. HOVNANIAN AT MOSAIC, LLC

K. HOVNANIAN AT MUIRFIELD, LLC

K. HOVNANIAN AT NEW WINDSOR, L.L.C.

K. HOVNANIAN AT NORTH BERGEN. L.L.C.

K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.

K. HOVNANIAN AT NORTH HALEDON, L.L.C.

K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.

K. HOVNANIAN AT NORTHAMPTON, L.L.C.

K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.

K. HOVNANIAN AT NORTHFIELD, L.L.C.

K. HOVNANIAN AT OCEAN TOWNSHIP, INC.




Sch. A-3




 









 








K. HOVNANIAN AT OCEAN WALK, INC.

K. HOVNANIAN AT OCEANPORT, L.L.C.

K. HOVNANIAN AT OLD BRIDGE, L.L.C.

K. HOVNANIAN AT OLDE ORCHARD, LLC

K. HOVNANIAN AT PARAMUS, L.L.C.

K. HOVNANIAN AT PARK LANE, LLC

K. HOVNANIAN AT PARKSIDE, LLC

K. HOVNANIAN AT PARSIPPANY, L.L.C.

K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.

K. HOVNANIAN AT PIAZZA D’ORO, L.L.C.

K. HOVNANIAN AT PIAZZA SERENA, L.L.C.

K. HOVNANIAN AT PITTSGROVE, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.

K. HOVNANIAN AT POSITANO, LLC

K. HOVNANIAN AT PRADO, L.L.C.

K. HOVNANIAN AT RANCHO 79, LLC

K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC

K. HOVNANIAN AT RANDOLPH I, L.L.C.

K. HOVNANIAN AT RAPHO, L.L.C.

K. HOVNANIAN AT RIDGEMONT, L.L.C.

K. HOVNANIAN AT RIVERBEND, LLC

K. HOVNANIAN AT RODERUCK, L.L.C.

K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.

K. HOVNANIAN AT ROWLAND HEIGHTS, LLC

K. HOVNANIAN AT SAGE, L.L.C.

K. HOVNANIAN AT SANTA NELLA, LLC

K. HOVNANIAN AT SARATOGA, INC.

K. HOVNANIAN AT SAWMILL, INC.

K. HOVNANIAN AT SAYREVILLE, L.L.C.

K. HOVNANIAN AT SEASONS LANDING, LLC

K. HOVNANIAN AT SHELDON GROVE, LLC

K. HOVNANIAN AT SHREWSBURY, LLC

K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.

K. HOVNANIAN AT SILVER SPRING, L.L.C.

K. HOVNANIAN AT SKYE ISLE, LLC

K. HOVNANIAN AT SMITHVILLE, INC

K. HOVNANIAN AT SOMERS POINT, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.

K. HOVNANIAN AT STANTON, LLC

K. HOVNANIAN AT STATION SQUARE, L.L.C.

K. HOVNANIAN AT SUNRIDGE PARK, LLC

K. HOVNANIAN AT SYCAMORE, INC.

K. HOVNANIAN AT THE CLIFFS, LLC

K. HOVNANIAN AT THE CROSBY, LLC

K. HOVNANIAN AT THE GABLES, LLC

K. HOVNANIAN AT THE MONARCH, L.L.C.

K. HOVNANIAN AT THE PRESERVE, LLC

K. HOVNANIAN AT THOMPSON RANCH, LLC




Sch. A-4




 









 








K. HOVNANIAN AT THORNBURY, INC.

K. HOVNANIAN AT TRAIL RIDGE, LLC

K. HOVNANIAN AT TROVATA, INC.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

K. HOVNANIAN AT UPPER MAKEFIELD I, INC.

K. HOVNANIAN AT UPPER PROVIDENCE, LLC

K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.

K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.

K. HOVNANIAN AT VALLE DEL SOL, LLC

K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.

K. HOVNANIAN AT VICTORVILLE, L.L.C.

K. HOVNANIAN AT VINELAND, L.L.C.

K. HOVNANIAN AT VISTA DEL SOL, L.L.C.

K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.

K. HOVNANIAN AT WASHINGTON, L.L.C.

K. HOVNANIAN AT WATERSTONE, LLC

K. HOVNANIAN AT WAYNE IX, L.L.C.

K. HOVNANIAN AT WAYNE, VIII, L.L.C.

K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.

K. HOVNANIAN AT WEST WINDSOR, L.L.C.

K. HOVNANIAN AT WESTSHORE, LLC

K. HOVNANIAN AT WHEELER RANCH, LLC

K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.

K. HOVNANIAN AT WILLOW BROOK, L.L.C.

K. HOVNANIAN AT WINCHESTER, LLC

K. HOVNANIAN AT WOODCREEK WEST, LLC

K. HOVNANIAN AT WOOLWICH I, L.L.C.

K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.

K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN CLASSICS, L.L.C.

K. HOVNANIAN COMMUNITIES, INC.

K. HOVNANIAN COMPANIES NORTHEAST, INC.

K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.

K. HOVNANIAN COMPANIES OF MARYLAND, INC.

K. HOVNANIAN COMPANIES OF NEW YORK, INC.

K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.

K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.

K. HOVNANIAN COMPANIES, LLC

K. HOVNANIAN CONSTRUCTION II, INC

K. HOVNANIAN CONSTRUCTION III, INC

K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.

K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.

K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.

K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.

K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.

K. HOVNANIAN DEVELOPMENTS OF D.C., INC.

K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.

K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.

K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.

K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.

K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.

K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.




Sch. A-5




 









 









K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.

K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.

K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.

K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.

K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.

K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.

K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.

K. HOVNANIAN ESTATES AT REGENCY, L.L.C.

K. HOVNANIAN FIRST HOMES, L.L.C.

K. HOVNANIAN FLORIDA REALTY, L.L.C.

K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC

K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC

K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC

K. HOVNANIAN GREAT WESTERN HOMES, LLC

K. HOVNANIAN HAMPTONS AT OAK CREEK II, L.L.C.

K. HOVNANIAN HOLDINGS NJ, L.L.C.

K. HOVNANIAN HOMES — DFW, L.L.C.

K. HOVNANIAN HOMES AT CAMERON STATION, LLC

K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.

K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.

K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.

K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.

K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.

K. HOVNANIAN HOMES AT RUSSETT, L.L.C.

K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC

K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.

K. HOVNANIAN HOMES OF D.C., L.L.C.

K. HOVNANIAN HOMES OF DELAWARE, L.L.C.

K. HOVNANIAN HOMES OF GEORGIA, L.L.C.

K. HOVNANIAN HOMES OF HOUSTON, L.L.C.

K. HOVNANIAN HOMES OF MARYLAND, L.L.C.

K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.

K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.

K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC

K. HOVNANIAN HOMES OF VIRGINIA, INC.

K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC

K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTHEAST SERVICES, L.L.C.

K. HOVNANIAN OF HOUSTON II, L.L.C.

K. HOVNANIAN OHIO REALTY, L.L.C.

K. HOVNANIAN OSTER HOMES, L.L.C.

K. HOVNANIAN PA REAL ESTATE, INC.




Sch. A-6




 









 









K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.

K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.

K. HOVNANIAN PROPERTIES OF RED BANK, INC.

K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.

K. HOVNANIAN STANDING ENTITY, L.L.C.

K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES, L.L.C.

K. HOVNANIAN T&C HOMES AT FLORIDA, L.L.C.

K. HOVNANIAN T&C HOMES AT ILLINOIS, L.L.C.

K. HOVNANIAN T&C INVESTMENT, L.L.C.

K. HOVNANIAN TIMBRES AT ELM CREEK, LLC

K. HOVNANIAN VENTURE I, L.L.C.

K. HOVNANIAN WINDWARD HOMES, LLC

K. HOVNANIAN’S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAILEY’S GLENN, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAKERSFIELD, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BEAUMONT, LLC

K. HOVNANIAN’S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT HEMET, LLC

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT LOS BANOS, LLC

K. HOVNANIAN’S FOUR SEASONS AT MORENO VALLEY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT PALM SPRINGS, LLC

K. HOVNANIAN’S FOUR SEASONS AT RENAISSANCE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK II, LLC

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT SILVER MAPLE FARM, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT VINT HILL, L.L.C.

K. HOVNANIAN’S FOUR SEASONS, LLC

K. HOVNANIAN’S PARKSIDE AT TOWNGATE, L.L.C.

KHIP, L.L.C.

LANDARAMA, INC.

M&M AT CHESTERFIELD, LLC

M&M AT CRESCENT COURT, L.L.C.

M&M AT WEST ORANGE, L.L.C.

M&M AT WHEATENA URBAN RENEWAL, L.L.C.

MATZEL & MUMFORD AT EGG HARBOR, L.L.C.

MATZEL & MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.

MCNJ, INC.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF KENTUCKY, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.




Sch. A-7




 









 








MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES, L.L.C.

MMIP, L.L.C.

NEW LAND TITLE AGENCY, L.L.C.

PADDOCKS, L.L.C.

PARK TITLE COMPANY, LLC

PINE AYR, LLC

RIDGEMORE UTILITY, L.L.C.




SEABROOK ACCUMULATION CORPORATION




STONEBROOK HOMES, INC.




TERRAPIN REALTY, L.L.C.




THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.




THE MATZEL & MUMFORD ORGANIZATION, INC




WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.




WASHINGTON HOMES, INC.




WESTMINSTER HOMES OF ALABAMA, L.L.C.




WESTMINSTER HOMES OF MISSISSIPPI, LLC




WESTMINSTER HOMES, INC.




WH LAND I, INC.




WH PROPERTIES, INC.




WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.



SECURED GROUP GUARANTORS:



HERITAGE PINES, LLC




HOVWEST LAND ACQUISITION, LLC




K. HOVNANIAN AT COBBLESTONE SQUARE CONDOMINIUMS, L.L.C.




K. HOVNANIAN HOVWEST HOLDINGS, L.L.C.




K. HOVNANIAN JV HOLDINGS, L.L.C.




K. HOVNANIAN JV SERVICES COMPANY, L.L.C.




Sch. A-8




 









 








EXHIBIT A



THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. UPON REQUEST, THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO A HOLDER OF THIS NOTE
INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE DATE AND THE YIELD TO MATURITY
OF THIS NOTE. HOLDERS SHOULD CONTACT THE CORPORATE CONTROLLER AT 110 WEST FRONT STREET, P.O. BOX
500, RED BANK, NEW JERSEY 07701.




[FACE OF NOTE]




K. HOVNANIAN ENTERPRISES, INC.


[2.00%][5.00%] Senior Secured Notes Due 2021




CUSIP No.:




			
	 	 	 
	No.
	 	$_______________






     K. Hovnanian Enterprises, Inc., a California corporation (the “Issuer,” which term includes
any successor under the Indenture hereinafter referred to), for value received, promises to pay to
____________________, or its registered assigns, the principal sum of ____________ DOLLARS
($______), [or such other amount as is provided in a schedule attached hereto]1, on
November 1, 2021.



     Interest Rate: [2.00%][5.00%] per annum.



     Interest Payment Dates: May 1 and November 1, commencing May 1, 2012.



     Record Dates: April 15 and October 15.



     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which will for all purposes have the same effect as if set forth at this place.





 




			
	1	 	For Global Notes.




A-1









 










     IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized officer.



     Dated: [___________], 2011



	 	 	 	 	 
	 	K. HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-2









 






	 	 	 	 	 



[Form of] Trustee’s Certificate of Authentication





     This is one of the [2.00%][5.00%] Senior Secured Notes Due 2021 described in the Indenture
referred to in this Note.



	 	 	 	 	 
	 	WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 



A-3









 






	 	 	 	 	 



[REVERSE SIDE OF NOTE]




K. HOVNANIAN ENTERPRISES, INC.



[2.00%][5.00%] Senior Secured Notes Due 2021




     Capitalized terms used herein are used as defined in the Indenture referred to below unless
otherwise indicated.



1. Two Series of Notes




     The Holders of the Notes of this series shall vote together as a single class with the Holders
of the Issuer’s [2.00%][5.00%] Senior Secured Notes Due 2021 for all purposes under the Indenture.




	2.	 	Principal and Interest.





     K. Hovnanian Enterprises, Inc. (the “Issuer,” which term includes any successor under the
Indenture hereinafter referred to), a California corporation, promises to pay the principal of this
Note on November 1, 2021.



     The Issuer promises to pay interest on the principal amount of this Note on each interest
payment date, as set forth on the face of this Note, at the rate of [2.00%][5.00%] per annum.



     Interest will be payable semiannually (to the holders of record of the Notes at the close of
business on the April 15 or October 15 immediately preceding the interest payment date) on each
interest payment date, commencing May 1, 2012.



     [The Holder of this Note is entitled to the benefits of the Registration Rights Agreement,
dated November 1, 2011, among the Issuer, the Guarantors party thereto and the Dealer Managers
named therein (the “Registration Rights Agreement”). In the event of a Registration Default (as
defined in the Registration Rights Agreement), the Holder shall be entitled to Additional Interest
as specified in the Registration Rights Agreement until the Registration Default is
cured.]2



     Interest on this Note will accrue from the most recent date to which interest has been paid on
this Note or the Note surrendered in exchange for this Note (or, if there is no existing default in
the payment of interest and if this Note is authenticated between a regular record date and the
next interest payment date, from such interest payment date) or, if no interest has been paid, from
November





 




			
	2	 	For Initial Notes and Initial Additional
Notes only.




A-4









 









1, 2011. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.





	3.	 	Paying Agent and Registrar.





     Initially, Wilmington Trust, National Association (the “Trustee”) will act as Paying Agent and
Registrar. The Issuer may change or appoint any Paying Agent, Registrar or co-Registrar without
notice to any Holder. The Issuer or any of its Subsidiaries may act as Registrar, co-Registrar or
(except for purposes of Article 8 of the Indenture) Paying Agent.




	4.	 	Indenture; Guarantees.





     This is one of the Notes issued under an Indenture dated as of November 1, 2011 (as amended
from time to time, the “Indenture”), among the Issuer, the Guarantors party thereto and the
Trustee. The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such
terms. To the extent permitted by applicable law, in the event of any inconsistency between the
terms of this Note and the terms of the Indenture, the terms of the Indenture will control.



     The Notes are general unsecured obligations of the Issuer. The Indenture limits the original
aggregate principal amount of the Notes of this series issued thereunder to $[•] but Additional
Notes may be issued pursuant to the Indenture (subject to the conditions stated therein), and the
originally issued Notes and all such Additional Notes vote together for all purposes as a single
class. This Note is guaranteed by the Guarantors as set forth in the Indenture and the Guarantee
endorsed hereon. Guarantees by Guarantors that are members of the Secured Group will be secured by
Liens on the Collateral as described in the Indenture and the Security Documents.



     Reference is hereby made to the Indenture for a statement of the respective rights, duties and
obligations thereunder of the Issuer, the Guarantors, the Trustee and the Holders.




	5.	 	Optional Redemption; Redemption with Proceeds of Equity Offering.





     The Issuer may, at its option, redeem the Notes, in whole, at any time, or in part, from time
to time, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to the
sum of:




     (i) 100% of the principal amount thereof, plus accrued and unpaid interest thereon to
the redemption date, if any; plus



A-5









 






     (ii) the greater of (A) 1% of the principal amount thereof and (B) the Make-Whole
Amount.



     The term “Make-Whole Amount” shall mean, in connection with any optional redemption of any
Note and as determined by the Issuer in its sole discretion, the excess, if any, of:




     (i) the aggregate present value as of the date of such redemption of each dollar of
principal being redeemed and the amount of interest (exclusive of interest accrued to the
redemption date) that would have been payable in respect of such dollar if such prepayment
had not been made, determined by discounting, on a semiannual basis, such principal and
interest at the Treasury Rate (determined on the business day preceding the date of such
redemption) plus 0.50%, from the respective dates on which such principal and interest
would have been payable if such payment had not been made; over




     (ii) the principal amount of the Note being redeemed.



     At any time and from time to time prior to November 1, 2014, the Issuer may redeem Notes of
this series with the net cash proceeds received by the Issuer from any Equity Offering at a
redemption price equal to [102%][105%] of the principal amount plus accrued and unpaid interest to
the redemption date, in an aggregate principal amount for all such redemptions not to exceed 35% of
the original aggregate principal amount of the Notes of this series (including Additional Notes of
this series), provided that:




     (i) in each case the redemption takes place not later than 60 days after the closing
of the related Equity Offering, and




     (ii) not less than 65% of the original aggregate principal amount of the Notes of
this series (including Additional Notes of this series) remains outstanding immediately
thereafter.



     If less than all of the Notes of this series are to be redeemed at any time, the Trustee will
select Notes of this series for redemption on a pro rata basis, by lot or by such other method as
the Trustee in its sole discretion shall deem appropriate and fair.



     No Notes of $2,000 in original principal amount or less shall be redeemed in part. Notices of
any redemption may be given prior to the completion thereof, and may, at the Issuer’s discretion,
be subject to one or more conditions precedent, including, but not limited to, completion of a
related Equity Offering.



A-6









 





     If any Note is to be redeemed in part only, the notice of redemption that relates to that Note
shall state the portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion of the original Note and of the same series will be issued
in the name of the Holder thereof upon cancellation of the original Note. Notes called for
redemption become due on the date fixed for redemption. On and after the redemption date, interest
ceases to accrue on Notes or portions thereof called for redemption.




	6.	 	Repurchase Provisions.





     If a Change of Control occurs, each Holder shall have the right, at such Holder’s option, to
require the Issuer to purchase all or any part (equal to $2,000 principal amount or any multiple of
$1,000 in excess thereof) of such Holder’s Notes on a date that is no later than 90 days after
notice of the Change of Control, at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase as
provided in, and subject to the terms of, the Indenture.




	7.	 	Mandatory Redemption.





     There is no sinking fund for, or mandatory redemption of, the Notes.




	8.	 	Discharge and Defeasance.





     If the Issuer deposits with the Trustee money and/or U.S. Government Obligations sufficient to
pay the then outstanding principal of, premium, interest and Additional Interest, if any, and
accrued interest on the Notes to redemption or maturity, as the case may be, the Issuer, the
Company and the Guarantors may in certain circumstances be discharged from certain of their
obligations under the Indenture, the Notes, the Guarantees and the Security Documents.




	9.	 	Registered Form; Denominations; Transfer; Exchange.





     The Notes are in registered form only without coupons in denominations of $2,000 principal
amount and any multiple of $1,000 in excess thereof. A Holder may register the transfer or
exchange of Notes in accordance with the Indenture. The Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. Pursuant to the Indenture, there are certain
periods during which the Trustee will not be required to issue, register the transfer of, or
exchange any Note or certain portions of a Note.




	10.	 	Persons Deemed Owners.





     The registered Holder of this Note shall be treated as the owner of it for all purposes.



A-7









 






	11.	 	Defaults and Remedies.





     If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Notes may declare all the Notes to be due and payable immediately. If a
bankruptcy or insolvency default with respect to the Issuer or the Company occurs and is
continuing, the Notes automatically become immediately due and payable. Holders may not enforce
the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in
its exercise of remedies.




	12.	 	Amendment, Supplement and Waiver.





     Subject to certain exceptions, the Indenture, the Notes, the Guarantees and the Security
Documents may be amended or supplemented, or future compliance therewith may be waived with the
consent of the Holders of a majority in principal amount of the outstanding Notes. Without notice
to or the consent of any Holder, the Company, the Issuer, the Guarantors and the Trustee, and with
respect to the Security Documents, the Collateral Agent, may amend or supplement the Indenture, the
Notes, the Guarantees or the Security Documents to, among other things, cure any ambiguity, defect
or inconsistency or if such amendment or supplement does not adversely affect the legal rights of
any Holder.




	13.	 	Trustee Dealings With Issuer.





     The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its affiliates, with the same rights as if it were not
Trustee; however, if it acquires any conflicting interest (as defined in the Trust Indenture Act),
it must eliminate such conflict, apply to the Commission for permission to continue or resign.




	14.	 	No Recourse Against Others.





     An incorporator, and any past, present or future director, officer, partner, employee or
stockholder, as such, of the Issuer, the Company or the Guarantors shall not have any liability for
any obligations of the Issuer, the Company or the Guarantors under the Notes, the Indenture or the
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.



A-8









 






	15.	 	Governing Law.





     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.




	16.	 	CUSIP Numbers.





     Pursuant to a recommendation promulgated by the Committee on Uniform Note Identification
Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices as a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice and reliance may be
placed only on the other identification numbers placed thereon.




	17.	 	Authentication.





     This Note is not valid until the Trustee (or Authenticating Agent) manually signs the
certificate of authentication on the other side of this Note.




	18.	 	Abbreviations.





     Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to
Minors Act).



     The Issuer will furnish a copy of the Indenture to any Holder upon written request and without
charge.




A-9











 





[FORM OF TRANSFER NOTICE]



FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto



Insert Social Security or Taxpayer Identification No.



 




 


Please print or typewrite name and address, including zip code, of assignee



 




 


the within Note and all rights thereunder, hereby irrevocably constituting and appointing



 




agent to transfer this Note on the books of the Issuer with full power of substitution in the
premises.




	 	 	 	 	 	 	 

	Dated:  

	 	 	 	Signed:  	 	 
	 

	 
	 	 	 
	 

	 	 	 	 	(sign exactly as name appears on the other side of this Note)






	 	 	 

	Signature Guarantee3:
	 	 








 




			
	3	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.




A-10









 










[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL

CERTIFICATES BEARING A RESTRICTED LEGEND]




     In connection with any transfer of this Note occurring prior to the date which is the date
following the first anniversary of the original issuance of this Note, the undersigned confirms
that such transfer is made without utilizing any general solicitation or general advertising in
connection with the transfer and further as follows:



Check One



9 (1) This Note is being transferred to a “qualified institutional buyer” in compliance with Rule
144A under the Securities Act of 1933, as amended, and certification in the form of Exhibit F to
the Indenture is being furnished herewith.



9 (2) This Note is being transferred to a non-“U.S. Person,” as defined in Rule 902 of Regulation S
under the Securities Act in compliance with the exemption from registration under the Securities
Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of
Exhibit E to the Indenture is being furnished herewith.




or



9 (3) This Note is being transferred other than in accordance with (1) or (2) above and documents
are being furnished herewith which comply with the conditions of transfer set forth in this Note
and the Indenture.




     If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note
in the name of any Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in the Indenture have been satisfied.


Dated:____________________




	 	 	 	 	 
	 	 	 
	 	  	 	 
	 	 	Transferor 	 
	 
	 	 	Signed:  	 	 



A-11









 









NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.


Signature Guarantee:4_____________________




By:_____________________________

(To be executed by an executive officer)






 




			
	4	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.




A-12









 










OPTION OF HOLDER TO ELECT PURCHASE




     If you wish to have all of this Note purchased by the Issuer pursuant to Section 4.10 or
Section 4.12 of the Indenture, check the box: 9



     If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.10 or
Section 4.12 of the Indenture, state the amount (in original principal amount) below:



          $____________________.



Date:____________



Your Signature:__________________________



(Sign exactly as your name appears on the other side of this Note)



Signature Guarantee:5 _____________________________






 




			
	5	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Trustee, which
requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Trustee in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.




A-13









 










SCHEDULE OF EXCHANGES OF INTERESTS IN GLOBAL NOTES6




     The following exchanges of a part of this Global Note for Certificated Notes or an interest in
another Global Note, or exchanges of a part of another Global Note or Certificated Note for an
interest in this Global Note, have been made:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal amount	 	 
	 	 	 	 	Amount of	 	Amount of	 	of this Global Note	 	 
	 	 	 	 	decrease in	 	increase in	 	following such	 	Signature of
	 	 	 	 	principal amount	 	principal amount	 	decrease or	 	authorized officer
	Date of Exchange	 	of this Global Note	 	of this Global Note	 	increase	 	of Trustee
	 
	 
	 







 




			
	6	 	For Global Notes




A-14









 










[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]




GUARANTEE



     The undersigned (the “Guarantors”) have unconditionally guaranteed, jointly and severally
(such guarantee by each Guarantor being referred to herein as the “Guarantee”) (i) the due and
punctual payment of the principal of and interest and Additional Interest, if any, on the Issuer’s
[2.00%][5.00%] Senior Secured Notes due 2021 (the “Notes”), whether at maturity or on an interest
payment date, by acceleration or otherwise, on the Notes, to the extent lawful, and of all other
obligations of the Issuer to the Holders or the Trustee all in accordance with the terms set forth
in Article 6 of the Indenture and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.



     No past, present or future stockholder, officer, director, employee, partner or incorporator,
as such, of any of the Guarantors shall have any liability under the Guarantee evidenced hereby by
reason of such person’s status as stockholder, officer, director, employee, partner or
incorporator. Each Holder of a Note by accepting a Note waives and releases all such liability.
This waiver and release are part of the consideration for the issuance of the Guarantee.



     Each Holder of a Note by accepting a Note agrees that any Guarantor named below shall have no
further liability with respect to its Guarantee if such Guarantor otherwise ceases to be liable in
respect of its Guarantee in accordance with the terms of the Indenture.



     The Guarantee evidenced hereby shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted shall have been
executed by the Trustee under the Indenture by the manual signature of one of its authorized
officers.



     This Guarantee shall be governed by, and construed in accordance with, the laws of the State
of New York.



EXISTING GUARANTORS:


HOVNANIAN ENTERPRISES, INC.

AUDDIE ENTERPRISES, L.L.C.

BUILDER SERVICES NJ, L.L.C.

BUILDER SERVICES NY, L.L.C.

BUILDER SERVICES PA, L.L.C.

DULLES COPPERMINE, L.L.C.

EASTERN NATIONAL TITLE AGENCY, LLC

EASTERN TITLE AGENCY, INC.




A-15









 





F&W MECHANICAL SERVICES, L.L.C.

FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.

FOUNDERS TITLE AGENCY, INC.

GLENRISE GROVE, L.L.C.

GOVERNOR’S ABSTRACT CO., INC.

HOMEBUYERS FINANCIAL SERVICES, L.L.C.

HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.

HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.

HOVNANIAN LAND INVESTMENT GROUP, L.L.C.

K. HOV IP, INC.

K. HOV IP, II, INC.

K. HOVNANIAN ACQUISITIONS, INC.

K. HOVNANIAN AT 4S, LLC

K. HOVNANIAN AT ACQUA VISTA, LLC

K. HOVNANIAN AT ALISO, LLC

K. HOVNANIAN AT ALLENTOWN, L.L.C.

K. HOVNANIAN AT ANDALUSIA, LLC

K. HOVNANIAN AT ARBOR HEIGHTS, LLC

K. HOVNANIAN AT AVENUE ONE, L.L.C.

K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.

K. HOVNANIAN AT BARNEGAT I, L.L.C.

K. HOVNANIAN AT BARNEGAT II, L.L.C.

K. HOVNANIAN AT BELLA LAGO, LLC

K. HOVNANIAN AT BENSALEM, LLC

K. HOVNANIAN AT BERKELEY, L.L.C.

K. HOVNANIAN AT BLUE HERON PINES, L.L.C.

K. HOVNANIAN AT BRANCHBURG, L.L.C.

K. HOVNANIAN AT BRIDGEPORT, INC.

K. HOVNANIAN AT BRIDGEWATER I, L.L.C.

K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.

K. HOVNANIAN AT CAMERON CHASE, INC.

K. HOVNANIAN AT CAMP HILL, L.L.C.

K. HOVNANIAN AT CAPISTRANO, L.L.C.

K. HOVNANIAN AT CARLSBAD, LLC

K. HOVNANIAN AT CEDAR GROVE III, L.L.C.

K. HOVNANIAN AT CEDAR GROVE V, L.L.C.

K. HOVNANIAN AT CHARTER WAY, LLC

K. HOVNANIAN AT CHESTER I, L.L.C.

K. HOVNANIAN AT CHESTERFIELD, L.L.C.

K. HOVNANIAN AT CIELO, L.L.C.

K. HOVNANIAN AT CLIFTON, L.L.C.

K. HOVNANIAN AT COASTLINE, L.L.C.

K. HOVNANIAN AT CORTEZ HILL, LLC

K. HOVNANIAN AT CRANBURY, L.L.C.

K. HOVNANIAN AT DENVILLE, L.L.C.

K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.

K. HOVNANIAN AT DOMINGUEZ HILLS, INC.

K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.

K. HOVNANIAN AT EASTLAKE, LLC




A-16









 





K. HOVNANIAN AT EDGEWATER II, L.L.C.

K. HOVNANIAN AT EDGEWATER, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.




K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.

K. HOVNANIAN AT EL DORADO RANCH, L.L.C.

K. HOVNANIAN AT ENCINITAS RANCH, LLC

K. HOVNANIAN AT EVERGREEN, L.L.C.

K. HOVNANIAN AT FAIR OAKS, L.L.C.

K. HOVNANIAN AT FIDDYMENT RANCH, LLC

K. HOVNANIAN AT FIFTH AVENUE, L.L.C.

K. HOVNANIAN AT FLORENCE I, L.L.C.

K. HOVNANIAN AT FLORENCE II, L.L.C.

K. HOVNANIAN AT FOREST MEADOWS, L.L.C.

K. HOVNANIAN AT FRANKLIN, L.L.C.

K. HOVNANIAN AT FRANKLIN II, L.L.C.

K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.

K. HOVNANIAN AT FRESNO, LLC

K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.

K. HOVNANIAN AT GILROY, LLC

K. HOVNANIAN AT GREAT NOTCH, L.L.C.

K. HOVNANIAN AT GUTTENBERG, L.L.C.

K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.

K. HOVNANIAN AT HAMBURG, L.L.C.

K. HOVNANIAN AT HAWTHORNE, L.L.C.

K. HOVNANIAN AT HERSHEY’S MILL, INC.

K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.

K. HOVNANIAN AT HILLTOP, L.L.C.

K. HOVNANIAN AT HOWELL, L.L.C.

K. HOVNANIAN AT HUDSON POINTE, L.L.C.

K. HOVNANIAN AT JACKSON I, L.L.C.

K. HOVNANIAN AT JACKSON, L.L.C.

K. HOVNANIAN AT JAEGER RANCH, LLC

K. HOVNANIAN AT JERSEY CITY IV, L.L.C.

K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.

K. HOVNANIAN AT KEYPORT, L.L.C.

K. HOVNANIAN AT KING FARM, L.L.C.

K. HOVNANIAN AT LA COSTA GREENS, L.L.C.

K. HOVNANIAN AT LA COSTA, LLC

K. HOVNANIAN AT LA HABRA KNOLLS, LLC

K. HOVNANIAN AT LA LAGUNA, L.L.C.

K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC

K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.

K. HOVNANIAN AT LAWRENCE V, L.L.C.

K. HOVNANIAN AT LEE SQUARE, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND I, L.L.C.

K. HOVNANIAN AT LOWER MORELAND II, L.L.C.

K. HOVNANIAN AT MAHWAH VI, INC.




A-17









 





K. HOVNANIAN AT MALAN PARK, L.L.C.

K. HOVNANIAN AT MANALAPAN III, L.L.C.

K. HOVNANIAN AT MANSFIELD I, L.L.C.

K. HOVNANIAN AT MANSFIELD II, L.L.C.

K. HOVNANIAN AT MANSFIELD III, L.L.C.

K. HOVNANIAN AT MANTECA, LLC

K. HOVNANIAN AT MAPLE AVENUE, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.

K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.

K. HOVNANIAN AT MARLBORO VI, L.L.C.

K. HOVNANIAN AT MARLBORO VII, L.L.C.

K. HOVNANIAN AT MELANIE MEADOWS, LLC

K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.

K. HOVNANIAN AT MENIFEE, LLC

K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.

K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MIDDLETOWN II, L.L.C.

K. HOVNANIAN AT MILLVILLE I, L.L.C.

K. HOVNANIAN AT MILLVILLE II, L.L.C.

K. HOVNANIAN AT MONROE II, INC.

K. HOVNANIAN AT MONROE IV, L.L.C.

K. HOVNANIAN AT MONROE NJ, L.L.C.

K. HOVNANIAN AT MONTVALE, LLC

K. HOVNANIAN AT MONTVALE II, L.L.C.

K. HOVNANIAN AT MOSAIC, LLC

K. HOVNANIAN AT MUIRFIELD, LLC

K. HOVNANIAN AT NEW WINDSOR, L.L.C.

K. HOVNANIAN AT NORTH BERGEN. L.L.C.

K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.

K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.

K. HOVNANIAN AT NORTH HALEDON, L.L.C.

K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.

K. HOVNANIAN AT NORTHAMPTON, L.L.C.

K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.

K. HOVNANIAN AT NORTHFIELD, L.L.C.

K. HOVNANIAN AT OCEAN TOWNSHIP, INC.

K. HOVNANIAN AT OCEAN WALK, INC.

K. HOVNANIAN AT OCEANPORT, L.L.C.

K. HOVNANIAN AT OLD BRIDGE, L.L.C.

K. HOVNANIAN AT OLDE ORCHARD, LLC

K. HOVNANIAN AT PARAMUS, L.L.C.

K. HOVNANIAN AT PARK LANE, LLC

K. HOVNANIAN AT PARKSIDE, LLC

K. HOVNANIAN AT PARSIPPANY, L.L.C.

K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.

K. HOVNANIAN AT PIAZZA D’ORO, L.L.C.

K. HOVNANIAN AT PIAZZA SERENA, L.L.C.

K. HOVNANIAN AT PITTSGROVE, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.




A-18









 





K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.

K. HOVNANIAN AT POSITANO, LLC

K. HOVNANIAN AT PRADO, L.L.C.

K. HOVNANIAN AT RANCHO 79, LLC

K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC

K. HOVNANIAN AT RANDOLPH I, L.L.C.

K. HOVNANIAN AT RAPHO, L.L.C.

K. HOVNANIAN AT RIDGEMONT, L.L.C.

K. HOVNANIAN AT RIVERBEND, LLC

K. HOVNANIAN AT RODERUCK, L.L.C.

K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.

K. HOVNANIAN AT ROWLAND HEIGHTS, LLC

K. HOVNANIAN AT SAGE, L.L.C.

K. HOVNANIAN AT SANTA NELLA, LLC

K. HOVNANIAN AT SARATOGA, INC.

K. HOVNANIAN AT SAWMILL, INC.

K. HOVNANIAN AT SAYREVILLE, L.L.C.

K. HOVNANIAN AT SEASONS LANDING, LLC

K. HOVNANIAN AT SHELDON GROVE, LLC

K. HOVNANIAN AT SHREWSBURY, LLC

K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.

K. HOVNANIAN AT SILVER SPRING, L.L.C.

K. HOVNANIAN AT SKYE ISLE, LLC

K. HOVNANIAN AT SMITHVILLE, INC

K. HOVNANIAN AT SOMERS POINT, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.

K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.

K. HOVNANIAN AT STANTON, LLC

K. HOVNANIAN AT STATION SQUARE, L.L.C.

K. HOVNANIAN AT SUNRIDGE PARK, LLC

K. HOVNANIAN AT SYCAMORE, INC.

K. HOVNANIAN AT THE CLIFFS, LLC

K. HOVNANIAN AT THE CROSBY, LLC

K. HOVNANIAN AT THE GABLES, LLC

K. HOVNANIAN AT THE MONARCH, L.L.C.

K. HOVNANIAN AT THE PRESERVE, LLC

K. HOVNANIAN AT THOMPSON RANCH, LLC

K. HOVNANIAN AT THORNBURY, INC.

K. HOVNANIAN AT TRAIL RIDGE, LLC

K. HOVNANIAN AT TROVATA, INC.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

K. HOVNANIAN AT UPPER MAKEFIELD I, INC.

K. HOVNANIAN AT UPPER PROVIDENCE, LLC

K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.

K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.

K. HOVNANIAN AT VALLE DEL SOL, LLC

K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.

K. HOVNANIAN AT VICTORVILLE, L.L.C.

K. HOVNANIAN AT VINELAND, L.L.C.

K. HOVNANIAN AT VISTA DEL SOL, L.L.C.




A-19









 





K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.

K. HOVNANIAN AT WASHINGTON, L.L.C.

K. HOVNANIAN AT WATERSTONE, LLC

K. HOVNANIAN AT WAYNE IX, L.L.C.

K. HOVNANIAN AT WAYNE, VIII, L.L.C.

K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.

K. HOVNANIAN AT WEST WINDSOR, L.L.C.

K. HOVNANIAN AT WESTSHORE, LLC

K. HOVNANIAN AT WHEELER RANCH, LLC

K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.

K. HOVNANIAN AT WILLOW BROOK, L.L.C.

K. HOVNANIAN AT WINCHESTER, LLC

K. HOVNANIAN AT WOODCREEK WEST, LLC

K. HOVNANIAN AT WOOLWICH I, L.L.C.

K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.

K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN CLASSICS, L.L.C.

K. HOVNANIAN COMMUNITIES, INC.

K. HOVNANIAN COMPANIES NORTHEAST, INC.

K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.

K. HOVNANIAN COMPANIES OF MARYLAND, INC.

K. HOVNANIAN COMPANIES OF NEW YORK, INC.

K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.

K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.

K. HOVNANIAN COMPANIES, LLC

K. HOVNANIAN CONSTRUCTION II, INC

K. HOVNANIAN CONSTRUCTION III, INC

K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.

K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.

K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.

K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.

K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.

K. HOVNANIAN DEVELOPMENTS OF D.C., INC.

K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.

K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.

K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.

K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.

K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.

K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.

K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.

K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.

K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.

K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.

K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.

K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.

K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.

K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.

K. HOVNANIAN ESTATES AT REGENCY, L.L.C.

K. HOVNANIAN FIRST HOMES, L.L.C.

K. HOVNANIAN FLORIDA REALTY, L.L.C.




A-20









 





K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC

K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC

K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC

K. HOVNANIAN GREAT WESTERN HOMES, LLC

K. HOVNANIAN HAMPTONS AT OAK CREEK II, L.L.C.

K. HOVNANIAN HOLDINGS NJ, L.L.C.

K. HOVNANIAN HOMES — DFW, L.L.C.

K. HOVNANIAN HOMES AT CAMERON STATION, LLC

K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.

K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.

K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.

K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.

K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.

K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.

K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.

K. HOVNANIAN HOMES AT RUSSETT, L.L.C.

K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC

K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.

K. HOVNANIAN HOMES OF D.C., L.L.C.

K. HOVNANIAN HOMES OF DELAWARE, L.L.C.

K. HOVNANIAN HOMES OF GEORGIA, L.L.C.

K. HOVNANIAN HOMES OF HOUSTON, L.L.C.

K. HOVNANIAN HOMES OF MARYLAND, L.L.C.

K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.

K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.

K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC

K. HOVNANIAN HOMES OF VIRGINIA, INC.

K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC

K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN NORTHEAST SERVICES, L.L.C.

K. HOVNANIAN OF HOUSTON II, L.L.C.

K. HOVNANIAN OHIO REALTY, L.L.C.

K. HOVNANIAN OSTER HOMES, L.L.C.

K. HOVNANIAN PA REAL ESTATE, INC.

K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.

K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.

K. HOVNANIAN PROPERTIES OF RED BANK, INC.

K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.

K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.

K. HOVNANIAN STANDING ENTITY, L.L.C.

K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.

K. HOVNANIAN SUMMIT HOMES, L.L.C.

K. HOVNANIAN T&C HOMES AT FLORIDA, L.L.C.

K. HOVNANIAN T&C HOMES AT ILLINOIS, L.L.C.




A-21









 





K. HOVNANIAN T&C INVESTMENT, L.L.C.

K. HOVNANIAN TIMBRES AT ELM CREEK, LLC

K. HOVNANIAN VENTURE I, L.L.C.

K. HOVNANIAN WINDWARD HOMES, LLC

K. HOVNANIAN’S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAILEY’S GLENN, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BAKERSFIELD, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT BEAUMONT, LLC

K. HOVNANIAN’S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT HEMET, LLC

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT KENT ISLAND, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT LOS BANOS, LLC

K. HOVNANIAN’S FOUR SEASONS AT MORENO VALLEY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT PALM SPRINGS, LLC

K. HOVNANIAN’S FOUR SEASONS AT RENAISSANCE, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK II, LLC

K. HOVNANIAN’S FOUR SEASONS AT RUSH CREEK, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT SILVER MAPLE FARM, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT VINT HILL, L.L.C.

K. HOVNANIAN’S FOUR SEASONS, LLC

K. HOVNANIAN’S PARKSIDE AT TOWNGATE, L.L.C.

KHIP, L.L.C.

LANDARAMA, INC.

M&M AT CHESTERFIELD, LLC

M&M AT CRESCENT COURT, L.L.C.

M&M AT WEST ORANGE, L.L.C.

M&M AT WHEATENA URBAN RENEWAL, L.L.C.

MATZEL & MUMFORD AT EGG HARBOR, L.L.C.

MATZEL & MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.

MCNJ, INC.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF KENTUCKY, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.

MIDWEST BUILDING PRODUCTS & CONTRACTOR SERVICES, L.L.C.

MMIP, L.L.C.

NEW LAND TITLE AGENCY, L.L.C.

PADDOCKS, L.L.C.

PARK TITLE COMPANY, LLC

PINE AYR, LLC

RIDGEMORE UTILITY, L.L.C.

SEABROOK ACCUMULATION CORPORATION

STONEBROOK HOMES, INC.

TERRAPIN REALTY, L.L.C.

THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.

THE MATZEL & MUMFORD ORGANIZATION, INC

WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.

WASHINGTON HOMES, INC.




A-22









 





WESTMINSTER HOMES OF ALABAMA, L.L.C.

WESTMINSTER HOMES OF MISSISSIPPI, LLC

WESTMINSTER HOMES, INC.

WH LAND I, INC.

WH PROPERTIES, INC.

WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.



SECURED GROUP GUARANTORS:




HERITAGE PINES, LLC

HOVWEST LAND ACQUISITION, LLC

K. HOVNANIAN AT COBBLESTONE SQUARE CONDOMINIUMS, L.L.C.

K. HOVNANIAN HOVWEST HOLDINGS, L.L.C.

K. HOVNANIAN JV HOLDINGS, L.L.C.

K. HOVNANIAN JV SERVICES COMPANY, L.L.C.




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Authorized Officer 	 
	 


[This Guarantee relates to K. Hovnanian Enterprises, Inc.’s [2.00%][5.00%] Senior Secured Notes due
2021 — CUSIP No.: ___________]




A-23









 








EXHIBIT B




SUPPLEMENTAL INDENTURE




dated as of __________, ____



among



K. HOVNANIAN ENTERPRISES, INC.



HOVNANIAN ENTERPRISES, INC.



The Other Guarantors Party Hereto



and



WILMINGTON TRUST, NATIONAL ASSOCIATION



as Trustee and Collateral Agent



 





2.00% Senior Secured Notes Due 2021

5.00% Senior Secured Notes Due 2021



B-1









 






     THIS [______] SUPPLEMENTAL INDENTURE (this “[______] Supplemental Indenture”), entered into as
of [__________], [____], among K. Hovnanian Enterprises, Inc., a California corporation (the
“Issuer”), Hovnanian Enterprises, Inc. (the “Company”), [list each new guarantor and its
jurisdiction of incorporation] (each an “Undersigned”) and Wilmington Trust, National Association,
a national banking association, as Trustee (the “Trustee”) and Collateral Agent (the “Collateral
Agent”).



RECITALS




     WHEREAS, the Issuer, Company, the other Guarantors party thereto and the Trustee entered into
an indenture, dated as of November 1, 2011 (the “Indenture”), relating to the Issuer’s 2.00% Senior
Secured Notes Due 2021 and its 5.00% Senior Secured Notes Due 2021 (the “Notes”);



     WHEREAS, as a condition to the purchase of the Notes by the Holders, the Company agreed
pursuant to the Indenture to cause any newly acquired or created Restricted Subsidiaries to provide
Guarantees.



AGREEMENT




     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and
intending to be legally bound, the parties hereto hereby agree as follows:



     Section 1. Capitalized terms used herein and not otherwise defined herein are used
as defined in the Indenture.



     Section 2. Each Undersigned, by its execution of this [______] Supplemental
Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms of the
Indenture applicable to Guarantors, including, but not limited to, Article 6 thereof.



     Section 3. This [_____] Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.



     Section 4. This [_____] Supplemental Indenture may be signed in various counterparts
which together shall constitute one and the same instrument.



     Section 5. This [_____] Supplemental Indenture is an amendment supplemental to the
Indenture and the Indenture and this [_____] Supplemental Indenture shall henceforth be read
together.



     Section 6. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental



B-2









 




Indenture or for or in respect of the
Recitals contained herein, all of which are made solely by the Issuer, the Company and each of the
undersigned.




[Signature pages follow]






B-3









 








     IN WITNESS WHEREOF, the parties hereto have caused this [_____] Supplemental Indenture to be
duly executed as of the date first above written.



	 	 	 	 	 
	 	K. HOVNANIAN ENTERPRISES, INC., 

as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HOVNANIAN ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WILMINGTON TRUST, NATIONAL ASSOCIATION


     as Trustee and Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B-4









 






	 	 	 	 	 



EXHIBIT C




RESTRICTED LEGEND





     THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:



     (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A “QIB”), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS SECURITY FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER REGULATION D OF THE
SECURITIES ACT (AN “IAI”),



     (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(d)(1) UNDER THE
SECURITIES ACT (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF
APPLICABLE) AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER, THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A QIB OR PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT PRIOR TO SUCH
TRANSFER, THE TRUSTEE IS FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE AND PROVIDED THAT
PRIOR TO SUCH TRANSFER, THE TRUSTEE IS FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT), (F) TO AN IAI THAT,



C-1









 




PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER AND THE TRUSTEE THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND




     (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(D) OR 2(E) ABOVE) A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.



     IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED
HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN
VIOLATION OF THE FOREGOING.



C-2









 





EXHIBIT D




DTC LEGEND




     UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ANY OF ITS SUBSIDIARIES OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL
INTEREST HEREIN.



     THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED.
TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY AND TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER
PROVISIONS OF THE INDENTURE.



D-1









 





EXHIBIT E




Regulation S Certificate




_________, ____




Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services





	 	Re: 	 	 K. Hovnanian Enterprises, Inc.

[•]% Senior Secured Notes due 2021 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of November 1, 2011 relating to the Notes





Dear Sirs:




     Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the
Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.



     [CHECK A OR B AS APPLICABLE.]




	 	G   A.	 	This Certificate relates to our proposed transfer of $____ principal amount
of Notes issued under the Indenture. We hereby certify as follows:






	 	1.	 	The offer and sale of the Notes was not and will
not be made to a person in the United States (unless such person is
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(vi) or the account held by it for which it is acting is
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(i) under the circumstances described in Rule 902(g)(3)) and
such offer and sale was not and will not be specifically targeted at an
identifiable group of U.S. citizens abroad.
	 
	 	2.	 	Unless the circumstances described in the
parenthetical in paragraph 1 above are applicable, either (a) at the
time the buy order was originated, the buyer was outside the United
States or we and any person acting on our behalf reasonably believed
that the buyer was





E-1









 





	 	 	 	outside the United States or (b) the transaction was executed in, on
or through the facilities of a designated offshore securities
market, and neither we nor any person acting on our behalf knows
that the transaction was pre-arranged with a buyer in the United
States.






	 	3.	 	Neither we, any of our affiliates, nor any person
acting on our or their behalf has made any directed selling efforts in
the United States with respect to the Notes.
	 
	 	4.	 	The proposed transfer of Notes is not part of a
plan or scheme to evade the registration requirements of the Securities
Act.
	 
	 	5.	 	If we are a dealer or a person receiving a
selling concession, fee or other remuneration in respect of the Notes,
and the proposed transfer takes place during the Restricted Period (as
defined in the Indenture), or we are an officer or director of the
Company or [a Dealer Manager] [an Initial Purchaser] (as defined in the
Indenture), we certify that the proposed transfer is being made in
accordance with the provisions of Rule 904(b) of Regulation S.






	 	G    B.	 	This Certificate relates to our proposed exchange of $____ principal amount
of Notes issued under the Indenture for an equal principal amount of Notes to be
held by us. We hereby certify as follows:






	 	1.	 	At the time the offer and sale of the Notes was
made to us, either (i) we were not in the United States or (ii) we were
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(vi) or the account held by us for which we were acting was
excluded from the definition of “U.S. person” pursuant to Rule
902(k)(2)(i) under the circumstances described in Rule 902(g)(3); and we
were not a member of an identifiable group of U.S. citizens abroad.
	 
	 	2.	 	Unless the circumstances described in paragraph
1(ii) above are applicable, either (a) at the time our buy order was
originated, we were outside the United States or (b) the transaction was
executed in, on or through the 




E-2









 






	 	 	 	facilities of a designated offshore
securities market and we did not pre-arrange the transaction in the
United States.






	 	3.	 	The proposed exchange of Notes is not part of a
plan or scheme to evade the registration requirements of the Securities
Act.





     You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.



	 	 	 	 	 
	 	Very truly yours,



[NAME OF SELLER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address: 	 	 
	 


Date:_________________





     Upon transfer of certificated Notes, the Notes would be registered in the name of the new
beneficial owner as follows:



	 	 	 	 	 
	 	 
	By:  	 	 
	 
	 	Date:   	 
	 
	 	Taxpayer ID number: 	 
	 




E-3











 





EXHIBIT F




Rule 144A Certificate




_________, ____




Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services





	 	Re:  	 	K. Hovnanian Enterprises, Inc.

[•]% Senior Secured Notes due 2021 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of November 1, 2011 relating to the Notes




Ladies and Gentlemen:




     This Certificate relates to:



     [CHECK A OR B AS APPLICABLE.]




	 	G   A.	 	Our proposed purchase of $____ principal amount of Notes issued under the
Indenture.
	 
	 	G   B.	 	Our proposed transfer or exchange of $____ principal amount of Notes issued
under the Indenture for an equal principal amount of Notes to be held by us.





     We and, if applicable, each account for which we are acting, are a qualified institutional
buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended
(the “Securities Act”). If we are acting on behalf of an account, we exercise sole investment
discretion with respect to such account. We are aware that the transfer of Notes to us, or such
exchange, as applicable, is being made in reliance upon the exemption from the provisions of
Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we
have received such information regarding the Company as we have requested pursuant to Rule
144A(d)(4) or have determined not to request such information.



F-1









 





     You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.



	 	 	 	 	 
	 	Very truly yours,



[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address: 	 	 
	 


Date:_________________





     Upon transfer of certificated Notes, the Notes would be registered in the name of the new
beneficial owner as follows:


By: ___________________________



Date: _________________________



Taxpayer ID number: ____________





F-2









 








EXHIBIT G




Institutional Accredited Investor Certificate




Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services





	 	Re: 	 	 K. Hovnanian Enterprises, Inc.

[•]% Senior Secured Notes due 2021 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of November 1, 2011 relating to the Notes




Ladies and Gentlemen:




     This Certificate relates to:



     [CHECK A, B OR C AS APPLICABLE.]




	 	G  A.	 	Our proposed purchase of $____ principal amount of Notes issued under the
Indenture.
	 
	 	G  B.	 	Our proposed purchase of $____ principal amount of a beneficial interest in
a Global Note
	 
	 	G  C.	 	Our proposed transfer or exchange of $____ principal amount of Notes issued
under the Indenture for an equal principal amount of Notes to be held by us.





     We hereby confirm that:




	 	1.	 	We are an institutional “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”) (an
“Institutional Accredited Investor”).






	 	2.	 	Any acquisition of Notes by us will be for our
own account or for the account of one or more other Institutional
Accredited Investors as to which we exercise sole investment discretion.




G-1









 












	 	3.	 	We have such knowledge and experience in
financial and business matters that we are capable of evaluating the
merits and risks of an investment in the Notes and we and any accounts
for which we are acting are able to bear the economic risks of and an
entire loss of our or their investment in the Notes.
	 
	 	4.	 	We are not acquiring the Notes or beneficial
interest therein with a view to any distribution thereof in a
transaction that would violate the Securities Act or the securities laws
of any State of the United States or any other applicable jurisdiction;
provided, that the disposition of our property and the property of any
accounts for which we are acting as fiduciary will remain at all times
within our and their control.
	 
	 	5.	 	We acknowledge that the Notes have not been
registered under the Securities Act and that the Notes may not be
offered or sold within the United States or to or for the benefit of
U.S. persons except as set forth below.
	 
	 	6.	 	The principal amount of Notes to which this
Certificate relates is at least equal to $250,000.





     We agree for the benefit of the Issuer and the Guarantors, on our own behalf and on behalf of
each account for which we are acting, that we will not, within the time period referred to under
Rule 144(d)(1) under the Securities Act (taking into account the provisions of Rule 144(d) under
the Securities Act, if applicable) as in effect on the date of the transfer of this Note, resell or
otherwise transfer this Note except (A) to the Issuer, the Company or any of its subsidiaries, (B)
to a person whom we reasonably believe is a QIB or purchasing for its own account or for the
account of a QIB in compliance with Rule 144A under the Securities Act, (C) in compliance with an
available exemption from the registration requirements of the Securities Act provided that prior to
such transfer, the Trustee is furnished with an opinion of counsel acceptable to the Issuer that
such transfer is in compliance with the Securities Act, (D) outside the United States in an
offshore transaction in compliance with Rule 904 under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if available and
provided that prior to such transfer, the Trustee is furnished with an opinion of counsel
acceptable to the Issuer that such transfer is in compliance with the Securities Act), (F) to an
IAI that, prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the transfer of this Note (the form of which can be
obtained from the Trustee) and, if such transfer is in respect of an aggregate principal



G-2









 




amount of
Notes less than $250,000, an opinion of counsel acceptable to the Issuer and the Trustee that such
transfer is in compliance with the Securities Act
or (G) pursuant to an effective registration statement under the Securities Act and, in each
case, in accordance with applicable state securities laws.




     Prior to the registration of any transfer or exchange, we acknowledge that the Issuer reserves
the right to require the delivery of such legal opinions, certifications or other evidence as may
reasonably be required in order to determine that the proposed transfer or exchange is being made
in compliance with the Securities Act and applicable state securities laws. We acknowledge that no
representation is made as to the availability of any Rule 144 exemption from the registration
requirements of the Securities Act.



     We understand that the Trustee will not be required to accept for registration of transfer or
exchange any Notes acquired by us, except upon presentation of evidence satisfactory to the Issuer
and the Trustee that the foregoing restrictions on transfer have been complied with. We further
agree to deliver to each person acquiring any of the Notes or any beneficial interest therein from
us a notice advising such person that resales of the Notes are restricted as stated herein.



     We agree to notify you promptly in writing if any of our acknowledgments, representations or
agreements herein ceases to be accurate and complete.



     We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any account for which we are
acting.



G-3









 





     You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.



	 	 	 	 	 
	 	Very truly yours,



[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 
	 


Date:_________________







G-4









 









     Upon transfer of certificated Notes, the Notes would be registered in the name of the new
beneficial owner as follows:


By: ___________________________



Date: _________________________



Taxpayer ID number: ____________






G-5









 








EXHIBIT H




[COMPLETE FORM I OR FORM II AS APPLICABLE.]




[FORM I]



Certificate of Beneficial Ownership




	To: 	 	Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services





     [Euroclear Bank S.A./N.V., as operator of the Euroclear System] OR
[Clearstream Banking, société anonyme]




	 	Re: 	 	 K. Hovnanian Enterprises, Inc.

[•]% Senior Secured Notes due 2021 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of November 1, 2011 relating to the Notes




Ladies and Gentlemen:




     We are the beneficial owner of $____ principal amount of Notes issued under the Indenture and
represented by a Regulation S Temporary Global Note (as defined in the Indenture).



         [CHECK A OR B AS APPLICABLE.]




	 	G   A.	 	We are a non-U.S. person (within the meaning of Regulation S under the
Securities Act of 1933, as amended).
	 
	 	G   B.	 	We are a U.S. person (within the meaning of Regulation S under the
Securities Act of 1933, as amended) that purchased the Notes in a transaction that
did not require registration under the Securities Act of 1933, as amended.





     You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.



H-1









 





	 	 	 	 	 
	 	Very truly yours,



[NAME OF BENEFICIAL OWNER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 
	 


Date:_________________







H-2









 








[FORM II]




Certificate of Beneficial Ownership




	To:	 	 Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Facsimile: 302-636-4149

Attention: Corporate Client Services






	 	Re: 	 	 K. Hovnanian Enterprises, Inc.

[•]% Senior Secured Notes due 2021 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of November 1, 2011 relating to the Notes




Ladies and Gentlemen:




     This is to certify that based solely on certifications we have received in writing, by tested
telex or by electronic transmission from member organizations (“Member Organizations”) appearing in
our records as persons being entitled to a portion of the principal amount of Notes represented by
a Regulation S Temporary Global Note issued under the above-referenced Indenture, that as of the
date hereof, $____ principal amount of Notes represented by the Regulation S Temporary Global Note
being submitted herewith for exchange is beneficially owned by persons that are either (i) non-U.S.
persons (within the meaning of Regulation S under the Securities Act of 1933, as amended) or (ii)
U.S. persons that purchased the Notes in a transaction that did not require registration under the
Securities Act of 1933, as amended.



     We further certify that (i) we are not submitting herewith for exchange any portion of such
Regulation S Temporary Global Note excepted in such Member Organization certifications and (ii) as
of the date hereof we have not received any notification from any Member Organization to the effect
that the statements made by such Member Organization with respect to any portion of such Regulation
S Temporary Global Note submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.



     You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.



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	 	Yours faithfully,



[EUROCLEAR BANK S.A./N.V., as operator of the Euroclear System]


OR


[CLEARSTREAM BANKING, société anonyme]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	  	 
	 


Date:_________________





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     EXHIBIT I


THIS SECURITY IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD
APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A
NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL
INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR CERTIFICATED SECURITIES OTHER THAN A PERMANENT GLOBAL
NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN
REGULATION S UNDER THE SECURITIES ACT.





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EXHIBIT J




UNRESTRICTED SUBSIDIARIES




77 HUDSON STREET JOINT DEVELOPMENT, L.L.C.

AG/HOV DELRAY HOLDINGS, L.L.C.

COBBLESTONE SQUARE DEVELOPMENT, L.L.C.

FIRST MORTGAGE LENDERS OF FLORIDA, L.L.C.

GTIS-HOV DULLES PARKWAY PARENT LLC

GTIS-HOV FESTIVAL LAKES LLC

GTIS-HOV GREENFIELD CROSSING PARENT LLC

GTIS-HOV HOLDINGS LLC

GTIS-HOV LEELAND STATION LLC

GTIS-HOV POSITANO LLC

GTIS-HOV RANCHO 79 LLC

GTIS-HOV RESIDENCES AT DULLES PARKWAY LLC

GTIS-HOV RESIDENCES AT GREENFIELD CROSSING LLC

GTIS-HOV VILLAGES AT PEPPER MILL LLC

GTIS-HOV WARMINSTER LLC

HEXTER-FAIR LAND TITLE COMPANY I, INC.

K. HOVNANIAN 77 HUDSON STREET INVESTMENTS, L.L.C.

K. HOVNANIAN AMERICAN MORTGAGE, L.L.C.

K. HOVNANIAN AT 77 HUDSON STREET URBAN RENEWAL COMPANY, L.L.C.

K. HOVNANIAN AT DELRAY BEACH, L.L.C.

K. HOVNANIAN AT MANALAPAN II, L.L.C.

K. HOVNANIAN AT PHILADELPHIA I, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL II, L.L.C.

K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL III, L.L.C.

K. HOVNANIAN AT TRENTON II, L.L.C.

K. HOVNANIAN AT TRENTON URBAN RENEWAL, L.L.C.

K. HOVNANIAN GT INVESTMENT, L.L.C.

K. HOVNANIAN INVESTMENTS, L.L.C.

K. HOVNANIAN M.E. INVESTMENTS, LLC

K. HOVNANIAN MANALAPAN INVESTMENT, L.L.C.

K. HOVNANIAN NASSAU GROVE HOLDINGS, L.L.C.

LAUREL HIGHLANDS, LLC

M&M AT MONROE WOODS, L.L.C.

MILLENNIUM TITLE AGENCY, LTD.

MM-BEACHFRONT NORTH I, L.L.C.

MM-BEACHFRONT NORTH II, L.L.C.

MSHOV HOLDING COMPANY, L.L.C.

NASSAU GROVE ENTERPRISES, L.L.C.

NORTH MANATEE, L.L.C.

OLD CITY DELAWARE, L.L.C.

OLD CITY DEVELOPMENT, INC.

OLD CITY JOINT DEVELOPMENT, L.L.C.

PI INVESTMENTS I, L.L.C.

PRESTON GRANDE HOMES, INC.

PRESTON PARKER, L. P.





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TOWN HOMES AT MONTGOMERY, L.L.C.

WHI-REPUBLIC, LLC

WINDWARD HOME MORTGAGE, L.L.C.

WOODMORE RESIDENTIAL, L.L.C.

WTC VENTURES, L.L.C.





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