Exhibit 10.2
AMENDMENT NO. 1
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment") is dated as of May
16, 2008, and amends
that Seventh Amended and Restated Credit Agreement, dated as of March 7, 2008
(as described herein the "Credit Agreement"), by and among K. HOVNANIAN
ENTERPRISES, INC., a California corporation (the "Borrower"), HOVNANIAN
ENTERPRISES, INC., a Delaware corporation ("Hovnanian" and a "Guarantor"), the
LENDERS (as defined therein), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as administrative agent for the Lenders under the Credit Agreement
(hereinafter referred to in such capacity as the "Agent").
BACKGROUND
The parties hereto desire to amend the Credit Agreement to (i) reduce the
principal amount of the Revolving Credit Commitments, (ii) provide for
additional real and personal property collateral security, (iii) permit
additional indebtedness and subordinate liens, (iv) change the Applicable
Margin, and (iv) make other amendments which are set forth below.
Subject to the terms and conditions set forth below, the parties hereto desire
to amend the Credit Agreement as set forth herein.
OPERATIVE PROVISIONS
NOW THEREFORE, the parties hereto, in consideration of their mutual covenants
and agreements herein contained and incorporating herein the definitions above,
hereby agree as follows:
1.
DEFINITIONS.
(A)
CAPITALIZED TERMS, REFERENCES.
CAPITALIZED TERMS NOT OTHERWISE
DEFINED HEREIN (INCLUDING IN THE FOREGOING BACKGROUND AND PREAMBLE SET FORTH
ABOVE) SHALL HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THE CREDIT
AGREEMENT.
AS USED IN THIS AMENDMENT, "INCLUDING" IS NOT A TERM OF LIMITATION
AND MEANS "INCLUDING WITHOUT LIMITATION."
EACH REFERENCE TO "HEREOF,"
"HEREUNDER," "HEREIN," AND "HEREBY" AND SIMILAR REFERENCES CONTAINED IN THE
CREDIT AGREEMENT AND EACH REFERENCE TO "THIS AGREEMENT" AND SIMILAR REFERENCES
CONTAINED IN THE CREDIT AGREEMENT SHALL, ON AND AFTER THE EFFECTIVE DATE
(DEFINED BELOW), REFER TO THE CREDIT AGREEMENT AS AMENDED HEREBY.
REFERENCES
HEREIN TO SECTION OR SUBSECTION NUMBERS ARE REFERENCES TO SECTIONS OR
SUBSECTIONS OF THE CREDIT AGREEMENT UNLESS OTHERWISE STATED.
(B)
DELETED DEFINITIONS.
THE DEFINITIONS OF THE FOLLOWING TERMS IN
SECTION 1.1 [CERTAIN DEFINITIONS] OF THE CREDIT AGREEMENT ARE DELETED AS OF THE
EFFECTIVE DATE:
Adjusted Leverage Ratio
Interim Value
Consolidated Tangible Net Worth
Sold Dwelling Units
Deferred Tax Valuation Allowance
Sold Homes
Finished Lots and Land Under Development
Unsecured Borrowing Base
Fixed Charge Coverage Ratio
Unsold Dwelling Units
Interim Additional Mortgaged Collateral
Unsold Homes
(C)
EXISTING DEFINITIONS.
THE FOLLOWING EXISTING DEFINITIONS IN
SECTION 1.1 [CERTAIN DEFINITIONS] OF THE CREDIT AGREEMENT ARE AMENDED AND
RESTATED IN THEIR ENTIRETY AS FOLLOWS AS OF THE EFFECTIVE DATE:
Applicable Margin shall mean, as applicable:
(A)
the percentage spread to be added to Base Rate
under the Base Rate Option according to the Pricing Grid below the heading "Base
Rate Margin",
(B)
the percentage spread to be added to LIBOR
Rate under the LIBOR Rate Option according to the Pricing Grid below the heading
"LIBOR Margin", and
(C)
the percentage spread to be added to the
Index Rate under the Index Rate Option according to the Pricing Grid below the
heading "Index Rate