TO PAY ANY AMOUNT REQUIRED TO
BE PAID BY IT TO EACH AGENT OR THE ISSUING BANK UNDER SUBSECTION (A) OR (B) OF
THIS SECTION, EACH LENDER SEVERALLY AGREES TO PAY TO THE APPLICABLE AGENT OR THE
ISSUING BANK, AS THE CASE MAY BE, SUCH LENDER'S APPLICABLE PERCENTAGE
(DETERMINED AS OF THE TIME THAT THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY
PAYMENT IS SOUGHT) OF SUCH UNPAID AMOUNT; PROVIDED THAT THE UNREIMBURSED EXPENSE
OR INDEMNIFIED LOSS, CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE CASE
MAY BE, WAS
49
INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT OR THE ISSUING BANK IN
ITS CAPACITY AS SUCH.
(D)
THE COMPANY ACKNOWLEDGES AND AGREES THAT CITIBANK, CUSA AND THEIR
RESPECTIVE AFFILIATES (EACH, AN "INDEMNIFIED PARTY") MAY ENTER INTO CERTAIN
TRANSACTIONS IN ORDER TO MITIGATE CREDIT RISK ARISING OUT OF THE FINANCING
CONTEMPLATED BY THIS AGREEMENT.
THE COMPANY AGREES TO INDEMNIFY EACH
INDEMNIFIED PARTY AGAINST, IN EACH CASE SUBJECT TO AND IN ACCORDANCE WITH THE
FEE LETTER, LOSSES, COSTS OR EXPENSES THAT SUCH INDEMNIFIED PARTY MAY SUSTAIN OR
INCUR AS A CONSEQUENCE OF (I) ANY REDUCTION OR TERMINATION OF THE COMMITMENTS
PRIOR TO THE MATURITY DATE, (II) THE ASSIGNMENT OF ANY INDEMNIFIED PARTY'S
COMMITMENT OR TOTAL EXPOSURE AS A RESULT OF A REQUEST BY THE COMPANY PURSUANT TO
SECTION 2.16 OR (III) THE OCCURRENCE OF ANY SUCCESSOR EVENT (AS DEFINED BELOW),
INCLUDING WITHOUT LIMITATION ANY SUCH LOSSES, COSTS OR EXPENSES SUSTAINED OR
INCURRED AS A CONSEQUENCE OF ANY EVENT DESCRIBED IN CLAUSE (I), (II) OR (III)
ABOVE IN CONNECTION WITH (A) THE TERMINATION OR ADJUSTMENT OF, OR (B)
DESIGNATION OF A "SUCCESSOR" (AS DEFINED IN THE 2003 ISDA CREDIT DERIVATIVES
DEFINITIONS) TO THE COMPANY OR HOVNANIAN UNDER, OR (C) ANY OTHER MODIFICATION
TO, ANY SUCH TRANSACTION ENTERED INTO BY AN INDEMNIFIED PARTY IN ORDER TO
MITIGATE CREDIT RISK ARISING OUT OF THE FINANCING CONTEMPLATED BY THIS
AGREEMENT.
FOR PURPOSES OF THIS SECTION 9.03(D), "SUCCESSOR EVENT" SHALL MEAN
ANY EVENT, SUCH AS A MERGER, CONSOLIDATION, AMALGAMATION, TRANSFER OF ASSETS OR
LIABILITIES, DEMERGER, SPIN-OFF OR OTHER SIMILAR EVENT, WHEREBY ANOTHER ENTITY
SHALL SUCCEED TO THE OBLIGATIONS OF THE COMPANY OR HOVNANIAN, WHETHER BY
OPERATION OF LAW OR PURSUANT TO ANY AGREEMENT.
(E)
TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO PARTY HERETO SHALL
ASSERT, AND EACH PARTY HERETO HEREBY WAIVES, ANY CLAIM AGAINST ANY OTHER PARTY,
ON ANY THEORY OF LIABILITY, FOR SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS
OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF, ANY LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY,
THE TRANSACTIONS, ANY LOAN, THE LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREOF.
(F)
ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE PAYABLE PROMPTLY
AFTER WRITTEN DEMAND THEREFORE ACCOMPANIED BY THE APPROPRIATE INVOICE OR OTHER
DETAIL SUPPORTING SUCH AMOUNT.
SECTION 9.04.
SUCCESSORS AND ASSIGNS.
(A)
THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND