Document:

exv4w29

Exhibit 4.29

K. HOVNANIAN ENTERPRISES, INC.,

as Issuer

HOVNANIAN ENTERPRISES, INC.

and the other Guarantors party hereto,

as Guarantors

and

WILMINGTON TRUST COMPANY,

as Trustee

_____________________________

First Supplemental Indenture

Dated as of February 14, 2011

_____________________________

117⁄8% Senior Notes due 2015

_____________________________

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1

	Scope of Supplemental Indenture; General

	 
	 	 	 	 
	Section 1.01. Scope of Supplemental Indenture; General
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2

	Certain Definitions

	 
	 	 	 	 
	Section 2.01. Certain Definitions
	 	 	2	 
	Section 2.02. Rules of Construction
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 3

	Covenants

	 
	 	 	 	 
	Section 3.01. Existence
	 	 	28	 
	Section 3.02. Payment of Taxes and Other Claims
	 	 	28	 
	Section 3.03. Maintenance of Properties and Insurance
	 	 	28	 
	Section 3.04. Repurchase of Notes Upon Change of Control
	 	 	29	 
	Section 3.05. Limitations on Indebtedness
	 	 	29	 
	Section 3.06. Limitations on Restricted Payments
	 	 	31	 
	Section 3.07. Limitations on Transactions with Affiliates
	 	 	34	 
	Section 3.08. Limitations on Dispositions of Assets
	 	 	35	 
	Section 3.09. Offer to Purchase
	 	 	37	 
	Section 3.10. Limitations on Liens
	 	 	39	 
	Section 3.11. Limitations on Restrictions Affecting Restricted Subsidiaries
	 	 	39	 
	Section 3.12. Limitations on Mergers, Consolidations and Sales of Assets
	 	 	41	 
	Section 3.13. Reports to Holders of Notes
	 	 	42	 
	Section 3.14. Limitation of Applicability of Certain Covenants if Notes Rated Investment Grade
	 	 	43	 
	Section 3.15. Applicability of Covenants Contained in the Base Indenture
	 	 	44	 
	 
	 	 	 	 
	ARTICLE 4

	Remedies

	 
	 	 	 	 
	Section 4.01. Events of Default
	 	 	44	 
	Section 4.02. Additional Provisions Related to Events of Default
	 	 	47	 

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	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 5

	Guarantees; Release of Guarantor

	 
	 	 	 	 
	Section 5.01. Unconditional Guarantees
	 	 	47	 
	Section 5.02. Release of a Guarantor
	 	 	47	 
	Section 5.03. Guarantors as “obligors” for Provisions Included in the Indenture Pursuant to the Trust Indenture Act of 1939
	 	 	48	 
	 
	 	 	 	 
	ARTICLE 6

	The Trustee

	 
	 	 	 	 
	Section 6.01. Compensation and Indemnification of Trustee and Its Prior Claim
	 	 	49	 
	Section 6.02. Appointment Of Trustee
	 	 	49	 
	 
	 	 	 	 
	ARTICLE 7

	Defeasance

	 
	 	 	 	 
	Section 7.01. Defeasance
	 	 	49	 
	Section 7.02. Additional Provisions to Survive Legal Defeasance and Discharge
	 	 	49	 
	Section 7.03. Additional Covenant Defeasance
	 	 	49	 
	Section 7.04. Section 10.4
	 	 	50	 
	Section 7.05. Satisfaction and Discharge of the Indenture
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 8

	The Notes

	 
	 	 	 	 
	Section 8.01. Form of Notes
	 	 	50	 
	Section 8.02. Depositary
	 	 	50	 
	Section 8.03. Certificated Notes
	 	 	50	 
	Section 8.04. Offices for Notices and Payments, etc
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 9

	Redemption

	 
	 	 	 	 
	Section 9.01. Optional Redemption
	 	 	51	 
	Section 9.02. Sinking Fund; Mandatory Redemption
	 	 	51	 
	Section 9.03. Redemption with Proceeds of Equity Offering
	 	 	51	 
	Section 9.04. Applicability of Sections of the Base Indenture
	 	 	51	 
	 
	 	 	 	 
	ARTICLE 10

	Amendments, Supplements And Waivers

	 
	 	 	 	 
	Section 10.01. Amendments, Supplements and Waivers
	 	 	52	 

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	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 11

	Release Of Issuer

	 
	 	 	 	 
	Section 11.01. Release of Issuer
	 	 	52	 
	 
	 	 	 	 
	ARTICLE 12

	Miscellaneous

	 
	 	 	 	 
	Section 12.01. GOVERNING LAW
	 	 	52	 
	Section 12.02. No Adverse Interpretation of Other Agreements
	 	 	52	 
	Section 12.03. Successors and Assigns
	 	 	53	 
	Section 12.04. Counterparts
	 	 	53	 
	Section 12.05. Severability
	 	 	53	 
	Section 12.06. Effect of Headings
	 	 	53	 
	Section 12.07. Conflict of Any Provision of Indenture with Trust Indenture Act of 1939
	 	 	53	 

SCHEDULE:

	1.	 	Guarantors
	 
	2.	 	Unrestricted Subsidiaries

EXHIBIT:

	A.	 	Form of Note
	 
	B.	 	Form of Notation on Note Relating to Guarantee
	 
	C.	 	Form of Supplemental Indenture

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     FIRST SUPPLEMENTAL INDENTURE dated as of February 14, 2011 (“Supplemental Indenture”) by and
among K. HOVNANIAN ENTERPRISES, INC., a California corporation (the “Issuer”), HOVNANIAN
ENTERPRISES, INC., a Delaware Corporation (“Hovnanian”), each of the other Guarantors (as defined
herein) and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the “Trustee”),
supplementing the Indenture dated as of February 14, 2011 by and among the Issuer, Hovnanian and
Wilmington Trust Company (the “Base Indenture” and as supplemented by this Supplemental Indenture,
the “Indenture”).

     Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of Notes (as defined herein):

     WHEREAS, Hovnanian and the Issuer have duly authorized the execution and delivery of the Base
Indenture to provide for the issuance from time to time of the Issuer’s Securities to be issued in
one or more series as in the Indenture provided and the Guarantees thereof;

     WHEREAS, the Issuer and the Guarantors desire and have requested the Trustee to join them in
the execution and delivery of this Supplemental Indenture in order to establish and provide for the
issuance by the Issuer of a series of Securities designated as its 117⁄8% Senior
Notes due 2015 (the “Notes”), substantially in the form attached hereto as Exhibit A and guaranteed
(the “Guarantees”) by Hovnanian and the Guarantors (as defined herein), on the terms set forth
herein;

     WHEREAS, the Issuer now wishes to issue Notes in an aggregate principal amount of
$155,000,000;

     WHEREAS, the conditions set forth in the Base Indenture for the execution and delivery of this
Supplemental Indenture have been complied with; and

     WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the
Issuer, the Guarantors and the Trustee, in accordance with its terms, and a valid amendment of, and
supplement to, the Base Indenture have been done;

     NOW, THEREFORE:

     In consideration of the premises and the purchase and acceptance of the Notes by the Holders
thereof, the Issuer and the Guarantors mutually covenant and agree with the Trustee, for the equal
and ratable benefit of the Holders of the Notes, that the Base Indenture is supplemented and
amended, to the extent expressed herein, as follows:

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ARTICLE 1

Scope of Supplemental Indenture; General

     Section 1.01. Scope of Supplemental Indenture; General. This Supplemental Indenture
supplements, and to the extent inconsistent therewith, replaces, the provisions of the Base
Indenture, to which provisions reference is hereby made.

     The changes, modifications and supplements to the Base Indenture effected by this Supplemental
Indenture shall be applicable only with respect to, and govern the terms of, the Notes (which shall
be initially in the aggregate principal amount of $155,000,000) and shall not apply to any other
Securities that have or may be issued under the Indenture unless a supplemental indenture with
respect to such other Securities specifically incorporates such changes, modifications and
supplements. Pursuant to this Supplemental Indenture, there is hereby created and designated a
series of Securities under the Indenture entitled “117⁄8% Senior Notes due 2015.”
The Notes shall be in the form of Exhibit A hereto, the terms of which are incorporated herein by
reference. The Notes shall be guaranteed by the Guarantors as provided in such form and the
Indenture.

     Subject to Section 3.05 hereof, the Issuer may issue additional notes subsequent to the Issue
Date (such notes, the “Additional Notes”) of the same series as the Notes. In the event that the
Issuer shall issue and the Trustee shall authenticate any Additional Notes issued under this
Supplemental Indenture subsequent to the Issue Date, the Issuer shall use its best efforts to
obtain the same “CUSIP” number for such Notes as is printed on the Notes outstanding at such time;
provided, however, that if any series of Notes issued under this Supplemental Indenture subsequent
to the Issue Date is determined to be a different class of security than the Notes outstanding at
such time for federal income tax purposes, the Issuer may obtain a “CUSIP” number for such Notes
that is different than the “CUSIP” number printed on the Notes then outstanding. Notwithstanding
the foregoing, all Notes issued under this Supplemental Indenture shall vote and consent together
on all matters as one class, including without limitation, waivers, amendments, redemption and
Offers to Purchase, and no Notes will have the right to vote or consent as a separate class from
other Notes on any matter.

ARTICLE 2

Certain Definitions

     Section 2.01. Certain Definitions. Section 1.1 of the Base Indenture is hereby amended by
adding the following definitions in their proper alphabetical order which, in the event of a
conflict with the definition of terms in the Base

2

 

Indenture, shall govern. Capitalized terms used but not defined herein have the meanings
ascribed to such terms in the Base Indenture.

     “Acquired Indebtedness” means (a) with respect to any Person that becomes a Restricted
Subsidiary (or is merged into Hovnanian, 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 Hovnanian, 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 Hovnanian, the Issuer or any Restricted Subsidiary)
and (b) with respect to Hovnanian, the Issuer or any Restricted Subsidiary, any Indebtedness
expressly assumed by Hovnanian, the Issuer or any Restricted Subsidiary in connection with the
acquisition of any assets from another Person (other than Hovnanian, 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 Hovnanian or a Restricted Subsidiary, as the case may be, at the time such Person
becomes a Restricted Subsidiary (or is merged into Hovnanian, 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 Notes” has the meaning ascribed to it in Section 1.01 hereof.

     “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 3.07(a) hereof.

     “Applicable Debt” means all Indebtedness of Hovnanian or any of its Restricted Subsidiaries
(a) under Credit Facilities or (b) 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 Hovnanian, 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 Hovnanian, the Issuer or any
Restricted Subsidiary or (b) the acquisition by Hovnanian, 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

3

 

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 Hovnanian, 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 Hovnanian, the Issuer and any Restricted Subsidiary or a transaction
between Restricted Subsidiaries,

     (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,

     (d) any exchange or swap of assets of Hovnanian, 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 (x) are to be used by Hovnanian, the Issuer or any Restricted Subsidiary in
the ordinary course of its Real Estate Business and (y) have a Fair Market Value not less than the
Fair Market Value of the assets exchanged or swapped,

     (e) any sale, transfer, conveyance, lease or other disposition of assets and properties that
is governed by Section 3.12 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 Lien and dispositions in connection with 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.

4

 

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

     “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) above entered into with any financial institution
meeting the qualifications specified in clause (c) above;

     (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).

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

5

 

     “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 Hovnanian 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 Hovnanian 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) Hovnanian or (y) the Permitted Hovnanian Holders)) becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act) of Common Equity of Hovnanian representing more than 50% of
the voting power of the Common Equity of Hovnanian;

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

     (d) the stockholders of Hovnanian approve any plan or proposal for the liquidation or
dissolution of Hovnanian; provided, however, that a liquidation or dissolution of Hovnanian which
is part of a transaction that does not constitute a Change of Control under the proviso contained
in clause (a) above 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 Hovnanian or the Issuer which requires Hovnanian or the Issuer to repay or
repurchase such debt securities.

     “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.

     “Concurrent Offerings” means (i) the issuance by Hovnanian of 13,512,500 shares of its Class A
Common Stock on February 9, 2011 pursuant to a prospectus supplement dated February 3, 2011 to a
prospectus dated January 28, 2011 and (ii) the issuance by the Issuer and Hovnanian of 3,000,000
7.25% tangible equity units on February 9, 2011 and 450,000 7.25% tangible equity units on February
14, 2011, in each case, pursuant to a prospectus supplement dated February 3, 2011 to a prospectus
dated January 28, 2011.

     “Consolidated Cash Flow Available for Fixed Charges” means, for any period, Consolidated Net
Income for such period plus (each to the extent deducted

6

 

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,

     (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 Hovnanian, 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 Hovnanian, 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

7

 

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 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,”

     (1) 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

     (2) notwithstanding clause (1) above, 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 Hovnanian for any period means the Interest Expense of
Hovnanian, 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 Hovnanian, 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 Hovnanian
and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP;
provided, that there will be

8

 

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 Hovnanian, 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
Hovnanian, 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
Hovnanian’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 the foregoing
clause (a), 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 Hovnanian,
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 Hovnanian 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 Hovnanian, the Issuer or any Restricted Subsidiary resulting from (i) the acquisition of
securities, or extinguishment of Indebtedness, of Hovnanian or any Restricted Subsidiary or (ii)
any Asset Disposition by Hovnanian or any Restricted Subsidiary, and

     (e) any extraordinary gain or loss together with any related provision for taxes, realized by
Hovnanian, 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 3.06(a) hereof, clause (d)(ii) above shall not be applicable.

9

 

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

     “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.

     “Credit Facilities” means, collectively, one or more credit facilities and lines of credit
among or between Hovnanian or one or more Restricted Subsidiaries and one or more lenders pursuant
to which Hovnanian or one or more Restricted Subsidiaries may incur indebtedness for working
capital and general corporate purposes (including acquisitions), as any such facility or line of
credit may be amended, restated, supplemented or otherwise modified from time to time, and includes
any agreement extending the maturity of, increasing the amount of, or restructuring, all or any
portion of the Indebtedness under such facility or line of credit or any successor facilities or
lines of credit and includes any facility or line of credit with one or more lenders refinancing or
replacing all or any portion of the Indebtedness under such facility or line of credit or any
successor facility or line of credit.

     “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.

     “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.

     “Designation Amount” has the meaning provided 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

10

 

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 Hovnanian or the Issuer 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 3.04 and Section
3.08 hereof, as applicable, and such Capital Stock specifically provides that Hovnanian or the
Issuer, as applicable, will not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to Hovnanian’s or the Issuer’s, as applicable, repurchase of the Notes as are
required pursuant to Section 3.04 or Section 3.08 hereof, as applicable.

     “DTC” has the meaning ascribed to such term in Section 8.02 hereof.

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

     “Event of Default” means any event specified as such in Section 4.01 hereof.

     “Excluded Contribution” means cash or Cash Equivalents received by Hovnanian 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 Hovnanian, in each case, after
January 31, 2008 (provided that the amount of Excluded Contributions under this Indenture shall be
reduced by the amount of any Restricted Payments (as defined under the Senior Secured Notes
Indenture) made with Excluded Contributions prior to the Issue Date pursuant to the Senior Secured
Notes Indenture) and to the extent designated as an Excluded Contribution pursuant to an Officer’s
Certificate of Hovnanian; provided that any cash proceeds received in connection with the
Concurrent Offerings shall not constitute Excluded Contributions.

     “expiration date” has the meaning ascribed to it in Section 3.09(b) hereof.

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     “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 Hovnanian or a duly authorized committee thereof, as evidenced by a resolution of such
Board or committee.

     “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” has the meaning ascribed to such term in Section 8.01 hereof.

     “Global Note Holder” has the meaning ascribed to such term in Section 8.02 hereof.

     “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, contingent or otherwise, of such Person: (i)
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 (ii) 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 (i) initially, Hovnanian and each of the other Guarantors signatory hereto
as set forth on Schedule 1 hereto, which includes each of Hovnanian’s Restricted Subsidiaries in
existence on the Issue Date, other than the Issuer and K. Hovnanian Poland, sp.zo.o. and (ii) each
of Hovnanian’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.

12

 

     “Holder”, “Holders”, “Holder of Notes”, “Holders of Notes” and similar terms mean in the case
of a Note, the Person in whose name such Note is registered in the books of the Registrar for the
Notes.

     “Hovnanian” has the meaning ascribed to it in the preamble hereof.

     “incurrence” has the meaning ascribed to it in Section 3.05(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 Hovnanian and its Restricted Subsidiaries will not include
the obligations of Hovnanian 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 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 3.06
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

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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)
above 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) above, 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” has the meaning ascribed to it in the preamble hereof.

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

     “Investment Grade” means, with respect to a debt rating 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 the Notes (for reasons outside the control of Hovnanian or the Issuer)
and Hovnanian shall select any other Rating Agency, the equivalent of such ratings by such other
Rating Agency.

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     “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.

     “Issue Date” means February 14, 2011.

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

     “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” means, in connection with any optional redemption of any Note pursuant to
Section 9.01 hereof, the excess, if any, of: (a) 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 (b) the principal amount of the Note being
redeemed.

     “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 Hovnanian substantially all of whose operations
consist of the mortgage lending business.

15

 

     “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 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 Hovnanian, 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, 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.

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

     “Obligations” means with respect to any Indebtedness, all obligations (whether in existence on
the Issue Date or arising afterwards, absolute or

16

 

contingent, direct or indirect) for or in respect of principal (when due, upon acceleration,
upon redemption, upon mandatory repayment or repurchase pursuant 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” has the meaning ascribed to it in Section 3.09(a) hereof.

     “Offer to Purchase” has the meaning ascribed to it in Section 3.09(a) hereof.

     “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.

     “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 $785.0 million
principal amount outstanding at any one time;

     (b) Indebtedness under the Notes, 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) below, which shall instead be incurred under such clauses;

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

17

 

     (e) intercompany debt obligations of (i) Hovnanian to the Issuer, (ii) the Issuer to
Hovnanian, (iii) Hovnanian or the Issuer to any Restricted Subsidiary and (iv) any Restricted
Subsidiary to Hovnanian or the Issuer or any other Restricted Subsidiary; provided, however, that
any Indebtedness of any Restricted Subsidiary or the Issuer or Hovnanian 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 3.05(a) hereof at the time the
Restricted Subsidiary in question ceases to be a Restricted Subsidiary;

     (f) Indebtedness of Hovnanian 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 Hovnanian 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 Hovnanian 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 Hovnanian, the Issuer or any Restricted Subsidiary or any Person that
becomes a Restricted Subsidiary as a result of such Investment or that is consolidated or merged
with or into, or transfers all or

18

 

substantially all of the assets of it or an operating unit or
line of business to, Hovnanian or a Restricted Subsidiary;

     (c) any receivables, loans or other consideration taken by Hovnanian, the Issuer or any
Restricted Subsidiary in connection with any asset sale otherwise permitted by the Indenture;

     (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 the 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 Hovnanian 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 Hovnanian 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 Hovnanian or a Restricted Subsidiary under warehouse lines of credit of
Mortgage Subsidiaries to repurchase mortgages; and

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

     “Permitted Liens” means

     (a) Liens for taxes, assessments or governmental or quasi-government 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

19

 

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,

     (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
Hovnanian, 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 Hovnanian, 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 Hovnanian, 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 (1) Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary
permitted to be incurred under this Indenture and Obligations in respect thereof; provided, that
the aggregate principal amount of Indebtedness of Hovnanian, the Issuer and the Restricted
Subsidiaries secured by Liens incurred pursuant to this clause (i), together with (x) the aggregate
principal amount of the Senior Secured Notes outstanding at such time and (y) the aggregate
principal amount of any Refinancing Indebtedness in respect of the Senior Secured Notes that is
secured by any assets of Hovnanian, the Issuer or

20

 

any Restricted Subsidiary, shall not exceed
$810.0 million and (2) Refinancing Indebtedness in respect of Indebtedness referred to in clause
(1),

     (j) Liens securing Non-Recourse Indebtedness of Hovnanian, the Issuer or any Restricted
Subsidiary; provided, that such Liens apply only to the property financed out of the net proceeds
of such Non-Recourse Indebtedness within 90 days after the incurrence of such Non-Recourse
Indebtedness,

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

     (l) Liens on property or assets of Hovnanian, the Issuer or any Restricted Subsidiary securing
Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary owing to Hovnanian, the Issuer
or one or more Restricted Subsidiaries (other than K. Hovnanian Poland, sp.z.o.o.),

     (m) leases or subleases granted to others not materially interfering with the ordinary course
of business of Hovnanian 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 the Indenture,

     (p) any right of a lender or lenders to which Hovnanian, 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 Hovnanian, 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 Hovnanian, the Issuer and the Restricted Subsidiaries,

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

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     (s) Liens securing Refinancing Indebtedness; provided, that such Liens extend only to the
assets securing the Indebtedness being refinanced; 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) above,

     (t) Liens incurred in the ordinary course of business as security for the obligations of
Hovnanian, 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 Hovnanian or any Subsidiary of Hovnanian or becomes a Subsidiary of Hovnanian;
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 Hovnanian or the Subsidiary or acquired by Hovnanian or its Subsidiaries,

     (v) Liens on property existing at the time of acquisition thereof by Hovnanian or any
Subsidiary of Hovnanian, 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.

     “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.

     “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 3.09(b) hereof.

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     “purchase date” has the meaning ascribed to it in Section 3.09(b) hereof.

     “Purchase Money Indebtedness” means Indebtedness of Hovnanian, 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
Hovnanian, 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 Hovnanian 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 Hovnanian (as certified by a resolution of the
Board of Directors of Hovnanian) 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.

     “Refinancing Indebtedness” means Indebtedness (to the extent not Permitted Indebtedness) that
refunds, refinances or extends any Indebtedness of Hovnanian, the Issuer or any 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 Hovnanian, 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

23

 

portion of the Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the Notes, and

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

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

     “Registrar” means a Person engaged to maintain the security register for the Notes.

     “Repurchase Date” has the meaning ascribed to it in Section 3.04(a) hereof.

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

     “Restricted Payment” means any of the following:

     (a) the declaration or payment of any dividend or any other distribution on Capital Stock of
Hovnanian, 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 Hovnanian, the Issuer or any Restricted
Subsidiary (other than (i) dividends or distributions payable solely in Qualified Stock and (ii) in
the case of the Issuer or Restricted Subsidiaries, dividends or distributions payable to Hovnanian,
the Issuer or a Restricted Subsidiary);

     (b) the purchase, redemption or other acquisition or retirement for value of any Capital Stock
of Hovnanian, the Issuer or any Restricted Subsidiary (other than a payment made to Hovnanian, the
Issuer or any Restricted Subsidiary); and

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

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

     “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.

     “Senior Secured Notes” means the Issuer’s 10
5/8% Senior Secured Notes due 2016 issued on October 20,
2009 (and any exchange notes issued in exchange therefor in compliance with the registration rights
agreement dated October 20, 2009 among the Issuer, Hovnanian, the other guarantors party thereto
and the initial purchasers named therein, and guarantees of such exchange notes).

     “Senior Secured Notes Indenture” means the Indenture dated as of October 20, 2009, among the
Issuer, the Company, the other guarantors named therein and Wilmington Trust Company, as Trustee.

     “Significant Subsidiary” means any Subsidiary of Hovnanian 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 3.12(a) hereof.

     “Supplemental Indenture” has the meaning ascribed to it in the preamble hereof.

     “Suspended Covenants” has the meaning ascribed to such term in Section 3.14 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 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

25

 

maturity of the Note
being prepaid. If no maturity exactly corresponds to such maturity, yields for the published
maturities occurring prior to and after such maturity most closely corresponding to such maturity
shall be calculated pursuant
to the immediately preceding sentence and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month.

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

     “Unrestricted Subsidiary” means any Subsidiary of Hovnanian so designated by a resolution
adopted by the Board of Directors of Hovnanian 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 Hovnanian, the Issuer or any Restricted Subsidiary, and neither Hovnanian, 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 the 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 by such Subsidiary
of Indebtedness of Hovnanian, 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 Hovnanian, the Issuer or any Restricted Subsidiary. As of the
Issue Date, the Unrestricted Subsidiaries will be the Subsidiaries of Hovnanian named in Schedule 2
hereto.

     Subject to the foregoing, the Board of Directors of Hovnanian or a duly authorized committee
thereof may designate any Subsidiary in addition to those named above to be an Unrestricted
Subsidiary; provided, however, that (a) the net amount (the “Designation Amount”) then outstanding
of all previous Investments by Hovnanian 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 3.06 hereof to the extent provided therein, (b)
Hovnanian must be permitted under Section 3.06 hereof to make the Restricted Payment deemed to have
been made pursuant to clause (a), 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

26

 

of such Person prior to such
Person’s merger with Hovnanian or any Restricted Subsidiary (but not in contemplation or
anticipation of such merger) shall not be
counted as an Investment by Hovnanian or such Restricted Subsidiary if such Subsidiary of such
Person is designated as an Unrestricted Subsidiary.

     The Board of Directors of Hovnanian 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 3.05 hereof and (b) immediately after giving effect to such redesignation
and the incurrence of any such additional Indebtedness, Hovnanian and the Restricted Subsidiaries
could incur $1.00 of additional Indebtedness under Section 3.05(a) hereof. Any such designation or
redesignation by the Board of Directors of Hovnanian 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 Hovnanian 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 as Unrestricted Subsidiaries; provided, however,
that the ownership of the general partnership interest (or a similar member’s interest in a limited
liability company) by an Unrestricted Subsidiary shall not cause a Subsidiary of Hovnanian of which
more than 95% of the equity interest is held by Hovnanian 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) above.

     Section 2.02. 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;

27

 

     (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 3

Covenants

     Section 3.01. Existence. Hovnanian and the Issuer will each do or cause to be done all
things necessary to preserve and keep in full force and effect its 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 Hovnanian, the Issuer and each Restricted
Subsidiary, provided that Hovnanian 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 Hovnanian and its
Restricted Subsidiaries taken as a whole; and provided further that this Section does not prohibit
any transaction otherwise permitted by Sections 3.08 and 3.12 hereof.

     Section 3.02. Payment of Taxes and Other Claims. Hovnanian will 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 Hovnanian 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 Hovnanian 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 3.03. Maintenance of Properties and Insurance. Hovnanian will 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
Hovnanian may be necessary so that the business of Hovnanian and its Restricted Subsidiaries may be
properly and advantageously conducted at all times; provided that nothing in this Section

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3.03
shall prevent Hovnanian or any Restricted Subsidiary from 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 Hovnanian,
desirable in the conduct of the business of Hovnanian and its Restricted Subsidiaries taken as
a whole.

     Section 3.04. Repurchase of Notes Upon 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, 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 to 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 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 3.05. Limitations on Indebtedness.

     (a) Hovnanian 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.

29

 

     (b) Notwithstanding the foregoing, the provisions of the 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
the Indenture, and

     (vi) any guarantee by the Issuer, Hovnanian or any Guarantor of Indebtedness that is
permitted to be incurred in compliance with the 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) 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), Hovnanian, 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.

     (d) Hovnanian 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
Hovnanian 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 Hovnanian or such
Guarantor, as the case may be.

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     Section 3.06. Limitations on Restricted Payments.

     (a) Hovnanian 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, Hovnanian could
incur at least $1.00 of Indebtedness pursuant to Section 3.05(a) hereof; and

     (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 Hovnanian 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 Hovnanian’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, Hovnanian from (1) any capital contribution to
Hovnanian after the Issue Date or any issue or sale after the Issue Date of
Qualified Stock (other than (a) to any Subsidiary of Hovnanian, (b) any Excluded
Contribution and (c) from the Concurrent Offerings) and (2) the issue or sale
after the Issue Date of any Indebtedness or other securities of Hovnanian
convertible into or exercisable for Qualified Stock of Hovnanian 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 the
Issue Date, that would have constituted a Restricted Payment if made after the
Issue Date, if such disposition or repayment results in cash received by
Hovnanian, the Issuer or any Restricted Subsidiary), an amount (to the extent
not included in the calculation of Consolidated Net Income

31

 

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 the Issue Date, 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 the Issue
Date, 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 Hovnanian or a Restricted Subsidiary in an amount
equal to the excess of (I) the total assets of such Subsidiary, valued on an
aggregate basis at the lesser of book value and Fair Market Value thereof, over
(II) 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 paragraph (a) of this Section 3.06 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
the Indenture;

     (ii) the purchase, redemption or other acquisition, cancellation or retirement for
value of any shares of Capital Stock of Hovnanian in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a Subsidiary of Hovnanian 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,

32

 

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, Hovnanian could incur at least $1.00 of
Indebtedness pursuant to Section 3.05(a) hereof; and

     (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 Hovnanian or any Subsidiary held by officers or
employees or former officers or employees of Hovnanian or any Subsidiary (or their estates
or beneficiaries under their estates) not to exceed $10.0 million in the aggregate since
the Issue Date;

provided, however, that each Restricted Payment described in clauses (i) and (ii) of this paragraph
(b) shall be taken into account for purposes of computing the aggregate amount of all Restricted
Payments pursuant to clause (iii) of paragraph (a) of this Section 3.06.

     (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
Hovnanian 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
paragraph (a) of this Section 3.06 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 The 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

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by a nationally recognized investment banking firm retained by the Board of Directors of
Hovnanian.

     Section 3.07. Limitations on Transactions with Affiliates.

     (a) Hovnanian 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 Hovnanian or any Affiliate of any of
Hovnanian’s Subsidiaries or any holder of 10% or more of the Common Equity of Hovnanian (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 Hovnanian, 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 Hovnanian or
any of Hovnanian’s Subsidiaries.

     (b) In addition, Hovnanian 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, Hovnanian shall have (x) obtained the approval of a majority of
the Board of Directors of Hovnanian and (y) either obtained the approval of a majority of
Hovnanian’s disinterested directors or obtained an opinion of a qualified independent
financial advisor to the effect that such Affiliate Transaction is fair to Hovnanian, 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, Hovnanian shall have (x) obtained the approval of a majority of
the Board of Directors of Hovnanian and (y) delivered to the Trustee an opinion of a
qualified independent financial advisor to the effect that such Affiliate Transaction is
fair to Hovnanian, 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 Hovnanian or its

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Subsidiaries generally (in their capacities as such) that has been approved by the
Board of Directors of Hovnanian,

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

     (iii) any Restricted Payment otherwise permitted under Section 3.06 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 Hovnanian and one or more Restricted
Subsidiaries or between or among Restricted Subsidiaries (provided, however, no such
transaction shall involve any other Affiliate of Hovnanian (other than an Unrestricted
Subsidiary to the extent the applicable amount constitutes a Restricted Payment permitted
by the Indenture)),

     (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 Hovnanian 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 Hovnanian, and

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

     Section 3.08. Limitations on Dispositions of Assets. (a) Hovnanian and the Issuer will not,
and will not cause or permit any Restricted Subsidiary to, make any Asset Disposition unless: (x)
Hovnanian (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 Hovnanian (or such Restricted Subsidiary, as the case may be) is
in the form of cash, Cash Equivalents and Marketable Securities.

     (b) The amount of (i) any Indebtedness (other than Subordinated Indebtedness) of Hovnanian or
any Restricted Subsidiary that is actually assumed

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by the transferee in such Asset Disposition and (ii) the fair market value (as determined in
good faith by the Board of Directors of Hovnanian) 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, shall be deemed to be consideration required by
clause (y) above for purposes of determining the percentage of such consideration received by
Hovnanian or the Restricted Subsidiaries.

     (c) The Net Cash Proceeds of an Asset Disposition shall, within one year, at Hovnanian’s
election, (1) be used by Hovnanian or a Restricted Subsidiary to (A) 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
Hovnanian and the Restricted Subsidiaries or (B) permanently prepay or repay secured Indebtedness
of Hovnanian or any Guarantor (and, if the Indebtedness is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto) or (2) to the extent not so used, be
applied to make an Offer to Purchase Notes and, if Hovnanian or a Restricted Subsidiary elects or
is required to do so, to repay, purchase or redeem any other unsubordinated Indebtedness (on a pro
rata basis if the amount available for such repayment, purchase or redemption is less than the
aggregate amount of (i) the principal amount of the Notes tendered in such Offer to Purchase and
(ii) the lesser of the principal amount, or accreted value, of such other 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 paragraph, Net
Cash Proceeds may be used to temporarily reduce Indebtedness or otherwise be invested in any manner
not prohibited by the Indenture.

     (d) Notwithstanding the foregoing, (A) Hovnanian will not be required to apply such Net Cash
Proceeds in accordance with clause (2) of paragraph (c) of this Section 3.08 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 $25.0 million and (B) in connection with an Asset
Disposition, Hovnanian and the Restricted Subsidiaries will not be required to comply with the
requirements of clause (y) of paragraph (a) of this Section 3.08 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 $25.0 million;
provided, however, that when any non-cash consideration is

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converted into cash, Cash Equivalents or Marketable Securities, such cash shall constitute Net
Cash Proceeds and be subject to paragraph (c) of this Section 3.08.

     Section 3.09. Offer to Purchase. (a) An “Offer to Purchase” means an offer by the Issuer to
purchase Notes as required by the Indenture. An Offer to Purchase must be made by written offer
(the “offer”) sent to the Holders. The Issuer will 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 will 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 the Indenture pursuant to which the Offer to Purchase is being
made;

     (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 the Indenture) (the “purchase
amount”);

     (iii) the purchase price, including the portion thereof representing accrued
interest;

     (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 Hovnanian and its Subsidiaries which the
Issuer in good faith believes will enable the Holders to make an informed decision with
respect to the Offer to Purchase, at a minimum to include or incorporate by reference:

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

     (B) a description of material developments in Hovnanian’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

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     (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 of 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 will 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);

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

     (x) on the purchase date the purchase price will become due and payable on each Note
accepted for purchase, and interest on Notes purchased will 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 will 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 will
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 will be purchased;

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     (xiii) if any Note is purchased in part, new Notes equal in principal amount to the
unpurchased portion of the Note will 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 will 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 will become due and payable on each Note accepted for purchase, and
interest on Notes purchased will cease to accrue on and after the purchase date. The Trustee will
promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes equal
in principal amount to any unpurchased portion of any Notes accepted for purchase in part.

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

     Section 3.10. Limitations on Liens. Hovnanian 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, 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 3.11. Limitations on Restrictions Affecting Restricted Subsidiaries. Hovnanian 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 Hovnanian or any other Restricted
Subsidiary, or pay interest on or principal of any Indebtedness owed to Hovnanian or any other
Restricted Subsidiary,

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

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

     except for:

     (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 Lien, or any other agreement restricting the sale or other
disposition of property, securing Indebtedness permitted by the Indenture if such
Permitted Lien or agreement does not expressly restrict the ability of a Subsidiary of
Hovnanian 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,

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     (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,

     (ix) encumbrances or restrictions existing under or by reason of the Indenture, the
Notes or the Guarantees,

     (x) purchase money obligations that impose restrictions on the property so acquired
of the nature described in clause (c) of this Section 3.11,

     (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 3.11 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 3.11, provided, that
such amendments, modifications, restatements, renewals, supplements, refundings,
replacements or refinancings are, in the good faith judgment of Hovnanian’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 3.12. Limitations on Mergers, Consolidations and Sales of Assets. This Section 3.12
shall replace the provisions contained in Sections 9.1 and 9.2 of

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the Base Indenture in their entirety and the references to (i) Article Nine in Section 9.3 of
the Base Indenture shall refer to this Section 3.12 and (ii) Sections 9.1 or 9.2 elsewhere in the
Base Indenture shall refer to this Section 3.12.

     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 the 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 Hovnanian, 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:

     (a) the Person formed by or surviving such consolidation or merger (if other than Hovnanian,
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 Hovnanian, the Issuer or the Guarantor, as
the case may be, under the Notes or a Guarantee, as the case may be, and the Indenture,

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

     (c) immediately after giving effect to such transaction, Hovnanian (or its Successor) could
incur at least $1.00 of Indebtedness pursuant to Section 3.05(a) hereof.

     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 5.02 hereof, or (ii) a transaction the purpose of which is to change the state
of incorporation of Hovnanian, the Issuer or any Guarantor.

     Section 3.13. Reports to Holders of Notes. (a) This Section 3.13(a) shall replace the
provisions contained in Section 4.3(a) of the Base Indenture in its entirety and the references to
Section 4.3(a) in Article Four or elsewhere in the Base Indenture shall refer to this Section
3.13(a).

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     Hovnanian 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. Hovnanian
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 Hovnanian
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
Hovnanian is required to furnish such reports to its stockholders pursuant to the Exchange Act,
Hovnanian 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.

     (b) The posting of the reports, information and documents referred to in Section 3.13(a) on
Hovnanian’s website or one maintained on its behalf for such purpose shall be deemed to satisfy
Hovnanian’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 Hovnanian’s
delivery obligations to the Trustee and the Holders.

     (c) The following shall be added at the end of the first sentence of Section 4.3(d) of the
Base Indenture: “and include in such Officers’ Certificate if any officer of Hovnanian is aware of
any Default or Event of Default, a statement specifying such Default or Event of Default and what
action Hovnanian is taking or proposes to take with respect thereto”.

     Section 3.14. Limitation of Applicability of Certain Covenants if Notes Rated Investment
Grade.

     (a) The Issuer, Hovnanian and its Restricted Subsidiaries’ obligations to comply with the
provisions of the Indenture under this Article 3 (except for Sections 3.01, 3.02, 3.03, 3.04, 3.10,
3.12 (other than clause (c) of the first paragraph thereof), 3.13 and 3.15 hereof) 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 the 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,
Hovnanian’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 of the obligations
to comply with the Suspended Covenants, the

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amount of Restricted Payments made after the Issue Date will be calculated as though Section
3.06 of this Supplemental Indenture 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 3.06(a) of this Supplemental Indenture.

     (c) Notwithstanding clauses (a) and (b) above, 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
Issuer, Hovnanian or any of its Subsidiaries prior to such reinstatement, or action taken by the
Issuer, Hovnanian 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 the Indenture upon reinstatement.

     (d) The Issuer shall promptly notify the Trustee of any suspension or reinstatement of the
Suspended Covenants.

     Section 3.15. Applicability of Covenants Contained in the Base Indenture. Each of the
agreements and covenants of the Issuer and/or Hovnanian, as applicable, contained in Article Three
of the Base Indenture shall apply to the Notes.

ARTICLE 4

Remedies

     Section 4.01. Events of Default. (a) “Event of Default” means any one or more of the
following events and this Section 4.01(a) (i) through (ix) replaces Section 5.1 (a) through (h) of
the Base Indenture in its entirety:

     (i) the failure by Hovnanian, the Issuer and the Guarantors to pay interest on any
Note when the same becomes due and payable and the continuance of any such failure for a
period of 30 days;

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

     (iii) the failure by Hovnanian, the Issuer or any Restricted Subsidiary to comply
with any of its agreements or covenants in, or provisions of, the Notes, the Guarantees or
the Indenture and such failure continues for the period and after the notice specified
below (except in the case of a default under Sections 3.04 and 3.12 hereof, which will
constitute Events of Default with notice but without passage of time);

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     (iv) the acceleration of any Indebtedness (other than Non-Recourse Indebtedness) of
Hovnanian, 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 Hovnanian, 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
Hovnanian 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 Hovnanian, 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) Hovnanian, 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

     (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 Hovnanian, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an involuntary case,

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

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

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

     (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 the
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 the Indenture and the
Guarantee).

     A Default as described in subclause (iii) above will not be deemed an Event of Default until
the Trustee notifies Hovnanian, or the Holders of at least 25 percent in principal amount of the
then outstanding Notes notify Hovnanian and the Trustee, of the Default and (except in the case of
a default with respect to Sections 3.04 and 3.12 hereof) Hovnanian 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.

     (b) The first sentence of the second paragraph in Section 5.1 of the Base Indenture is
replaced, with respect to the Notes, in its entirety with the following and the third paragraph in
Section 5.1 of the Base Indenture is deleted in its entirety:

     If an Event of Default (other than an Event of Default with respect to Hovnanian or
the Issuer resulting from subclauses (vii) or (viii) of Section 4.01(a)), shall have
occurred and be continuing under the Indenture, the Trustee by notice to Hovnanian, or the
Holders of at least 25 percent in principal amount of the Notes then outstanding by notice
to Hovnanian 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 Hovnanian or the
Issuer specified in subclauses (vii) or (viii) of Section 4.01(a) 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 Hovnanian or any Holder.

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     Section 4.02. Additional Provisions Related to Events of Default. The provisions of Sections
5.1 (except as specified above), 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 of the Base Indenture
shall apply to the Notes; provided that (x) the reference in the last paragraph of Section 5.1 of
the Base Indenture shall be to clauses (i) and (ii) of Section 4.01(a) hereof, (y) the first clause
of the parenthetical contained in Section 5.8 of the Base Indenture shall be replaced with the
following: “(the term “defaults” for the purposes of this Section 5.8 being hereby defined to be
any Event of Default as defined in this Supplemental Indenture, not including periods of grace, if
any, provided for therein” and (z) all references contained in Section 5.8 of the Base Indenture to
clause (d) shall be replaced with the following: “clause (iii) of Section 4.01(a)”.

     In addition, Hovnanian is required to deliver to the Trustee prompt written notice of the
occurrence of any Default or Event of Default.

ARTICLE 5

Guarantees; Release of Guarantor

     Section 5.01. Unconditional Guarantees. (a) Hovnanian and each of the other Guarantors
hereby (and will so long, in the case of a Restricted Subsidiary, as it remains a Restricted
Subsidiary) Guarantee the Notes in accordance with the provisions of Article Thirteen of the Base
Indenture.

     (b) Each Guarantor, by execution hereof, agrees to be bound by the Base Indenture, as
supplemented by this Supplemental Indenture, with respect to the Notes as if such Guarantor was a
party to both the Base Indenture and this Supplemental Indenture.

     (c) Each existing Restricted Subsidiary (other than the Issuer (for so long as it remains the
Issuer) and K. Hovnanian Poland, sp.z.o.o.) will be a Guarantor. Hovnanian is permitted to cause
any Unrestricted Subsidiary to be a Guarantor. If the Issuer, Hovnanian or any of its Restricted
Subsidiaries acquires or creates a Restricted Subsidiary after the Issue Date, the new Restricted
Subsidiary shall (subject to Section 5.02(b) hereof) provide a Guarantee Notation, substantially in
the form of Exhibit B hereto and shall also execute a supplemental indenture in the form of Exhibit
C hereto, and deliver an Opinion of Counsel to the Trustee in accordance with Section 8.4 of the
Base Indenture.

     Section 5.02. Release of a Guarantor. (a) If all or substantially all of the assets of any
Guarantor other than Hovnanian or all of the Capital Stock of any Guarantor other than Hovnanian is
sold (including by consolidation, merger, issuance or otherwise) or disposed of (including by
liquidation, dissolution or otherwise) by Hovnanian or any of its Subsidiaries, or, unless
Hovnanian elects

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otherwise, if any Guarantor other than Hovnanian is designated an Unrestricted Subsidiary in
accordance with the terms of the Indenture, then such Guarantor (in the event of a sale or other
disposition of all of the Capital Stock of such Guarantor or a 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 the Indenture without any
further action on the part of the Trustee or any Holder of the Notes.

     (b) Upon the release of the guarantee by a Guarantor (including, for the avoidance of doubt,
the Issuer after it ceases to be the Issuer pursuant to Article Fourteen of the Base Indenture)
other than Hovnanian under all then outstanding Applicable Debt, at any time after the suspension
of the Suspended Covenants pursuant to Section 3.14 hereof, (i) the Guarantee of such Guarantor
under the Indenture will be released and discharged in respect of the Notes 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 respect of the
Notes. 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 conditions set forth in the Indenture
or (ii) the Suspended Covenants cease to be suspended pursuant to Section 3.14 hereof then all
Restricted Subsidiaries of Hovnanian then existing (other than the Restricted Subsidiaries named in
Section 5.01(c) hereof) will Guarantee the Notes on the terms and conditions set forth in the
Indenture. For purposes of this clause (b), Applicable Debt secured by a Lien on such Restricted
Subsidiary’s Property or issued by such 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
Hovnanian to the Trustee to such effect, without any further action required on the part of the
Trustee or any Holder.

     Section 5.03. Guarantors as “obligors” for Provisions Included in the Indenture Pursuant to
the Trust Indenture Act of 1939. Each provision included in the Indenture which is required to be
included by any of Sections 310 to 317 of the Trust Indenture Act of 1939, inclusive, or is deemed
applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, and
which applies to an “obligor,” as that term is defined under the Trust Indenture Act of 1939, shall
apply to each of the Guarantors.

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ARTICLE 6

The Trustee

     Section 6.01. Compensation and Indemnification of Trustee and Its Prior Claim. Solely with
respect to the Notes to which this Supplemental Indenture relates, Section 6.6 of the Base
Indenture is amended by replacing each occurrence of the word “Issuer” in such Section 6.6 with the
word “Hovnanian.”

     Section 6.02. Appointment Of Trustee. The Issuer hereby appoints Wilmington Trust Company as
Trustee for the Notes, and Wilmington Trust Company accepts such appointment, subject to the terms
and conditions of this Indenture.

ARTICLE 7

Defeasance

     Section 7.01. Defeasance. Except as stated below, the provisions of Article Ten of the Base
Indenture shall apply to the Notes in their entirety; provided, that the “obligations” referred to
in each of Section 10.2 and Section 10.3 of the Base Indenture will also apply to the “obligations”
of Hovnanian and the Guarantors with respect to their Guarantees in the case of Section 10.2 of the
Base Indenture and with respect to the covenants and events of default specified herein in the case
of Section 10.3 of the Base Indenture.

     Section 7.02. Additional Provisions to Survive Legal Defeasance and Discharge. Section 10.2
of the Base Indenture is hereby amended to (x) delete the “and” following clause (c) and before
clause (d) of such section and to replace it with “;” and (y) add the following clauses (e) and (f)
to the end of such section, “(e) the rights of registration of transfer and exchange of the Notes;
and (f) the rights of Holders of Notes that are beneficiaries with respect to property so deposited
with the Trustee payable to all or any of them”.

     Section 7.03. Additional Covenant Defeasance. In addition to the “obligations” referred to
in Section 10.3 of the Base Indenture, “Covenant Defeasance”, as defined in such Section, will also
apply to the release of obligations of the Issuer, Hovnanian and the Guarantors set forth in
Section 3.04 through 3.11 hereof, inclusive, clause (c) of Section 3.12 hereof, Section 3.13
hereof, Section 5.01 hereof and each Guarantor’s obligations under its Guarantee Notation and
clauses (iii) (with respect to the covenants so defeased), (iv), (v), (vi), (vii) (with respect to
Significant Subsidiaries), (viii) (with respect to Significant Subsidiaries) and (ix) of Section
4.01(a) hereof will no longer constitute Events of Default or Defaults.

49

 

     Section 7.04. Section 10.4. Section 10.4(b) of the Base Indenture is hereby amended by
replacing the words “the date of this Indenture” with “February 14, 2011”.

     Section 7.05. Satisfaction and Discharge of the Indenture. Section 10.9 of the Base
Indenture is hereby amended by replacing the word “Event of Default” in clause (a)(iii) thereof
with the word “Default.”

ARTICLE 8

The Notes

     Section 8.01. Form of Notes. The Notes will be issued as Global Securities in the form of
Exhibit A hereto (the “Global Note”). The terms of such Notes are herein incorporated by reference
and are part of this Supplemental Indenture.

     Section 8.02. Depositary. The Depositary for the Global Note will initially be The
Depositary Trust Company (“DTC”) and the Global Note will be deposited on or about the Issue Date
with, or on behalf of, DTC and registered in the name of Cede & Co., as nominee of DTC (such
nominee being referred to herein as the “Global Note Holder”).

     Section 8.03. Certificated Notes. In addition to the provisions set forth in Section 2.8 of
the Base Indenture, any Person having a beneficial interest in the Global Note may, upon request to
the Trustee, exchange such beneficial interest for Notes in the form of Certificated Notes. Upon
any such issuance, the Trustee is required to register such Certificated Notes in the name of, and
cause the same to be delivered to, such Person or Persons (or the nominee of any thereof).

     Section 8.04. Offices for Notices and Payments, etc. The Issuer initially designates the
Corporate Trust Office of the Trustee as the office or agency where the Notes may be presented for
payment, registration of transfer and for exchange as provided for in this Indenture, and as the
office or agency where notices and demands to or upon the Issuer and Hovnanian in respect of the
Notes or of this Indenture may be served. The Issuer hereby appoints the Trustee as Registrar and
Paying Agent and as the agent upon whom notices and demands may be served with respect to the
Notes.

50

 

ARTICLE 9

Redemption

     Section 9.01. Optional Redemption. The Notes will be redeemable, in whole, at any time, or
in part, from time to time, at the option of the Issuer upon not less than 30 nor more than 60
days’ notice at a redemption price equal to the sum of:

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

     (b) the Make-Whole Amount.

     The Trustee shall have no responsibility in connection with the calculation of such redemption
price.

     Section 9.02. Sinking Fund; Mandatory Redemption. There is no sinking fund for, or mandatory
redemption of, the Notes.

     Section 9.03. Redemption with Proceeds of Equity Offering. At any time and from time to time
prior to April 15, 2014, the Issuer may redeem Notes with the net cash proceeds received by the
Issuer from any Equity Offering of Hovnanian at a redemption price equal to 111.875% 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 (including Additional Notes) provided that:

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

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

     Section 9.04. Applicability of Sections of the Base Indenture. The provisions of Sections
12.2, 12.3 and 12.4 of the Base Indenture in respect of the Notes shall apply to any optional
redemption of the Notes. Notwithstanding the foregoing, 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.
Section 12.5 of the Base Indenture shall not so apply.

51

 

ARTICLE 10

Amendments, Supplements And Waivers

     Section 10.01. Amendments, Supplements and Waivers. The Issuer, Hovnanian, the Guarantors
and the Trustee may amend, supplement or waive the Indenture, the Guarantees or the Notes as
provided in Article Eight of the Base Indenture; provided, that, in addition to the provisions
specified in Section 8.1 of the Base Indenture, without the consent of, or notice to, any Holder,
Hovnanian, the Issuer, the Guarantors and the Trustee may amend or supplement the Indenture, the
Notes or the Guarantees to evidence the assumption by Hovnanian (or its successor entity) or a
successor entity of the Issuer of the obligations of the Issuer under the Indenture and the Notes;
provided, further, that, in addition to the provisions of Section 8.2 of the Base Indenture, no
amendment, supplement or waiver shall, without the consent of each Holder affected: (i) alter the
provisions (including related definitions) set forth in Article 9 hereof or Section 3.04 or 3.08
hereof; (ii) release any Guarantor from any of its obligations under its Guarantee or the Indenture
otherwise than in accordance with the Indenture or (iii) waive a continuing Default or Event of
Default in the payment of principal of or interest on the Notes.

ARTICLE 11

Release Of Issuer

     Section 11.01. Release of Issuer. The Issuer may be released from its obligations under the
Indenture and the Notes in accordance with the provisions of Article Fourteen of the Base Indenture
and the following is added at the end of clause (3) of Article Fourteen thereof: “until such time,
if any, as such Guarantee may be released pursuant to Section 3.14 or Section 5.02 hereof.”

ARTICLE 12

Miscellaneous

     Section 12.01. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE, THE NOTES AND EACH GUARANTEE
SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.

     Section 12.02. No Adverse Interpretation of Other Agreements. This Supplemental Indenture
may not be used to interpret another indenture (other than the Base Indenture) or loan or debt
agreement of Hovnanian, the Issuer or any

52

 

subsidiary of Hovnanian. Any such indenture (other than the Base Indenture) or loan or debt
agreement may not be used to interpret this Supplemental Indenture.

     Section 12.03. Successors and Assigns. All covenants and agreements of the Issuer, Hovnanian
and the Guarantors in this Supplemental Indenture and the Notes shall bind their respective
successors and assigns and inure to the benefit of their respective successors and assigns. All
agreements of the Trustee in this Supplemental Indenture shall bind its successors and assigns and
inure to the benefit of their respective successors and assigns.

     Section 12.04. Counterparts. The parties may sign any number of counterparts of this
Supplemental Indenture. Each signed counterpart shall be an original, but all of them together
represent the same agreement.

     Section 12.05. Severability. To the extent permitted by applicable law, in case any one or
more of the provisions contained in this Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Supplemental Indenture or of the
Notes.

     Section 12.06. Effect of Headings. The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

     Section 12.07. Conflict of Any Provision of Indenture with Trust Indenture Act of 1939. If
and to the extent that any provision of this Supplemental Indenture limits, qualifies or conflicts
with another provision included in this Supplemental Indenture or in the Base Indenture which is
required to be included herein by any of Sections 310 to 317 of the Trust Indenture Act of 1939,
inclusive, or is deemed applicable to this Indenture by virtue of the provisions of the Trust
Indenture Act of 1939, such required provision shall control.

53

 

SIGNATURES

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

	 	 	 	 	 
	 	K. HOVNANIAN ENTERPRISES, INC., as 

     the Issuer

 	 
	 	By:  	/s/ J. Larry Sorsby
 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	HOVNANIAN ENTERPRISES, INC., as 

     Guarantor

 	 
	 	By:  	/s/ J. Larry Sorsby
 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 
	 	On behalf of each entity named in Schedule 1 

     hereto, as Guarantors

 	 
	 	By:  	/s/ J. Larry Sorsby
 	 
	 	 	Name:  	J. Larry Sorsby 	 
	 	 	Title:  	Executive Vice President and

Chief Financial Officer 	 
	 

	 	 	 	 	 

	WILMINGTON TRUST COMPANY, as	 	 
	     Trustee	 	 
	 
	 	 	 	 
	By:

	 	/s/ Joshua C. Jones	 	 
	 

	 	 	 	 
	 

	 	Name: Joshua C. Jones	 	 
	 

	 	Title: Financial Services Officer	 	 

 

 

SCHEDULE 1

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.

GOVERNOR’S ABSTRACT CO., INC.

HOMEBUYERS FINANCIAL SERVICES, L.L.C.

HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.

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

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

HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, 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 TEXAS LLC

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

HOVNANIAN LAND INVESTMENT GROUP, L.L.C.

K. HOV INTERNATIONAL, INC.

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 ALMOND ESTATES, LLC

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 BERKELEY, L.L.C.

K. HOVNANIAN AT BERNARDS V, L.L.C.

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

Schedule 1-1

 

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 CALABRIA, INC.

K. HOVNANIAN AT CAMDEN I, 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 CARMEL DEL MAR, INC.

K. HOVNANIAN AT CARMEL VILLAGE, LLC

K. HOVNANIAN AT CASTILE, INC.

K. HOVNANIAN AT CEDAR GROVE III, L.L.C.

K. HOVNANIAN AT CEDAR GROVE V, L.L.C.

K. HOVNANIAN AT CHAPARRAL, INC.

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 CRESTLINE, INC.

K. HOVNANIAN AT CURRIES WOODS, 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 DOVER, L.L.C.

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 ELK TOWNSHIP, L.L.C.

K. HOVNANIAN AT ENCINITAS RANCH, LLC

K. HOVNANIAN AT EVERGREEN, L.L.C.

K. HOVNANIAN AT EWING, 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.

Schedule 1-2

 

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 GRIDLEY, LLC

K. HOVNANIAN AT GUTTENBERG, L.L.C.

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

K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.

K. HOVNANIAN AT HAMBURG, L.L.C.

K. HOVNANIAN AT HAWTHORNE, L.L.C.

K. HOVNANIAN AT HAZLET, L.L.C.

K. HOVNANIAN AT HERSHEY’S MILL, INC.

K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.

K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.

K. HOVNANIAN AT HILLTOP, 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 LA PAZ, LLC

K. HOVNANIAN AT LA TERRAZA, INC.

K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.

K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC

K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.

K. HOVNANIAN AT LANDMARK, LLC

K. HOVNANIAN AT LARKSPUR, LLC

K. HOVNANIAN AT LAWRENCE V, L.L.C.

K. HOVNANIAN AT LEE SQUARE, L.L.C.

K. HOVNANIAN AT LINWOOD, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.

Schedule 1-3

 

K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.

K. HOVNANIAN AT LIVE OAK II, LLC

K. HOVNANIAN AT LONG BRANCH I, 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 LOWER MORELAND III, L.L.C.

K. HOVNANIAN AT MACUNGIE, 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 MATSU, 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 MT. OLIVE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MUIRFIELD, LLC

K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.

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.

Schedule 1-4

 

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 CALDWELL, 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 NORTHLAKE, INC.

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 PACIFIC BLUFFS, 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 PERKIOMEN II, INC.

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

K. HOVNANIAN AT PHILADELPHIA III, L.L.C.

K. HOVNANIAN AT PHILADELPHIA IV, 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 CRISTIANITOS, INC.

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 READINGTON II, L.L.C.

K. HOVNANIAN AT RED BANK, L.L.C.

K. HOVNANIAN AT RIDGEMONT, L.L.C.

K. HOVNANIAN AT RIDGESTONE, L.L.C.

K. HOVNANIAN AT RIVERBEND, LLC

Schedule 1-5

 

K. HOVNANIAN AT RIVERCREST, 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 SAN SEVAINE, INC.

K. HOVNANIAN AT SANTA FE SPRINGS, LLC

K. HOVNANIAN AT SANTA NELLA, LLC

K. HOVNANIAN AT SARATOGA, INC.

K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.

K. HOVNANIAN AT SAWMILL, INC.

K. HOVNANIAN AT SAYREVILLE, L.L.C.

K. HOVNANIAN AT SHELDON GROVE, LLC

K. HOVNANIAN AT SHREWSBURY, LLC

K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.

K. HOVNANIAN AT SIERRA ESTATES, LLC

K. HOVNANIAN AT SILVER SPRING, L.L.C.

K. HOVNANIAN AT SKYE ISLE, LLC

K. HOVNANIAN AT SMITHVILLE III, L.L.C.

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 SPARTA, L.L.C.

K. HOVNANIAN AT SPRINGCO, L.L.C.

K. HOVNANIAN AT STANTON, LLC

K. HOVNANIAN AT STATION SQUARE, L.L.C.

K. HOVNANIAN AT STONE CANYON, INC.

K. HOVNANIAN AT SUNRIDGE PARK, LLC

K. HOVNANIAN AT SUNSETS, LLC

K. HOVNANIAN AT SYCAMORE, INC.

K. HOVNANIAN AT TEANECK, L.L.C.

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 TRENTON, L.L.C.

K. HOVNANIAN AT TROVATA, INC.

K. HOVNANIAN AT UNION TOWNSHIP I, INC.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.

K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

Schedule 1-6

 

K. HOVNANIAN AT UPPER MAKEFIELD I, INC.

K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.

K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.

K. HOVNANIAN AT VAIL RANCH, INC.

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 WANAQUE, L.L.C.

K. HOVNANIAN AT WARMINSTER, LLC

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 BRADFORD, 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 WILDROSE, INC.

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 WOODHILL ESTATES, L.L.C.

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 CIP, L.L.C.

K. HOVNANIAN CLASSICS, L.L.C.

K. HOVNANIAN COMMUNITIES, INC.

K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.

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 OF VIRGINIA, INC.

K. HOVNANIAN COMPANIES, LLC

K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.

K. HOVNANIAN CONSTRUCTION II, INC

K. HOVNANIAN CONSTRUCTION III, INC

Schedule 1-7

 

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 CONNECTICUT, 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 INDIANA, INC.

K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.

K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.

K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, 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 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 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 PAYNE STREET, L.L.C.

K. HOVNANIAN HOMES AT PRIMERA, L.L.C.

Schedule 1-8

 

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 INDIANA, 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 MICHIGAN, 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 T&C MANAGEMENT CO., 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.

Schedule 1-9

 

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 DULLES DISCOVERY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT HEMET, LLC

K. HOVNANIAN’S FOUR SEASONS AT HUNTFIELD, L.L.C.

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 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.

K. HOVNANIAN’S PRIVATE HOME PORTFOLIO, 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 MICHIGAN, 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.

NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.

Schedule 1-10

 

NEW LAND TITLE AGENCY, L.L.C.

PADDOCKS, L.L.C.

PARK TITLE COMPANY, LLC

PINE AYR, LLC

REAL PROPERTY HOLDING — PRINCE GEORGE’S COUNTY, MD, LLC

RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.

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

THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC

THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.

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 OF TENNESSEE, INC.

WESTMINSTER HOMES, INC.

WH LAND I, INC.

WH PROPERTIES, INC.

WH/PR LAND COMPANY, L.L.C.

WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

Schedule 1-11

 

SCHEDULE 2

Unrestricted Subsidiaries

12TH* STREET RESIDENTIAL, LTD.

77 HUDSON STREET JOINT DEVELOPMENT, L.L.C.

AG/HOV DELRAY HOLDINGS, L.L.C.

AG/HOV DELRAY, L.L.C.

BRIGHTBEACH DEVELOPMENT, LTD.

BRIGHTCHASE, LTD.

BRIGHTON HOMES AT WALDEN, LTD.

COBBLESTONE SQUARE DEVELOPMENT, L.L.C.

FIRST MORTGAGE LENDERS OF FLORIDA, L.L.C.

GTIS-HOV FESTIVAL LAKES LLC

GTIS-HOV HOLDINGS LLC

GTIS-HOV POSITANO LLC

GTIS-HOV RANCHO 79 LLC

HERITAGE PINES, L.L.C.

HEXTER-FAIR LAND TITLE COMPANY I, INC.

HOVSITE CATALINA LLC

HOVSITE CHURCHILL CLUB LLC

HOVSITE CIDER GROVE LLC

HOVSITE FIRENZE LLC

HOVSITE FLORIDA HOLDINGS LLC

HOVSITE GREENWOOD MANOR LLC

HOVSITE HOLDINGS LLC

HOVSITE HUNT CLUB LLC

HOVSITE ILLINOIS HOLDINGS LLC

HOVSITE IRISH PRAIRIE LLC

HOVSITE LIBERTY LAKES LLC

HOVSITE MONTEVERDE 1 & 2 LLC

HOVSITE MONTEVERDE 3 & 4 LLC

HOVSITE PROVIDENCE LLC

HOVSITE SOUTHAMPTON LLC

HOVWEST LAND ACQUISITION, LLC

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 COBBLESTONE SQUARE CONDOMINIUMS, L.L.C.

K. HOVNANIAN AT DELRAY BEACH, L.L.C.

K. HOVNANIAN AT EAGLE’S POINT, 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.

Schedule 2-1

 

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 HOVWEST HOLDINGS, L.L.C.

K. HOVNANIAN INVESTMENTS, L.L.C.

K. HOVNANIAN JV HOLDINGS, L.L.C.

K. HOVNANIAN JV SERVICES COMPANY, L.L.C.

K. HOVNANIAN MANALAPAN INVESTMENT, L.L.C.

K. HOVNANIAN MINNESOTA HOLDINGS, LLC

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.

RR HOUSTON DEVELOPERS, LLC

RR HOUSTON DEVELOPMENT, L.P.

RR HOUSTON INVESTMENT, L.P.

RR HOUSTON INVESTORS, LLC

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.

Schedule 2-2

 

Exhibit A

     [THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
“DEPOSITARY”), TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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 AN INTEREST HEREIN.]1

     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.

 

			
	1	 	This should be included only if the Note is
issued in global form.

A-1

 

[FACE OF NOTE]

K. HOVNANIAN ENTERPRISES, INC.

	 	 	 

	REGISTERED — No.                     

	 	CUSIP No.: 442488 BK7
	 
	 	 
	 

	 	$__________ [, or such other
amount as is provided in the
schedule of increases or
decreases in the global note
attached hereto]2

117⁄8% Senior Notes due 2015

K. Hovnanian Enterprises, Inc., a California corporation (the “Issuer”, which term includes any
successor under the Indenture hereinafter referred to), for value received hereby promises to pay
to                     , or registered assigns, the principal sum of
____________ Dollars ($__________) [or such other amount as is provided in the schedule of
increases or decreases in the global note attached hereto]2 on October 15, 2015.

Interest Rate: 117⁄8% per annum.

Interest Payment Dates: April 15 and October 15, commencing April 15, 2011

Interest Record Dates: April 1 and October 1

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.

 

			
	2	 	For Global Notes.

A-2

 

     IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized officer.

Dated:

	 	 	 	 	 	 	 

	 	 	K. HOVNANIAN ENTERPRISES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

A-1

 

[Form of] Trustee’s Certificate of Authentication

     This is one of the Securities of the series designated herein referred to in the within
mentioned Indenture.

	 	 	 	 	 

	WILMINGTON TRUST COMPANY, as 

Trustee	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 

 

[REVERSE SIDE OF NOTE]

K. HOVNANIAN ENTERPRISES, INC.

117⁄8% Senior Notes due 2015

     Capitalized terms used herein are used as defined in the Indenture referred to below unless
otherwise indicated.

     1. 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 interest on the
principal amount of this Note at the rate per annum shown above. The Issuer will pay interest
semiannually on April 15 and October 15 of each year, commencing April 15, 2011, until the
principal is paid or made available for payment. Interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided for or, if no interest has been paid,
from February 14, 2011, provided that, if there is no existing default in the payment of interest,
and if this Note is authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such succeeding interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day months.

     The Issuer promises to pay the principal of this Note on October 15, 2015.

     2. Method of Payment.

     The Issuer will pay interest on the Notes (except defaulted interest, if any, which will be
paid on such special payment date to Holders of record on such special record date as may be fixed
by the Issuer) to the persons who are registered Holders of Notes at the close of business on the
April 1 and October 1 immediately preceding the interest payment date. Holders must surrender Notes
to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in
money of the United States that at the time of payment is legal tender for payment of public and
private debts. Payment of principal of, premium, if any, and interest on a Global Note registered
in the name of, or held by the Depositary or its nominee will be made in immediately available
funds to the Depositary or its nominee, as the case may be, as the registered Holder of such a
Global Note. If any of the Notes are no longer represented by a Global Note, payment of interest
on the definitive Notes may, at the Issuer’s option, be made by check mailed directly to Holders at
their registered address.

     3. Paying Agent and Registrar.

 

 

     Initially, Wilmington Trust Company (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 Paying Agent, Registrar or co-Registrar.

     4. Indenture.

     The Issuer issued the Notes under an Indenture among the Issuer, Hovnanian, the Guarantors and
the Trustee, the terms of which have been established in the First Supplemental Indenture (the
“Supplemental Indenture”) dated as of February 14, 2011, supplementing an Indenture dated February
14, 2011 (the “Base Indenture”, as supplemented by the Supplemental Indenture, the “Indenture”),
pursuant to Section 2.3 of the Base Indenture. This Note is one of the Securities of the series
designated as the “117/8% Senior Notes due 2015” of the Issuer. The Issuer may
issue additional Notes of this series after this Note has been issued. This Note and any
additional notes of this series subsequently issued under the Indenture shall be treated as a
single series for all purposes under the Indenture and shall vote and consent together on all
matters as one class, including, without limitation, waivers, amendments, redemption and offers to
purchase. The terms of the Notes and the Guarantees include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(“TIA”), as in effect on the date of the Indenture. The Notes and the Guarantees are subject to
all such terms, and Holders are referred to the Indenture and the TIA for a statement of them. 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 Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to: K. Hovnanian Enterprises, Inc., 110 West Front Street, Red
Bank, New Jersey 07701, Attention: Corporate Controller.

     5. Optional Redemption; Redemption with Proceeds of Equity Offering.

     The Notes will be redeemable, in whole, at any time, or in part, from time to time, at the
option of the Issuer upon not less than 30 nor more than 60 days’ notice at a redemption price
equal to the sum of:

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

     (b) the Make-Whole Amount.

 

 

     The Trustee shall have no responsibility in connection with the calculation of such redemption
price.

     “Make-Whole Amount” means, in connection with any optional redemption of any Note, the excess,
if any, of: (a) 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 0.5%,
from the respective dates on which such principal and interest would have been payable if such
payment had not been made; over (b) the principal amount of the Note being redeemed.

     “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 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, yields for the published
maturities occurring prior to and after such maturity most closely corresponding to such maturity
shall be calculated pursuant to the immediately preceding sentence and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month.

     At any time and from time to time prior to April 15, 2014, the Issuer may redeem Notes with
the net cash proceeds received by the Issuer from any Equity Offering of Hovnanian at a redemption
price equal to 111.875% 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 (including Additional Notes) provided that:

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

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

     If less than all of the Notes are to be redeemed at any time, the Trustee, within 10 Business
Days after the Issuer gives written notice to the Trustee that such redemption is to occur, will
select Notes 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.

     Notes may be redeemed in part in denominations of $2,000 and multiples of $1,000 in excess
thereof. 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.

     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 and shall state that on and
after the redemption date a new Note in principal amount equal to the unredeemed portion of the
original Note will be issued in the name of the Holder thereof upon surrender 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 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. Denominations, Transfer, Exchange.

     The Notes are in registered form only without coupons in denominations of $2,000 of principal
amount and integral multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes
in accordance with the Indenture. The Registrar 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 Registrar is not required to issue, register the transfer of, or exchange any Note or
certain portions of a Note.

     9. Persons Deemed Owners.

 

 

     The registered Holder of this Note shall be treated as the owner of it for all purposes.

     10. Discharge and Defeasance.

     Subject to certain conditions set forth in the Indenture, the Issuer, Hovnanian and the
Guarantors at any time may terminate some or all of their obligations under the Notes and the
Indenture if the Issuer deposits with the Trustee money and/or U.S. Government Obligations for the
payment of principal, premium, if any, and interest on the Notes to maturity or redemption, as the
case may be.

     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 Hovnanian 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 an 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 or the Guarantees may be amended or
supplemented, or future compliance therewith or default 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 Issuer, Hovnanian, the Guarantors and the Trustee may amend or
supplement the Indenture, the Notes or the Guarantees to, among other things set forth in the
Indenture, cure any ambiguity, defect or inconsistency if such amendment or supplement does not
adversely affect the legal rights of the Holders in any material respect.

     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 TIA), 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, Hovnanian or the Guarantors shall not have any liability for
any obligations of the Issuer, Hovnanian 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.

     15. Guarantees.

     The Notes will be entitled to the benefits of certain Guarantees made for the benefit of the
Holders. Reference is hereby made to the Indenture for a statement of the respective rights,
limitation of rights, duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.

     16. Governing Law.

     THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.

     17. 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.

     18. 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.

     19. 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).

 

 

ASSIGNMENT FORM

     If you the Holder want to assign this Note, fill in the form below:

     I or we assign and transfer this Note to

 

(Insert assignee’s social security or tax ID number)

 

(Print or type assignee’s name, address, and zip code)

and irrevocably appoint ____________________ agent to transfer this Note on the books of the
Issuer. The agent may substitute another to act for him.

	 	 	 	 	 	 	 	 	 

	Date:

	 	 	 	Your signature:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the other side
of this Note)	 	 
	 
	 	 	 	 	 	 	 	 
	Signature Guarantee:	 	 	 	 	 	 
	 	 	 

	 	 	 	 	Signature must be guaranteed by participant in a
recognized Signature Guarantee Medallion Program (or
other signature guarantor program reasonably
acceptable to the Trustee)	 	 

 

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you wish to have all of this Note purchased by the Issuer pursuant to Section 3.04 or 3.08
of the First Supplemental Indenture, check the box: o

     If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 3.04 or
3.08 of the First Supplemental 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:	 	 	 	 	 	 
	 	 	 

	 	 	 	 	Signature must be guaranteed by participant in a
recognized Signature Guarantee Medallion Program (or
other signature guarantor program reasonably
acceptable to the Trustee)	 	 

 

 

SCHEDULE OF INCREASES OR DECREASES

IN THE GLOBAL NOTE*

The following increases or decreases in this Global Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Amount of	 	Principal Amount	 	Signature of
	 	 	decrease in	 	increase in	 	of this Global	 	authorized
	 	 	Principal Amount	 	Principal Amount	 	Note following	 	signatory of
	Date of Increase or	 	of this Global	 	of this Global	 	such decrease (or	 	Trustee or
	Decrease	 	Note	 	Note	 	increase)	 	Custodian
	 
	 	 
	 	 
	 	 
	 	 

 

			
	*	 	This should be included only if the Note is issued in global form.

 

 

Exhibit B

[Form of Notation on Note Relating to Guarantee]

GUARANTEE

     The undersigned (the “Guarantors”, which term includes any successor persons under the
Indenture (the “Indenture”) referred to in the Note upon which this notation is endorsed) (the
“Endorsed Note”), has unconditionally guaranteed, jointly and severally (i) the due and punctual
payment of the principal of, premium, if any, and interest on the Endorsed Note and all other Notes
of the same series as the Endorsed Note (the “Guaranteed Notes”), whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the overdue principal of,
premium, if any, and interest, if any, on the Guaranteed Notes, to the extent lawful, and the due
and punctual performance of all other obligations of the Issuer to the Holders of Guaranteed Notes
or the Trustee all in accordance with the terms set forth in Article Thirteen of the Indenture and
(ii) in case of any extension of time of payment or renewal of any Guaranteed 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. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto
in the Indenture.

     The obligations of the Guarantors to the Holders of Guaranteed Notes and to the Trustee
pursuant to the Guarantee evidenced hereby and the Indenture are expressly set forth in Article 13
of the Indenture and reference is hereby made to such Indenture for the terms of this Guarantee.

     No stockholder, officer, director, employee, partner or incorporator, as such, past, present
or future, of the Guarantors shall have any personal liability under the Guarantee evidenced hereby
by reason of such person’s status as such stockholder, officer, director, employee, partner or
incorporator. Each Holder of a Guaranteed Note by accepting a Guaranteed Note waives and releases
all such liability. This waiver and release are part of the consideration for the issuance of this
Guarantee.

     Each Holder of a Guaranteed Note by accepting a Guaranteed 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 of the Guaranteed Notes 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 constructed in accordance with, the laws of the State of
New York.

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.

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

 

 

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

FOUNDERS TITLE AGENCY, INC.

GOVERNOR’S ABSTRACT CO., INC.

HOMEBUYERS FINANCIAL SERVICES, L.L.C.

HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.

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

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

HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, 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 TEXAS LLC

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

HOVNANIAN LAND INVESTMENT GROUP, L.L.C.

K. HOV INTERNATIONAL, INC.

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 ALMOND ESTATES, LLC

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 BERKELEY, L.L.C.

K. HOVNANIAN AT BERNARDS V, 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 CALABRIA, INC.

K. HOVNANIAN AT CAMDEN I, 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 CARMEL DEL MAR, INC.

K. HOVNANIAN AT CARMEL VILLAGE, LLC

K. HOVNANIAN AT CASTILE, INC.

K. HOVNANIAN AT CEDAR GROVE III, L.L.C.

K. HOVNANIAN AT CEDAR GROVE V, L.L.C.

K. HOVNANIAN AT CHAPARRAL, INC.

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 CRESTLINE, INC.

K. HOVNANIAN AT CURRIES WOODS, 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 DOVER, L.L.C.

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 ELK TOWNSHIP, L.L.C.

K. HOVNANIAN AT ENCINITAS RANCH, LLC

K. HOVNANIAN AT EVERGREEN, L.L.C.

K. HOVNANIAN AT EWING, 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 GRIDLEY, LLC

K. HOVNANIAN AT GUTTENBERG, L.L.C.

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

K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.

K. HOVNANIAN AT HAMBURG, L.L.C.

K. HOVNANIAN AT HAWTHORNE, L.L.C.

K. HOVNANIAN AT HAZLET, L.L.C.

K. HOVNANIAN AT HERSHEY’S MILL, INC.

K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.

K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.

K. HOVNANIAN AT HILLTOP, 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 LA PAZ, LLC

K. HOVNANIAN AT LA TERRAZA, INC.

K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.

K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC

K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.

K. HOVNANIAN AT LANDMARK, LLC

K. HOVNANIAN AT LARKSPUR, LLC

K. HOVNANIAN AT LAWRENCE V, L.L.C.

K. HOVNANIAN AT LEE SQUARE, L.L.C.

K. HOVNANIAN AT LINWOOD, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.

K. HOVNANIAN AT LITTLE EGG HARBOR III, 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 LIVE OAK II, LLC

K. HOVNANIAN AT LONG BRANCH I, 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 LOWER MORELAND III, L.L.C.

K. HOVNANIAN AT MACUNGIE, 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 MATSU, 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 MT. OLIVE TOWNSHIP, L.L.C.

K. HOVNANIAN AT MUIRFIELD, LLC

K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.

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 CALDWELL, 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 NORTHLAKE, INC.

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 PACIFIC BLUFFS, 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 PERKIOMEN II, INC.

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

K. HOVNANIAN AT PHILADELPHIA III, L.L.C.

K. HOVNANIAN AT PHILADELPHIA IV, 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 CRISTIANITOS, INC.

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 READINGTON II, L.L.C.

K. HOVNANIAN AT RED BANK, L.L.C.

K. HOVNANIAN AT RIDGEMONT, L.L.C.

K. HOVNANIAN AT RIDGESTONE, L.L.C.

 

 

K. HOVNANIAN AT RIVERBEND, LLC

K. HOVNANIAN AT RIVERCREST, 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 SAN SEVAINE, INC.

K. HOVNANIAN AT SANTA FE SPRINGS, LLC

K. HOVNANIAN AT SANTA NELLA, LLC

K. HOVNANIAN AT SARATOGA, INC.

K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.

K. HOVNANIAN AT SAWMILL, INC.

K. HOVNANIAN AT SAYREVILLE, L.L.C.

K. HOVNANIAN AT SHELDON GROVE, LLC

K. HOVNANIAN AT SHREWSBURY, LLC

K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.

K. HOVNANIAN AT SIERRA ESTATES, LLC

K. HOVNANIAN AT SILVER SPRING, L.L.C.

K. HOVNANIAN AT SKYE ISLE, LLC

K. HOVNANIAN AT SMITHVILLE III, L.L.C.

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 SPARTA, L.L.C.

K. HOVNANIAN AT SPRINGCO, L.L.C.

K. HOVNANIAN AT STANTON, LLC

K. HOVNANIAN AT STATION SQUARE, L.L.C.

K. HOVNANIAN AT STONE CANYON, INC.

K. HOVNANIAN AT SUNRIDGE PARK, LLC

K. HOVNANIAN AT SUNSETS, LLC

K. HOVNANIAN AT SYCAMORE, INC.

K. HOVNANIAN AT TEANECK, L.L.C.

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 TRENTON, L.L.C.

K. HOVNANIAN AT TROVATA, INC.

K. HOVNANIAN AT UNION TOWNSHIP I, 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 UWCHLAN II, L.L.C.

K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.

K. HOVNANIAN AT VAIL RANCH, INC.

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 WANAQUE, L.L.C.

K. HOVNANIAN AT WARMINSTER, LLC

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 BRADFORD, 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 WILDROSE, INC.

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 WOODHILL ESTATES, L.L.C.

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 CIP, L.L.C.

K. HOVNANIAN CLASSICS, L.L.C.

K. HOVNANIAN COMMUNITIES, INC.

K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.

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 OF VIRGINIA, INC.

K. HOVNANIAN COMPANIES, LLC

K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.

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 CONNECTICUT, 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 INDIANA, INC.

K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.

K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.

K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, 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 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 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 PAYNE STREET, L.L.C.

K. HOVNANIAN HOMES AT PRIMERA, 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 INDIANA, 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 MICHIGAN, 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 T&C MANAGEMENT CO., 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 DULLES DISCOVERY, L.L.C.

K. HOVNANIAN’S FOUR SEASONS AT HEMET, LLC

K. HOVNANIAN’S FOUR SEASONS AT HUNTFIELD, L.L.C.

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 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.

K. HOVNANIAN’S PRIVATE HOME PORTFOLIO, 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 MICHIGAN, 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.

NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.

NEW LAND TITLE AGENCY, L.L.C.

PADDOCKS, L.L.C.

PARK TITLE COMPANY, LLC

PINE AYR, LLC

REAL PROPERTY HOLDING — PRINCE GEORGE’S COUNTY, MD, LLC

RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.

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

THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC

THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.

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 OF TENNESSEE, INC.

WESTMINSTER HOMES, INC.

WH LAND I, INC.

WH PROPERTIES, INC.

WH/PR LAND COMPANY, L.L.C.

WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

[Signature page follows]

 

 

	 	 	 

	 	 	 
	By:	 	 
	Title:
	 	 

[Signature Page to Guarantee]

 

 

EXHIBIT C

SUPPLEMENTAL INDENTURE

dated as of                    ,                     

among

K. HOVNANIAN ENTERPRISES, INC.

HOVNANIAN ENTERPRISES, INC.

The Other Guarantors Party Hereto

and

WILMINGTON TRUST COMPANY,

as Trustee

 

117⁄8% Senior Notes due 2015

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. (“Hovnanian”), [each of the guarantors
listed on Schedule I hereto] (each an “Undersigned”) and Wilmington Trust Company, a Delaware
baking corporation, as trustee (the “Trustee”).

RECITALS

     WHEREAS, the Issuer, Hovnanian, the other Guarantors party thereto and the Trustee entered
into the Indenture dated as of February 14, 2011 (as supplemented, the “Indenture”) as supplemented
by a Supplemental Indenture thereto, dated as of February 14, 2011 (the “First Supplemental
Indenture”), relating to the Issuer’s 117⁄8% Senior Notes due 2015 (the “Notes”);

     WHEREAS, as a condition to the purchase of the Notes by the Holders, Hovnanian agreed pursuant
to the Indenture to cause any newly acquired or created Restricted Subsidiaries to provide
Guarantees of the Notes, subject to certain limitations.

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 Thirteen of the
Base Indenture and Article 5 of the First Supplemental Indenture. Each Undersigned will also
execute a Guarantee Notation in respect of the Notes.

     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 will constitute one and the same instrument.

     Section 5. This [            ] Supplemental Indenture is an amendment
supplemental to the Indenture (as amended and supplemented to the date hereof), and the Indenture
and this [            ] Supplemental Indenture will henceforth be read together.

B-2

 

     Section 6. The recitals herein contained are made solely by the Issuer, Hovnanian
and the undersigned and not by the Trustee, and the Trustee assumes no responsibility for the
validity or accuracy thereof.

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., as 
      Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	On behalf of each entity named in
      Schedule 1 hereto, as Guarantors	 	
	 
	 	 	 	 	 	 
	 
	 	By:	 	 	 	 
	 

	 	 	 	 
 Name:	 	 
	 

	 	 	 	Title:	 	 

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY,

     as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

B-4exv10w1

Exhibit 10.1

AMENDMENT NO. 6

TO THE

MEDICIS 2006 INCENTIVE AWARD PLAN

               This Amendment No. 6 (“Amendment”) to the Medicis 2006 Incentive Award Plan, as
amended (the “Plan”), is adopted by Medicis Pharmaceutical Corporation, a Delaware
corporation (the “Company”), as of February 10, 2011.

RECITALS

               A. The Stock Option and Compensation Committee (the “Committee”) of the Board of
Directors of the Company deems it advisable and in the best interest of the Company and its
stockholders to amend the Plan, as provided below.

               B. Pursuant to Section 11.2 of the Plan, the Committee has the authority to amend the Plan.

AMENDMENT

	1.	 	Section 4.6 of the Plan is hereby amended and restated in its entirety as follows:

	 	4.6.	 	Automatic Grants to Non-Employee Directors.

     (a) On the date of each annual meeting of the stockholders at which one or more
members of the Board are standing for re-election during the term of the Plan,
beginning with the annual meeting held in 2011, each person serving as a
Non-Employee Director on such date shall automatically be granted (i) a
Non-Qualified Stock Option (an “Annual Option Award”) and (ii) Restricted
Stock (an “Annual Restricted Stock Award”) or Restricted Stock Units (an
“Annual Restricted Stock Unit Award”) to be determined in the sole
discretion of the Administrator, in each case, as follows:

          (i) Each Annual Option Award shall cover a number of shares of Common Stock
having a fair value as of the date of grant equal to $87,500, calculated using the
Black-Scholes option pricing model for the actual date of grant of such Award,
utilizing the valuation assumptions determined by the Administrator (or its
designee) with respect to each such Award, and rounded down to the nearest whole
cent. A member of the Board who is also a former Employee will be eligible to
receive one or more Annual Option Awards.

          (ii) Each Annual Restricted Stock Award or Annual Restricted Stock Unit Award
shall cover a number of shares of Common Stock having a fair value as of the date of
grant equal to $87,500, calculated by dividing $87,500 by the Fair Market Value as
of the date of grant of such Award and rounded down to the nearest whole cent. A
member of the Board who is also a former Employee will be eligible to receive one or
more Annual Restricted Stock Awards or Annual Restricted Stock Unit Awards.

 

 

     (b) The following provisions shall govern the terms of Annual Option Awards
granted pursuant to this Section 4.6. Each Option shall have an exercise price per
share of Common Stock equal to 100% of the Fair Market Value of a share of Common
Stock on the date such Option is granted. Each Option shall vest and become
exercisable for all of the shares of Common Stock subject to such Option upon the
earlier of (i) the one (1)-year anniversary of the grant date of such Option or (ii)
the next annual meeting at which one or more members of the Board are standing for
re-election, subject in either case to the Non-Employee Director’s continued service
on the Board through such date. The term of each such Option shall be seven (7)
years from the date of grant. Each Option granted under this Section 4.6 shall
remain exercisable for 12 months following the Non-Employee Director’s Termination
of Directorship (or such longer period as the Administrator may determine in its
discretion on or after the date of grant of such Option); provided,
however, that in no event shall any Option remain exercisable beyond its
maximum 7-year term. Unless otherwise determined by the Administrator on or after
the date of grant of such Option, no portion of an Option granted under this Section
4.6 which is unexercisable at the time of a Non-Employee Director’s Termination of
Directorship shall thereafter become exercisable.

     (c) The following provisions shall govern the terms of Annual Restricted Stock
Awards and Annual Restricted Stock Unit Awards granted pursuant to this Section 4.6.
Each Annual Restricted Stock Award and Annual Restricted Stock Unit Award shall
vest pursuant to a vesting schedule determined by the Administrator in its sole
discretion. Unless otherwise determined by the Administrator on or after the date
of grant of such Award, no portion of an Annual Restricted Stock Award or Annual
Restricted Stock Unit Award granted under this Section 4.6 which is unvested at the
time of a Non-Employee Director’s Termination of Directorship shall thereafter
become vested.

	2.	 	Capitalized terms used in this Amendment and not otherwise defined shall have the same
meanings assigned to them in the Plan. Except as otherwise expressly set forth in this
Amendment, the Plan shall remain in full force and effect in accordance with its terms.
	 
	3.	 	This Amendment shall be governed by, interpreted under, and construed and enforced in
accordance with the internal laws, and not the laws relating to conflicts or choice of laws,
of the State of Delaware applicable to agreements made and to be performed wholly within the
State of Delaware.

* * * * *

2

 

               I hereby certify that this Amendment No. 6 was adopted by the Stock Option and Compensation
Committee of the Board of Directors on February 10, 2011.

               Executed this 10th day of February, 2011.

	 	 	 	 	 
	 	MEDICIS PHARMACEUTICAL CORPORATION

 	 
	 	                                           /s/ Mark A. Prygocki
 	 
	 	Mark A. Prygocki 	 
	 	President 	 
	 

3

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