Document:

Exhibit 10.3

 

OWENS BROKERAGE, LTD.

Commercial & Investment Properties

Property Management

 

LEASE EXTENSION - ANNEX SPACE

 

This Rider Amends that original Lease dated June 1, 2003 between
Kenilworth Systems Inc. [Tenant] and Nassau County P.B.A. [Landlord] for
tenancy at 185 Willis Avenue – Mineola, N.Y...[second floor].

 

This Rider is effective August 1,
2003 until May 31, 2006 and applies directly to the annexed space adjacent
to the original Lease premises.

 

All terms and requirements of the aforementioned Lease prevail
throughout this additional period. 
Consolidated rental for both suites will be $2,500.00 per month.  This includes four percent
annual rental increase as well as proportionate taxes over the
base year.

 

Security will increase to a total of $4,255.00.  Two months for the original space and one
month for the additional space.

 

 

	
  ACCEPTED:

  	
  /s/ Herbert Lindo, President

  	
   

  	
  DATED:

  	
  August 12, 2003

  	
   

  
	
   

  	
  KENILWORTH SYSTEMS INC {TENANT}

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED:

  	
  /s/ Pete Owens, Agent for Landlord

  	
   

  	
  DATED:

  	
  August 12, 2003

  	
   

  
	
   

  	
  NASSAU COUNTY P>B>A> {LANDLORD}

  

 

 

499 Jericho Tpke. * Mineola, New York 11501

Tel: 516-294-0010 * 1-888-303-3847 * Fax: 516-294-1278

www.owensbrokerage.comExhibit 4.1

 

CERTIFICATE OF
DESIGNATIONS, POWERS,

PREFERENCES AND RIGHTS

OF THE

7.625% SERIES A PREFERRED STOCK

($25,000.00 initial liquidation preference per share)

 

OF

 

HOVNANIAN
ENTERPRISES, INC.

 

 

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

 

HOVNANIAN ENTERPRISES, INC., a Delaware
corporation (the “Corporation”), HEREBY CERTIFIES that the following
resolutions were duly adopted by the Preferred Offering Committee (the “Preferred
Offering Committee”) of the Board of Directors of the Corporation in accordance
with Section 151(g) of the General Corporation Law of the State of
Delaware pursuant to the authority conferred upon the Board of Directors of the
Corporation by the provisions of the amended Certificate of Incorporation of
the Corporation and pursuant to the authority conferred upon the Board of
Directors by the restated By-Laws of the Corporation and pursuant to the
authority duly delegated to the Preferred Offering Committee thereto by the
Board of Directors of the Corporation:

 

RESOLVED, that pursuant to paragraph FOURTH
of the Corporation’s Certificate of Incorporation, which authorizes 100,000
shares of preferred stock, par value $.01 per share, the Board of Directors of
the Corporation hereby fixes the following designations, powers, preferences
and rights of a series of preferred stock:

 

1.                                       Designation and Amount; Fractional
Shares.  The series of preferred
stock shall be designated as the “7.625% Series A Preferred Stock” (the “Series A
Preferred Stock”).  The Series A
Preferred Stock shall be perpetual and the authorized number of shares of Series A
Preferred Stock shall be 8,000 shares. 
The Series A Preferred Stock is issuable in whole shares only.

 

2.                                       Dividends.  Holders of shares of Series A Preferred
Stock shall be entitled to receive, when, as, and if declared by the Board of
Directors of the Corporation or a duly authorized committee thereof out of
funds of the Corporation legally available for payment, non-cumulative
quarterly cash dividends at an annual rate of 7.625% of the liquidation
preference of each share, or $1,906.25 per share of Series A Preferred
Stock per year.  Dividends on the Series A
Preferred Stock are payable quarterly in arrears on the 15th day of January,
April, July and October of each year (each a “Dividend Payment Date”),
when, as, and if declared, beginning on October 15, 2005.  If any of those dates is not a New York
business day, then the dividend payment date will be the next succeeding
New York business day.  “New York
business day”

 

 

means any day
that is not a Saturday or Sunday and that, in New York City, is not a day
on which banking institutions generally are authorized or obligated by law or
executive order to be closed.  The amount
of dividends payable for any period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. 
Dividends shall be payable, in arrears, to holders of record as they
appear on the stock books of the Corporation on each record date, which shall
be the 1st day of the month in which such Dividend Payment Date occurs (each of
which dates being a “Dividend Payment Record Date”).  Dividends shall accrue from July 12,
2005 (the “Date of Original Issue”) or, if issued after the Date of Original
Issue, from such date or from the most recent Dividend Payment Date (whether or
not dividends have been paid on such Dividend Payment Date), whichever is
later, and shall cease to accrue on the Series A Preferred Stock on the
date of their redemption pursuant to Section 6, unless the Corporation
shall default in providing funds for the payment of the redemption price on the
shares called for redemption pursuant thereto.

 

No dividends may be declared or paid or set
apart for payment on any Parity Preferred Stock (as defined in Section 8
below) unless there shall also be or have been declared and paid or set apart
for payment on the Series A Preferred Stock, dividends for the
then-current quarterly dividend period of the Series A Preferred Stock
ending on or before the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends (x) accumulated,
but without, in the case of non-cumulative shares, accumulation of unpaid
dividends for prior dividend periods, and unpaid or payable on such Parity
Preferred Stock, on the one hand, and (y) accumulated, but without, in the case
of non-cumulative shares, accumulation of unpaid dividends for prior dividend
periods, and unpaid through the dividend payment period or periods of the Series A
Preferred Stock coinciding with or next preceding such dividend payment date,
on the other hand.

 

So long as any shares of Series A
Preferred Stock shall be outstanding, no dividend (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, the common stock of the Corporation or any other
stock of the Corporation ranking, as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up of the
Corporation, junior to the Series A Preferred Stock), whether in cash or
property, may be paid or declared or set apart, nor may any distribution be
made on the common stock (or any other stock of the Corporation ranking, as to
the payment of dividends, junior to the Series A Preferred Stock), unless
dividends have been declared and paid or set apart on the Series A
Preferred Stock for the then-current quarterly dividend period; provided,
however, that the foregoing dividend preference shall not be cumulative and
shall not in any way create any claim or right in favor of the holders of Series A
Preferred Stock in the event that dividends have not been declared or paid or
set apart on the Series A Preferred Stock in respect of any prior dividend
period.  If the full dividend on the Series A
Preferred Stock is not paid for any quarterly dividend period, the holders of Series A
Preferred Stock will have no claim in respect of the unpaid amount so long as
no dividend (other than those referred to above) is paid on the common stock
(or any other stock of the Corporation ranking, as to the payment of dividends,
junior to the Series A Preferred Stock) for such dividend period.

 

The Corporation may, in its discretion,
choose to pay dividends on the Series A Preferred Stock without the
payment of any dividends on its common stock (or any of its other stock
ranking, as to the payment of dividends, junior to the Series A Preferred
Stock).

 

2

 

Holders of Series A Preferred Stock
will not be entitled to any dividends, whether payable in cash or property,
other than as herein provided and will not be entitled to interest, or any sum
in lieu of interest, in respect of any dividend payment.

 

3.                                       Liquidation Preference.  The shares of Series A Preferred Stock
shall rank, as to liquidation, dissolution or winding up of the Corporation,
prior to the shares of common stock and any other stock of the Corporation
ranking junior to the Series A Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so that in the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series A Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of common stock or any
other such junior stock, an amount equal to the liquidation preference of $25,000.00
per share plus an amount equal to all dividends (whether or not earned or
declared) accrued and unpaid for the then-current quarterly dividend period
accrued to but excluding the date of final distribution, but without
accumulation of unpaid dividends on the Series A Preferred Stock.  The holders of the Series A Preferred
Stock shall not be entitled to receive the preferential amounts as aforesaid
until the liquidation preference of any other stock of the Corporation ranking
senior to the Series A Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. 
After payment of the full amount of the preferential amounts as
aforesaid, the holders of shares of Series A Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Corporation.  If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity Preferred
Stock and Series A Preferred Stock shall be insufficient to pay in full
the preferential amounts payable thereon, then such assets, or the proceeds
thereof, shall be distributable among such holders ratably in accordance with
the respective amounts which would be payable on such shares if all amounts
payable thereon were paid in full (but without, in the case of any
non-cumulative preferred stock, accumulation of unpaid dividends for prior dividend
periods).  For the purposes hereof,
neither a consolidation or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or into the
Corporation, nor a sale, lease, exchange or transfer of all or substantially
all of the Corporation’s assets shall be considered a liquidation, dissolution
or winding up of the Corporation.

 

4.                                       Conversion.  The Series A Preferred Stock is not
convertible into, or exchangeable for, other securities or property.

 

5.                                       Voting Rights. The Series A
Preferred Stock will have no voting rights except as provided herein or as
otherwise from time to time required by law.

 

The holders of the Corporation’s Series A
Preferred Stock and any other classes or series of preferred stock the Corporation
may issue (if the terms of any such class or series of preferred stock so
provide), by majority vote (based on liquidation preference), voting together
as a single class regardless of class or series, will be entitled to nominate
two persons as “Advisory Directors” to attend meetings of the Board of
Directors of the Corporation if dividends on the Series A Preferred Stock
or any such other classes or series of preferred stock the Corporation issues
are not paid in an aggregate amount equal to at least six full quarterly
dividend payments

 

3

 

(whether or
not consecutive).  Promptly after the
dividend payment date when such threshold is reached or after any Advisory
Director’s term expires pursuant to clause (ii) in the next succeeding
paragraph, the Corporation will call a meeting of the holders of Series A
Preferred Stock and of any other classes or series of preferred stock entitled
to vote with the holders of Series A Preferred Stock on the nomination of
Advisory Directors, for the purpose of nominating Advisory Directors.  The Corporation will appoint as Advisory
Directors persons from time-to-time nominated as Advisory Directors by the
holders of Series A Preferred Stock and any such other classes or series
of preferred stock.

 

During such time as Advisory Directors are
appointed and serving, an agenda item relating to the Series A Preferred
Stock will be included for all meetings of the Corporation’s Board of
Directors.  The Advisory Directors will only
have the right to receive notices of, and information distributed to members of
the Board of Directors in connection with, participate in and address the Board
of Directors during, that portion of meetings of the Board of Directors
consisting of the Board of Directors’ discussion of the agenda item relating to
the Series A Preferred Stock.  The
Advisory Directors will not be members of the Corporation’s Board of Directors
and will not have the right to vote with members of the Board of Directors on
matters considered by the Board of Directors. 
The term of each Advisory Director, once appointed, will continue until
the earliest of (i) the first date as of which full dividends on the Series A
Preferred Stock and any such other classes or series of preferred stock
entitled to vote with the holders of the Series A Preferred Stock on the
nomination of Advisory Directors have been paid for at least four consecutive
quarterly dividend periods (but subject always to the same provisions in the
case of future missed six full quarterly dividend payments), (ii) the date
on which such Advisory Director resigns, dies or is removed either by the
holders of Series A Preferred Stock and the holders of any such other
classes or series of preferred stock entitled to vote with the holders of Series A
Preferred Stock on the nomination of Advisory Directors, by majority vote
(based on liquidation preference), voting together as a single class regardless
of classes or series, either in writing or at a meeting duly called for such
purpose, or by the Board of Directors if such Advisory Director fails to comply
with his or her obligations under the agreement referred to in the next
paragraph, and (iii) the redemption of all of the shares of the Series A
Preferred Stock.  The holders of shares
of Series A Preferred Stock and the holders of any other classes or series
of preferred stock entitled to vote with the holders of Series A Preferred
Stock on the nomination of Advisory Directors, by majority vote (based on
liquidation preference), voting together as a single class, regardless of class
or series will have the right to remove Advisory Directors and to fill
vacancies.

 

The right of each person appointed as an
Advisory Director to attend meetings of the Board of Directors is subject to
such person entering into an agreement with the Corporation under which:

 

(i)                                     the parties agree that, as an Advisory Director, such person will be
subject to the duty to act in good faith in accordance with the provisions of
the Delaware General Corporation Law (“DGCL”) applicable to directors and to
the Corporation’s by-laws and policies applicable to directors in the same
manner as if such person were a director of the Corporation; and accordingly,
such person will be subject to the same duty to treat confidentially
information such person receives concerning the Corporation and its

 

4

 

affiliates in such person’s capacity as an
Advisory Director that such person would be subject to if such person were a
director of the Corporation;

 

(ii)                                  the parties acknowledge that, as an Advisory Director, such person
is not a director of the Corporation, and such person does not share with the
members of the Corporation’s Board of Directors the power, authority and responsibility
to direct the operations of the Corporation ; and

 

(iii)                               the parties agree that (a) the DGCL will not preclude such
person from attending meetings of the Corporation’s Board of Directors,
addressing the Board of Directors and receiving related materials in connection
with an agenda item relating to the Series A Preferred Stock and (b) such
person will not receive the compensation paid to directors of the Corporation.

 

So long as any shares of Series A
Preferred Stock remain outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least a majority of the shares of the Series A
Preferred Stock:

 

(i)                                     authorize, create or issue any capital stock of the Corporation
ranking, as to dividends or upon liquidation, dissolution or winding up, prior
to the Series A Preferred Stock, or reclassify any authorized capital
stock of the Corporation into any such shares of such capital stock, or issue
any obligation or security convertible into or evidencing the right to purchase
any such shares of capital stock; or

 

(ii)                                  amend, alter or repeal this Certificate of Designations for the Series A
Preferred Stock, or the amended Certificate of Incorporation of the
Corporation, whether by merger, consolidation or otherwise, so as to adversely
affect the powers, preferences or special rights of the Series A Preferred
Stock.

 

Any increase
in the amount of authorized common stock or other authorized preferred stock or
any increase or decrease in the number of shares of any series of preferred
stock or the authorization, creation and issuance of other classes or series of
common stock or other stock, in each case ranking on a parity with or junior to
the shares of Series A Preferred Stock with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to adversely affect such powers, preferences or
special rights.

 

The foregoing voting provisions shall not
apply if, at or prior to the time when the act with respect to which such vote
would otherwise be required or upon which the holders of Series A
Preferred Stock shall be entitled to vote shall be effected, all outstanding
shares of Series A Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to effect
such redemption.

 

6.                                       Redemption.  The Series A Preferred Stock shall not
be redeemable prior to July 12, 2010. On or after that date, subject to
the notice provisions set forth below and subject to any further limitations
which may be imposed by law, the Corporation may redeem the Series A
Preferred Stock, in whole or in part, at any time or from time to time, out of
funds legally available therefor, at a redemption price equal to the
liquidation preference per share plus an

 

5

 

amount equal
to the amount of the accrued and unpaid dividends (whether or not earned or
declared) from the Dividend Payment Date immediately preceding the redemption
date to but excluding the redemption date, but without accumulation of unpaid
dividends on the Series A Preferred Stock for prior dividend periods;
provided, however, that, unless the Series A Preferred Stock shall be
redeemed in whole, no redemption shall reduce the aggregate liquidation
preference of the Series A Preferred Stock outstanding to $25,000,000 or
less.  If less than all of the
outstanding shares of Series A Preferred Stock are to be redeemed, the
Corporation will select the shares to be redeemed from the outstanding shares
not previously called for redemption by lot or pro rata (as nearly as
possible).

 

In the event the Corporation shall redeem
shares of Series A Preferred Stock, written notice of such redemption
shall be given by first class mail, postage prepaid, mailed not less than 30
days nor more than 60 days prior to the redemption date, to each holder of
record of the shares to be redeemed at such holder’s address as the same
appears on the stock books of the Corporation; provided, however, that no
failure to give such notice nor any defect therein shall affect the validity of
the proceeding for the redemption of any shares of Series A Preferred
Stock to be redeemed except as to the holder to whom the Corporation has failed
to mail said notice or except as to the holder whose notice was defective.  Each such notice shall state: (a) the
redemption date; (b) the number of shares of Series A Preferred Stock
to be redeemed and, if less than all the shares held by such holder are to be
redeemed from such holder, the number of shares to be redeemed from such
holder; (c) the redemption price and any accumulated and unpaid dividends
to the redemption date; (d) the place or places where certificates for
such shares are to be surrendered for payment of the redemption price; and (e) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date (unless the Corporation shall default in providing funds for the payment
of the redemption price of the shares called for redemption at the time and
place specified in such notice).

 

The Corporation’s obligation to provide
funds for the payment of the redemption price (and any accumulated and unpaid
dividends to the redemption date) of the shares called for redemption shall be
deemed fulfilled if, on or before a redemption date, the Corporation shall
deposit, with a bank or trust company, or an affiliate of a bank or trust
company, having an office or agency in the United States and having a capital
and surplus of at least $50,000,000, such funds sufficient to pay the
redemption price (and any accumulated and unpaid dividends to the redemption
date) of the shares called for redemption, in trust for the account of the
holders of the shares to be redeemed (and so as to be and continue to be
available therefor), with irrevocable instructions and authority to such bank
or trust company that such funds be delivered upon redemption of the shares of Series A
Preferred Stock so called for redemption.

 

Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of two years
from the redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption shall
look only to the general funds of the Corporation for the payment of the
amounts payable upon such redemption. 
Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.

 

6

 

The Series A Preferred Stock will not
be subject to any mandatory redemption, sinking fund or other similar
provisions. In addition, holders of Series A Preferred Stock will have no
right to require redemption of any shares of Series A Preferred Stock.

 

Shares of Series A Preferred Stock
that have been issued and reacquired in any manner, including shares purchased
or redeemed, shall (upon compliance with any applicable provisions of the laws
of the State of Delaware) have the status of authorized and unissued shares of
the class of Preferred Stock undesignated as to series and may be redesignated
and reissued as part of any series of preferred stock.

 

7.                                       Amendment of Resolution.  The Board of Directors of the Corporation
reserves the right from time to time to increase or decrease the number of shares
that constitute the Series A Preferred Stock (but not below the number of
shares thereof then outstanding) and in other respects to amend this
Certificate of Designations within the limitations provided by law, this
resolution and the Certificate of Incorporation (as amended).

 

8.                                       Rank. 
Any stock of any class or classes or series of the Corporation shall be
deemed to rank:

 

(a) prior to shares of the Series A
Preferred Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, if the holders of stock of such class or classes or series
shall be entitled by the terms thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of the Series A
Preferred Stock (but not solely because dividends thereon shall be cumulative);

 

(b) on a parity with shares of the Series A
Preferred Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend payment dates,
or redemption or liquidation prices per share thereof be different from those
of the Series A Preferred Stock, if the holders of stock of such class or
classes or series shall be entitled by the terms thereof to the receipt of
dividends or of amounts distributed upon liquidation, dissolution or winding
up, as the case may be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of Series A
Preferred Stock (the term “Parity Preferred Stock” being used to refer to any
stock on a parity with the shares of Series A Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, as the
context may require); and

 

(c) junior to shares of the Series A
Preferred Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, if such class or classes or series shall be common stock
or if the holders of the Series A Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
stock of such class or classes or series.

 

7

 

9.                                       General Provisions.

 

(a) The term “outstanding”, when used
with reference to shares of Series A Preferred Stock, shall mean issued
shares of Series A Preferred Stock, excluding shares of Series A
Preferred Stock held by the Corporation or any subsidiary of the Corporation.

 

(b) The headings of the sections of
this Certificate of Designations are for convenience of reference only and
shall not define, limit or affect any of the provisions hereof.

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

8

 

IN WITNESS WHEREOF, the undersigned, being
duly authorized thereto, does hereby affirm, under penalties of perjury, that
this certificate is the act and deed of the Corporation and that the facts
herein stated are true, and accordingly has hereunto set his hand this 12th day
of July, 2005.

 

	
   

  	
  HOVNANIAN ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
  Name:

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
					

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]