Document:

Exhibit 10.2

 

AMENDED AND RESTATED GUARANTY AND SURETYSHIP AGREEMENT

 

THIS AMENDED AND
RESTATED GUARANTY AND SURETYSHIP AGREEMENT (the “Guarantee”) is made and
entered into June 14, 2005, by each of the entities listed on the
signature pages hereto (each a “Guarantor” and collectively, the “Guarantors”),
in favor of PNC BANK, NATIONAL ASSOCIATION, including its successors and
assigns, as administrative agent for the Lenders under the Credit Agreement
described below (the “Agent”).

 

BACKGROUND:

 

In order to induce the
Lenders to make loans to K. Hovnanian Enterprises, Inc., a California
corporation (the “Borrower”), in accordance with that certain Fifth Amended and
Restated Credit Agreement of even date herewith (as it may hereafter from time
to time be amended, restated, modified or supplemented, the “Credit Agreement”)
by and among the Borrower, Hovnanian Enterprises, Inc. (one of the
Guarantors), the Agent, and the Lenders now or hereafter party thereto (the “Lenders”),
each Guarantor hereby unconditionally and irrevocably guarantees and becomes
surety as though it was a primary obligor for the full and timely payment when
due, whether at maturity, by declaration, acceleration or otherwise, of the
principal of and interest and fees on all Obligations (as defined in the Credit
Agreement), both those now in existence and those that shall hereafter be made,
of the Borrower to the Agent and the Lenders under the Credit Agreement and the
Notes issued by the Borrower in connection therewith and any extensions, renewals,
replacements or refundings thereof, and each and every other obligation or
liability (both those now in existence and those that shall hereafter arise and
including, without limitation, all costs and expenses of enforcement and
collection, including reasonable attorney’s fees) of the Borrower to the
Lenders under the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement), and any extensions, renewals, replacements or refundings
thereof (hereinafter referred to as the “Guaranteed Indebtedness”), whether or
not such Guaranteed Indebtedness or any portion thereof shall hereafter be
released or discharged or is for any reason invalid or unenforceable.

 

1.                                       Capitalized terms used herein and not otherwise defined herein shall have such
meanings given to them in the Credit Agreement.

 

2.                                       Each Guarantor agrees to make such full payment forthwith upon demand of
the Agent when the Guaranteed Indebtedness or any portion thereof is due to be
paid by the Borrower to the Lenders, whether at stated maturity, by
declaration, acceleration or otherwise. 
Each Guarantor agrees to make such full payment irrespective of whether
or not any one or more of the following events has occurred:  (i) the Agent has made any demand on the
Borrower or the other Guarantors; (ii) the Agent has taken any action of
any nature against the Borrower or the other Guarantors; (iii) the Agent
has pursued any rights which it has against any other Person who may be liable
for the Guaranteed Indebtedness; (iv) the Agent holds or has resorted to
any security for the Guaranteed Indebtedness; or (v) the Agent has invoked
any other remedy or right it has available with respect to the Guaranteed
Indebtedness.  Each Guarantor further
agrees to make full payment to the Lenders even if circumstances exist which
otherwise constitute a legal or equitable discharge of such Guarantor as surety
or guarantor.

 

 

3.                                       The terms, conditions and provisions of Section 5.1 [Representations
and Warranties] of the Credit Agreement are incorporated herein by reference as
if fully set forth in this Guarantee. 
The Guarantors, jointly and severally, without any further act or
undertaking or the occurrence of any other event, make the representations and
warranties set forth in Section 5.1 [Representations and Warranties] of
the Credit Agreement to the Agent and to each of the Lenders on the date hereof
and on the Closing Date and each date thereafter on which a Loan is made or a
Letter of Credit is issued as provided in and subject to Section 6.1 [First
Loans and Letters of Credit] and Section 6.2 [Each Additional Loan or
Letter of Credit] of the Credit Agreement. 
In addition, each Guarantor warrants to the Agent and the Lenders that: (i) no
other agreement, representation or special condition exists between such
Guarantor and the Agent or any Lender regarding the liability of such Guarantor
hereunder, nor does any understanding exist between such Guarantor and any
Lender that the obligations of such Guarantor hereunder are or will be other
than as set forth herein; and (ii) as of the date hereof, such Guarantor
has no defense whatsoever to any action or proceeding that may be brought to
enforce this Guarantee.

 

4.                                       Until all of the Guaranteed Indebtedness is paid in full, each Guarantor
waives and agrees not to enforce any of the rights of such Guarantor against
the Borrower or the other Guarantors, including, but not limited to: (i) any
right of such Guarantor to be subrogated in whole or in part to any right or
claim with respect to any Guaranteed Indebtedness or any portion thereof to the
Lenders which might otherwise arise from payment by any Guarantor to the
Lenders on the account of the Guaranteed Indebtedness or any portion thereof;
and (ii) any right of any Guarantor to require the marshalling of assets
of the Borrower or the other Guarantors which might otherwise arise from
payment by any Guarantor to the Lenders on account of the Guaranteed
Indebtedness or any portion thereof.  If
any amount shall be paid to any Guarantor in violation of the preceding
sentence, such amount shall be deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Lenders and shall
forthwith be paid to the Agent and the Lenders to be credited and applied upon
the Guaranteed Indebtedness, whether matured or unmatured, in accordance with
the terms of the Credit Agreement.  Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
waivers set forth in this Section are knowingly made in contemplation of
such benefits.

 

5.                                       Each Guarantor waives promptness and diligence by the Lenders with respect
to its rights under the Credit Agreement or any of the other Loan Documents,
including, but not limited to, this Guarantee.

 

6.                                       Each Guarantor waives any and all notice with respect to:  (i) acceptance by the Agent on behalf of
the Lenders of this Guarantee; (ii) the provisions of any note, instrument
or agreement relating to the Guaranteed Indebtedness; and (iii) any
default in connection with the Guaranteed Indebtedness.

 

7.                                       Each Guarantor waives any presentment, demand, notice of dishonor or
nonpayment, protest, and notice of protest in connection with the Guaranteed
Indebtedness.

 

8.                                       Each Guarantor agrees that the Lenders may from time to time and as many
times as the Lenders, in their sole discretion, deem appropriate, do any of the
following without notice to any Guarantor and without adversely affecting the
validity or enforceability of this Guarantee:

 

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(i) release, surrender, exchange, compromise, or
settle the Guaranteed Indebtedness or any portion thereof; (ii) change,
renew, or waive the terms of the Guaranteed Indebtedness or any portion
thereof; (iii) change, renew, or waive the terms, including without
limitation, the rate of interest charged to the Borrower or any Guarantor, of
any note, instrument, or agreement relating to the Guaranteed Indebtedness or
any portion thereof; (iv) grant any extension or indulgence with respect
to the payment to the Lenders of the Guaranteed Indebtedness or any portion
thereof; (v) enter into any agreement of forbearance with respect to the
Guaranteed Indebtedness or any portion thereof; (vi) release, surrender,
exchange or compromise any security held by the Agent on behalf of the Lenders
for the Guaranteed Indebtedness; (vii) release any Person who is a
guarantor or surety or who has agreed to purchase the Guaranteed Indebtedness
or any portion thereof; and (viii) release, surrender, exchange or
compromise any security or lien held by the Agent on behalf of the Lenders for
the liabilities of any Person who is a guarantor or surety for the Guaranteed
Indebtedness or any portion thereof. 
Each Guarantor agrees that the Agent on behalf of the Lenders may do any
of the above as it deems necessary or advisable, in its sole discretion,
without giving any notice to any Guarantor, and that each Guarantor will remain
liable for full payment to the Lenders of the Guaranteed Indebtedness.

 

9.                                       Each Guarantor agrees to be jointly and severally bound by the terms of
this Guarantee and jointly and severally liable under this Guarantee.  As a result of such liability, each Guarantor
acknowledges that the Lenders may, in their sole discretion, elect to enforce
this Guarantee for the total Guaranteed Indebtedness against any Guarantor
without any duty or responsibility to pursue the other Guarantors and that such
an election by the Lenders shall not be a defense to any action the Agent on
behalf of the Lenders may elect to take against any Guarantor.

 

10.                                 If any amount owing hereunder shall have become due and payable (by
acceleration or otherwise), any Lender and any branch, subsidiary or affiliate
of any Lender anywhere in the world shall each have the right, at any time and
from time to time to the fullest extent permitted by Law, in addition to all
other rights and remedies available to it, without prior notice to any
Guarantor, to set-off against and to appropriate and apply to such due and
payable amounts any debt owing to, and any other funds held in any manner for
the account of any Guarantor by any Lender or any such branch, subsidiary or
affiliate including, without limitation, all funds in all deposit accounts (whether
time or demand, general or special, provisionally credited or finally credited,
or otherwise) now or hereafter maintained by any Guarantor with any Lender or
such branch, subsidiary or affiliate. 
Such right shall exist whether or not any Lender shall have given notice
or made any demand hereunder or under any of the Notes or Loan Documents,
whether or not such debt owing to or funds held for the account of any
Guarantor is or are matured or unmatured, and regardless of the existence or
adequacy of any collateral, guarantee or any other security, right or remedy
available to any Lender.  Each Guarantor
hereby consents to and confirms the foregoing arrangements, and confirms each
Lenders rights and each such branch’s, subsidiary’s and affiliate’s rights of
banker’s lien and set-off.

 

11.                                 Each Guarantor recognizes and agrees that the Borrower, after the date
hereof, may incur additional Obligations or other obligations, fees and
expenses to the Lenders under the Credit Agreement, refinance existing Guaranteed
Indebtedness or pay existing Guaranteed Indebtedness and subsequently incur
additional Obligations to the Lenders under the Credit Agreement, and that in
any such transaction, even if such transaction is not now contemplated,

 

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the Lenders will rely in any such case upon this
Guarantee and the enforceability thereof against each Guarantor and that this
Guarantee shall remain in full force and effect with respect to such future
Obligations of the Borrower to the Lenders and such Obligations shall for all
purposes constitute Guaranteed Indebtedness.

 

12.                                 Each Guarantor further agrees that, if at any time all or any part of any
payment, from whomever received, theretofore applied by the Lenders to any of
the Guaranteed Indebtedness is or must be rescinded or returned by the Lenders
for any reason whatsoever including, without limitation, the insolvency,
bankruptcy or reorganization of any Guarantor, such liability shall, for the
purposes of this Guarantee, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by any Lender, and this Guarantee shall
continue to be effective or be reinstated, as the case may be, as to such
liabilities, all as though such application by the Lenders had not been made.

 

13.                                 Each Guarantor agrees that no failure or delay on the part of any Lender
or of the Agent on behalf of the Lenders to exercise any of its rights, powers
or privileges under this Guarantee shall be a waiver of such rights, powers or
privileges or a waiver of any default, nor shall any single or partial exercise
of any of the Agent’s or of any Lenders’ rights, powers or privileges preclude
other or further exercise thereof or the exercise of any other right, power or
privilege or be construed as a waiver of any default.  Each Guarantor further agrees that no waiver
or modification of any rights of the Lenders or of the Agent under this Guarantee
shall be effective unless in writing and signed by each Lender and the
Agent.  Each Guarantor further agrees
that each written waiver shall extend only to the specific instance actually
recited in such written waiver and shall not impair the rights of any Lender or
of the Agent in any other respect.

 

14.                                 Each Guarantor unconditionally agrees to pay all costs and expenses,
including attorney’s fees, incurred by the Agent on behalf of the Lenders in
enforcing this Guarantee against any Guarantor.

 

15.                                 Each Guarantor agrees that this Guarantee and the rights and obligations
of the parties hereto shall for all purposes be governed by and construed and
enforced in accordance with the substantive law of the State of New Jersey
without giving effect to its principles of conflict of laws.

 

16.                                 Each Guarantor acknowledges that in addition to binding itself to this
Guarantee, at the time of execution of this Guarantee the Agent offered to such
Guarantor a copy of this Guarantee in the form in which it was executed and
that by acknowledging this fact such Guarantor may not later be able to claim
that a copy of the Guarantee was not received by it.

 

17.                                 Each Guarantor agrees that this Guarantee shall be binding upon each
Guarantor and its successors and assigns; provided, however, that
no Guarantor may assign or transfer any of its rights and obligations hereunder
or any interest herein.  Each Guarantor
further agrees that (i) this Guarantee is freely assignable and
transferable by the Lenders in connection with any assignment or transfer of
the Guaranteed Indebtedness and (ii) this Guarantee shall inure to the
benefit of the Lenders, and their successors and assigns.

 

4

 

18.                                 Each Guarantor agrees that if any Guarantor fails to perform any covenant
or agreement hereunder or if there occurs and continues to exist an Event of
Default under the Credit Agreement, all or any part of the Guaranteed
Indebtedness may be declared to be forthwith due and payable and, in the case
of an Event of Default described in Section 8.1.14 [Involuntary
Proceedings] or Section 8.1.15 [Voluntary Proceedings] of the Credit
Agreement, the Guaranteed Indebtedness shall be immediately due and payable, in
any case without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived.

 

19.                                 Each Guarantor agrees that the enumeration of the Lenders’ rights and
remedies set forth in this Guarantee is not intended to be exhaustive and the
exercise by any of the Lenders of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
shall be in addition to any other right or remedy given hereunder or under any
other agreement among the parties to the Loan Documents or which may now or
hereafter exist at law or in equity or by suit or otherwise.

 

20.                                 Each Guarantor agrees that all notices, statements, requests, demands and
other communications under this Guarantee shall be given to each of the
Guarantors at the address set forth below their respective names on the
signature page hereof in the manner provided in Section 10.6
[Notices] of the Credit Agreement.

 

21.                                 (a)                                  Each Guarantor agrees that the provisions of this Guarantee are severable,
and in an action or proceeding involving any state or federal bankruptcy,
insolvency or other law affecting the rights of creditors generally:

 

(i)                                     if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Guarantee in any jurisdiction.

 

(ii)                                  if this
Guarantee would be held or determined to be void, invalid or unenforceable on
account of the amount of a Guarantor’s aggregate liability under this
Guarantee, then, notwithstanding any other provision of this Guarantee to the
contrary, the aggregate amount of such liability shall, without any further
action by the Lenders, such Guarantor or any other Person, be automatically
limited and reduced to the highest amount which is valid and enforceable as
determined in such action or proceeding, which (without limiting the generality
of the foregoing) may be an amount which is not greater than the greater of:

 

(A)                              the fair
consideration actually received by such Guarantor under the terms of and as a
result of the Loan Documents, including, without limiting the generality of the
foregoing, and to the extent not inconsistent with applicable federal and state
laws affecting the enforceability of guarantees, distributions or advances made
to such Guarantor with the proceeds of any credit extended under the Loan
Documents in exchange for its guaranty of the Guaranteed Indebtedness, or

 

(B)                                the excess
of (1) the amount of the fair saleable value of the assets of such
Guarantor as of the date of this Guarantee as determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors as in

 

5

 

effect on the date thereof over (2) the
amount of all liabilities of such Guarantor as of the date of this Guarantee,
also as determined on the basis of applicable federal and state laws governing
the insolvency of debtors as in effect on the date thereof.

 

(b)                                 If the
guarantee by any one or more Guarantors of the Guaranteed Indebtedness is held
or determined to be void, invalid or unenforceable, in whole or in part, such
holding or determination shall not impair or affect:

 

(i)                                     the validity
and enforceability of the guarantee hereunder by any other Guarantor, which
shall continue in full force and effect in accordance with its terms; or

 

(ii)                                  the validity
and enforceability of any clause or provision not so held to be void, invalid
or unenforceable.

 

22.                                 EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS GUARANTEE.  EACH GUARANTOR (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, AND EXECUTION AND DELIVERY HEREOF BY EACH
GUARANTOR, AND (ii) ACKNOWLEDGES THAT THE ENTERING INTO OF THE CREDIT
AGREEMENT BY THE LENDERS HAS BEEN INDUCED BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS SET FORTH IN THIS SECTION.

 

23.                                 Each Guarantor (i) hereby irrevocably submits to the nonexclusive
jurisdiction of the Superior Court of New Jersey, Law Division, Middlesex
County, or any successor to said court, and to the nonexclusive jurisdiction of
the United States District Court for the District of New Jersey, or any
successor to said court (hereinafter referred to as the “New Jersey Courts”)
for purposes of any suit, action or other proceeding which relates to this
Guarantee or any other Loan Document, (ii) to the extent permitted by
applicable Law, hereby waives and agrees not to assert by way of motion, as a
defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of the New Jersey Courts; that such
suit, action or proceeding is brought in an inconvenient forum; that the venue
of such suit, action or proceeding is improper; or that this Guarantee or any
Loan Document may not be enforced in or by the New Jersey Courts, (iii) hereby
agrees not to seek, and hereby waives, any collateral review by any other
court, which may be called upon to enforce the judgment of any of the New
Jersey Courts, of the merits of any such suit, action or proceeding or the
jurisdiction of the New Jersey Courts, and (iv) waives personal service of
any and all process upon it and consents that all such service of process be
made by certified or registered mail addressed as provided in Section 20
hereof and service so made shall be deemed to be completed upon actual receipt
thereof.  Nothing herein shall limit any
Lenders right to bring any suit, action or other proceeding against any
Guarantor or any of any Guarantor’s assets or to serve process on any Guarantor
by any means authorized by Law.

 

24.                                 Each Guarantor waives all defenses based on suretyship not specifically
waived.

 

6

 

25.                                 At any time when the
Borrower wishes to cause the Lenders to release a Guarantor from its
obligations under this Guarantee (whether directly or in connection with the
designation of a Restricted Subsidiary as a Non-Restricted Person), the consent
of the Lenders shall be required as described below and shall be subject to the
other provisions of this Section 25.

 

(a)                                  For the release of (i) any
Guarantor whose assets are principally comprised of residential or commercial
property which is leased or held for the purposes of leasing to unaffiliated
third parties or (ii) any Guarantor in which any Loan Party (or Loan
Parties in the aggregate) has, at the time of such release, a Subsidiary
Investment less than $1,000,000 or (iii) Corporate Office Subsidiary
incident to it becoming an Non-Restricted Person or (iv) any Guarantor at
the time such Guarantor enters into a newly-formed Joint Venture with a person
which is not an Affiliate of the Loan Parties and transfers all or a
substantial portion of its assets to such Joint Venture provided that such
Guarantor is a Non-Restricted Person (or simultaneously with Borrower’s request
for such release the Borrower has designated such Guarantor as a “Non-Restricted
Person” in compliance with Section 2.11.2 of the Credit Agreement), no
consent of the Lenders shall be required and such request of the Borrower shall
be granted absent an Event of Default or Potential Default, effective on the
date specified by the Borrower which shall not be earlier than five (5) Business
Days after the receipt by the Agent of such request;

 

(b)                                 For the release of any
Guarantor (not described in clause 26(a)(i) hereof) in which any Loan
Party (or Loan Parties in the aggregate) has, at the time of such release, a
Subsidiary Investment greater than or equal to $1,000,000 and less than
$5,000,000 (except Corporate Office Subsidiary, if otherwise applicable), the
consent of Required Lenders shall be required; and

 

(c)                                  For the release of
Hovnanian or any Guarantor (not described in clause 26(a)(i) hereof) in
which any Loan Party (or Loan Parties in the aggregate) has, at the time of
such release, a Subsidiary Investment greater than or equal to $5,000,000
(except Corporate Office Subsidiary, if otherwise applicable), the consent of
100% of the Lenders shall be required.

 

(d)                                 The designation of a
Person as a Non-Restricted Person for any reason shall not itself constitute a
release of any Guarantor and any such release of such Person shall be in
accordance with Section 2.11 of the Credit Agreement.

 

26.                                 All of the terms,
conditions and provisions of Sections 7.1 [Affirmative Covenants], Section 7.2
[Negative Covenants] and Section 7.3 [Reporting Requirements] of the
Credit Agreement are incorporated herein by reference as if fully set forth
herein.  Each of the Guarantors, jointly
and severally, without any further act or undertaking or the occurrence of any
other event, covenant and agree that until payment in full of the Loans,
Reimbursement Obligations and Letter of Credit Borrowings and interest thereon,
expiration or termination of all Letters of Credit, satisfaction of all of the
Loan Parties’ other Obligations under the Credit Agreement and the satisfaction
of the Guaranteed Indebtedness under this Guarantee and termination of the
Commitments, they shall comply with the affirmative covenants set forth in Section 7.1
[Affirmative Covenants] of the Credit Agreement, comply with the negative
covenants set forth in Section 7.2 [Negative Covenants] of the Credit
Agreement and comply

 

7

 

with Section 7.3 [Reporting Requirements] of the Credit
Agreement.  In particular, each of the
Guarantors shall not own or create directly or indirectly any Subsidiaries
other than (i) any Subsidiary which has joined this Guarantee as a
Guarantor on the Closing Date, (ii) any Subsidiary formed or acquired
after the Closing Date which joins this Guarantee as a Guarantor pursuant to Section 27
below or (iii) any Non-Restricted Person. 
To the extent that the obligations set forth in Section 7.3
[Reporting Requirements] are obligations which, by their nature, can only be
performed and/or satisfied by the Borrower and/or by Hovnanian, each of the
Guarantors shall fully cooperate with the Borrower and with Hovnanian in their
respective efforts to comply with their respective obligations set forth
therein.

 

27.                                 Any Subsidiary of
Hovnanian which is required to join this Guarantee as a Guarantor pursuant to Section 26
hereof or which is to become a Restricted Subsidiary shall execute and deliver
to the Agent (i) a Guarantor Joinder pursuant to which it shall join as a
Guarantor this Guarantee; and (ii) at the request of the Agent, documents
in the forms described in Section 6.1 [First Loans and Letters of Credit]
of the Credit Agreement, modified as appropriate to relate to such new
Guarantor.  Such new Guarantor shall
deliver such Guarantor Joinder and any related documents that the Agent may
reasonably request to the Agent after the formation thereof and its designation
as a Restricted Subsidiary, and such Subsidiary shall not be a Restricted
Subsidiary until the delivery and effectiveness of the items required herein.

 

28.                                 All of the representations
and warranties of the Guarantors contained herein (either directly or
indirectly) or made in connection herewith shall survive the making of Loans
and issuance of Letters of Credit and shall not be waived by the execution and
delivery of the Credit Agreement by any other party, including the Agent and
the Lenders, any investigation by the Agent or the Lenders, the making of
Loans, issuance of Letters of Credit, or payment in full of the Loans.  All covenants and agreements of the
Guarantors contained in this Guarantee shall continue in full force and effect
from and after the date hereof so long as the Borrower may borrow or request
Letters of Credit under the Credit Agreement, and until termination of the
Commitments and payment in full of the Loans and expiration or termination of
all Letters of Credit.

 

29.                                 Notwithstanding the
other provisions contained herein, at such time as the Guaranteed Indebtedness
shall have been paid in full, this Guarantee and all obligations of the Agent
and each Guarantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party.  At the request and sole expense of the
Guarantors, following any such termination, the Agent shall execute and deliver
to the Guarantors such documents as the Guarantors shall reasonably request to
evidence such termination.

 

[SIGNATURES
APPEAR ON FOLLOWING PAGE]

 

8

 

[SIGNATURE PAGE 1 OF 35 TO THE GUARANTY AGREEMENT]

 

IN WITNESS WHEREOF, each
Guarantor and the Agent, intending to be legally bound, have executed this
Guarantee on the date first above written.

 

	
   

  	
  HOVNANIAN
  ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
  Name:

  	
  J. Larry Sorsby

  
	
   

  	
  Title:

  	
  Executive Vice President
  and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARROW PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN DEVELOPMENTS OF FLORIDA,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOV INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOV IP, II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOV IP, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN ACQUISITIONS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BALLANTRAE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BERNARDS IV, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BRANCHBURG III, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BRIDGEPORT, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  BRIDGEWATER VI, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BURLINGTON III, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT BURLINGTON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CALABRIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  CARMEL DEL MAR, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CASTILE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CHAPARRAL, INC.

  

 

 

[SIGNATURE
PAGE 2 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT CLARKSTOWN, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CRESTLINE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT DOMINGUEZ HILLS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT EAST WHITELAND I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT FREEHOLD TOWNSHIP I,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HERSHEY’S MILL, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HACKETTSTOWN, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HOPEWELL IV, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HOPEWELL VI, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HOWELL TOWNSHIP,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT KINGS GRANT I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT KLOCKNER FARMS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LA TERRAZA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LA TROVATA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LAKEWOOD, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LOWER SAUCON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MAHWAH II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MAHWAH V, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  MAHWAH VI, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MAHWAH VII, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MANALAPAN, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MARLBORO II, INC.

  

 

 

[SIGNATURE
PAGE 3 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT MARLBORO TOWNSHIP

  IV, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT METRO DC SOUTH, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MONTCLAIR NJ, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MONTGOMERY I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MONROE II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT NORTHERN

  WESTCHESTER, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT NORTHLAKE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT OCEAN TOWNSHIP, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT OCEAN WALK, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  PERKIOMEN I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PERKIOMEN II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PLAINSBORO III, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PRINCETON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT RANCHO CRISTIANITOS,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT RESERVOIR RIDGE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SAN SEVAINE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SARATOGA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SAWMILL, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SCOTCH PLAINS II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SCOTCH PLAINS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  SMITHVILLE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SOUTH BRUNSWICK III,

  INC.

  

 

 

[SIGNATURE
PAGE 4 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT SOUTH BRUNSWICK V,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT STONE CANYON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT STONY POINT, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SYCAMORE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT TANNERY HILL, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THE BLUFF, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THE CEDARS, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THORNBURY, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  TIERRASANTA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT TUXEDO, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UNION TOWNSHIP I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UPPER FREEHOLD

  TOWNSHIP I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UPPER MAKEFIELD I, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT VAIL RANCH, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WALL TOWNSHIP VI, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WALL TOWNSHIP VIII,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WASHINGTONVILLE,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WAYNE III, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WAYNE V, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WILDROSE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES NORTHEAST,

  INC.

  

 

 

[SIGNATURE
PAGE 5 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN COMPANIES OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF

  MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF METRO

  WASHINGTON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF NEW YORK,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF NORTH

  CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF

  PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF SOUTHERN

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN CONSTRUCTION II, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN CONSTRUCTION III, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN CONSTRUCTION

  MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENT OF METRO

  WASHINGTON, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF

  ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF D.C.,

  INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF

  DELAWARE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF

  ILLINOIS, INC.

  

 

 

[SIGNATURE
PAGE 6 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF

  MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN DEVELOPMENTS OF METRO

  WASHINGTON, 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 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 WEST

  VIRGINIA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN EQUITIES, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN FORECAST HOMES, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES OF NORTH

  CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES OF VIRGINIA, INC.

  

 

 

[SIGNATURE
PAGE 7 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN INVESTMENT PROPERTIES

  OF NEW JERSEY, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PA REAL ESTATE, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PORT IMPERIAL URBAN

  RENEWAL, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PROPERTIES OF NEWARK

  URBAN RENEWAL CORPORATION, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PROPERTIES OF NORTH

  BRUNSWICK V, INC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PROPERTIES OF WALL, INC.

  
	
   

  	
   

  
	
   

  	
  KHC ACQUISITION, INC.

  
	
   

  	
   

  
	
   

  	
  LANDARAMA, INC.

  
	
   

  	
   

  
	
   

  	
  M&M AT LONG BRANCH, INC.

  
	
   

  	
   

  
	
   

  	
  MATZEL & MUMFORD OF DELAWARE, INC.

  
	
   

  	
   

  
	
   

  	
  MCNJ, INC.

  
	
   

  	
   

  
	
   

  	
  PINE BROOK COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  REFLECTIONS OF YOU INTERIORS, INC.

  
	
   

  	
   

  
	
   

  	
  SEABROOK ACCUMULATION

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  STONEBROOK HOMES, INC.

  
	
   

  	
   

  
	
   

  	
  THE MATZEL & MUMFORD ORGANIZATION,

  INC.

  
	
   

  	
   

  
	
   

  	
  WASHINGTON HOMES, INC.

  
	
   

  	
   

  
	
   

  	
  WESTMINSTER HOMES OF TENNESSEE, INC.

  
	
   

  	
   

  
	
   

  	
  WESTMINSTER HOMES, INC.

  
	
   

  	
   

  
	
   

  	
  WH LAND I, INC.

  

 

 

[SIGNATURE
PAGE 8 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  WH PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
  On behalf of, and as Executive Vice

  President and Chief Financial Officer of

  each of the foregoing corporations

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES OF D.C., L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  K. Hovnanian Developments of
  D.C., Inc.,

  as the sole member of the foregoing limited

  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP OF

  MARYLAND, L.L.C.

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP OF

  NORTH CAROLINA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT KING FARM, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT RODERUCK. L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WILLOW BROOK, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES OF METRO D.C.

  NORTH, L.L.C.

  
									

 

 

[SIGNATURE
PAGE 9 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  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 ST.

  MARGARETS LANDING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  RIDGEMORE UTILITY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  WASHINGTON HOMES AT COLUMBIA TOWN

  CENTER, L.L.C.

  
	
   

  	
   

  
	
   

  	
  WESTMINSTER HOMES OF ALABAMA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  WESTMINSTER HOMES OF MISSISSIPPI,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  WOODLAND LAKES CONDOS @ BOWIE

  NEWTOWN, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of Maryland,

  Inc., as the sole member of each of the

  foregoing limited liability companies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   /s/
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  DULLES COPPERMINE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP OF

  VIRGINIA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LAKE RIDGE CROSSING, L.L.C.

  
	
   

  	
   

  
	
   

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

  
							

 

 

[SIGNATURE
PAGE 10 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN FOUR SEASONS AT

  HISTORIC VIRGINIA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES AT CAMERON

  STATION, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES AT LAUREL

  HIGHLANDS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT

  ASHBURN VILLAGE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT VINT

  HILL, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of Metro

  Washington, Inc., as the sole member of

  each of the foregoing limited liability

  companies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  EDISON CONTRACT SERVICES, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  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
  BRIDGEWATER I, L.L.C

  
	
   

  	
   

  
	
   

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

  
							

 

 

[SIGNATURE
PAGE 11 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CHESTERFIELD, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CLIFTON, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CRANBURY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  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 EDGEWATER II, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT EDGEWATER, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT EGG HARBOR

  TOWNSHIP, 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 FREEHOLD TOWNSHIP,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT GREAT NOTCH, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HACKETTSTOWN II,

  L.L.C.

  

 

 

[SIGNATURE
PAGE 12 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  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 JACKSON I, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT JACKSON, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT JERSEY CITY IV, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT JERSEY CITY V URBAN

  RENEWAL COMPANY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LAFAYETTE ESTATES,

  L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LITTLE EGG HARBOR

  TOWNSHIP II, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LITTLE EGG HARBOR

  CONTRACTORS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  LITTLE EGG HARBOR,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LONG BRANCH I, 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 MARLBORO TOWNSHIP

  IX, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MARLBORO TOWNSHIP

  V, L.L.C.

  

 

 

[SIGNATURE
PAGE 13 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  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 MENDHAM TOWNSHIP,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MIDDLE TOWNSHIP,

  L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  MIDDLETOWN, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  MONROE IV, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  MONTVALE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MT. OLIVE TOWNSHIP,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT NORTH BERGEN II, 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,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT NORTH HALEDON, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT NORTH WILDWOOD,

  L.L.C.

  

 

 

[SIGNATURE
PAGE 14 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT NORTHFIELD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT OLD BRIDGE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PARAMUS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PARSIPPANY-TROY

  HILLS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PITTSGROVE, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SOMERS POINT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SOUTH BRUNSWICK,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SPRINGFIELD, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UNION TOWNSHIP II,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UPPER FREEHOLD

  TOWNSHIP II, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT UPPER FREEHOLD

  TOWNSHIP III, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WANAQUE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WARREN TOWNSHIP,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WASHINGTON, L.L.C.

  

 

 

[SIGNATURE
PAGE 15 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT WAYNE IX, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WAYNE VIII, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WEST MILFORD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WEST WINDSOR, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WOODHILL ESTATES,

  L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN CENTRAL ACQUISITIONS,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN INVESTMENTS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  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 SHORE ACQUISITIONS,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN SOUTHERN NEW JERSEY,

  L.LC.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN SOUTH JERSEY

  ACQUISITIONS, L.L.C.K. HOVNANIAN T&C

  INVESTMENT, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S PRIVATE HOME

  PORTFOLIO, L.L.C.

  

 

 

[SIGNATURE
PAGE 16 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  KHIP, L.L.C.By:

  	
   

  	
  K. Hovnanian Holdings NJ,

  	 

	
   

  	
  L.L.C., as the sole member of each of the
  foregoing

  limited liability companies.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  K. Hovnanian Developments of New

  Jersey, Inc., as member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  	
    /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  K. Hovnanian Developments of New

  Jersey II, Inc., as member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  	
   /s/
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP OF

  CALIFORNIA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT 4S II, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT 4S, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT ACQUA VISTA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT ALISO, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT ARBOR HEIGHTS, L.L.C.

  
																		

 

 

[SIGNATURE
PAGE 17 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT BELLA LAGO, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  BRIDLEWOOD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CAPISTRANO, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  CARMEL VILLAGE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT CITY IN THE HILLS,

  L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT EASTLAKE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT ENCINITAS RANCH,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT GASLAMP SQUARE,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT HIGHWATER, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT LA COSTA, L.L.C

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  LA HABRA KNOLLS,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  MENIFEE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT MOSAIC, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT OLDE ORCHARD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT PACIFIC BLUFFS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  PARK LANE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT RANCHO SANTA

  MARGARITA, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  RIVERBEND, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT ROWLAND HEIGHTS,

  L.L.C.

  

 

 

[SIGNATURE PAGE 18 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN AT SHELF COMPANY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  SKYE ISLE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT SUNSETS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THE CROSBY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THE GABLES, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THE PRESERVE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT THOMPSON RANCH,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT TRAIL RIDGE, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WINCHESTER, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN T&C MANAGEMENT CO.,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT

  BAKERSFIELD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT

  HEMET, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT

  MENIFEE VALLEY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN’S FOUR SEASONS AT PALM

  SPRINGS, L.L.C.

  

 

 

[SIGNATURE PAGE 19 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of California,

  Inc., as the sole member of each of the

  foregoing limited liability companies.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOLDINGS NJ, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of New Jersey,

  Inc., as member of each of the foregoing

  limited liability companies.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of New Jersey

  II, Inc., as member of each of the foregoing

  limited liability companies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest: 

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  
											

 

 

[SIGNATURE PAGE 20 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  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 NORTHAMPTON. L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT RAPHO, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT
  UPPER UWCHLAN II,

  L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN AT WEST BRADFORD, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES OF PENNSYLVANIA,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN PENNSYLVANIA

  ACQUISITIONS, L.L.C.

  

 

 

[SIGNATURE PAGE 21 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN SUMMIT HOMES OF

  PENNSYLVANIA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Companies of Pennsylvania,

  Inc., as the sole member of each of the

  foregoing limited liability companies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  HOVNANIAN LAND INVESTMENT GROUP OF

  FLORIDA, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES AT CAMP SPRINGS,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES AT FOREST RUN,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN HOMES AT RENAISSANCE

  PLAZA, L.L.C.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  K. HOVNANIAN WINDWARD HOMES, L.L.C.

  

 

 

[SIGNATURE
PAGE 22 OF 35 TO THE GUARANTY AGREEMENT]

 

	
   

  	
  K. HOVNANIAN HOMES OF MARYLAND,

  L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Hovnanian Developments of
  Florida, Inc., as

  the sole member of each of the foregoing

  limited liability companies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K. HOVNANIAN COMPANIES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Enterprises, Inc., as
  member

  of the foregoing limited liability company.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K. Hovnanian Developments of New Jersey

  II, Inc., as member of each of the foregoing

  limited liability companies.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  J. Larry Sorsby

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Peter S. Reinhart

  	
   

  
	
   

  	
   

  	
  Peter S. Reinhart

  
	
   

  	
   

  	
  SecretaryEXHIBIT 10.1

 

PROMOTION AGREEMENT

 

This Promotion Agreement (this “Agreement”) is entered into and made effective as of June 14, 2005, by and among SLS International, Inc., a Delaware corporation (“SLS”), JMBP, Inc. (“JMBP”), a California corporation, and Mark Burnett (“Burnett” and, together with SLS and JMBP, the “Parties”).  In consideration of the mutual agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

	
            1.
 	
                 
 	
            Term of 
 Agreement:
 	
                 
 	
            Unless otherwise specifically stated with respect to any covenant or agreement set forth herein, this Agreement, and the covenants and obligations set forth herein, shall be for a three (3) year term beginning on the date hereof (the "Term").
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            2.
 	
             
 	
            Product 
 Placements:
 	
             
 	
            (a)  JMBP and Burnett will use their respective commercially reasonable good-faith efforts, on an ongoing basis and from time to time during the Term, to identify opportunities to cause loudspeakers, headphones, amplifiers, home-theater-in-a-box systems and tabletop home entertainment systems (collectively, the “A/V Products”) under SLS’ brand (as so branded, the “SLS Products”) to be placed and/or otherwise used on the set or other shooting location in connection with television productions involving JMBP, Burnett or any of their respective affiliates (each, a "Product Placement"), including, without limitation,
by using their respective commercially reasonable good-faith efforts to effect a Product Placement on the television production “Rock Star” that is expected to air in the fall of 2005.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (b)  SLS will reasonably cooperate with JMBP's and Burnett's efforts to identify and execute Product Placement opportunities under this Section 2.  No Product Placement shall occur unless a separate Product Placement agreement is entered into by the Parties.  The Parties shall use commercially reasonable good-faith efforts to reach agreement with respect to each Product Placement provided that the related Product Placement agreement shall be on terms in accordance Sections 7 and 13.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

 

 

 

 

	
            3.
 	
             
 	
            Product 
 Integrations:
 	
             
 	
            (a)  JMBP and Burnett will use their respective commercially reasonable good-faith efforts to discover, create and execute a product integration whereby an SLS Product or SLS Products will be integrated as a part of the central premise of an episode of a Prime-Time Network Show (as defined below) in which JMBP or Burnett is involved (a "Product Integration").  In addition, JMBP and Burnett will consider in good faith such other Product Integration ideas as SLS may propose from time to time during the Term.  “Prime-Time Network Show” shall mean a primetime television production on any of the ABC, NBC, CBS and FOX television networks.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (b)  The Product Integration that JMBP and Burnett shall make commercially reasonable good-faith efforts to create and execute shall involve the SLS “Q-Line Qube System” (or such other SLS Product as may be mutually agreed by the Parties).  In the case of a Product Integration involving the Q-Line Qube System, JMBP and Burnett will use their commercially reasonable good-faith efforts to schedule such Product Integration to be initially aired to coincide with SLS’ launch of the “Q-Line Qube System” product, which is currently expected to be launched in the first quarter of 2006.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (c)  In connection with each Product Integration:
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            • the specific SLS Products to be used in connection therewith shall be determined mutually by the Parties;
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            • the Parties shall mutually select the Prime-Time Network Show in connection therewith; and
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            • SLS will make Quincy Jones (or another SLS spokesperson or representative subject to approval by JMBP or Burnett, such approval not to be unreasonably withheld) available to appear (at no additional cost to JMBP or Burnett except as contemplated by Section 3(e)) in connection therewith.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (d)  SLS will reasonably cooperate with JMBP's and Burnett's efforts to identify and execute Product Integration opportunities under this Section 3.  No Product Integration shall occur unless a separate Product Integration agreement is entered into by the Parties.  The Parties shall use commercially reasonable good-faith efforts to reach agreement with respect to each such Product Integration provided that the related Product Integration agreement shall be on terms in accordance Sections 7 and 13.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 2 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (e)  In exchange for each Product Integration, SLS will pay JMBP four percent (4%) of the total Net Sales of the SLS Products included in the Product Integration and any other SLS Products appearing or depicted in the program featuring the Product Integration during the one (1) year period beginning on the initial airing date of the related episode (each, a “PI Royalty”).  "Net Sales" shall mean the aggregate revenues realized by SLS as a result of the sales in question, less deductions for (i) trade discounts, shipping charges, returns and allowances actually granted and (ii) any and all royalties and other fees, expenses and costs payable to Quincy Jones and/or, as applicable, any other talent participating in a
Product Integration; provided, however, that the foregoing deductions shall not collectively exceed ten percent (10%) of such aggregate revenues.  Net Sales shall be determined without deducting income taxes, franchise taxes, uncollectible accounts or financial discounts.  Except as specifically referenced above, no costs incurred in the manufacture, sale, distribution, advertising or exploitation of such products shall be deducted in the computation of Net Sales.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            4.
 	
             
 	
            Licenses In 
 Connection with 
 Promotional
 Activities:
 	
             
 	
            (a)  In connection with each Product Placement and Product Integration, JMBP and SLS shall use their respective commercially reasonable good-faith efforts to enter into a license agreement whereby JMBP will grant SLS worldwide, non-exclusive, non-transferable licenses (each, a “License”) to use various trademarks and phrases relating to JMBP productions associated with any Product Placement or Product Integration, each such license to permit uses in connection with the sale, marketing and promotion of certain SLS Products to be mutually agreed upon by JMBP and SLS, as follows: (i) on packaging (whether on the box or on materials provided therein) of SLS Products; and (ii) in advertising (whether print, billboard, radio, television, theatrical, website-based or
otherwise) relating to SLS Products.  Any such license(s) will be for a term of one (1) year or less beginning on the date on which the episode associated with the related Product Integration or Product Placement is initially aired.  Any advertising on television or radio shall be subject to the prior approval of JMBP's distributors and the networks exhibiting the productions related to the applicable licensed phrases or trademarks, which approval JMBP will request in good faith.  The licenses will bear no royalties for uses in advertising which displays or depicts the SLS brand or any related brand but does not display, depict or advertise a particular SLS Product, but will bear a royalty of two percent (2%) of the Net Sales of each unit of SLS Product sold with packaging containing such licensed phrases (the “License Royalty”); provided, however, that no License Royalty will be paid with respect to
any unit for which a PI Royalty has been or is to be paid.  With respect to any license for use in advertisements displaying, depicting or advertising particular SLS Products, the Parties will use their respective commercially reasonable good-faith efforts to negotiate license arrangements that provide benefits commensurate with the two percent (2% ) royalty arrangement described above, provided, however, that in no event shall additional royalties be payable with respect to any unit of SLS Product for which either a PI Royalty or a License Royalty has been or is to be paid.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

- 3 -

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (b)  The specific phrases to be included in each license shall be mutually agreed upon by JMBP and SLS as set forth in the applicable License agreement.  JMBP shall have approval rights over any proposed use by SLS of any trademarks and phrases and the right to control any such use.  Any such License agreement shall be on terms in accordance with Sections 7 and 13. 
 	
             

	
             
 	
             
 	
             
 	
             
 	
             
 	
             

	
            5.
 	
             
 	
            Consulting 
 Services.
 	
             
 	
            (a)  Burnett will act as an advisor and consultant to SLS whereby Burnett will, on an ongoing basis from time to time throughout the Term, use his commercially reasonable good-faith efforts to promote SLS and the SLS Products in connection with television and related opportunities.  Such services include (i) advising SLS with respect to Product Placement and Product Integration matters, (ii) making introductions on behalf of SLS to celebrities, captains of industry, business partners of JMBP and Burnett, certain media entities, television networks and producers, retailers and related entities and (iii) personally recommending SLS Products as reasonable opportunities to do so may arise from time to time.  Burnett shall use his reasonable discretion in determining the prospects and strategies in promoting SLS and the SLS
Products as contemplated by this Section 5.  
 	
             

	
             
 	
             
 	
             
 	
             
 	
             
 	
             

	
             
 	
             
 	
             
 	
             
 	
            (b)  In connection with Burnett’s obligations under Section 5(a), Burnett shall make himself reasonably available for face-to-face meetings with a representative of SLS (which representative shall be reasonably selected by SLS) at least once per fiscal quarter during the Term for purposes of collaborating as to prospects for promoting SLS and SLS Products as contemplated by this Section 5, provided, however, that the dates, times and locations of such meetings shall be consistent with Burnett’s schedule and availability (but otherwise subject to reasonable advance notice and availability of SLS and its appointed representatives) and SLS shall, if reasonably required by Burnett’s schedule, travel to Burnett’s location for such meetings.
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             

	
             
 	
             
 	
             
 	
             
 	
            (c)  Burnett shall not, and is not authorized to, negotiate the terms and conditions of any agreements with any third parties on SLS’ behalf, including, without limitation, with respect to the license of any intellectual property or the payment for materials, products or services.
 	
             

	
             
 	
             
 	
             
 	
             
 	
             
 	
             

	
            6.
 	
             
 	
            Exclusivity.
 	
             
 	
            (a)  During the Term, Burnett shall not act as a paid personal spokesman with respect to any A/V Products offered by any Competitor or CE Manufacturer (each as defined below).
 	
             

	
             
 	
             
 	
             
 	
             
 	
             
 	
             

 

 

- 4 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (b)  During the Term, neither JMBP nor Burnett shall feature or display any A/V Product offered by any Competitor or CE Manufacturer in an unpaid Product Placement in a program for which JMBP (or another production entity controlled by Burnett) is the producer of, or controls, the production of such program, unless SLS is first offered, by notice in accordance with Section 18, the exclusive right to provide such A/V Product for such Product Placement.  If SLS declines to provide the requested A/V product for any such Product Placement (or fails to accept the offer within two (2) days after receipt of such notice), then JMBP and Burnett may instead feature or display the applicable A/V Product offered by any Competitor or CE Manufacturer.  For purposes of this Section 6(b) only, JMBP may give notice to SLS via e-mail to an
e-mail address or addresses supplied by SLS for purposes of such notice.  “Competitor” means any individual or entity primarily engaged in the business of manufacturing or distributing loudspeakers (including, without limitation, Bose, JBL, M&K, Infinity, Paradigm and B&W).  “CE Manufacturer” means any manufacturer of consumer electronics products, including, without limitation, audio/video products.  Notwithstanding anything to the contrary herein, the exclusivity provisions contained in this Section 6(b) shall not apply to any series which is in pre-production as of the date hereof (including "Rock Star" and "Apprentice IV").
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (c)  As to each Product Integration pursuant to Section 3, JMBP shall not produce for airing, during the season of such Prime-Time Network Show in which the SLS Product has been or is to be integrated, any episode of the associated Prime-Time Network Show which includes a product integration of a third-party’s A/V Product which directly competes with such SLS Product.  For the sake of clarity, (i) any loudspeaker shall be deemed a product which directly competes with any SLS-branded loudspeaker, and (ii) this Section 6(c) shall not apply to any program where JMBP (or another production entity controlled by Burnett) does not produce or control the production thereof.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            7.
 	
             
 	
            Creative 
 Control; Access 
 Rights.
 	
             
 	
            Except as provided otherwise in Sections 2 and 3, JMBP and Burnett will retain full creative control over all productions involving each Product Placement and Product Integration, including control over all aspects of the Product Placement and Product Integration, provided, however, that SLS will have the right to have a designee reasonably acceptable to JMBP or Burnett at or around the shooting location of each production relating to any Product Placement or Product Integration.  To the extent practicable, JMBP will provide reasonable advance notice to SLS of the dates, times and locations of all such productions.
 

 

 

- 5 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 
	
            8.
 	
             
 	
            Indemnification;
 Remedies.
 	
             
 	
            JMBP shall indemnify and hold harmless, and shall defend and protect, SLS and its stockholders, officers, directors, employees, agents and representatives (collectively, the “SLS Indemnified Parties”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages and expenses (regardless of whether such indemnified party is a party to the action for which the indemnification hereunder applies), including reasonable attorneys’ fees and disbursements (the “Indemnified Losses”) incurred by any SLS Indemnified Party as a result of, or arising out of, or relating to any action, claim, cause of action or suit by any third party alleging that such
third party is entitled to (a) any of the consideration provided or to be provided to JMBP or Burnett hereunder or (b) any other payment or benefit in connection with this Agreement or any of the transactions contemplated hereby based on any commitment or obligation by JMBP or Burnett to such third-party.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            SLS shall indemnify and hold harmless, and shall defend and protect, JMBP and Burnett and, as applicable, their stockholders, officers, directors, employees, agents and representatives (collectively, the “JMBP/Burnett Indemnified Parties”) from and against any and all Indemnified Losses incurred by any JMBP/Burnett Indemnified Party as a result of, or arising out of, or relating to any action, claim, cause of action or suit by any third party alleging that such third party is entitled to (a) any of the consideration provided or to be provided to SLS hereunder or (b) any other payment or benefit in connection with this Agreement or any of the transactions contemplated hereby based on any commitment or obligation by SLS to such third-party.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            To the extent that the foregoing undertakings by any indemnifying party may be unenforceable for any reason, the indemnifying party shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Losses which is permissible under applicable law.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            SLS waives any right to injunctive relief as a remedy for any breach of this Agreement.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            9.
 	
             
 	
            Audit Rights
 	
             
 	
            (a)  All payments in connection with any amounts owing hereunder will be made within thirty (30) days after the end of each calendar quarter during which such payment obligations are accrued.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 6 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (b)  SLS will maintain accurate and complete books and records in accordance with generally accepted accounting principles as necessary to determine the amounts payable from time to time.  For purposes of verifying the amounts owed to JMBP or Burnett hereunder, JMBP or its designee will have the right to examine and audit SLS’ books and records, at JMBP’s expense, upon reasonable advance written notice to SLS; provided, however, that SLS shall be required to pay for the reasonable out-of-pocket costs of the audit if it is agreed by JMBP and SLS (or finally determined by an arbitrator or court of competent jurisdiction) that the amounts owing for any period are ten percent (10%) or more lower than they should have been.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            10.
 	
             
 	
            SLS Stock 
 Options and 
 Warrant:
 	
             
 	
            On the date hereof, SLS shall issue to Burnett (i) options to purchase one million (1,000,000) shares of SLS common stock with an exercise price of Two Dollars and Five Cents ($2.05) per share (the “Options”) and (ii) warrants to purchase one million (1,000,000) shares of SLS common stock with an exercise price of Six Dollars and Fifty Cents ($6.50) per share (the “Warrants” and, together with the Options, the “Securities”).  The Options will be issued pursuant to an Option Agreement in the form of Exhibit A hereto (the “Option Agreement”).  The
Warrants will be issued pursuant to a Warrant Certificate in the form of Exhibit B hereto (the “Warrant Certificate”).
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            11.
 	
             
 	
            Representations 
 and Warranties 
 by SLS:
 	
             
 	
            SLS represents and warrants to each of JMBP and Burnett that:  
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (a) 
 	
            It is duly organized and is validly existing in good standing under the laws of the jurisdiction in which it was organized.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (b) 
 	
            It has the power authority to enter into and perform its obligations under this Agreement, the Option Agreement and the Warrant Certificate (collectively, the “Transaction Agreements”) and perform the transactions contemplated thereby;
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (c) 
 	
            It has taken all necessary action to authorize the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby; and  
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 7 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (d) 
 	
            The execution, delivery and performance of its obligations under the Transaction Agreements and the transactions contemplated thereby will not violate or conflict with or result in any breach of or default under any material contract, agreement, lease, license, indenture, trust or other instrument which is either binding upon or enforceable against it, nor will such execution, delivery and performance conflict with any decree, writ, injunction, judgment or order of any court or administrative or other governmental body or of any arbitration award which is either applicable to, binding upon or enforceable against it.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            12.
 	
             
 	
            Representations 
 and Warranties 
 by JMBP and 
 Burnett:
 	
             
 	
            (a)  Each of JMBP and Burnett represents and warrants to SLS that:  
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
            (i)
 	
            Such Party has the power authority to enter into and perform such Party’s obligations under the Transaction Agreements and perform the transactions contemplated thereby;
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
            (ii)
 	
            Such Party has taken all necessary action to authorize the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby; and
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
            (iii)
 	
            The execution, delivery and performance of such Party’s obligations under the Transaction Agreements and the transactions contemplated thereby will not violate or conflict with or result in any breach of or default under any material contract, agreement, lease, license, indenture, trust or other instrument which is either binding upon or enforceable against such Party, nor will such execution, delivery and performance conflict with any decree, writ, injunction, judgment or order of any court or administrative or other governmental body or of any arbitration award which is either applicable to, binding upon or enforceable against such Party.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (b)  JMBP represents and warrants to SLS that JMBP is duly organized and is validly existing in good standing under the laws of the jurisdiction in which it was organized.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 8 -

 

 

 

	
            13.
 	
             
 	
            Additional 
 Agreements:
 	
             
 	
            (a)  This Agreement shall remain a binding legal agreement between the Parties except to the extent set forth in any additional definitive agreements entered into by the Parties in connection with Product Placements, Product Integrations and/or License Agreements, it being understood that such other definitive agreements, upon execution thereof, will supersede the terms of this Agreement to the extent of a clear inconsistency between the terms hereof and the terms of such additional definitive agreement.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            (b)  With respect to any terms not set forth in this Agreement, the Product Placement agreements, Product Integration agreements and License agreements will contain terms and conditions consistent with product placements, product integrations and licenses conducted by JMBP and Burnett in the ordinary course of business (including with respect to approval rights and payment of expenses), provided, however, that each such additional definitive agreement shall, with respect to all material terms thereof, be on such terms that are at least as favorable as such terms have been provided to any third party who shall have, prior to the date that such agreement is entered into by and between JMBP and/or Burnett, on the one hand, and SLS, on the other hand, entered into a similar
definitive agreement with JMBP and/or Burnett.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            14.
 	
             
 	
            Expenses:
 	
             
 	
            Each Party will bear its own costs and expenses related to the transactions contemplated by the Transaction Agreements, except as otherwise required by Section 13 and/or as may be set forth in any Product Placement agreement, Product Integration agreement or License agreement.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            15.
 	
             
 	
            Publicity:
 	
             
 	
            Any press release or other public disclosure regarding the Transaction Agreements or the relationship contemplated therein will be subject to the mutual approval of SLS and JMBP, such approval not to be unreasonably withheld or delayed.  The Parties acknowledge that SLS intends to file a Form 8-K attaching such press release within the time period required under applicable securities laws.  For the avoidance of doubt, the Parties agree that any disclosure reasonably necessary to carry out the terms of the Transaction Agreements is permitted.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            16.
 	
             
 	
            Independent 
 Contractor
 	
             
 	
            The Parties intend and agree that Burnett and JMBP are independent contractors and that nothing in the Transaction Agreements shall be interpreted or construed as creating or establishing the relationship of employer and employee, agency, partnership, or joint venture between SLS, on the one hand, and Burnett or JMBP, on the other hand.  Burnett and JMBP are not engaged by SLS on a full-time, exclusive basis and shall retain the right to perform services for others during the Term.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            17.
 	
             
 	
            Governing Law; 
 Arbitration:
 	
             
 	
            (a)  This Agreement is, and the definitive agreements shall be, governed by California law.  
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 9 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            (b)  Any and all disputes and controversies arising in connection with this Agreement or the transactions contemplated hereby shall be resolved by binding arbitration before JAMS, under its Streamlined Arbitration Rules and Procedures, in Los Angeles, California and on a confidential basis.  Any such arbitration shall be conducted by one (1) arbitrator, which shall be a retired judge selected mutually by the Parties.  If the Parties are unable to agree on a single arbitrator, then within ten (10) days after the initiation of an arbitration proceeding, the arbitrator shall be a retired judge appointed by the commercial panel of JAMS.  The written decision of the arbitrator shall be final and binding upon the Parties.  While the proceeding is pending, each Party will bear its own fees and expenses with respect to the
arbitration and any proceeding related thereto, and the fees and other costs of JAMS and the arbitrator shall be borne one-half (1/2) by SLS, on the one hand, and one-half (1/2) by JMBP and Burnett, on the other hand; provided, however, that the non-prevailing party in any such dispute (as declared by the arbitrator, if at all) shall pay all of the prevailing party's fees and expenses (including legal fees and expenses, and any expenses of JAMS or the arbitrator).
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            18.
  	
             
  	
            Notices:
  	
             
  	
            All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, facsimiled (which is confirmed) or mailed  by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
  
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            If to JMBP or Burnett, to:
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            JMBP, Inc.
 640 North Sepulveda Boulevard
 2nd Floor
 Los Angeles, CA 90049 
 Facsimile:  (310) 903-5500
 Attention:  Jordan Yospe, Esq.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            With a copy (which shall not constitute notice) to:
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            Irell & Manella LLP
 1800 Avenue of the Stars
 Suite 900
 Los Angeles, CA 90067
 Facsimile:  (310) 203-7199
 Attention: Rick Wirthlin, Esq.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 10 -

 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
            If to SLS, to
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            SLS International, Inc.
 1650 West Jackson Street
 Ozark, MO 65721
 Facsimile:  (417) 883-2723
 Attention:  Chief Executive Officer and President
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            With a copy (which shall not constitute notice) to:
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            Drinker Biddle & Reath LLP
 50 Fremont Street
 20th Floor
 San Francisco, CA 94109
 Attention:  Scott Joachim, Esq.
 Facsimile:  (415) 591-7510
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            The address to which such notices or other communications are to be given by either Party may be changed by written notice given by such Party to the other Party pursuant to this Section 18.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            19.
 	
             
 	
            Assignment: 
 	
             
 	
            Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties hereto without the prior written consent of the other Parties, except that (a) SLS may assign, in its sole discretion, any or all of its rights and interests hereunder to any of its subsidiaries in existence at such time, (b) JMBP may delegate its obligations hereunder to any of its affiliated production companies or any entity controlled by Burnett and (c) any Party may transfer its rights and obligations hereunder to any entity to which all or substantially all of the assets of such Party are assigned.  Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            20.
 	
             
 	
            Entire 
 Agreement; No 
 Third-Party 
 Beneficiaries:
 	
             
 	
            The Transaction Agreements (including the documents and the instruments referred to therein and any other writings signed by each of the Parties with respect to any related matters) (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter thereof, and (b) are not intended to confer upon any person or entity other than the Parties thereto any rights or remedies thereunder.
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

- 11 -

 

 

 

 

	
            21.
  	
             
  	
            Amendments; 
 Waivers.
  	
             
  	
            No amendment, modification or alteration of the terms or provisions of this Agreement shall be binding unless the same shall be in writing and duly executed by the Party against whom such amendment, modification or alteration is sought to be enforced.  Any of the terms and conditions of this Agreement may be waived in writing at any time by the Party which is entitled to the benefits thereof.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of such provision at any time in the future or a waiver of any other provision hereof.
  

 

[Signature Page Follows]

 

- 12 -

 

 

 

In witness whereof, the Parties have caused this Agreement to be executed as of the date first written above.

 

	
            SLS INTERNATIONAL, INC.
 

 

 

	
            By:__________________________
 
	
            Name:
 	
             

	
            Title:
 	
             

			

 

	
            JMBP, INC.
 

 

 

	
            By:__________________________
 
	
            Name:
 	
             

	
            Title:
 	
             

			

 

 

	
            MARK BURNETT
 

 

 

	
            ______________________________
 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Promotion Agreement

 

 

- 13 -

 

 

 

Exhibit A

Option Agreement

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

- 14 -

 

Exhibit B

Warrant Certificate

 

 

- 15 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]