Document:

EX-10.16

Exhibit 10.16

MARCUS E. JUNDT

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “Agreement”), dated as of September 26, 2006, is
made by and between Kona Grill, Inc., a Delaware corporation, having its principal offices at
7150 East Camelback Road, Suite 220, Scottsdale, Arizona 85251 (the “Company”), and Marcus E.
Jundt, a resident of South Dakota (the “Executive”).

Recitals

WHEREAS, the Company desires to employ the Executive and the Executive desires to be
employed by the Company upon the terms and conditions set forth herein;

WHEREAS, to retain Executive, the Company is willing to offer substantial compensation to
Executive in the form of salary and other benefits;

WHEREAS, Executive acknowledges that during the course of his employment, Executive will have
access to and be provided with confidential and proprietary information and trade secrets of the
Company which are invaluable to the Company and vital to the success of the Company’s business;

WHEREAS, the Company and Executive desire to protect such proprietary and confidential
information and trade secrets from disclosure to third parties or unauthorized use to the detriment
of the Company; and

WHEREAS, the Company and Executive desire to set forth in this Agreement, the terms,
conditions, and obligations of the parties with respect to such employment.

NOW, THEREFORE, in consideration of the foregoing recitals, premises and mutual covenants
herein contained, and intending to be legally bound hereby, the Company and the Executive hereby
agree as follows:

1. Definitions.

1.1. “Board” means the Board of Directors of the Company.

1.2. “Cause” means (a) the Executive engages in gross misconduct or gross negligence in the
performance of the Executive’s duties for the Company or any of its subsidiaries, (b) the Executive
embezzles assets of the Company or any of its subsidiaries, (c) the Executive is convicted
(including a plea of guilty or nolo contendere) of a felony involving moral turpitude, (d) the
Executive’s breach of any restrictive covenant set forth in Section 8 of this Agreement, or (e) the
Executive’s willful and material failure to follow the lawful and reasonable instructions of the
Board, which, in each such case (except with regard to (c), is not cured within a reasonable period
of time after receipt of notice).

1.3. “Corporate Transaction” means the direct or indirect sale or other disposition for value
(to an entity or person unrelated or unaffiliated with the Company) of the equity interests in the
Company or the assets of the Company.

1.4. “Disability” means the Executive’s inability to render, for a period of 180 consecutive
days, services hereunder by reason of mental or physical disease or disability, as determined by
the written medical opinion of an independent medical physician mutually acceptable to the
Executive and the Company. The Company shall comply with the Americans with Disabilities Act and
any other applicable federal or state laws in making a determination whether Executive’s condition
constitutes “Disability” for purposes of this Agreement.

1.5. “Good Reason” means and will be deemed to exist if, without the Executive’s consent, (a)
the Executive suffers a material diminution in the Executive’s duties, responsibilities or
effective authority or any adverse changes in the Executive’s titles or positions, (b) the
Executive suffers a reduction of “Base Salary” or target bonus opportunity as set forth below; or
(c) the Company fails to pay any earned compensation or to provide for the Executive’s vested
benefits when due and payable and which, in each such case, is not cured within a reasonable period
of time after receipt of notice.

2. Employment. Subject to the terms and provisions set forth in this Agreement and
specifically as provided in Section 4.1, the Company hereby agrees that the Executive shall be
employed as the President and Chief Executive Officer of the Company and shall be a member of the
Board, and the Executive hereby accepts such employment.

3. Employment Term. The Executive’s employment under this Agreement shall be at-will.
Executive’s employment may be terminated by the Company with or without Cause, with or without
notice, and without resort to any specific disciplinary procedure or process at any time, subject
to the provisions of Section 6 of this Agreement and Executive may resign or otherwise terminate
his employment with the Company at any time, with or without Good Reason, with or without notice.
Nothing in writing given to Executive, including this Agreement, and nothing promised verbally,
shall obligate the Company to continue to employ Executive for any specified duration or period.
Executive is requested, as a matter of professional courtesy, but is not required, to provide the
Company with three (3) weeks’ notice of resignation.

4. Positions, Responsibilities and Duties.

4.1. Positions. During the period of the Executive’s employment with the Company
(the “Employment Period"), the Executive shall be employed and serve as the President
and Chief Executive Officer of the Company and as a member of the Board. In such positions, the
Executive shall have the duties, responsibilities and authority normally associated with the office
and position of President and Chief Executive Officer and member of the Board of a publicly-held
corporation. The Executive shall report to the Board. All other employees of the Company shall
report to the Executive and/or his designees.

4.2. Duties. During the Employment Period, the Executive shall have complete
responsibility for and authority over all day-to-day operations of the Company. Additionally,
during the Employment Period, the Executive shall devote substantially all of his business time,
during normal business hours, to the business and affairs of the Company and the Executive shall
use his reasonable best efforts to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement; provided, however, that the
Executive shall be allowed, to the extent such activities do not substantially interfere with the
performance by the Executive of his duties and responsibilities hereunder, to manage the
Executive’s personal, financial and legal affairs. Notwithstanding the foregoing, the Executive
shall be permitted (a) to continue to serve as an officer of Jundt Associates, Inc. and (b) to the
extent that the Board gives its advance written consent and that such activities do not
substantially interfere with the performance by the Executive of his duties and responsibilities
hereunder, to serve on corporate, civic or charitable boards or committees.

5. Compensation and Other Benefits.

5.1. Base Salary. During the Employment Period, the Executive shall receive a base
salary payable in accordance with the Company’s normal payroll practices of $300,000 per year,
which the Board may, in its sole discretion, review and may, in its sole discretion, increase (but
not decrease) (“Base Salary”).

5.2. Annual Incentive Bonus.

a. In each calendar year during the Employment Period, beginning in calendar year 2006, the
Executive shall be eligible to receive an annual target incentive bonus of $150,000 (the
“Incentive Bonus”), based upon the attainment of certain objectives, which shall be established
by the Executive and the Board. Any payments made under this Section 5.2(a), shall be paid
within 2 and 1/2 months of the end of the Bonus Period provided the Incentive Bonus is no longer
subject to a substantial risk of forfeiture.

b. For the Bonus Period in which the Executive’s employment with the Company terminates for
any reason, the Company shall pay the Executive a pro rata portion (based upon the period ending on
the date on which the Executive’s employment with the Company terminates) of the Incentive Bonus
otherwise payable under Section 5.2(a) for the Bonus Period in which such termination of
employment occurs; provided, however, that the Bonus Period for purposes of this Section
5.2(b) shall be deemed to end on the last day of the fiscal quarter of the Company during which
the Executive’s employment so terminates.

c. The Executive shall receive such additional bonuses, if any, as the Board may in its sole
and absolute discretion determine.

d. Any bonuses payable pursuant to this Section 5.2 are sometimes hereinafter referred
to as “Incentive Compensation.” Each period for which Incentive Compensation is payable under the
Agreement is sometimes hereinafter referred to as a Bonus Period. Unless otherwise specified by
the Board or provided under this Agreement, the Bonus Period shall be the fiscal year of the
Company.

5.3 Stock Options. Upon the execution of this Agreement by the parties hereto, the
Company shall grant Executive One Hundred Thousand (100,000) stock options (the “Stock Options”) to
purchase Common Stock of the Company under (and therefore subject to all terms and conditions of)
the Company’s 2005 Stock Award Plan (the “Company’s Stock Plan”) at an exercise price equal to
$16.40 per share, which is equal to 110% of the closing price per share of the Company’s Common
Stock as quoted on the NASDAQ Capital Market. The Stock Options will be granted as incentive stock
options to the extent possible under the Company’s Stock Plan and applicable law. The Stock
Options shall vest in accordance with the Company’s existing guidelines; provided,
however, upon the occurrence of either (i) a Change in Control or (ii) termination without
Cause under Section 6.3 hereof, all unvested Stock Options shall vest immediately and become
exercisable. All or any portion of the vested Stock Options may be exercised at any one or more
times by the Executive during the Term of Employment and for a period of twelve (12) months
following the Term of Employment. The Stock Options shall be granted pursuant to certain
restrictions as defined from time to time by the Company in its sole discretion.

5.4. Vacation. The Executive shall be entitled to three (3) weeks of paid vacation
each calendar year during the Term of Employment, to be taken at such times as the Executive and
the Company shall mutually determine and provided that no vacation time shall significantly
interfere with the duties required to be rendered by the Executive hereunder. Any vacation time
not taken by Executive during any calendar year may not be carried forward into any succeeding
calendar year. Any earned but unused vacation time will be paid out to Executive at the time of
his termination in accordance with applicable law.

5.5. Benefit Plans. During the Employment Period, the Executive shall be eligible to
participate in all pension, 401(k) and other employee pension benefit plans, policies and programs
(the “Retirement Plans”) maintained by the Company from time to time for the benefit of senior
executive officers. During the Employment Period, the Executive, the Executive’s spouse, if any,
and his eligible dependents, if any, shall be eligible to participate in and be covered on the
same basis as other senior executive officers of the Company under all the welfare benefit plans,
policies and/or programs maintained by the Company from time to time including, without
limitation, all medical, hospitalization, dental, disability, life, accidental death and
dismemberment and travel accident insurance plans, policies and/or programs (the “Welfare Benefit
Plans”). The Welfare Plans and the Retirement Plans are sometimes referred to collectively herein
as the “Benefit Plans.”

5.6. Relocation. The Executive will receive reimbursement of all typical and
reasonable moving expenses incurred with respect to the Executive’s relocation from South Dakota
to Arizona. The Executive will also receive reimbursement of the full cost of any real estate
commission paid by the Executive on the sale of the Executive’s South Dakota home, provided that
at the closing of any such sale, the Executive is then still an employee of the Company.

5.7. Expense Reimbursement. During and in respect of the Employment Period, the
Executive shall be entitled to receive reimbursement for reasonable business expenses incurred by
the Executive in performing his duties and responsibilities hereunder, including travel,
entertainment, parking, business meetings and professional dues, incurred and substantiated in
accordance with the policies and procedures established from time to time by the Company for
senior executives of the Company.

5.8. Life Insurance. Executive agrees to cooperate with the Company in obtaining all
life insurance as the Board or any lender deems necessary.

5.9 Directors & Officers Insurance. At all times during the Employment Period,
Executive shall be considered an officer of the Company and shall be covered by D&O Insurance, or
any other similar type of insurance, that provides coverage for the Executive’s acts or omissions
undertaken during the course and scope of his employment

6. Termination. Upon the occurrence of any termination of the Executive’s employment
as chief executive officer, the Executive shall remain a member of the Board unless mutually
agreed upon or in the event Executive is not able to serve.

6.1. Termination Due to Death. In the event of the Executive’s death, the Company
will terminate the Executive’s employment hereunder and the Executive’s estate or his legal
representative, as the case may be, shall be entitled to: (a) any Base Salary earned but unpaid as
of the date of death; (b) a pro-rata payment, for the year of termination equal to the Incentive
Bonus that would have been earned for such year (determined at the end of the fiscal year in which
such termination occurs) multiplied by a fraction, the numerator of which is the number of days
transpired in the calendar year up to and including the date on which the Executive is terminated
by the Company due to death, and the denominator of which is 365, such payment shall be made at
the time when bonus payments are paid to other senior executives in accordance with the Company’s
normal payroll procedures; and (c) any other payments and/or benefits which the Executive or the
Executive’s legal representative is entitled to receive under any of the Benefit Plans or
otherwise in accordance with the terms of such plan or arrangement.

6.2. Termination Due to the Executive’s Disability. The Company may terminate the
Executive’s employment hereunder due to Disability in accordance with this Section.
Notwithstanding the foregoing, if, in the good faith determination of the Board, the Executive is
suffering from a mental or physical disease or disability that impacts the performance of his
duties in any material respect, the Company may, in its absolute and sole discretion, suspend the
Executive for a period of up to 180 days during the Employment Period (provided that such
suspension shall not constitute Good Reason under Section 1.5 and provided further that during
such suspension, the Executive shall (a) continue to receive his Base Salary in accordance with
Section 5.1 and (b) be eligible to receive the benefits he may be entitled to under the Company’s
short-term disability plan, if any). If the Board does not re-instate the Executive to employment
(under the terms and conditions of this Agreement) by the end of such 180 day period or at any
time prior to the end of such period, in the Board’s sole discretion, the Company may (i)
terminate the Executive’s employment without Cause (as provided under Section 6.3) if the
Executive’s condition does not meet the definition of Disability at the time of termination, or
(ii) terminate the Executive’s employment due to Disability (as provided under this Section) if
the Executive’s condition does meet the definition of Disability at the time of termination. In
such latter event, the Executive or his legal representative, as the case may be, shall be
entitled to:

(a) any Base Salary earned but unpaid as of the date of the Executive’s termination due to
Disability;

(b) a pro-rata payment, for the year of termination equal to the Incentive Bonus that would
have been earned for such year (determined at the end of the fiscal year in which such termination
occurs) multiplied by a fraction, the numerator of which is the number of days transpired in the
calendar year up to and including the date on which the Executive is terminated by the Company due
to Disability, and the denominator of which is 365, such payment shall be made at the time when
bonus payments are paid to other senior executives in accordance with the Company’s normal payroll
procedures; and

(c) any other payments and/or benefits which the Executive or the Executive’s legal
representative is entitled to receive under any of the Benefit Plans, the SERP or otherwise in
accordance with the terms of such plan or arrangement.

6.3. Termination by the Company Without Cause or by the Executive for Good Reason.
The Company may terminate the Executive’s employment hereunder without Cause. The Executive may
terminate his employment hereunder with the Company for Good Reason.

6.3.1. In either such event (unless the Executive has incurred a termination under
Section 6.1 or 6.2 above), the Executive shall be entitled to, upon execution and
effectiveness of a general release: (a) Base Salary earned but unpaid as of the date of the
Executive’s termination and (b) any other payments and/or benefits which the Executive is
entitled to receive under any of the Benefit Plans or otherwise in accordance with the
terms of such plan or arrangement. Additionally, the Executive will receive (i) Base
Salary continuation for eighteen months paid in equal monthly installments, (ii)
continuation of medical and dental benefits in effect as of the date of termination of
employment for a period of eighteen (18) months and (iii) payment of 150% of the most
recent Incentive Bonus actually paid to the Executive, payable in eighteen (18) monthly
installments (collectively the “Severance Payment”). In order to comply with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), under no circumstances may
the time or schedule of any payment made, or benefit provided, pursuant to this Section
6.3.1 be accelerated or subject to a further deferral except as otherwise permitted or
required pursuant to regulations or other guidance issued pursuant to Section 409A of the
Code. In addition, Executive does not have any right to make any election regarding the
time or form of any payment due under this Section 6.3.1 or any other provision of this
Agreement.

6.4. Termination by the Company For Cause or Termination by the Executive Without
Good Reason. The Executive shall have the right to terminate his employment hereunder without
Good Reason or without any reason at all. The Company may terminate the Executive’s employment
hereunder for Cause. In either such event, the Executive shall be entitled only to: (a) any Base
Salary earned but unpaid through the date of such termination; (b) any other accrued and vested
payments and/or benefits which the Executive is entitled to receive under any of the Benefit
Plans.

6.5. Certain Other Payments.

6.5.1. In the event that (i) the Executive becomes entitled to any other payments or
benefits from the Company in connection with a Corporate Transaction (collectively, the
“Total Payments") which constitute an “excess parachute payment” as defined in
Section 280G(b) of the Code, and (ii) the Executive would be subject to an excise tax
imposed under Section 4999 of the Code (the “Excise Tax”), then the Executive may submit
all or any portion of the Total Payments to a shareholder vote for purposes of satisfying
Section 280G(b)(5) of the Code (a “Shareholder Vote”).

6.5.2. To the extent that the Executive does not so submit any portion of the Total
Payments to a Shareholder Vote and, if any such portion of the Total Payments would subject
Executive to the Excise Tax, then, such non-submitted portion of the Total Payments and
benefits will be reduced to the extent necessary to eliminate the imposition of the Excise
Tax.

7. Successors.

7.1. The Executive. This Agreement is personal to the Executive and, without the
prior express written consent of the Company, shall not be assignable by the Executive, except
that the Executive’s rights to receive any compensation or benefits under this Agreement may be
transferred or disposed of pursuant to testamentary disposition, intestate succession or pursuant
to a domestic relations order. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s heirs, beneficiaries and/or legal representatives.

7.2. The Company. This Agreement shall inure to the benefit of and be binding upon
the Company and its respective successors and assigns.

8. Restrictive Covenants.

8.1. Non-Solicitation. During the Employment Period and for a period of twelve months
after any termination of employment hereunder for any reason, the Executive will not, directly or
indirectly, on the Executive’s behalf or on behalf of any other person, firm, partnership,
corporation or other entity, (a) solicit, induce or attempt to solicit or induce any employee of
the Company, its parent or any of its subsidiaries to leave employment with the Company, its
parent or any of its subsidiaries or (b) hire any such employee (except for general, non-targeted
employment advertising efforts by any such person, firm, partnership, corporation or other
entity).

8.2. Non-Competition. During the Period of Employment and for a period of eighteen
(18) months after any termination of employment hereunder for any reason, the Executive will not
directly or indirectly, engage in, represent in any way, be connected with, become employed by or
have any interest in any business or activity which competes in any material manner in any location
at which the material businesses of the Company, its parent or any of its subsidiaries are
conducted at the time of such termination.

8.3. Confidentiality. During the Employment Period or at any time thereafter, the
Executive will not, without the prior express written consent of the Company, directly or
indirectly divulge, disclose or make available or accessible any confidential matters or
proprietary information of the Company, its parent and/or its subsidiaries known to the Executive
which are not otherwise in the public domain to any person, firm, partnership, corporation, trust
or any other entity or third party (other than when the Executive is required to do so by a lawful
order of (a) a court of competent jurisdiction, (b) any governmental authority or agency, or (c)
any recognized subpoena power).

8.4. Injunctive Relief. The Executive acknowledges and agrees that the Company will
have no adequate remedy at law, and would be irreparably harmed, if the Executive breaches or
threatens to breach any of the provisions of this Section 8 of this Agreement. The Executive agrees
that the Company shall be entitled to equitable and/or injunctive relief to prevent any breach or
threatened breach of this Section 8, and to specific performance of each of the terms of such
Section in addition to any other legal or equitable remedies that the Company may have. The
Executive further agrees that he shall not, in any equity proceeding relating to the enforcement of
the terms of this Section 8, raise the defense that the Company has an adequate remedy at law.

8.5. Special Severability. The terms and provisions of this Section 8 are intended to
be separate and divisible provisions and if, for any reason, any one or more of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any other provision of
this Agreement shall thereby be affected. It is the intention of the parties to this Agreement that
the potential restrictions on the Executive’s future employment imposed by this Section 8 be
reasonable in both duration and geographic scope and in all other respects. If for any reason any
court of competent jurisdiction shall find any provisions of this Section 8 unreasonable in
duration or geographic scope or otherwise, the Executive and the Company agree that the
restrictions and prohibitions contained herein shall be effective to the fullest extent allowed
under applicable law in such jurisdiction.

9. Miscellaneous.

9.1. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, applied without reference to principles of conflict of
laws.

9.2. Amendments. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors and legal
representatives.

9.3. Legal Fees. The Executive shall be paid or reimbursed for all reasonable attorney
fees incurred by the Executive in connection with the review, preparation and negotiation of this
Agreement up to $2,000.

9.4. Indemnification. The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a
director or officer of the Company and/or any affiliate, whether or not the basis of such
Proceeding is alleged action in an official capacity as a director, officer, employee or agent
while serving as a director, officer, employee or agent, he shall be indemnified and held harmless
by the Company (unless the Executive’s actions or omissions constitute gross negligence or willful
misconduct) to the fullest extent authorized by Delaware law, as the same exists or may hereafter
be amended, against all costs and expenses incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if the Executive has
ceased to be an officer, director or agent, or is no longer employed by the Company and shall inure
to the benefit of his heirs, executors and administrators.

9.5. Notices. All notices and other communications hereunder shall be in writing and
shall be given by hand-delivery to the other parties or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

To the Company:

Kona Grill, Inc.

7150 E. Camelback Road

Suite 220

Scottsdale, AZ 85251

Attn: Mark Robinow

	 	 	With a copy to Company’s

	 	 	Counsel at:

Greenberg Traurig, LLP

2375 E. Camelback Road

Suite 700

Phoenix, AZ 85016

Attn: Quinn P. Williams

	 	 	If to the Executive:

Marcus E. Jundt

Jundt Associates, Inc.

301 Carlson Parkway

Suite 120

Minnetonka, MN 55305

or to such other address as any party shall have furnished to the others in writing in accordance
herewith. Notices and communications shall be effective when actually received by the addressee.

9.6. Withholding. The Company may withhold from any amounts payable under this
Agreement such federal, state or local income taxes to the extent the same required to be withheld
pursuant to any applicable law or regulation.

9.7. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement.

9.8. Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.

9.9. Counterparts. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original instrument, but all of which together shall constitute but one
and the same Agreement.

9.10. Entire Agreement. This Agreement contains the entire agreement between the
parties concerning the subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between the parties with
respect thereto. Additionally, this Agreement supersedes the Offer Letter.

9.11. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of the Executive’s employment under this Agreement for any reason to
the extent necessary to the intended provision of such rights and the intended performance of such
obligations.

[Remainder of page intentionally blank; signatures on following page]

1

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the Company has
caused this Agreement to be executed in its name on its behalf, all as of the day and year first
above written.

Kona Grill, Inc.

By: /s/ Mark S. Robinow

Name: Mark Robinow

Title: Executive Vice President

Executive:

/s/ Marcus E. Jundt

Marcus E. Jundt

2EX-10.1

Exhibit 10.1

AGREEMENT TO

INCREASE COMMITMENT AMOUNT

THIS AGREEMENT TO INCREASE COMMITMENT AMOUNT (the “Agreement”), dated as of September
22, 2006, is by and among DHI Mortgage Company, Ltd, a Texas limited partnership (formerly known as
CH Mortgage Company I, Ltd.) (“Borrower”), U.S. Bank National Association, as one of the Banks and
as agent (the “Agent”) for the financial institutions (the “Banks”) party to the Credit Agreement
described below, and JPMorgan Chase Bank, N.A., as a Bank (“JPM Chase”).

RECITALS

1. The Borrower, the Agent and the Banks entered into a Second Amended and Restated Credit
Agreement dated as of April 7, 2006, (as hereafter amended, the “Credit Agreement”); and

2. Pursuant to Section 10.11(d) of the Credit Agreement, the Borrower, the Agent and JPM Chase
desire to temporarily increase the Agent’s Commitment Amount and JPM Chase’s Commitment Amount as
herein set forth.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby covenant and agree to be bound as follows:

Section 1. Capitalized Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement, unless the context shall
otherwise require.

Section 2. Temporary Commitment Amount Increase.

2.1 Changes in Commitment Amount of Agent and JPM Chase. Effective as of the
date first above written (the “Increase Date”), the Commitment Amount of the Agent and the
Commitment Amount of JPM Chase are each hereby increased from $100,000,000 to $205,000,000.
Effective as of November 6, 2006 (the “Temporary Increase Termination Date”), the Commitment
Amount of Agent and the Commitment Amount of JPM Chase are each hereby reduced from
$205,000,000 to $100,000,000.

Section 3. New Schedule of Commitments.

3.1 Schedule of Warehousing Commitment Amounts. Schedule 5 of the Credit
Agreement is hereby amended and restated in its entirety to read as set forth in Exhibit A
hereto.

Section 4. Effectiveness of Agreement. This Agreement shall become effective upon
delivery by the Borrower to the Agent of, and compliance by the Borrower with, the following:

4.1 This Agreement duly executed by the Borrower, the Agent and JPM Chase.

4.2 New Notes payable to the Agent and to JPM Chase, in the amount of each such Bank’s
increased Commitment Amount after giving effect to this Agreement (the “New Notes”), duly
executed by the Company;

4.3 A certificate of the Secretary or Assistant Secretary of the Borrower’s general
partner (1) certifying that there has been no amendment to the organizational and governance
documents of the Borrower since true and accurate copies of the same were delivered to the
Agent with certificate of the Secretary of the Borrower dated as of April 7, 2006, and (ii)
confirming that a resolution of the Board of Directors of the Borrower’s general partner
authorizes the execution, delivery and performance of this Agreement and the New Notes (the
“Increase Documents”), and identifying the officers of the Borrower’s general partner
authorized to sign the Increase Documents.

4.4 The Borrower shall have satisfied such other conditions as specified by the Agent,
including payment of all unpaid legal fees and expenses incurred by the Agent through the
date of this Agreement in connection with the Credit Agreement and the Increase Documents.

Section 5. Representations, Warranties, Authority, No Adverse Claim.

5.1 Reassertion of Representations and Warranties, No Default. The Borrower
represents that on and as of the date hereof and after giving effect to this Agreement
(a) all of the representations and warranties contained in the Credit Agreement are true,
correct and complete in all respects as of the date hereof as though made on and as of such
date, except for changes permitted by the terms of the Credit Agreement, and (b) there will
exist no Unmatured Event of Default or Event of Default under the Credit Agreement as
amended by this Agreement on such date.

5.2 Authority, No Conflict, No Consent Required. The Borrower represents and
warrants that it has the power and legal right and authority to enter into the Increase
Documents and has duly authorized as appropriate the execution and delivery of the Increase
Documents and other agreements and documents executed and delivered by it in connection
herewith or therewith by proper corporate action, and none of the Increase Documents nor the
agreements contained herein or therein contravenes or constitutes a default under any
agreement, instrument or indenture to which the Borrower is a party or a signatory or a
provision of the Borrower’s organizational and governance documents or any other agreement
or requirement of law, or result in the imposition of any Lien on any property of the
Borrower under any agreement binding on or applicable to the Borrower or any of its property
except, if any, in favor of the Banks. The Borrower represents and warrants that no
consent, approval or authorization of or registration or declaration with any Person,
including but not limited to any governmental authority, is required in connection with the
execution and delivery by the Borrower of the Increase Documents or other agreements and
documents executed and delivered by the Borrower in connection therewith or the performance
of obligations of the Borrower therein described, except for those which the Borrower has
obtained or provided and as to which the Borrower has delivered certified copies of
documents evidencing each such action to the Agent.

5.3 No Adverse Claim. The Borrower warrants, acknowledges and agrees that no
events have taken place and no circumstances exist at the date hereof that would give the
Borrower a basis to assert a defense, offset or counterclaim to any claim of the Banks with
respect to the Borrower’s obligations under the Loan Documents.

Section 6. Affirmation of Credit Agreement, Further References, Affirmation of Security
Interest. The Agent and the Borrower each acknowledge and affirm that the Credit Agreement, as
hereby amended, is hereby ratified and confirmed in all respects and all terms, conditions and
provisions of the Credit Agreement, except as amended by this Agreement, shall remain unmodified
and in full force and effect. All references in any document or instrument to the Credit Agreement
are hereby amended and shall refer to the Credit Agreement as amended by this Agreement. The
Borrower confirms to the Agent and the Banks that the Obligations are and continue to be secured by
the security interest granted by the Borrower in favor of the Agent for the benefit of the Banks
under the Pledge and Security Agreement, and all of the terms, conditions, provisions, agreements,
requirements, promises, obligations, duties, covenants and representations of the Borrower under
such documents and any and all other documents and agreements entered into with respect to the
Borrower’s obligations under the Loan Documents are incorporated herein by reference and are hereby
ratified and affirmed in all respects by the Borrower.

Section 7. Successors. The Increase Documents shall be binding upon the Borrower, the
Banks and the Agent and their respective successors and assigns, and shall inure to the benefit of
the Borrower, the Banks and the Agent and the successors and assigns of the Banks and the Agent.

Section 8. Legal Expenses. As provided in Section 8.03 of the Credit Agreement, the
Borrower agrees to reimburse the Agent, upon execution of this Agreement, for all reasonable
out-of-pocket expenses (including attorney fees and legal expenses of Dorsey & Whitney LLP, counsel
for the Bank) incurred in connection with the Credit Agreement, including in connection with the
negotiation, preparation and execution of the Increase Documents and all other documents
negotiated, prepared and executed in connection with the Increase Documents, and in enforcing the
obligations of the Borrower under the Increase Documents, and to pay and save the Banks harmless
from all liability for, any stamp or other taxes which may be payable with respect to the execution
or delivery of the Increase Documents, which obligations of the Borrower shall survive any
termination of the Credit Agreement.

Section 9. Counterparts. The Increase Documents may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an
original, provided that all such counterparts shall be regarded as one and the same document, and
either party to the Increase Documents may execute any such agreement by executing a counterpart of
such agreement.

Section 10. Governing Law. THE INCREASE DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR
AFFILIATES.

[Remainder of this page left blank intentionally]

1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the date and year first above written.

DHI MORTGAGE COMPANY, LTD

By: DHI Mortgage Company GP, Inc.

Its General Partner

By: /s/ Mark C. Winter

Title: CFO/EVP

2

U.S. BANK NATIONAL ASSOCIATION, as Agent and a Bank

By: /s/ Edwin D. Jenkins

Title: Senior Vice President

3

JPMORGAN CHASE BANK, N.A., as Bank

By: /s/ Thanh Roettele

Title: Vice President

4

EXHIBIT A

AGREEMENT TO INCREASE

COMMITMENT AMOUNT

Schedule 5 to Second Amended

and Restated Credit Agreement

On and After September 22, 2006 to November 6, 2006

	 	 	 	 	 	 	 	 	 
	Lenders	 	Total Commitment	 	Total Percentage
	U.S. Bank National
Association
	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank
	 	 	 	 	 	 	 	 
	National City Bank
	 	 	 	 	 	 	 	 
	Bank of America
	 	 	 	 	 	 	 	 
	BNP Paribas
	 	 	 	 	 	 	 	 
	Comerica Bank
	 	 	 	 	 	 	 	 
	Scotiabanc
	 	 	 	 	 	 	 	 
	Societe Generale
	 	 	 	 	 	 	 	 
	Washington Mutual
	 	 	 	 	 	 	 	 
	Total
	 	$	750,000,000	 	 	 	100	%

On and After November 6, 2006

	 	 	 	 	 	 	 	 	 
	Lenders	 	Total Commitment	 	Total Percentage
	U.S. Bank National
Association
	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank
	 	 	 	 	 	 	 	 
	National City Bank
	 	 	 	 	 	 	 	 
	Bank of America
	 	 	 	 	 	 	 	 
	BNP Paribas
	 	 	 	 	 	 	 	 
	Comerica Bank
	 	 	 	 	 	 	 	 
	Scotiabanc
	 	 	 	 	 	 	 	 
	Societe Generale
	 	 	 	 	 	 	 	 
	Washington Mutual
	 	 	 	 	 	 	 	 
	Total
	 	$	540,000,000	 	 	 	100	%

5

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