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This amendment to our 10Q of 4/30/96 is being filed for the purpose
of including the exhibit of the Third Amendment to the Credit
Agreement.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10Q
[ X ] Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For quarterly period ended APRIL 30, 1996 or
[ ] Transition report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Commission file number 1-8551
Hovnanian Enterprises, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-1851059
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
l0 Highway 35, P.O. Box 500, Red Bank, N. J. 07701
(Address of principle executive offices)
908-747-7800
(Registrant's telephone number, including area code)
Same
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Sections l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. 15,112,362 Class A Common
Shares and 7,924,691 Class B Common Shares were outstanding as of May 31, 1996.
HOVNANIAN ENTERPRISES, INC.
FORM 10Q
INDEX
PAGE NUMBER
PART I. Financial Information
Item l. Consolidated Financial Statements:
Consolidated Balance Sheets at April 30,
1996 (unaudited) and October 31, 1995 3
Consolidated Statements of Income for the
three and six months ended April 30, 1996
and 1995 (unaudited) 5
Consolidated Statements of Stockholders' Equity
for the six months ended April 30, 1996
(unaudited) 6
Consolidated Statements of Cash Flows
for the six months ended April 30,
1996 and 1995 (unaudited) 7
Notes to Consolidated Financial
Statements (unaudited) 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 9
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security
Holders 16
Item 6(a). Exhibit 10(a) - Third Amendment to Credit
Agreement dated June 4, 1996 among
K. Hovnanian Enterprises, Inc., Hovnanian
Enterprises, Inc., Certain Subsidiaries Thereof,
Midlantic Bank,N.A., Chemical Bank, Meridian
Bank, NationsBank,N.A., First National Bank of
Boston, Bank of America Illinois, First National
Bank of Chicago, Comerica Bank, and Credit Lyonnais.
Item 6(b). Exhibit 27 - Financial Data Schedules
Item 6(c). No reports on Form 8K have been filed during
the quarter for which this report is filed.
Signatures 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOVNANIAN ENTERPRISES, INC.
(Registrant)
DATE: June 3, 1997 /S/KEVORK S. HOVNANIAN
Kevork S. Hovnanian,
Chairman of the Board and
Chief Executive Officer
DATE: June 3, 1997 /S/PAUL W. BUCHANAN
Paul W. Buchanan,
Senior Vice President
Corporate Controller
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement ("Third Amendment")dated as of the
day of ___________, 1996 among K. Hovnanian Enterprises, Inc. ("Company"),
Hovnanian Enterprises, Inc. ("Hovnanian"), the subsidiaries of Hovnanian listed
on the signature pages of this Third Amendment (each, together with Hovnanian, a
"Guarantor" and collectively the "Guarantors") and
Midlantic Bank, N.A. (formerly known as Midlantic National Bank)("Midlantic"),
Chemical Bank ("Chemical"), Meridian Bank ("Meridian"), NationsBank, National
Association (formerly known as NationsBank of Virginia, N.A.) ("NationsBank"),
First National Bank of Boston ("Bank of Boston"), Bank of America Illinois ("B
of A Illinois"), The First National Bank of Chicago ("First of Chicago"),
Comerica Bank ("Comerica") and Credit Lyonnais New York Branch ("Credit
Lyonnais") (each such banking institution individually referred to as a "Bank"
and collectively as the "Banks"), and Midlantic Bank, N.A., as Agent for the
Banks ("Agent").
BACKGROUND
WHEREAS, pursuant to that certain Credit Agreement, dated as of July 30,
1993, among the Company, certain Guarantors named therein or thereafter added,
the Banks named therein, and the Agent (as the same was amended by a certain
Amendment to Credit Agreement dated as of July 19, 1994 (the "Amendment") and a
certain Second Amendment to Credit Agreement dated as of
April 28, 1995 ("Second Amendment") and may be further amended or supplemented
from time to time, the "Credit Agreement"), the Banks named therein agreed to
make certain loans and extend credit to the Company;
WHEREAS, the performance by the Company of its obligations under the Credit
Agreement and the Notes is guaranteed, jointly and severally, by the Guarantors
pursuant to the Guaranties of the Guarantors to each of the Banks (collectively,
the "Guaranties");
WHEREAS, pursuant to a certain Joinder Agreement and related agreements
dated December 8, 1993, PNC Bank, National Association ("PNC") joined in the
Revolving Credit Commitment and thereby became an Additional Bank thereunder;
WHEREAS, pursuant to a certain Joinder Agreement ("Meridian Joinder") and
related agreements dated January 26, 1994, Meridian joined in the Revolving
Credit Commitment and has thereby become an Additional Bank thereunder;
WHEREAS, pursuant to the Amendment, NationsBank, Bank of Boston, and
Continental Bank (now known as Bank of America Illinois) joined in the Revolving
Credit Commitment and thereby became Additional Banks thereunder, and the
parties made certain other modifications in their financing arrangements;
WHEREAS, pursuant to Section 8.7(c) of the Credit Agreement and to a
certain Joinder Agreement and related agreements dated August 31, 1994, Bank of
America National Trust and Savings Association ("B of A") joined in the
Revolving Credit Commitment and thereby became the Additional Bank referred to
in said Section 8.7(c) of the Credit Agreement and caused the total amount of
Revolving Credit Commitments to be increased to $215,000,000;
WHEREAS, B of A Illinois has obtained by assignment the Revolving Credit
Commitment, Revolving Credit Note and outstanding Revolving Credit Loans of B of
A and has succeeded to the rights, title, interest and obligations of B of A
with respect thereto and under the Credit Agreement and related
agreements and documents;
WHEREAS, as of the date hereof, First of Chicago is obtaining by assignment
the Revolving Credit Commitment, Revolving Credit Note and outstanding Revolving
Credit Loans of NBD Bank ("NBD") and is succeeding to the rights, title,
interest and obligations of NBD with respect thereto and under the Credit
Agreement and related agreements and documents;
WHEREAS, as of the date hereof, Midlantic is obtaining by assignment the
Revolving Credit Commitment, Revolving Credit Note and outstanding Revolving
Credit Loans of PNC and is succeeding to the rights, title, interest and
obligations of PNC with respect thereto and under the Credit Agreement and
related agreements and documents;
WHEREAS, contemporaneously with the execution and delivery hereof, the
Revolving Credit Commitment of Summit Bank (formerly known as United Jersey
Bank) in the amount of $20,000,000 is terminated and all outstanding Revolving
Credit Loans (with interest accrued to the date of payment) owing to such Bank
shall thereupon be paid in full;
WHEREAS, Comerica and Credit Lyonnais (for the purposes hereof, each
individually referred to as a "Joining Bank" and collectively as the "Joining
Banks") desire and are willing to join in and assume a Revolving Credit
Commitment (each in the amount of $20,000,000) under and thereby become
Additional Banks under the Credit Agreement and the Company, the Guarantors, the
Banks and the Agent have approved such joinder by the Joining
Banks; and
WHEREAS, the Company, the Guarantors, the Banks and the Agent desire to
further modify the provisions of the Credit Agreement under the terms and
conditions set forth in this Third Amendment.
NOW, THEREFORE, with the foregoing Background incorporated by reference and
made part hereof, and intending to be legally bound, the parties hereto promise
and agree as follows:
1. All terms used herein as defined terms and not herein defined shall
have the respective meanings ascribed to them in the Credit Agreement.
2. The definition of "Commitment Termination Date" contained in Section
1.1 of the Credit Agreement is hereby deleted and replaced in its entirety by
the following new definition:
"Commitment Termination Date" shall mean, with respect to each Bank,
March 31, 1999, provided, however, that on or before March 31 of each year, each
Bank will review its respective commitment and, in its sole discretion, may
extend the Commitment Termination Date for a period of twelve months, provided,
that in no event shall the Commitment Termination Date be so extended unless and
until all Banks agree to such extension in writing.
3. The definition of "Revolving Credit Commitments" contained in Section
1.1 of the Credit Agreement is hereby deleted and replaced in its entirety by
the following new definition:
"Revolving Credit Commitments" means the collective commitments of all
the Banks to make the Revolving Credit Loans to the Company pursuant to this
Agreement in an aggregate principal amount not to exceed, at any time
outstanding, $235,000,000; provided, however, that the Revolving Credit
Commitment of each Bank shall at all times be reduced by an amount equal to each
such Bank's Revolving Credit Commitment Percentage of any then outstanding
Excess Other Senior Homebuilding Indebtedness; and the "Revolving Credit
Commitment" of any Bank at any particular time means the respective commitment
of such Bank to make Revolving Credit Loans to the Company pursuant to this
Agreement in an amount equal to its Revolving Credit Commitment Percentage
multiplied by the aggregate principal amount of the Revolving Credit
Commitments, all as set forth on Schedule 9 attached hereto.
4. The definitions of "Libor Based Rate" and "Prime Based Rate" contained
in Section 1.1 of the Loan Agreement are hereby deleted and replaced in their
entirety by the following new definitions:
"Libor Based Rate" shall mean, with respect to a specified Interest
Period and to the extent applicable with respect to any Bank, that rate of
interest per annum which is equal to such Bank's Libor plus the Applicable Libor
Margin, plus, for each Bank, the cost (as determined by such Bank whose
determination shall be final and conclusive save for manifest error) of
maintaining the Reserve Percentage required for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Regulations of
the Board of Governors of the Federal Reserve System).
"Prime Based Rate" shall mean, with respect to any Bank, that rate of
interest per annum which is equal to the Prime Rate of such Bank, plus the
Applicable Prime Margin.
5. The following new definitions are hereby added to and deemed
incorporated into (in their respective alphabetical order) Section 1.1 of the
Credit Agreement:
"Adjusted Libor Margin" means the Initial Libor Margin as adjusted, up
or down, by 12 basis points for each Rating Change by one of the Rating Agencies
in such agency's Implied Senior Debt Rating applicable to the Company.
"Adjusted Prime Margin" means the Initial Prime Margin as adjusted by
12 basis points in the case of each negative Rating Change to the fourth tier or
the fifth tier and each positive Rating Change to the fourth tier or the third
tier (or adjusted by 6 basis points in the case of each positive Rating Change
to the second tier or the first tier and each negative Rating Change to the
second tier or the third tier) by one of the Rating Agencies in such agency's
Implied Senior Debt Rating applicable to the Company.
"Applicable Libor Margin" means the Initial Libor Margin or, as the
case may be, the Adjusted Libor Margin.
"Applicable Prime Margin" means the Initial Prime Margin or, as the
case may be, the Adjusted Prime Margin.
"Implied Senior Debt Rating" means the rating, if any, designated by
one of the Rating Agencies as its Implied Senior Debt Rating for the Company.
"Initial Libor Margin" means 200 basis points prior to the date of the
Third Amendment and 175 basis points thereafter.
"Initial Prime Margin" means 50 basis points prior to the date of the
Third Amendment and 25 basis points thereafter.
"Moody's" means Moody's Investors Service, Inc., or any successor.
"Rating Agency" means each of S&P and Moody's.
"Rating Change" means a change in the applicable rating among the five
tiers on the following chart assigned by one of the respective Rating Agencies
as its Implied Senior Debt Rating for the Company (the present assigned rating
by each Rating Agency being at (or in the case of Moody's deemed at) the third
tier shown below):
S & P Moody's Tiers
BB+ (or better) Ba1 (or better) First
BB Ba2 Second
BB- Ba3 Third
B+ B1 Fourth
B (or worse) B2 (or worse) Fifth
"S & P" means Standard & Poor's Ratings Services, a Division of The
McGraw-Hill Companies, Inc., or any successor.
"Third Amendment" means that certain Third Amendment to Credit
Agreement dated May 31, 1996 among the Company, the Guarantors identified
therein, the Banks identified therein and the Agent.
6. Paragraph 6.1(a)(xi) of the Credit Agreement is deleted in its
entirety and replaced by the following new paragraph:
(xi) within fifty-five (55) days after each fiscal year end, a
certificate containing the calculations to determine the Borrowing Base as well
as the calculations to determine compliance or noncompliance, as the case may
then be, with subsection 6.2(bb), in each case as of such fiscal year end; and
7. Paragraph 8.7(c) of the Credit Agreement is hereby further modified to
allow and provide for the joinder, pursuant to the terms and conditions of this
Third Amendment, of the Joining Banks as Additional Banks under the Credit
Agreement and each of their assumption of a Revolving Credit Commitment, as well
as the resulting increase in the aggregate Revolving Credit Commitments. The
Company shall have no further option pursuant to such paragraph 8.7(c) to add
Additional Banks under the Credit Agreement.
8. Each Joining Bank hereby joins in, and assumes a Revolving Credit
Commitment under, the Credit Agreement (as amended hereby) and thereby becomes
an Additional Bank there-under. Each Joining Bank shall thereby for all
purposes be hereinafter considered a Bank under the Credit Agreement, agrees to
be bound by its respective Revolving Credit Commitment set forth herein and the
terms of the Credit Agreement (as amended hereby), and shall thereby obtain all
benefits and rights of and agree to perform all duties and obligations of a Bank
thereunder.
9. The parties hereto each hereby approve (a) the assignment of all of
NBD's rights, title, interest and obligations under the Credit Agreement and
related agreements and documents to First of Chicago and (b) the assignment of
all of PNC's rights, title, interest and obligations under the Credit Agreement
and related agreements and documents to Midlantic.
10. By reason of the joinder of the Joining Banks as Banks under the
Credit Agreement, certain changes being hereby made to the Revolving Credit
Commitments of Midlantic and Chemical and the resulting increase in the
Revolving Credit Commitments (as contemplated by paragraph 3 above of this Third
Amendment), Sixth Replacement Schedule 9 (attached to the Agent's letter to the
Banks of November 21, 1995) to the Credit Agreement is hereby replaced and
superseded in its entirety by Seventh Replacement Schedule 9 attached to this
Third Amendment. All references in the Credit Agreement to Schedule 9 shall
hereinafter be deemed for all purposes to refer to Seventh Replacement Schedule
9.
11. Contemporaneously herewith, the Company shall execute and deliver to
each Joining Bank a Revolving Credit Note in the amount of its respective
Revolving Credit Commitment and the Guarantors shall each execute and deliver
their Guaranty to each Joining Bank. The Company shall also then execute and
deliver a replacement Revolving Credit Note to each of Midlantic (to consolidate
the two existing notes now held by Midlantic), Chemical, B of A Illinois (to
consolidate the two existing notes held by B of A Illinois in the amount of
$20,000,000 each into a single note in the amount of $40,000,000) and First of
Chicago in the amount of its respective current Revolving Credit Commitment as
reflected by this Third Amendment.
12. The parties acknowledge and agree that the Company need not be in
compliance with Subsection 6.2(w) of the Credit Agreement for the first ten (10)
Business Days following the date of this Third Amendment. The Banks agree that,
to the extent then requested by the Company and subject in any event to the
limits of their respective Revolving Credit Commitments, they shall make a
Revolving Credit Loan in an amount sufficient so that no violation then occurs
with respect to subsection 6.2(w) of the Credit Agreement.
13. The Credit Agreement is further modified by adding the following new
paragraph as paragraph 3.11:
3.11 Taxes. (a) All payments made by the Company under the Credit
Agreement and the Revolving Credit Notes issued from time to time thereunder
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Agent or any Bank as a result of a present or former connection
between the Agent or such Bank and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the Agent
or such Bank having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or the Revolving Credit Notes). If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Agent or any Bank thereunder or under the Revolving
Credit Notes, the amounts so payable to the Agent or such Bank shall be
increased to the extent necessary to yield to the Agent or such Bank (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in the Credit Agreement and
the Revolving Credit Notes, provided, however, that the Company shall not be
required to increase any such amounts payable to any Bank that is not organized
under the laws of the United States of America or a state thereof if (i) such
Bank fails to comply with the requirements of paragraph (b) of this subsection
or (ii) either of the certifications made by such Bank as set forth in such
paragraph is not true and correct with respect to such Bank. Whenever any Non-
Excluded Taxes are payable by the Company, as promptly as possible thereunder
the Company shall send to the Agent for its own account or for the account of
such Bank, as the case may be, a certified copy of an original official receipt
received by the Company showing payment thereof. If the Company fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary evidence,
the Company shall indemnify the Agent and the Banks for any incremental taxes,
interest or penalties that may become payable by the Agent or any Bank as a
result of any such failure. The agreements in this subsection shall survive the
termination of the Credit Agreement and the payment of the Revolving Credit
Notes and all other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Company and the Agent (A) two duly completed
copies of United States internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal Revenue Service Form W-
8 or W-9, or successor applicable form, as the case may be;
(ii) deliver to the Company and the Agent two further copies of any
such form or certification on or before the date that such form or certification
expires or becomes obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Company; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Company or the
Agent; unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank so advises the Company
and the Agent. Such Bank shall certify (i) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Bank or a participant pursuant to subsection 8.7
of the Credit Agreement shall, upon the effectiveness of the related transfer,
be required to provide all of the forms and statements required pursuant to this
subsection, provided that in the case of a participant such participant shall
furnish all such required forms and statements to the Bank from which the
related participation shall have been purchased.
14. The parties understand and agree that the limitations and provisions
of paragraph 8.7 of the Credit Agreement shall not prevent any Bank from
transferring its Revolving Credit Loans, Revolving Credit Note and Revolving
Credit Commitment to another branch of the same institution.
15. Contemporaneously with the execution hereof, the Company shall pay an
amendment fee, in consideration of the agreements and undertakings of the Banks
set forth in this Third Amendment, as follows:
(a) To each Joining Bank, a payment equal to one-tenth of one percent
(.10%) of the amount of the Facility Commitment of each such Bank;
(b) To each Bank (other than the Joining Banks) whose Facility
Commitment is increasing, one-tenth of one percent (.10%) of the amount of the
increase in the Facility Commitment of each such Bank (as reflected by Seventh
Replacement Schedule 9); and
(c) To each Bank other than the Joining Banks, three-hundreds of one
percent (.03%) of the amount of the Facility Commitment of each such Bank in
effect prior to the date of this Third Amendment.
16. The parties hereto covenant and agree that each of Chemical, B of A
Illinois and Midlantic shall be a managing agent (individually referred to as a
"Managing Agent" and collectively as the "Managing Agents") who shall perform
such duties and responsibilities as the Company, the Agent and the Banks may
hereafter request and the Managing Agents shall accept. Without the prior
written consent of the Agent, no duty, responsibility, right or option granted
to the Agent shall be delegated to any of the Managing Agents and no
compensation payable to the Agent shall be shared with the Managing Agents.
Except as limited by this paragraph, each disclaimer, exculpation provision,
indemnity and other provision contained in Section 9 of the Credit Agreement
provided for the benefit of the Agent shall likewise be deemed given to and
provided for the Managing Agents.
17. The Company hereby warrants and represents as follows:
(a) There is not currently outstanding any Event of Default of any
event which with the giving of notice or the lapse of time or both would become
an Event of Default;
(b) The Company has full power, authority and legal right to execute,
deliver and perform under this Third Amendment. The execution, delivery and
performance by the Company of this Third Amendment have been duly authorized by
all necessary corporate action and are in furtherance of its corporate purposes.
(c)The Guarantors each have full power, authority and legal right to
execute, deliver and perform under this Third Amendment. The execution,
delivery and performance by each Guarantor of this Third Amendment have been
duly authorized by all necessary corporate action and are in furtherance of its
corporate purposes.
(d) No consent of any other Person (including shareholders of the
Company or of any of the Guarantors) and no consent, license, approval or
authorization of, or registration or declaration with, any governmental body,
authority, bureau or agency is required in connection with the execution,
delivery and performance by the Company and the Guarantors of this Third
Amendment.
(e) The execution, delivery and performance of and compliance with
this Third Amendment will not result in any violation of or be in conflict with
or constitute a default under any term of the respective certificates of
incorporation or bylaws of the Company or any Guarantor, or of any agreement,
indenture, mortgage, lease, assignment, note or other instrument to which the
Company or any Guarantor is a party or which purports to be binding upon any of
them or upon any of their properties or assets, or any judgment, decree, order,
law, statute, ordinance, rule or governmental regulation applicable to any of
them (except to the extent that any such violations, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect), or result in the
creation of an Encumbrance upon any of their properties or assets pursuant to
any such term.
(f) The respective representations and warranties of the Company and
each of the Guarantors contained in the Credit Agreement are true and complete
and correct in all material respects (or as to any representation or warranty
which is expressly qualified by reference to the term "Material Adverse Effect",
then in all respects) as if made on and as of the date of this Third Amendment,
except that the following changes have occurred with respect to the Schedules
attached to and made part of the Credit Agreement:
(i) Schedule 1 has been further modified as a result of the
inclusion of additional Guarantors and other Consolidated Subsidiaries since the
date of the Second Amendment, each Guarantor executing a separate Joinder
Agreement and also executing this Third Amendment in such capacity, and Third
Supplement to Schedule 1 reflecting the names and status of all such additional
Consolidated Subsidiaries is attached hereto and made part hereof;
(ii) Seventh Replacement Schedule 9 and Third Replacement
Schedule 11 attached to this Third Amendment are deemed incorporated into the
Credit Agreement and Third Supplement to Schedule 1 attached to this Third
Amendment is deemed incorporated into Schedule 1 (as previously amended) to
the Credit Agreement.
18. This Third Amendment shall amend and be deemed incorporated into the
Credit Agreement as previously amended. To the extent any provision of this
Third Amendment is expressly inconsistent with any term or provision of the
Credit Agreement, as previously amended, the terms and provisions of this Third
Amendment shall control.
19. This Third Amendment may be executed by one or more of the parties
hereto on any number of separate counterparts, and all of said counterparts
taken together shall be deemed and constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, Hovnanian, the Guarantors, the Banks and
the Agent have each executed this Third Amendment as of the date first above
written.
By:
J. Larry Sorsby
Senior Vice President,
Treasurer and Chief Financial Officer
HOVNANIAN ENTERPRISES, INC.
By:
J. Larry Sorsby
Senior Vice President,
Treasurer and Chief Financial Officer
EASTERN TITLE AGENCY, INC.
CEDAR HILL WATER WORKS CORPORATION
CEDAR HILL SEWER WORKS CORPORATION
0515 CO., INC.
EXC, INC.
DRYER ASSOCIATES, INC.
EASTERN NATIONAL TITLE INSURANCE AGENCY, INC.
EASTERN NATIONAL TITLE INSURANCE AGENCY I, INC.
K. HOVNANIAN ENTERPRISES, INC.
ARROW PROPERTIES, INC.
K. HOVNANIAN AT HOPEWELL III INC.
K. HOVNANIAN AT WAYNE IV, INC.
(f/k/a K. HOVNANIAN AT DOVER TOWNSHIP, INC.)
K. HOVNANIAN AT MONTVILLE, INC.
K. HOVNANIAN AT ATLANTIC CITY, INC.
HOVNANIAN AT TARPON LAKES I, INC.
HOVNANIAN AT TARPON LAKES II, INC.
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.
HOVNANIAN GEORGIA, INC.
HOVNANIAN OF PALM BEACH, INC.
HOVNANIAN OF PALM BEACH, II, INC.
HOVNANIAN OF PALM BEACH, III, INC.
HOVNANIAN OF PALM BEACH, IV, INC.
HOVNANIAN OF PALM BEACH, V, INC.
HOVNANIAN OF PALM BEACH, VI, INC.
HOVNANIAN OF PALM BEACH, VII, INC.
HOVNANIAN OF PALM BEACH, VIII, INC.
HOVNANIAN OF PALM BEACH, IX, INC.
HOVNANIAN OF PALM BEACH, X, INC.
HOVNANIAN OF PALM BEACH, XI, INC.
MONTEGO BAY II ACQUISITION CORP., INC.
HOVNANIAN PENNSYLVANIA, INC.
HOVNANIAN PROPERTIES OF ATLANTIC COUNTY, INC.
HOVNANIAN TEXAS, INC.
JERSEY CITY DANFORTH CSP, INC.
K. HOVNANIAN AT ASHBURN VILLAGE
K. HOVNANIAN AT BARDEN OAKS, INC.
K. HOVNANIAN AT KINGS GRANT I, INC.
K. HOVNANIAN AT BERNARDS II, INC.
K. HOVNANIAN AT PERKIOMEN I, INC.
K. HOVNANIAN AT BRANCHBURG I, INC.
K. HOVNANIAN AT BRANCHBURG II, INC.
K. HOVNANIAN AT BRANCHBURG III, INC.
K. HOVNANIAN AT BRIDGEWATER V, INC.
K. HOVNANIAN AT BRIDGEWATER II, INC.
K. HOVNANIAN AT BRIDGEWATER III, INC.
K. HOVNANIAN AT BRIDGEWATER IV, INC.
K. HOVNANIAN AT BULL RUN, INC.
K. HOVNANIAN AT BURLINGTON, INC.
K. HOVNANIAN AT CARMEL, INC.
K. HOVNANIAN AT CAROLINA COUNTY CLUB I, INC.
K. HOVNANIAN AT CEDAR GROVE I, INC.
K. HOVNANIAN AT CEDAR GROVE II, INC.
K. HOVNANIAN AT CHAPEL TRAIL, INC.
K. HOVNANIAN AT DELRAY BEACH, INC.
K. HOVNANIAN AT DELRAY BEACH I, INC.
K. HOVNANIAN AT DELRAY BEACH II, INC.
K. HOVNANIAN AT OCEAN TOWNSHIP II, INC.
K. HOVNANIAN AT HORIZON HEIGHTS, INC.
(f/k/a K. HOVNANIAN AT EAST BRUNSWICK II, INC.)
K. HOVNANIAN AT KLOCKNER FARMS, INC.
K. HOVNANIAN COMPANIES JERSEY SHORE, INC.
K. HOVNANIAN AT EAST BRUNSWICK, INC.
K. HOVNANIAN AT EMBASSY LAKES INC.
K. HOVNANIAN AT FAIRWAY VIEWS, INC.
K. HOVNANIAN AT FT. MYERS I, INC.
K. HOVNANIAN AT FT. MYERS II, INC.
K. HOVNANIAN AT FREEHOLD TOWNSHIP, INC. (f/k/a K. HOVNANIAN AT GALLOWAY, INC.)
K. HOVNANIAN AT LAKEWOOD, INC. (f/k/a K. HOVNANIAN AT GALLOWAY III, INC.)
MINERVA GROUP, INC. (f/k/a K. HOVNANIAN AT GALLOWAY IV, INC.)
PARTHENON GROUP, INC. (f/k/a K. HOVNANIAN AT GALLOWAY V, INC.)
K. HOVNANIAN AT MARLBORO TOWNSHIP, INC.
K. HOVNANIAN AT WAYNE V, INC. (f/k/a K. HOVNANIAN AT GALLOWAY VII, INC.)
K. HOVNANIAN AT GALLOWAY VIII, INC.
K. HOVNANIAN AT READINGTON, INC.
K. HOVNANIAN AT HALF MOON BAY, INC.
K. HOVNANIAN AT HOWELL TOWNSHIP II, INC.
(f/k/a K. HOVNANIAN AT HAMILTON, INC.)
K. HOVNANIAN AT HAMILTON II, INC.
K. HOVNANIAN AT HOPEWELL I, INC.
K. HOVNANIAN AT PLAINSBORO III, INC.
(f/k/a K. HOVNANIAN AT HOPEWELL II, INC. (a 1989 corp.))
K. HOVNANIAN AT JACKSONVILLE I, INC.
K. HOVNANIAN AT JACKSONVILLE II, INC.
K. HOVNANIAN AT JENSEN BEACH, INC.
K. HOVNANIAN AT JERSEY CITY I, INC.
K. HOVNANIAN AT JERSEY CITY II, INC.
K. HOVNANIAN AT JERSEY CITY III, INC.
K. HOVNANIAN AT LAKE CHARLESTOWN, INC.
K. HOVNANIAN COMPANIES OF NORTH JERSEY, INC.
K. HOVNANIAN AT LAWRENCE GROVE, INC.
K. HOVNANIAN AT LAWRENCE SQUARE, INC.
K. HOVNANIAN AT MAHWAH V, INC.
(f/k/a K. HOVNANIAN AT LAWRENCE SQUARE II, INC.)
K. HOVNANIAN AT WALL TOWNSHIP II, INC.
K. HOVNANIAN AT SOUTH BRUNSWICK II, INC.
K. HOVNANIAN AT LOWER SAUCON, INC.
K. HOVNANIAN AT MAHOPAC, INC.
K. HOVNANIAN AT EAST WINDSOR I, INC. (f/k/a K. HOVNANIAN AT MAHWAH I, INC.)
K. HOVNANIAN AT MAHWAH II, INC.
K. HOVNANIAN AT MAHWAH III, INC.
K. HOVNANIAN AT MAHWAH IV, INC.
K. HOVNANIAN AT MAHWAH VI, INC.
K. HOVNANIAN AT MEDFORD I, INC.
K. HOVNANIAN AT MONTCLAIR, INC.
K. HOVNANIAN AT MARTIN DOWNS I, INC.
K. HOVNANIAN AT MARTIN DOWNS II, INC.
K. HOVNANIAN AT MERRIMACK, INC.
K. HOVNANIAN AT MERRIMACK II, INC.
K. HOVNANIAN AT MONTGOMERY I, INC.
K. HOVNANIAN AT MONTVILLE, INC.
K. HOVNANIAN AT WALL TOWNSHIP, INC.
K. HOVNANIAN AT WAYNE III, INC. (f/k/a K. HOVNANIAN AT MORRIS II, INC.)
K. HOVNANIAN AT NEWARK I, INC.
K. HOVNANIAN AT WALL TOWNSHIP III, INC.
K. HOVNANIAN AT NEWARK URBAN RENEWAL CORPORATION I, INC.
K. HOVNANIAN AT NEWARK URBAN RENEWAL CORPORATION II, INC.
K. HOVNANIAN AT NEWARK URBAN RENEWAL CORPORATION III, INC.
K. HOVNANIAN AT NEWARK URBAN RENEWAL CORPORATION IV, INC.
K. HOVNANIAN AT NEWARK URBAN RENEWAL CORPORATION V, INC.
K. HOVNANIAN AT NORTH BRUNSWICK II, INC.
K. HOVNANIAN AT NORTH BRUNSWICK III, INC.
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.
K. HOVNANIAN AT ORLANDO I, INC.
K. HOVNANIAN AT ORLANDO II, INC.
K. HOVNANIAN AT ORLANDO III, INC.
K. HOVNANIAN AT ORLANDO IV, INC.
K. HOVNANIAN AT PALM BEACH XIII, INC.
K. HOVNANIAN AT PASCO I, INC.
K. HOVNANIAN AT PASCO II, INC.
K. HOVNANIAN AT PEEKSKILL, INC.
K. HOVNANIAN AT MAHWAH VII, INC. (f/k/a
K. HOVNANIAN AT PISCATAWAY, INC.)
K. HOVNANIAN AT MONTCLAIR, N.J., INC.
K. HOVNANIAN AT THE RESERVE AT MEDFORD, INC.
K. HOVNANIAN AT PLAINSBORO I, INC.
K. HOVNANIAN AT PORT ST. LUCIE I, INC.
K. HOVNANIAN AT RIVER OAKS, INC.
K. HOVNANIAN AT RESERVOIR RIDGE, INC. (f/k/a K. HOVNANIAN AT SOMERSET, INC.)
K. HOVNANIAN AT SOUTH BRUNSWICK, III, INC.
(f/k/a K. HOVNANIAN AT SOMERSET II, INC.)
K.HOVNANIAN AT PRINCETON, INC. (f/k/a K. HOVNANIAN AT SOMERSET III, INC.)
K. HOVNANIAN AT HOWELL TOWNSHIP, INC. (f/k/a K. HOVNANIAN AT SOMERSET V, INC.)
K. HOVNANIAN AT SOMERSET VI, INC.
K. HOVNANIAN AT SOUTH BRUNSWICK IV, INC.
(f/k/a/ K. HOVNANIAN AT SOMERSET VII, INC.)
K. HOVNANIAN AT SOMERSET VIII, INC.
K. HOVNANIAN AT SOUTH BRUNSWICK, INC.
K. HOVNANIAN AT SPRING RIDGE, INC.
K. HOVNANIAN AT SULLY STATION, INC.
K. HOVNANIAN AT TARPON LAKES III, INC.
K. HOVNANIAN AT TAUTON, INC.
K. HOVNANIAN AT BRANCHBURG IV, INC. (f/k/a K. HOVNANIAN AT TINTON FALLS, INC.)
K. HOVNANIAN AT WEST ORANGE, INC.(f/k/a K. HOVNANIAN AT TINTON FALLS II, INC.)
K. HOVNANIAN AT UPPER MERION, INC.
K. HOVNANIAN AT VALLEYBROOK, INC.
K. HOVNANIAN AT WALL TOWNSHIP, INC.
K. HOVNANIAN AT WALL TOWNSHIP V, INC.
K. HOVNANIAN AT WASHINGTONVILLE, INC.
K. HOVNANIAN AT WAYNE, INC.
K. HOVNANIAN AT WESTCHESTER, INC.
K. HOVNANIAN AT WOODBRIDGE ESTATES, INC.
K. HOVNANIAN AVIATION, INC.
K. HOVNANIAN COMPANIES OF FLORIDA, INC.
K. HOVNANIAN COMPANIES OF MASSACHUSETTS, INC.
K. HOVNANIAN COMPANIES OF METRO WASHINGTON, INC.
K. HOVNANIAN COMPANIES NORTHEAST, INC.
K. HOVNANIAN COMPANIES OF NEW YORK, INC.
K. HOVNANIAN COMPANIES OF NORTH CAROLINA, INC.
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.
(f/k/a K. HOVNANIAN COMPANIES OF THE DELAWARE VALLEY, INC.)
K. HOVNANIAN DEVELOPMENTS OF METRO WASHINGTON, INC.
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.
K. HOVNANIAN EQUITIES, INC.
K. HOVNANIAN AT MONTVILLE II, INC.
K. HOV INTERNATIONAL, INC.
KINGS GRANT EVESHAM CORP.
K. HOVNANIAN INVESTMENT PROPERTIES OF NEW JERSEY, INC.
K. HOVNANIAN MARINE, INC.
K. HOVNANIAN MORTGAGE USA, INC.
K. HOVNANIAN OF FLORIDA, INC.
K. HOVNANIAN AT CAROLINA COUNTRY CLUB, INC.
K. HOVNANIAN OF PALM BEACH XIII, INC.
K. HOVNANIAN AT HANOVER, INC.
MOLLY PITCHER CONSTRUCTION CO., INC. (f/k/a MOLLY PITCHER RENOVATIONS, INC.)
K. HOVNANIAN PROPERTIES OF EAST BRUNSWICK II, INC.
K. HOVNANIAN PROPERTIES OF RED BANK, INC.
(f/k/a K. HOVNANIAN PROPERTIES OF FRANKLIN II,INC.)
K. HOVNANIAN PROPERTIES OF FRANKLIN, INC.
K. HOVNANIAN PROPERTIES OF NORTH BRUNSWICK I, INC.
(f/k/a K. HOVNANIAN PROPERTIES OF GALLOWAY II, INC.)
K. HOVNANIAN PROPERTIES OF ORLANDO, INC.
K. HOVNANIAN REAL ESTATE INVESTMENT, INC.
K. HOVNANIAN REAL ESTATE OF FLORIDA, INC.
K. HOVNANIAN PLAINSBORO, II, INC.
LANDARAMA, INC.
K. HOVNANIAN AT BEDMINSTER, INC.
NEW ENGLAND COMMUNITY MANAGEMENT CO., INC.
NEW K. HOVNANIAN COMPANIES OF FLORIDA, INC.
K. HOVNANIAN TREASURE COAST, INC.
(f/k/a NEW K. HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.)
PIKE UTILITIES, INC.
PINE BROOK CO., INC.
R.C.K. COMMUNITY MANAGEMENT CO., INC.
RECREATIONAL DEVELOPMENT CORP., INC.
K. HOVNANIAN AT WALL TOWNSHIP IV, INC.
MONTEGO BAY I ACQUISITION CORP., INC.
SOUTH FLORIDA RESIDENTIAL TITLE AGENCY, INC.
K. HOVNANIAN AT NORTH BRUNSWICK IV, INC.
(f/k/a THE HERITAGE CLUB AT HOLMDEL, INC.)
THE NEW FORTIS CORPORATION
TROPICAL SERVICE BUILDERS, INC.
WESTERN FINANCIAL SERVICES, INC.
K. HOVNANIAN COMPANIES OF CENTRAL JERSEY, INC.
K. HOVNANIAN AT HOLMDEL, INC.
K. HOVNANIAN PROPERTIES OF ATLANTIC COUNTY, INC.
K. HOVNANIAN AT HOLLY CREST, INC.
K. HOVNANIAN AT LAKE CHARLESTON II, INC.
K. HOVNANIAN AT LAKE CHARLESTON III, INC.
K. HOVNANIAN COMPANIES OF NORTH CENTRAL JERSEY, INC.
KHIPE, INC.
K. HOVNANIAN INVESTMENT PROPERTIES, INC.
K. HOVNANIAN AT BELMONT, INC.
K. HOVNANIAN AT CAROLINA COUNTRY CLUB II, INC.
K. HOVNANIAN AT PARK RIDGE, INC.
K. HOVNANIAN AT VALLEYBROOK II, INC.
K. HOVNANIAN AT FAIR LAKES, INC. (f/k/a K. HOVNANIAN AT WATER'S EDGE, INC.)
K. HOVNANIAN AT WINSTON TRAILS II, INC.
K. HOVNANIAN AT FAIR LAKES GLEN, INC.
K. HOVNANIAN AT PEMBROKE SHORES, INC.
(f/k/a K. HOVNANIAN AT PEMBROKE ISLES, INC.)
K. HOVNANIAN AT COCONUT CREEK, INC.
GOVERNOR'S ABSTRACT CO., INC.
K. HOVNANIAN AT POLO TRACE, INC.
K. HOVNANIAN COMPANIES OF SOUTH JERSEY, INC.
K. HOVNANIAN AT PERKIOMEN II, INC.
K. HOVNANIAN AT WAYNE II, INC.
K. HOVNANIAN AT UPPER MAKEFIELD I, INC.
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.
K. HOVNANIAN AT LA TERRAZA, INC.
(f/k/a K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA I, INC.)
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.
FOUNDERS TITLE AGENCY, INC.
K. HOVNANIAN AT CAROLINA COUNTRY CLUB III, INC.
KHC ACQUISITION, INC.
STONEBROOK HOMES, INC.
K. HOVNANIAN AT STUART ROAD, INC.
K. HOVNANIAN AT BALLANTRAE, INC.
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.
K. HOVNANIAN AT EAST WINDSOR II, INC.
(f/k/a K. HOVNANIAN PROPERTIES OF GALLOWAY, INC.)
BALLANTRAE HOME SALES, INC.
K. HOVNANIAN AT HACKETTSTOWN, INC.
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA II, INC.
K. HOVNANIAN AT GREENBROOK, INC. (f/k/a K. HOVNANIAN AT FAIRWAY ESTATES, INC.,
f/k/a K. HOVNANIAN AT SPRING MOUNTAIN, INC.)
K. HOVNANIAN AT CARMEL DEL MAR, INC.
K. HOVNANIAN AT PRINCETON, INC.
K. HOVNANIAN AT HUNTER ESTATES, INC.
K. HOVNANIAN AT VAIL RANCH, INC.
K. HOVNANIAN AT RARITAN I, INC.
K. HOVNANIAN AT CALABRIA, INC.
K. HOVNANIAN AT BEDMINSTER II, INC.
K. HOVNANIAN AT BERLIN, INC.
K. HOVNANIAN FLORIDA REGION, INC.
K. HOVNANIAN AT MARLBORO TOWNSHIP II, INC.
K. HOVNANIAN SOUTHEAST FLORIDA, INC.
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.
K. HOVNANIAN COMPANIES OF MARYLAND, INC.
K. HOVNANIAN AT SENECA CROSSING, INC.
K. HOVNANIAN AT EXETER HILLS, INC.
K. HOVNANIAN AT EAST BRUNSWICK VI, INC.
K. HOVNANIAN AT INVERRARY I, INC.
K. HOVNANIAN AT MAHWAH IX, INC.
K. HOVNANIAN AT HOPEWELL IV, INC.
K. HOVNANIAN AT NORTHLAKE, INC.
K. HOVNANIAN AT LOCUST GROVE I, INC.
(f/k/a K. HOVNANIAN AT HOPEWELL II, INC. (a 1995 corp.)
K. HOVNANIAN AT BERNARDS III, INC.
K. HOVNANIAN AT BRIDGEWATER VI, INC.
K. HOVNANIAN AT CASTILE, INC.
K. HOVNANIAN AT TIERRASANTA, INC.
K. HOVNANIAN AT WAYNE VI, INC.
K. HOVNANIAN AT PRESTON, INC.
K. HOVNANIAN AT LAKES OF BOCA RATON, INC.
K. HOVNANIAN AT WINSTON TRAILS, INC.
K. HOVNANIAN AT EAST BRUNSWICK V, INC.
K. HOVNANIAN AT MAHWAH VIII, INC. (f/k/a K. HOVNANIAN AT GALLOWAY II, INC.)
BALLANTRAE DEVELOPMENT CORP.
K. HOVNANIAN AT MARLBORO TOWNSHIP III, INC.
(f/k/a K. HOVNANIAN PROPERTIES OF NORTH BRUNSWICK III, INC.)
K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.
K. HOVNANIAN AT TROVATA, INC.
K. HOVNANIAN AT THE BLUFF, INC.
(f/k/a K. HOVNANIAN PROPERTIES OF NORTH BRUNSWICK IV. INC.)
K. HOVNANIAN AT SCOTCH PLAINS, INC.
(f/k/a K. HOVNANIAN AT WATCHUNG RESERVE, INC.)
K. HOVNANIAN AT EAST BRUNSWICK VII, INC.
(f/k/a K. HOVNANIAN AT WINDSONG EAST BRUNSWICK, INC.)
K. HOVNANIAN AT SOUTH BRUNSWICK V. INC.
K. HOVNANIAN AT TANNERY HILL, INC.
K. HOVNANIAN AT WALL TOWNSHIP VI, INC.
K. HOVNANIAN AT CRYSTAL SPRINGS, INC.
K. HOVNANIAN AT THE CEDARS, INC.
K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.
K. HOVNANIAN ACQUISITIONS, INC.
K. HOVNANIAN AT BURLINGTON II, INC.
K. HOVNANIAN AT BURLINGTON III, INC.
K. HOVNANIAN AT MANALAPAN, INC.
K. HOVNANIAN AT BALLANTREA ESTATES, INC.
K. HOVNANIAN AT SMITHVILLE, INC.
K. HOVNANIAN AT JEFFERSON, INC.
(f/k/a K. HOVNANIAN AT HERSHEY'S MILL, INC. (aNJ corp.))
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP I, INC.
K. HOVNANIAN AT HERSHEY'S MILL, INC. (a PA corp.)
BALLANTRAE MARINA, INC.
K. HOVNANIAN AT BERNARDS IV, INC.
K. HOVNANIAN AT DOMINION RIDGE, INC.
K. HOVNANIAN AT WALL TOWNSHIP VII, INC.
By:
J. Larry Sorsby
Senior Vice President, Treasurer and
Chief Financial Officer of each of
the foregoing corporations
MIDLANTIC BANK, N.A. AS AGENT
By:
Name: Douglas G. Paul
Title: Vice President
MIDLANTIC BANK, N.A.
By:
Name: Douglas G. Paul
Title: Vice President
CHEMICAL BANK
By:
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
Name:
Title:
MERIDIAN BANK
By:
Name:
Title:
NATIONSBANK, NATIONAL ASSOCIATION
By:
Name:
Title:
FIRST NATIONAL BANK OF BOSTON
By:
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
Name:
Title:
COMERICA BANK
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title: