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<SEC-DOCUMENT>0000950123-11-014330.txt : 20110215
<SEC-HEADER>0000950123-11-014330.hdr.sgml : 20110215
<ACCEPTANCE-DATETIME>20110215172115
ACCESSION NUMBER:		0000950123-11-014330
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20110209
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110215
DATE AS OF CHANGE:		20110215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HOVNANIAN ENTERPRISES INC
		CENTRAL INDEX KEY:			0000357294
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATIVE BUILDERS [1531]
		IRS NUMBER:				221851059
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08551
		FILM NUMBER:		11615193

	BUSINESS ADDRESS:	
		STREET 1:		110 WEST FRONT STREET
		STREET 2:		PO BOX 500
		CITY:			RED BANK
		STATE:			NJ
		ZIP:			07701
		BUSINESS PHONE:		7327477800

	MAIL ADDRESS:	
		STREET 1:		110 WEST FRONT STREET PO BOX 500
		STREET 2:		110 WEST FRONT STREET  PO BOX 500
		CITY:			RED BANK
		STATE:			NJ
		ZIP:			07701
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>y89643e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
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<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): February&nbsp;9, 2011</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>HOVNANIAN ENTERPRISES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in Charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR></TR>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-8551</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>22-1851059</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or Other <BR>
Jurisdiction <BR>
of Incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>110 West Front Street<BR>
P.O. Box 500<BR>
Red Bank, New Jersey 07701</B><BR>
(Address of Principal Executive Offices) (Zip Code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(732)&nbsp;747-7800</B><BR>
(Registrant&#146;s telephone number, including area code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Not Applicable</B><BR>
(Former Name or Former Address, if Changed Since<BR>
Last Report)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;1.01. <u>Entry Into a Material Definitive Agreement</u>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><I>Common Stock Offering</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On February&nbsp;9, 2011, Hovnanian Enterprises, Inc. (&#147;Hovnanian&#148;),
completed an underwritten public offering of 13,512,500 shares
(the &#147;Shares&#148;) of its Class&nbsp;A Common Stock, par value $0.01 per
share (the &#147;Common Stock&#148;), including 1,762,500 Shares issued
pursuant to the over-allotment option granted to the
underwriters, at a price of $4.30 per share, pursuant to an
underwriting agreement (the &#147;Common Stock Underwriting
Agreement&#148;) among Hovnanian and J.P. Morgan Securities LLC,
Credit Suisse Securities (USA)&nbsp;LLC, Merrill Lynch, Pierce,
Fenner &#038; Smith Incorporated and Citigroup Global Markets Inc.,
and the several other underwriters named therein. The Common
Stock Underwriting Agreement has previously been filed as
Exhibit&nbsp;1.3 to Hovnanian&#146;s Current Report on Form 8-K dated
February&nbsp;9, 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 4%"><I>Senior Notes Offering</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">On February&nbsp;14, 2011, K. Hovnanian Enterprises, Inc. (&#147;K.
Hovnanian&#148;), a wholly owned subsidiary of Hovnanian, completed
an underwritten public offering of $155,000,000 aggregate
principal amount of 11<font size="2"></FONT><SUP><FONT style="FONT-SIZE: 60%">7</font></SUP>/<FONT style="FONT-SIZE: 50%">8</FONT>% Senior Notes due 2015 (the &#147;Senior
Notes&#148;), pursuant to an underwriting agreement (the &#147;Senior
Notes Underwriting Agreement&#148;) among K. Hovnanian, Hovnanian,
the Subsidiary Guarantors (as defined below), and Credit Suisse
Securities (USA)&nbsp;LLC, Citigroup Global Markets Inc., Deutsche
Bank Securities Inc. and J.P. Morgan Securities LLC. The
Senior Notes Underwriting Agreement has previously been filed
as Exhibit&nbsp;1.2 to Hovnanian&#146;s Current Report on Form 8-K dated
February&nbsp;9, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In connection with the issuance of the Senior Notes, K.
Hovnanian and Hovnanian, as guarantor, entered into an
Indenture dated as of February&nbsp;14, 2011 with Wilmington Trust
Company, as trustee (the &#147;Senior Notes Base Indenture&#148;), and a
First Supplemental Indenture, with the Subsidiary Guarantors
and the Trustee (the &#147;Senior Notes Supplemental Indenture&#148; and,
together with the Senior Notes Base Indenture, the &#147;Senior
Notes Indenture&#148;). The form of the Senior Notes Base Indenture
was filed as Exhibit&nbsp;4.14 to Hovnanian&#146;s, K. Hovnanian&#146;s and
the Subsidiary Guarantors&#146; Registration Statement on Form S-3
(File No.&nbsp;333-171349) (the &#147;Registration Statement&#148;). As of
the date of the Senior Notes Supplemental Indenture, Hovnanian
and each of Hovnanian&#146;s subsidiaries, except for its home
mortgage subsidiaries, joint ventures and subsidiaries holding
interests in joint ventures and certain of its title insurance
subsidiaries, is a guarantor of the Senior Notes
(collectively, the &#147;Subsidiary Guarantors&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Senior Notes bear interest at 11<font size="2"></FONT><SUP><FONT style="FONT-SIZE: 60%">7</font></SUP>/<FONT style="FONT-SIZE: 50%">8</FONT>% per annum and mature on
October&nbsp;15, 2015. Interest is payable semi-annually on April&nbsp;15
and October&nbsp;15 of each year, beginning on April&nbsp;15, 2011, to
holders of record at the close of business on April 1 or
October&nbsp;1, as the case may be, immediately preceding each such
interest payment date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">The Senior Notes Indenture contains restrictive covenants that
limit among other things, the ability of Hovnanian and certain
of its subsidiaries, including K. Hovnanian, to incur
additional indebtedness, pay dividends and make distributions
on common and preferred stock, repurchase common and preferred
stock, make other restricted payments, including investments,
sell certain assets, incur liens, consolidate, merge, sell or
otherwise dispose of all or substantially all of its assets and
enter into certain transactions with affiliates. The Senior
Notes Indenture also contains customary events of default which
would permit the holders of the Senior Notes to declare those
Senior Notes to be immediately due and payable if not cured
within applicable grace periods, including the failure to make
timely payments on the Senior Notes or other material
indebtedness, the failure to satisfy covenants and specified
events of bankruptcy and insolvency.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Tangible Equity Units Offering</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also on February&nbsp;9, 2011, Hovnanian and K. Hovnanian completed
an underwritten public offering of an aggregate of 3,000,000
7.25% Tangible Equity Units (the &#147;Units&#148;), and on February&nbsp;14,
2011, Hovnanian and K. Hovnanian issued an additional 450,000
Units pursuant to the over-allotment option granted to the
underwriters as provided in the underwriting agreement (the
&#147;Units Underwriting Agreement&#148;), among Hovnanian, K. Hovnanian
and the Subsidiary Guarantors, and Credit Suisse Securities
(USA)&nbsp;LLC, Citigroup Global Markets Inc. and J.P. Morgan
Securities LLC, and the several other underwriters named
therein. The Units Underwriting Agreement has previously been
filed as Exhibit&nbsp;1.6 to Hovnanian&#146;s Current Report on Form 8-K
dated February&nbsp;9, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Unit initially consists of (i)&nbsp;a prepaid stock purchase
contract (each, a &#147;Purchase Contract,&#148; and collectively, the
&#147;Purchase Contracts&#148;), which shall be settled against by Hovanian by delivery
of a number of shares of Hovnanian&#146;s Common Stock to be
determined pursuant to the Purchase Contract Agreement (as
defined below) and (ii)&nbsp;a senior subordinated amortizing note
due February&nbsp;15, 2014 (each, an &#147;Amortizing Note,&#148; and
collectively, the &#147;Amortizing Notes&#148;) which has an initial
principal amount of $4.526049 per Amortizing Note, bears
interest at a rate of 12.072% per annum, and has a scheduled
final installment payment date of February&nbsp;15, 2014.
Each Unit may be separated into its constituent Purchase
Contract and Amortizing Note after the initial issuance date of
the Units, and the separate components may be combined to
create a Unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the issuance of the Units (and the Purchase
Contracts that are a component thereof), Hovnanian and K. Hovnanian entered into a Purchase
Contract Agreement, dated as of February&nbsp;9, 2011, with Wilmington Trust Company, as purchase contract agent, as trustee under the Amortizing Notes
Indenture (as defined below) and as attorney-in-fact for the holders of the Purchase Contracts from
time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless settled earlier, on February&nbsp;15, 2014 (subject
to postponement under certain circumstances), each Purchase
Contract will automatically settle and Hovnanian will deliver a
number of shares of Common Stock based on the applicable market
value, which is the average of the closing prices of the Common
Stock on each of the 20 consecutive trading days beginning on,
and including, the 23rd scheduled trading day immediately
preceding February&nbsp;15, 2014, as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if the applicable market value equals or exceeds the
threshold appreciation price, which is approximately $5.25,
holders will receive 4.7655 shares (subject to adjustment);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if the applicable market value is greater than $4.30
but less than the threshold appreciation price, holders will
receive a number of shares having a value, based on the
applicable market value, equal to $25; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if the applicable market value is less than or equal to $4.30, holders will receive 5.8140 shares (subject to adjustment).</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At any time prior to the third scheduled trading day immediately
preceding February&nbsp;15, 2014, the holder of a Purchase Contract
may settle its purchase contract early, and Hovnanian will
deliver 4.7655 shares of Common Stock. In addition, if a
&#147;fundamental change&#148; (as defined in the Purchase Contract
Agreement) occurs and the Purchase Contract holder elects to
settle its Purchase Contract early in connection with such
fundamental change, such holder will receive a number of shares
of Common Stock based on the fundamental change early
settlement rate, as described in the Purchase Contract
Agreement. Hovnanian may elect to settle all, but not less than all, outstanding
Purchase Contracts prior to February&nbsp;15, 2014 at the &#147;early
mandatory settlement rate&#148; (as defined in the Purchase Contract
Agreement), upon a date fixed by Hovnanian upon not less than
five business days&#146; notice. Except for cash in lieu of
fractional shares, the Purchase Contract holders will not
receive any cash distributions under the Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In order to preserve the tax treatment of Hovnanian&#146;s net operating loss carryforwards under the
Internal Revenue Code of 1986, as amended, beneficial owners of Units and any separate Purchase
Contracts will be subject to both a beneficial ownership limitation (the &#147;Section&nbsp;382 Ownership
Blocker&#148;) and a settlement limitation (the &#147;Section&nbsp;382 settlement blocker&#148;) each as described in
the Purchase Contract Agreement. In addition, holders of Common Stock (including holders of Units
or separate Purchase Contracts that become holders of Common Stock upon settlement of the Purchase
Contracts), will be subject to both Hovnanian&#146;s stockholder rights plan and the transfer
restrictions of Hovnanian&#146;s amended Certificate of Incorporation, each as further described in the
Registration Statement, and the prospectus supplement relating to the offering of the Units dated
February&nbsp;3, 2011 to the prospectus contained therein dated January&nbsp;28, 2011.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the issuance of the Amortizing Notes, which
are a component of the Units, K. Hovnanian and Hovnanian, as guarantor, entered into Indenture,
dated as of February&nbsp;9, 2011 with Wilmington Trust Company, as
trustee (the &#147;Amortizing Notes Base Indenture&#148;), and a First
Supplemental Indenture, with the Subsidiary Guarantors (as defined above under Senior Notes Offering) and the
Trustee (the &#147;Amortizing Notes Supplemental Indenture&#148; and,
together, with the Amortizing Notes Base Indenture, the
&#147;Amortizing Notes Indenture&#148;). The form of the Amortizing
Notes Base Indenture was filed as Exhibit&nbsp;4.15 to the
Registration Statement. As of the date of the
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Amortizing Notes
Supplemental Indenture, the Amortizing Notes are guaranteed by Hovnanian and the Subsidiary Guarantors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On each February&nbsp;15, May&nbsp;15, August&nbsp;15 and November&nbsp;15,
commencing on May&nbsp;15, 2011 (each, an &#147;installment payment
date&#148;), K. Hovnanian will pay holders of Amortizing Notes equal
quarterly cash installments of $0.453125 per Amortizing Note
(except for the May&nbsp;15, 2011 installment payment, which will be
$0.483334 per Amortizing Note), which cash payment in the
aggregate will be equivalent to 7.25% per year with respect to
each $25 stated amount of Units. Each installment will
constitute a payment of interest (at a rate of 12.072% per
annum) and a partial repayment of principal on the Amortizing
Note, allocated as set forth in the amortization schedule
provided in the Amortizing Notes Supplemental Indenture. If
Hovnanian elects to settle the Purchase Contracts early,
holders of the Amortizing Notes will have the right to require
K. Hovnanian to repurchase such holders&#146; Amortizing Notes,
except in certain circumstances as described in the Amortizing Notes Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Amortizing Notes Indenture
contains customary events of default which would permit
the holders of the Amortizing Notes to declare those Amortizing
Notes to be immediately due and payable if not cured within
applicable grace periods and subject to the subordination
provisions described in the Amortizing Notes Indenture,
including the failure to make timely payments on the Amortizing
Notes or other material indebtedness, the failure to satisfy
covenants and specified events of bankruptcy and insolvency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Amortizing Notes Indenture also contains restrictive covenants
that limit among other things, the ability of Hovnanian and
certain of its subsidiaries, including K. Hovnanian, to incur
subordinated indebtedness unless such indebtedness is
subordinate to or <I>pari passu </I>with the obligations of K.
Hovnanian, Hovnanian and the Subsidiary Guarantors under the
Amortizing Notes and the guarantees thereof, and to
consolidate, merge, sell or otherwise dispose of all or
substantially all of its assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hovnanian has applied to list the Units on the
New York Stock Exchange, subject to satisfaction of its minimum
listing standards with respect to the Units. If the Units are
approved for listing, Hovnanian expects trading on the New York
Stock Exchange to begin within 30 calendar days after the date
of original issuance of the Units. However, Hovnanian will not
initially apply to list the separate purchase contracts or the
separate amortizing notes on any securities exchange or
automated inter-dealer quotation system.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>General</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The sale of the Shares, the Senior Notes and the Units was made
pursuant to the Registration Statement and the prospectus
supplements, dated February&nbsp;3, 2011, to the prospectus
contained therein dated January&nbsp;28, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The proceeds from the issuances of the Shares, the Senior Notes
and the Units were used to fund the purchase, on February&nbsp;14,
2011, of certain of K. Hovnanian&#146;s senior and senior
subordinated notes in tender offers for any and all of such
notes as follows: $24.6&nbsp;million aggregate principal amount of
8% Senior Notes due 2012 (the &#147;2012 Senior Notes&#148;), $44.1
million aggregate principal amount of 8<FONT style="FONT-size: 70%"><sup>7</SUP></FONT>/<FONT style="FONT-size: 60%">8</FONT>% Senior Subordinated
Notes due 2012 (the &#147;2012 Senior Subordinated Notes&#148;) and $29.2
million aggregate principal amount of 7<FONT style="FONT-size: 70%"><SUP>3</SUP></FONT>/<FONT style="FONT-size: 60%">4</FONT>% Senior Subordinated
Notes due 2013 (the &#147;2013 Notes&#148; and, together with the 2012
Senior Notes and the 2012 Senior Subordinated Notes, the
&#147;Tender Offer Notes&#148;). The tender offers will remain open
until 12:00 midnight, New York City time, on February&nbsp;28, 2011.
Also on February&nbsp;14, 2011, K. Hovnanian called for redemption
all Tender Offer Notes that are not tendered in the tender
offers. Such redemptions will be funded with the proceeds from
the offerings of the Shares, the Senior Notes and the Units.
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;2.03 <U>Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.</U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The information set forth above under Item&nbsp;1.01 with respect to the Senior Notes and the Units is hereby
incorporated by reference into this Item&nbsp;2.03.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Item&nbsp;8.01 <U>Other Events.</U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In connection with the offering of the Shares, the Senior
Notes and the Units, as described in response to Item&nbsp;1.01
of this Current Report on Form 8-K, the following exhibits are
filed with this Current Report on Form 8-K and are
incorporated by reference herein and into the Registration
Statement: (i)&nbsp;Purchase Contract Agreement, (ii)&nbsp;Form of
Unit, (iii)&nbsp;Form of Purchase Contract, (iv)&nbsp;Amortizing
Notes Supplemental Indenture, (v)&nbsp;Form of Amortizing Note,
(vi)&nbsp;Senior Notes Supplemental Indenture, (vii)&nbsp;Form of
Senior Note, (viii)&nbsp;legal opinion of Simpson Thacher &#038;
Bartlett LLP, and related consent, (ix)&nbsp;legal opinion of
Peter S. Reinhart, Senior Vice-President and General
Counsel of Hovnanian and K. Hovnanian, and related consent
and (x)&nbsp;information relating to Part&nbsp;II, Item&nbsp;14 &#147;Other
Expenses of Issuance and Distribution&#148; of the Registration
Statement.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Item&nbsp;9.01. <U>Financial Statements and Exhibits</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(d) <I>Exhibits.</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase Contract Agreement, dated as of February&nbsp;9, 2011, among
Hovnanian, K. Hovnanian and Wilmington Trust Company, as Trustee
under the Amortizing Notes Indenture, as Purchase Contract Agent
and as attorney-in-fact for the holders of the Purchase Contracts
from time to time.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Unit (included in Exhibit&nbsp;4.24 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Purchase Contract (included in Exhibit&nbsp;4.24 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amortizing Notes Supplemental Indenture, dated as of February&nbsp;9,
2011, among K. Hovnanian, Hovnanian and the other guarantors named
therein and Wilmington Trust Company, as Trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amortizing Note (included in Exhibit&nbsp;4.27 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.29
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Notes Supplemental Indenture, dated as of February&nbsp;14, 2011,
among K. Hovnanian, Hovnanian and the other guarantors named
therein and Wilmington Trust Company, as Trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Senior Note (included in Exhibit&nbsp;4.29 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;5.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Simpson Thacher &#038; Bartlett LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;5.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Peter S. Reinhart, Senior Vice-President and General
Counsel of Hovnanian and K. Hovnanian.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;23.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Simpson Thacher &#038; Bartlett LLP (included in Exhibit&nbsp;5.3).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;23.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Peter S. Reinhart, Senior Vice-President and General
Counsel of Hovnanian and K. Hovnanian (included in Exhibit&nbsp;5.4).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Information relating to Part II, Item&nbsp;14 &#147;Other Expenses of
Issuance and Distribution&#148; of the Registration Statement (File No.
333-171349).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>SIGNATURES</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">
HOVNANIAN ENTERPRISES, INC.<BR>
(Registrant)<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Peter S. Reinhart
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Peter S. Reinhart&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Senior Vice President and General Counsel&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date: February&nbsp;15, 2011
</DIV>








<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>INDEX TO EXHIBITS</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase Contract Agreement, dated as of February&nbsp;9, 2011, among
Hovnanian, K. Hovnanian and Wilmington Trust Company, as Trustee
under the Amortizing Notes Indenture, as Purchase Contract Agent
and as attorney-in-fact for the holders of the Purchase Contracts
from time to time.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Unit (included in Exhibit&nbsp;4.24 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Purchase Contract (included in Exhibit&nbsp;4.24 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amortizing Notes Supplemental Indenture, dated as of February&nbsp;9,
2011, among K. Hovnanian, Hovnanian and the other guarantors named
therein and Wilmington Trust Company, as Trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amortizing Note (included in Exhibit&nbsp;4.27 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.29
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Notes Supplemental Indenture, dated as of February&nbsp;14, 2011,
among K. Hovnanian, Hovnanian and the other guarantors named
therein and Wilmington Trust Company, as Trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;4.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Senior Note (included in Exhibit&nbsp;4.29 hereof).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;5.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Simpson Thacher &#038; Bartlett LLP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;5.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Peter S. Reinhart, Senior Vice-President and General
Counsel of Hovnanian and K. Hovnanian.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;23.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Simpson Thacher &#038; Bartlett LLP (included in Exhibit&nbsp;5.3).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;23.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Peter S. Reinhart, Senior Vice-President and General
Counsel of Hovnanian and K. Hovnanian (included in Exhibit&nbsp;5.4).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Information relating to Part II, Item&nbsp;14 &#147;Other Expenses of
Issuance and Distribution&#148; of the Registration Statement (File No.
333-171349).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.24
<SEQUENCE>2
<FILENAME>y89643exv4w24.htm
<DESCRIPTION>EX-4.24
<TEXT>
<HTML>
<HEAD>
<TITLE>exv4w24</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;4.24</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXECUTION VERSION</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 3px double #000000; FONT-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PURCHASE CONTRACT AGREEMENT</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Dated as of February&nbsp;9, 2011</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>among</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>HOVNANIAN ENTERPRISES, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>and</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>K. HOVNANIAN ENTERPRISES, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>and</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WILMINGTON TRUST COMPANY,</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>as Purchase Contract Agent,</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>as Attorney-in-Fact for the Holders from time to time as provided herein</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>and as Trustee under the Indenture referred to herein</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 3px double #000000; FONT-size: 1px">&nbsp;</DIV>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<DIV align="center" style="border-top: 1px solid #000000; width:26%; margin-top:6pt">&nbsp;</DIV>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 1</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Definitions and Other Provisions of General Application</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.01</B><I>. Definitions</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.02</B><I>. Compliance Certificates and Opinions</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.03</B><I>. Notices</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.04</B><I>. Effect of Headings and Table of Contents</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.05</B><I>. Successors and Assigns</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.06</B><I>. Separability Clause</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.07</B><I>. Benefits of Agreement</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.08</B><I>. Governing Law</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.09</B><I>. Conflict Indenture</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.10</B><I>. Legal Holidays</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.11</B><I>. Counterparts</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.12</B><I>. Inspection of Agreement</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.13</B><I>. Calculations</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;1.14</B><I>. UCC</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 2</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Unit and Purchase Contract Forms</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;2.01</B><I>. Forms of Units and Purchase Contracts Generally</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;2.02</B><I>. Form of Certificate of Authentication</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;2.03</B><I>. Global Securities; Separation of Units</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;2.04</B><I>. Recreation of Units</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 3</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">The Units and Purchase Contracts</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.01</B><I>. Amount and Denominations</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.02</B><I>. Rights and Obligations Evidenced by the Equity-Linked
Securities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.03</B><I>. Execution, Authentication, Delivery and Dating</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.04</B><I>. Temporary Equity-Linked Securities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">24</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.05</B><I>. Registration; Registration of Transfer and Exchange</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">25</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.06</B><I>. Book-Entry Interests</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.07</B><I>. Notices to Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.08</B><I>. Appointment of Successor Depositary</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.09</B><I>. Definitive Securities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.10</B>. <I>Section&nbsp;382 Ownership Blocker</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">28</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.11</B><I>. Mutilated, Destroyed, Lost and Stolen Securities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">30</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.12</B><I>. Persons Deemed Owners</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">31</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;3.13</B><I>. Cancellation</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">33</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 4</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Settlement of the Purchase Contracts</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.01</B><I>. Settlement Rate</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">34</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.02</B><I>. Representations and Agreements of Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">34</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.03</B><I>. Purchase Contract Settlement Fund</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">35</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.04</B><I>. Settlement Conditions</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.05</B><I>. Mandatory Settlement on the Mandatory Settlement Date</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.06</B><I>. Early Settlement</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">36</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.07</B><I>. Early Settlement Upon a Fundamental Change</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">38</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.08</B>. <I>Early Mandatory Settlement at the Company&#146;s Election</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">42</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.09</B><I>. Acceleration of Mandatory Settlement Date</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">44</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.10</B>. <I>Section&nbsp;382 Settlement Blocker</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">44</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.11</B><I>. Registration of Underlying Shares and Transfer Taxes</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.12</B><I>. Return of Purchase Contract Settlement Fund</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;4.13</B><I>. No Fractional Shares</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">46</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 5</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Adjustments</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;5.01</B><I>. Adjustments to the Fixed Settlement Rates</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">46</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;5.02</B><I>. Reorganization Events</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">55</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 6</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Concerning the Holders of Purchase Contracts</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;6.01</B><I>. Evidence of Action Taken by Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">58</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;6.02</B><I>. Proof of Execution of Instruments and of Holding of Securities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">58</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;6.03</B><I>. Purchase Contracts Deemed Not Outstanding</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">58</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;6.04</B><I>. Right of Revocation of Action Taken</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">59</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;6.05</B><I>. Record Date for Consents and Waivers</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">59</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 7</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Remedies</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.01</B><I>. Unconditional Right of Holders to Receive Shares of Class&nbsp;A Common Stock</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.02</B><I>. Notice To Purchase Contract Agent; Limitation On Proceedings</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->ii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.03</B><I>. Restoration of Rights and Remedies</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.04</B><I>. Rights and Remedies Cumulative</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.05</B><I>. Delay or Omission Not Waiver</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.06</B><I>. Undertaking for Costs</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.07</B><I>. Waiver of Stay or Execution Laws</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;7.08</B><I>. Control by Majority</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">62</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 8</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">The Purchase Contract Agent and Trustee</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.01</B><I>. Certain Duties and Responsibilities</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">62</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.02</B><I>. Notice of Default</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.03</B>. <I>Certain Rights of Purchase Contract Agent</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.04</B><I>. Not Responsible for Recitals</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.05</B><I>. May Hold Units and Purchase Contracts</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.06</B><I>. Money Held in Custody</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.07</B><I>. Compensation, Reimbursement and Indemnification</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.08</B><I>. Corporate Purchase Contract Agent Required; Eligibility</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">67</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.09</B><I>. Resignation and Removal; Appointment of Successor</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">67</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.10</B><I>. Acceptance of Appointment by Successor</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">69</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.11</B><I>. Merger; Conversion; Consolidation or Succession to Business</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">69</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.12</B><I>. Preservation of Information; Communications to Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">70</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.13</B><I>. No Other Obligations of Purchase Contract Agent or Trustee</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">70</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;8.14</B><I>. Tax Compliance</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">71</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 9</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Supplemental Agreements</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.01</B><I>. Supplemental Agreements Without Consent of Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">71</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.02</B><I>. Supplemental Agreements With Consent of Holders</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">72</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.03</B><I>. Execution of Supplemental Agreements</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">73</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.04</B><I>. Effect of Supplemental Agreements</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">73</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.05</B><I>. Reference to Supplemental Agreements</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">73</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;9.06</B><I>. Notice of Supplemental Agreements</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">74</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 10</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Consolidation, Merger, Conveyance, Transfer or Lease</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;10.01</B><I>. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except Under Certain Conditions</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">74</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;10.02</B><I>. Rights and Duties of Successor Entity</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">74</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;10.03</B><I>. Officers&#146; Certificate and Opinion of Counsel Given to Purchase Contract Agent</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">75</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->iii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><B>ARTICLE 11</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center"><FONT style="FONT-variant: SMALL-CAPS">Covenants of the Company and the Note Issuer</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.01</B><I>. Performance Under Purchase Contracts</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">75</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.02</B><I>. Maintenance of Office Or Agency</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">75</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.03</B><I>. Statements of Officers of the Company as to
Default; Notice of Default</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">76</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.04</B><I>. Existence</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">76</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.05</B><I>. Company to Reserve Class&nbsp;A Common Stock</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">76</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.06</B><I>. Covenants as to Class&nbsp;A Common Stock</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">77</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Section&nbsp;11.07</B><I>. Tax Treatment</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">77</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="center">EXHIBITS<BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;A: Form of Unit </DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>A-1</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;B: Form of Purchase Contract </DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>B-1</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->iv<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PURCHASE CONTRACT AGREEMENT, dated as of February&nbsp;9, 2011 among HOVNANIAN ENTERPRISES,
INC., a Delaware corporation (the &#147;<B>Company</B>&#148;), K. HOVNANIAN ENTERPRISES, INC., a California
corporation (the &#147;<B>Note Issuer</B>&#148;), and WILMINGTON TRUST COMPANY, a Delaware banking corporation
acting as purchase contract agent and attorney-in-fact for the Holders of Purchase Contracts (as
defined herein) from time to time (the &#147;<B>Purchase Contract Agent</B>&#148;) and as trustee under the
Indenture (as defined herein).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">RECITALS OF THE COMPANY AND THE NOTE ISSUER
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Note Issuer have duly authorized the execution and delivery of this
Agreement and the Units and Purchase Contracts issuable hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All things necessary to make the Units and the Purchase Contracts, when such are executed by
the Company and, in the case of the Units, by the Note Issuer, and authenticated on behalf of the
Holders and delivered by the Purchase Contract Agent, as provided in this Agreement, the valid
obligations of the Company and, in the case of the Units, of the Note Issuer, and to constitute
this Agreement a valid agreement of the Company and the Note Issuer, in accordance with its terms,
have been done. For and in consideration of the premises and the purchase of the Units (including
the constituent parts thereof) by the Holders thereof, it is mutually agreed as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 1</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Definitions and Other Provisions of General Application</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.01</B><I>. Definitions. </I>For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, and nouns and pronouns of the masculine gender include
the feminine and neuter genders;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the words &#147;herein,&#148; &#147;hereof&#148; and &#147;hereunder&#148; and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision;
and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the following terms have the meanings given to them in this Section&nbsp;1.01(d):
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Acceleration Date</B>&#148; has the meaning set forth in Section&nbsp;4.09.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Acquiring Person</B>&#148; has the meaning set forth in the Rights Plan (for the avoidance of doubt,
regardless of whether the Rights Plan is then in effect).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Affiliate</B>&#148; means, when used with reference to a specified Person, any Person directly or
indirectly controlling, or controlled by or under direct or indirect common control with the Person
specified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Agreement</B>&#148; means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the
applicable provisions hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Applicable Market Value</B>&#148; (i)&nbsp;with respect to Class&nbsp;A Common Stock, means the average of the
Closing Prices of the Class&nbsp;A Common Stock on each of the 20 consecutive Trading Days beginning on,
and including, the 23rd Scheduled Trading Day immediately preceding the Scheduled Mandatory
Settlement Date, subject to adjustment as provided in Article&nbsp;5 and (ii)&nbsp;with respect to any
Exchange Property, has the meaning set forth in Section&nbsp;5.02(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Applicants</B>&#148; has the meaning set forth in Section&nbsp;8.12(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bankruptcy Event</B>&#148; means the occurrence of one or more of the following events:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;a decree or order by a court having jurisdiction in the premises shall have been entered
adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of the Company under any Bankruptcy Law and if such decree or order shall have been
entered more than 60&nbsp;days prior to the last Trading Day of the 20 consecutive Trading Day during
which the Applicable Market Value is determined, such decree or order shall have continued
undischarged and unstayed for a period of 60&nbsp;days;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;a decree or order by a court having jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of the Company or of all or substantially all of its property, or for the winding up or
liquidation of its affairs, shall have been entered and if such decree or order shall have been
entered more than 60&nbsp;days prior to the last Trading Day of the 20 consecutive Trading Day during
which the Applicable Market Value is determined, such decree or order shall have continued
undischarged and unstayed for a period of 60&nbsp;days; or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(c)&nbsp;the Company shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under any Bankruptcy Law, or shall
consent to the filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as they
become due.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bankruptcy Law</B>&#148; means title 11 of the United States Code, as amended, or any similar federal
or state law for the relief of debtors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Beneficial Holder</B>&#148; means, with respect to a Book-Entry Interest, a Person who is the
beneficial owner of such Book-Entry Interest as reflected on the books of the Depositary or on the
books of a Person maintaining an account with the Depositary (directly as a Depositary Participant
or as an indirect participant, in each case in accordance with the rules of the Depositary).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Beneficially Own</B>&#148; shall have the meaning set forth in the Rights Plan (for the avoidance of
doubt, regardless of whether the Rights Plan is then in effect). For the avoidance of doubt, for
the purposes of administering the Section&nbsp;382 Ownership Blocker and the Section&nbsp;382 Settlement
Blocker, a Person shall not be deemed to Beneficially Own any shares of another Person (and the
first Person shall not be treated as an &#147;Affiliate&#148; or an &#147;Associate&#148; (as such terms are defined in
the Rights Plan) of the second Person) solely by reason of the shares of such Persons being
aggregated and treated as owned by the same public group as defined under Treasury Regulation
section 1.382-2T(f)(13).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Board of Directors</B>&#148; means the board of directors of the Company or any duly authorized
committee of that board or any director or directors and/or, with respect to the Notes, any officer
or officers to whom that board or committee shall have duly delegated its authority.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Board Resolution</B>&#148; means (a)&nbsp;one or more resolutions, certified by the secretary or an
assistant secretary of the Company to have been duly adopted or consented to by the Board of
Directors and to be in full force and effect, or (b), with respect to the Notes, a certificate
signed by the director or directors and/or officer or officers to whom the Board of Directors or
any duly authorized committee of that Board shall have duly delegated its authority, in each case
delivered to the Purchase Contract Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Book-Entry Interest</B>&#148; means a beneficial interest in a Global Security, registered in the name
of a Depositary or a nominee thereof, ownership and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">transfers of which shall be maintained and made through book entries by such Depositary as
described in Section&nbsp;3.06.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Business Day</B>&#148; means any day other than a Saturday, Sunday or any day on which banking
institutions in New York, New York are authorized or obligated by applicable law or executive order
to close or be closed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Capital Stock</B>&#148; means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person&#146;s capital stock or
other equity interests, and options, rights or warrants to purchase such capital stock or other
equity interests, whether now outstanding or issued after the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Certificate of Incorporation</B>&#148; means the Certificate of Incorporation of the Company as in
effect on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Class&nbsp;A Common Stock</B>&#148; means the Class&nbsp;A common stock, par value $0.01 per share, of the
Company as it existed on the date of this Agreement, subject to Section&nbsp;5.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Clearing Agency</B>&#148; means an organization registered as a &#147;Clearing Agency&#148; pursuant to Section
17A of the Exchange Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>close of business</B>&#148; means 5:00 p.m. (New York City time).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Closing Price</B>&#148; with respect to any Exchange Property, has the meaning set forth in Section
5.02; and with respect to a share of the Class&nbsp;A Common Stock on any given date, means:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the reported closing price on that date or, if no closing price is reported, the last
reported sale price of shares of Class&nbsp;A Common Stock on the NYSE on that date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;if the Class&nbsp;A Common Stock is not traded on the NYSE, the closing price on that date as
reported in composite transactions for the principal U.S. national or regional securities exchange
on which the Class&nbsp;A Common Stock is so traded or, if no closing price is reported, the last
reported sale price of the Class&nbsp;A Common Stock on the principal U.S. national or regional
securities exchange on which the Class&nbsp;A Common Stock is so traded;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;if the Class&nbsp;A Common Stock is not traded on a U.S. national or regional securities
exchange, the last quoted bid price on that date for the Class&nbsp;A Common Stock in the
over-the-counter market as reported by Pink OTC Markets Inc. or a similar organization; or
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;if the Class&nbsp;A Common Stock is not so quoted by Pink OTC Markets Inc. or a similar
organization, the market value of the Class&nbsp;A Common Stock on that date as determined by the Board
of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All references herein to the closing price of Class&nbsp;A Common Stock and the last reported sale
price of Class&nbsp;A Common Stock on the NYSE shall be such closing price and such last reported sale
price as reflected on the website of the NYSE (www.nyse.com) and as reported by Bloomberg
Professional Service; <I>provided </I>that, in the event that there is a discrepancy between the closing
price and the last reported sale price as reflected on the website of the NYSE and as reported by
Bloomberg Professional Service, the closing price and the last reported sale price on the website
of the NYSE shall govern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Code</B>&#148; means the Internal Revenue Code of 1986 (title 26 of the United States Code), as
amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Common Equity</B>&#148; of any Person means Capital Stock of such Person that is generally entitled
(a)&nbsp;to vote in the election of directors of such Person or (b)&nbsp;if such Person is not a corporation,
to vote or otherwise participate in the selection of the governing body, partners, managers or
others that will control the management or policies of such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Company</B>&#148; means the Person named as the &#147;Company&#148; in the first paragraph of this Agreement
until a successor shall have become such pursuant to Article&nbsp;10, and thereafter &#147;Company&#148; shall
mean such successor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Component Note</B>&#148; means a Note, in global form and attached to a Global Unit, that (a)&nbsp;shall
evidence the number of Notes specified therein that are components of the Units evidenced by such
Global Unit, (b)&nbsp;shall be registered on the security register for the Notes in the name of the
Purchase Contract Agent, as attorney-in-fact of holder(s) of the Units of which such Notes form a
part, and (c)&nbsp;shall be held by the Purchase Contract Agent as attorney-in-fact of such holder(s),
together with such Global Unit, as custodian of such Global Unit for the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Component Purchase Contract</B>&#148; means a Purchase Contract, in global form and attached to a
Global Unit, that (a)&nbsp;shall evidence the number of Purchase Contracts specified therein that are
components of the Units evidenced by such Global Unit, (b)&nbsp;shall be registered on the Security
Register in the name of the Purchase Contract Agent, as attorney-in-fact of holder(s) of the Units
of which such Purchase Contract forms a part, and (c)&nbsp;shall be held by the Purchase Contract Agent
as attorney-in-fact of such holder(s), together with such Global Unit, as custodian of such Global
Unit for the Depositary.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>control</B>&#148; when used with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms &#147;<B>controlling</B>&#148; and &#147;<B>controlled</B>&#148; have meanings
correlative to the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Corporate Trust Office</B>&#148; means the principal corporate trust office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Current Market Price</B>&#148; per share of Class&nbsp;A Common Stock on any date means:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;for purposes of Section&nbsp;5.01(a)(ii), the average of the Closing Prices of the Class&nbsp;A
Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of the issuance or distribution requiring such
computation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;for purposes of Section&nbsp;5.01(a)(iv) (in the event of an adjustment not relating to a
Spin-Off) and Section&nbsp;5.01(a)(v), the average of the Closing Prices of the Class&nbsp;A Common Stock
over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately
preceding the earlier of the Ex-Date and the Record Date for the issuance or distribution requiring
such computation;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;for purposes of Section&nbsp;5.01(a)(iv) (in the event of an adjustment relating to a Spin-Off
only), the average of the Closing Prices of the Class&nbsp;A Common Stock over the 10 consecutive
Trading Day period commencing on, and including, the effective date of such Spin-Off; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;for purposes of adjustments pursuant to Section&nbsp;5.01(a)(vi), the average of the Closing
Prices of the Class&nbsp;A Common Stock over the 10 consecutive Trading Day period commencing on, and
including, the Trading Day immediately following the Tender Offer Expiration Date for the relevant
tender offer or exchange offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Custodian</B>&#148; means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>default</B>&#148; means any failure to comply with terms of this Agreement or any covenant contained
herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Definitive Equity-Linked Security</B>&#148; means an Equity-Linked Security in definitive form.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&#147;<B>Definitive Security</B>&#148; means any Security in definitive form.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Depositary</B>&#148; means a Clearing Agency that is acting as a depositary for the Equity-Linked
Securities and in whose name, or in the name of a nominee of that organization, shall be registered
one or more Global Securities and which shall undertake to effect book-entry transfers of the
Equity-Linked Securities as contemplated by Section&nbsp;3.06, Section&nbsp;3.07, Section&nbsp;3.08 and Section
3.09.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Depositary Participant</B>&#148; means a broker, dealer, bank, other financial institution or other
Person for whom from time to time the Depositary effects book-entry transfers of securities
deposited with the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Determination Date</B>&#148; means each of (a)&nbsp;the last Trading Day of the 20 Trading Day period
during which the Applicable Market Value is determined, (b)&nbsp;any Early Settlement Date, (c)&nbsp;any
Early Mandatory Settlement Notice Date, (d)&nbsp;any date on which the Fundamental Change Early
Settlement Right is exercised, and (e)&nbsp;the day immediately preceding any Acceleration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>DTC</B>&#148; means The Depository Trust Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>DWAC System</B>&#148; has the meaning set forth in Section&nbsp;2.03(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Date</B>&#148; has the meaning set forth in Section&nbsp;4.08(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Notice</B>&#148; has the meaning set forth in Section&nbsp;4.08(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Notice Date</B>&#148; has the meaning set forth in Section&nbsp;4.08(b)(ii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Rate</B>&#148; shall be the Maximum Settlement Rate on the Early Mandatory
Settlement Notice Date, unless the Closing Price of the Class&nbsp;A Common Stock for 20 or more Trading
Days in a period of 30 consecutive Trading Days ending on the Trading Day immediately preceding the
Early Mandatory Settlement Notice Date exceeds 130% of the Threshold Appreciation Price in effect
on each such Trading Day, in which case the &#147;<B>Early Mandatory Settlement Rate</B>&#148; shall be the Minimum
Settlement Rate on the Early Mandatory Settlement Notice Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Right</B>&#148; has the meaning set forth in Section&nbsp;4.08(a).
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Settlement</B>&#148; means, in respect of any Purchase Contract, that the Holder of such
Purchase Contract has elected to settle such Purchase Contract early pursuant to Section&nbsp;4.06 or
Section&nbsp;4.07, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Settlement Right</B>&#148; has the meaning set forth in Section&nbsp;4.06(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Settlement Date</B>&#148; has the meaning set forth in Section&nbsp;4.06(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Settlement Notice</B>&#148; has the meaning set forth in Section&nbsp;4.06(b)(i).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Settlement Rate</B>&#148; means, for any Purchase Contract in respect of which Early Settlement
is applicable, the Minimum Settlement Rate, unless the Holder of such Purchase contract has elected
to settle such Purchase Contract early in connection with a Fundamental Change pursuant to Section
4.07, in which case the &#147;<B>Early Settlement Rate</B>&#148; for such Purchase Contract means the Fundamental
Change Early Settlement Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Effective Date</B>&#148; has the meaning set forth in Section&nbsp;4.07(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Equity-Linked Security</B>&#148; means a Unit or a Purchase Contract, as applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Excess Equity-Linked Securities</B>&#148; has the meaning set forth in Section&nbsp;3.10(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Exchange Act</B>&#148; means the Securities Exchange Act of 1934, as amended, and any statute
successor thereto, in each case as amended from time to time, together with the rules and
regulations promulgated thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Exchange Property</B>&#148; has the meaning set forth in Section&nbsp;5.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Ex-Date</B>&#148; when used with respect to any issuance or distribution, means the first date on
which the shares of Class&nbsp;A Common Stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive the issuance or distribution in question from the
Company or, if applicable, from the seller of the Class&nbsp;A Common Stock on such exchange or market
(in the form of due bills or otherwise) as determined by such exchange or market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fair Market Value</B>&#148; means, with respect to any asset, the price (after taking into account any
liabilities relating to such assets) that would be negotiated in an arm&#146;s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction, as such price is determined in good faith by the Board of
Directors, as evidenced by a resolution of the Board of Directors.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fixed Settlement Rate</B>&#148; has the meaning set forth in Section&nbsp;4.01(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change</B>&#148; shall be deemed to have occurred upon the occurrence of any of the
following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Class&nbsp;A Common Stock (or other common stock receivable upon settlement of the Purchase
Contracts, if applicable) is neither listed for trading on a United States national securities
exchange nor approved for trading on an established automated over-the-counter trading market in
the United States;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the consummation of any acquisition (whether by means of a liquidation, share exchange,
tender offer, consolidation, recapitalization, reclassification, merger of the Company or any sale,
lease or other transfer of all or substantially all of the consolidated assets of the Company and
its Subsidiaries) or a series of related transactions or events pursuant to which:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 90% or more of the Class&nbsp;A Common Stock is exchanged for, converted into or
constitutes solely the right to receive cash, securities or other property; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) more than 10% of such cash, securities or other property does not consist of
shares of common stock that are, or that upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;any &#147;person&#148; or &#147;group&#148; within the meaning of Section 13(d) of the Exchange Act, other
than the Company, any of its Subsidiaries and any of their employee benefit plans, has become the
direct or indirect &#147;beneficial owner&#148; (as defined in Rule&nbsp;13d-3 under the Exchange Act) of Class&nbsp;A
Common Stock representing more than 50% of the voting power of the Class&nbsp;A Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change Early Settlement Date</B>&#148; has the meaning set forth in Section&nbsp;4.07(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change Early Settlement Period</B>&#148; has the meaning set forth in Section&nbsp;4.07(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change Early Settlement Rate</B>&#148; has the meaning set forth in Section&nbsp;4.07(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change Early Settlement Right</B>&#148; has the meaning set forth in Section&nbsp;4.07(a).
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Note</B>&#148; means a Note, as defined in the Indenture, in global form that (a)&nbsp;shall
evidence the number of Separate Notes specified therein, (b)&nbsp;shall be registered on the security
register for the Notes in the name of the Depositary or its nominee, and (c)&nbsp;shall be held by the
Trustee as custodian for the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Purchase Contract</B>&#148; means a Purchase Contract in global form that (a)&nbsp;shall evidence
the number of Separate Purchase Contracts specified therein, (b)&nbsp;shall be registered on the
Security Register in the name of the Depositary or its nominee, and (c)&nbsp;shall be held by the
Purchase Contract Agent as custodian for the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Security</B>&#148; means a Global Unit, a Global Purchase Contract or a Global Note, as
applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Unit</B>&#148; means a Unit in global form that (a)&nbsp;shall evidence the number of Units
specified therein, (b)&nbsp;shall be registered on the Security Register in the name of the Depositary
or its nominee, (c)&nbsp;shall include, as attachments thereto, a Component Note and a Component
Purchase Contract, evidencing, respectively, a number of Notes and a number of Purchase Contracts,
in each case, equal to the number of Units evidenced by such Unit in global form, and (d)&nbsp;shall be
held by the Purchase Contract Agent as custodian for the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Holder</B>&#148; means, with respect to a Unit or Purchase Contract, the Person in whose name the Unit
or Purchase Contract, as the case may be, is registered in the Security Register, and with respect
to a Note, the Person in whose name the Note is registered as provided for in the Indenture;
<I>provided</I>, <I>however</I>, that in determining whether the Holders of the requisite number of Units or
Purchase Contracts, as the case may be, have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Units or Purchase Contracts,
as the case may be, remain in the form of one or more Global Securities and if the Depositary that
is the registered holder of such Global Security has sent an omnibus proxy assigning voting rights
to the Depositary Participants to whose accounts the Units or Purchase Contracts, as the case may
be, are credited on the related record date, the term &#147;<B>Holder</B>&#148; shall mean such Depositary
Participant acting at the direction of the Beneficial Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Indenture</B>&#148; means the Senior Subordinated Indenture, dated as of February&nbsp;9, 2011, among the
Note Issuer, the Company and the Trustee (including any provisions of the TIA that are deemed
incorporated therein), as supplemented by the First Supplemental Indenture, dated as of February&nbsp;9,
2011, among the Note Issuer, the Company, the other Guarantors from time to time party thereto, and
the Trustee, pursuant to which the Notes will be issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Installment Payment</B>&#148; has the meaning set forth in the Indenture.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issue Date</B>&#148; means February&nbsp;9, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issuer Order</B>&#148; means a written statement, request or order of the Company, which is signed in
its name by the chairman of the Board of Directors, the chief financial officer, the president or
chief executive officer, any senior vice president, any vice president or the treasurer of the
Company, and delivered to the Purchase Contract Agent and/or the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Mandatory Settlement Date</B>&#148; means the Scheduled Mandatory Settlement Date, subject to
acceleration pursuant to Section&nbsp;4.09; <I>provided </I>that, if one or more of the 20 Scheduled Trading
Days beginning on, and including, the 23rd Scheduled Trading Day immediately preceding the
Scheduled Mandatory Settlement Date is not a Trading Day, the &#147;<B>Mandatory Settlement Date</B>&#148; shall be
postponed until the third Scheduled Trading Day immediately following the last Trading Day of the
20 Trading Day period during which the Applicable Market Value is determined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Maximum Settlement Rate</B>&#148; has the meaning set forth under Section&nbsp;4.01(b)(iii), subject to
adjustment pursuant to the terms of Article&nbsp;5.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Minimum Settlement Rate</B>&#148; has the meaning set forth under Section&nbsp;4.01(b)(i), subject to
adjustment pursuant to the terms of Article&nbsp;5.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Minimum Stock Price</B>&#148; has the meaning set forth under Section&nbsp;4.07(f).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Notes</B>&#148; means the series of notes designated as the 12.072% Senior Subordinated Amortizing
Notes due February&nbsp;15, 2014 to be issued by the Note Issuer under the Indenture, and &#147;<B>Note</B>&#148; means
each note of such series having an initial principal amount of $4.526049.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>NYSE</B>&#148; means the New York Stock Exchange, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Officers&#146; Certificate</B>&#148; means a certificate signed by the chairman of the Board of Directors,
the president or chief executive officer, or any vice president and by the chief financial officer,
the treasurer, any assistant treasurer, the controller, any assistant controller, the secretary or
any assistant secretary of the Company. Each such certificate shall include the statements
provided for in Section&nbsp;1.02 if and to the extent required by the provisions of such Section&nbsp;1.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>open of business</B>&#148; means 9:00 a.m. (New York City time).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Opinion of Counsel</B>&#148; means an opinion in writing signed by the chief counsel of the Company or
the Note Issuer or by such other legal counsel who may be an employee of or counsel to the Company
or the Note Issuer and who shall be reasonably satisfactory to the Purchase Contract Agent and/or
the Trustee,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">as applicable. Each such opinion shall include the statements provided for in Section&nbsp;1.02 if
and to the extent required by the provisions of such Section&nbsp;1.02.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Outstanding Purchase Contracts</B>&#148; means, subject to the provisions of Section&nbsp;6.03, as of the
date of determination, all Purchase Contracts theretofor executed, authenticated on behalf of the
Holder and delivered under this Agreement (including, for the avoidance of doubt, Purchase
Contracts held as a component of Units and Separate Purchase Contracts), except:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Purchase Contracts theretofor cancelled by the Purchase Contract Agent or delivered to the
Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Purchase Contracts in exchange for or in lieu of which other Purchase Contracts have been
executed, authenticated on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Purchase Contract in respect of which there shall have been presented to the Purchase
Contract Agent proof satisfactory to it that such Purchase Contract is held by a protected
purchaser in whose hands the Purchase Contracts are valid obligations of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Participant</B>&#148; has the meaning set for in Section&nbsp;2.03(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Person</B>&#148; means any individual, corporation, limited liability company, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated organization or government
or any agency or political subdivision thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Prospectus Supplement</B>&#148; means the preliminary prospectus supplement dated January&nbsp;31, 2011, as
supplemented by the pricing term sheet dated February&nbsp;3, 2011, relating to the offering and sale of
the Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract</B>&#148; means a prepaid stock purchase contract obligating the Company to deliver
shares of Class&nbsp;A Common Stock on the terms and subject to the conditions set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract Agent</B>&#148; means the Person named as the &#147;Purchase Contract Agent&#148; in the first
paragraph of this Agreement until a successor Purchase Contract Agent shall have become such
pursuant to Article&nbsp;8, and thereafter &#147;Purchase Contract Agent&#148; shall mean such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract Settlement Fund</B>&#148; has the meaning set forth in Section&nbsp;4.03.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Record Date</B>&#148; means, when used with respect to any dividend, distribution or other transaction
or event in which the holders of the Class&nbsp;A Common Stock (or other applicable security) have the
right to receive any cash, securities or other property or in which the Class&nbsp;A Common Stock (or
other applicable security) is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of holders of the Class&nbsp;A Common Stock (or
other applicable security) entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract or otherwise).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Reference Price</B>&#148; means $4.30, subject to adjustment pursuant to Section&nbsp;5.01(f).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Reorganization Event</B>&#148; has the meaning set forth in Section&nbsp;5.02(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Date</B>&#148; has the meaning set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Price</B>&#148; has the meaning set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Right</B>&#148; has the meaning set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Responsible Officer</B>&#148; means any officer of the Purchase Contract Agent with direct
responsibility for the administration of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Rights Plan</B>&#148; means the Rights Agreement, dated as of August&nbsp;14, 2008, between the Company and
National City Bank, as Rights Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Scheduled Mandatory Settlement Date</B>&#148; means February&nbsp;15, 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Scheduled Trading Day</B>&#148; is a day that is scheduled to be a Trading Day on the U.S. national or
regional securities exchange or association or over-the-counter market on which the Class&nbsp;A Common
Stock is listed or admitted for trading. If the Class&nbsp;A Common Stock is not so listed or admitted
for trading, &#147;<B>Scheduled Trading Day</B>&#148; means a Business Day.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Section&nbsp;382 Ownership Blocker</B>&#148; has the meaning set forth in Section&nbsp;3.10(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Section&nbsp;382 Settlement Blocker</B>&#148; has the meaning set forth in Section&nbsp;4.10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Securities Act</B>&#148; means the Securities Act of 1933, as amended, and any statute successor
thereto, in each case as amended from time to time, and the rules and regulations promulgated
thereunder.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Security</B>&#148; means a Unit, a Purchase Contract or a Note, as applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Security Register</B>&#148; has the meaning set forth in Section&nbsp;3.05.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Security Registrar</B>&#148; has the meaning set forth in Section&nbsp;3.05.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Separate Note</B>&#148; has the meaning set forth in Section&nbsp;2.03(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Separate Purchase Contract</B>&#148; has the meaning set forth in Section&nbsp;2.03(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Settlement Date</B>&#148; means any Fundamental Change Early Settlement Date, Early Settlement Date,
Early Mandatory Settlement Date, or Mandatory Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Settlement Rate</B>&#148; has the meaning set forth in Section&nbsp;4.01(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Spin-Off</B>&#148; means the Company makes a dividend or other distribution to all or substantially
all holders of Class&nbsp;A Common Stock consisting of Capital Stock of, or similar equity interests in,
or relating to, a Subsidiary or other business unit of the Company that, upon issuance, will be
traded on a U.S. national securities exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Stated Amount</B>&#148; means $25.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Stock Price</B>&#148; has the meaning set forth in Section&nbsp;4.07(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Subsidiary</B>&#148; of any Person means any corporation or other entity of which a majority of the
Capital Stock having ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions of such corporation or other entity is at the time directly or
indirectly owned or controlled by such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Tender Offer Expiration Date</B>&#148; has the meaning set forth in Section&nbsp;5.01(a)(vi).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Tender Offer Expiration Time</B>&#148; has the meaning set forth in Section&nbsp;5.01(a)(vi)(A)(2).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Threshold Appreciation Price</B>&#148; means an amount equal to the Stated Amount, <I>divided by </I>the
Minimum Settlement Rate (such quotient rounded to the nearest $0.0001). The Threshold Appreciation
Price shall initially be $5.2460.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>TIA</B>&#148; means the Trust Indenture Act of 1939, as amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Trading Day</B>&#148; means a day on which shares of the Class&nbsp;A Common Stock (a)&nbsp;are not suspended
from trading on any U.S. national or regional securities exchange or association or
over-the-counter market at the close of business and (ii)&nbsp;have traded at least once on the U.S.
national or regional securities exchange or association or over-the-counter market that is the
primary market for the trading of the Class&nbsp;A Common Stock. If the Class&nbsp;A Common Stock (or any
other security for which the Closing Price must be determined) is not listed or admitted for
trading on any U.S. national or regional securities exchange or association or over-the-counter
market, &#147;<B>Trading Day</B>&#148; means a Business Day.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Trustee</B>&#148; means Wilmington Trust Company, as trustee under the Indenture, or any successor
thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Underwriters</B>&#148; has the meaning set forth in the Underwriting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Underwriting Agreement</B>&#148; means the Underwriting Agreement, dated as of February&nbsp;3, 2011,
between the Company, the Note Issuer, the Guarantors named in Schedule&nbsp;B thereto and the
Underwriters named therein relating to the Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Unit</B>&#148; means the collective rights of a Holder of a unit consisting of a single Purchase
Contract and a single Note prior to separation pursuant Section&nbsp;2.03 or subsequent to recreation
pursuant to Section&nbsp;2.04.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Valuation Period</B>&#148; has the meaning set forth in Section&nbsp;5.01(a)(iv)(B)(1).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.02</B><I>. Compliance Certificates and Opinions. </I>Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to the Purchase Contract
Agent and/or Trustee to take any action in accordance with any provision of this Agreement, the
Company or the Note Issuer, as applicable, shall furnish to the Purchase Contract Agent and/or
Trustee, as applicable, an Officers&#146; Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or opinion need be
furnished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every Officers&#146; Certificate or opinion with respect to compliance with a condition or covenant
provided for in this Agreement shall include:
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a statement that each individual signing such Officers&#146; Certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such Officers&#146; Certificate or opinion
are based;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a statement that, in the opinion of each such individual, he or she has made
such examination or investigation as is necessary to enable such individual to express an
informed opinion as to whether or not such covenant or condition has been complied with;
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any certificate, statement or opinion of an officer of the Company or the Note Issuer, as
applicable, may be based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, on information with respect to which is in the possession of the
Company or the Note Issuer, as applicable, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company or the Note Issuer, as applicable, unless
such counsel knows that the certificate, statement or opinion or representations with respect to
the matters upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are erroneous.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any certificate, statement or opinion of an officer of the Company or the Note Issuer, as
applicable, or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of accountants in the employ
of the Company or the Note Issuer, as applicable, unless such officer or counsel, as the case may
be, knows that the certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any certificate or opinion of any independent firm of public accountants filed with and
directed to the Trustee shall contain a statement that such firm is independent.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.03</B><I>. Notices. </I>Any notice or demand which by any provision of this
Agreement is required or permitted to be given or served by the Purchase Contract Agent or by the
Holders to or on the Company or the Note Issuer may be given or served by being deposited postage
prepaid, first class mail (except as otherwise specifically provided herein) addressed (until
another address of the Company or the Note Issuer is filed by the Company or the Note Issuer with
the Purchase Contract Agent) (a)&nbsp;in the case of the Company, to Hovnanian Enterprises, Inc., 110
West Front Street, P.O. Box 500, Red Bank, New Jersey 07701, and (b)&nbsp;in the case of the Note
Issuer, to K. Hovnanian Enterprises, Inc., 110 West Front Street, P.O. Box 500, Red Bank, New
Jersey 07701. Any notice, direction, request or demand by the Company, the Note Issuer or any
Holder to or upon the Purchase Contract Agent or the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first class mail (except as
otherwise specifically provided herein) addressed (until another address of the Purchase Contract
Agent or Trustee is filed by the Purchase Contract Agent or Trustee with the Company and the Note
Issuer) to Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, DE
19890.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where this Agreement provides for notice to Holders, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid,
to each Holder entitled thereto, at his last address as it appears in the Security Register. Where
this Agreement provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with the Purchase
Contract Agent, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case, by reason of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice to the Company or the Note Issuer when such notice is required to be
given pursuant to any provision of this Agreement, then any manner of giving such notice as shall
be reasonably satisfactory to the Purchase Contract Agent shall be deemed to be sufficient notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.04</B><I>. Effect of Headings and Table of Contents. </I>The Article and Section
headings herein and in the Table of Contents are for convenience only and shall not affect the
construction hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.05</B><I>. Successors and Assigns. </I>All covenants and agreements in this
Agreement by the Company, the Note Issuer and the Purchase Contract Agent shall bind their
respective successors and assigns, whether so expressed or not.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.06</B><I>. Separability Clause. </I>In case any provision in this Agreement or in
the Purchase Contracts shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.07</B><I>. Benefits of Agreement. </I>Nothing contained in this Agreement or in the
Purchase Contracts, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall
be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and
of the Purchase Contracts by their acceptance of delivery of such Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.08</B><I>. Governing Law. </I>This Agreement, the Units and the Purchase Contracts,
and any claim, controversy or dispute arising under or related to this Agreement, the Units or the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.09</B><I>. Conflict Indenture. </I>To the extent that any provision of this
Purchase Contract Agreement relating to or affecting the Notes conflicts with or is inconsistent
with the Indenture, the Indenture shall govern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.10</B><I>. Legal Holidays. </I>In any case where any Settlement Date shall not be a
Business Day, notwithstanding any other provision of this Agreement or the Purchase Contracts, the
settlement of the Purchase Contracts shall not be effected on such date, but instead shall be
effected on the next succeeding Business Day with the same force and effect as if made on such
Settlement Date, and no interest or other amounts shall accrue or be payable by the Company or to
any Holder in respect of such delay.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.11</B><I>. Counterparts. </I>This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together constitute one and
the same instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.12</B><I>. Inspection of Agreement. </I>A copy of this Agreement shall be available
at all reasonable times during normal business hours at Hovnanian Enterprises, Inc., 110 West Front
Street, Red Bank, New Jersey 07701 for inspection by any Holder or Beneficial Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.13</B><I>. Calculations. </I>The solicitation of any necessary bids and the
performance of any calculations to be made hereunder shall be the sole obligation of the Company,
and the Purchase Contract Agent shall have no obligation to make such calculations. These
calculations include, but are not limited to, determination of the applicable Settlement Rate, the
Fixed Settlement Rates, the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Early Settlement Rate, the Early Mandatory Settlement Rate, the Fundamental Change Early
Settlement Rate, the Applicable Market Value, the Closing Price and the Current Market Price, as
the case may be. All such calculations made by the Company or its agent hereunder shall be made in
good faith and, absent manifest error, be final and binding on the Purchase Contract Agent, the
Trustee, each Paying Agent and the Holders. For any calculations to be made by the Company or its
agent hereunder, the Company shall provide a schedule of such calculations to the Purchase Contract
Agent and the Trustee, and each of the Purchase Contract Agent and the Trustee shall be entitled to
conclusively rely upon the accuracy of the calculations by the Company or its agent without
independent verification, shall have no liability with respect thereto and shall have no liability
to the Holders for any loss any of them may incur in connection with no independent verification
having been done.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.14</B><I>. UCC. </I>Each Purchase Contract (whether or not included in a Unit) is a
security governed by Article&nbsp;8 of the Uniform Commercial Code as in effect in the State of New York
on the date hereof.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 2</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Unit and Purchase Contract Forms </FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.01</B><I>. Forms of Units and Purchase Contracts Generally. </I>(a)&nbsp;The Units and
Purchase Contracts shall be in substantially the forms set forth in Exhibit&nbsp;A and Exhibit&nbsp;B hereto,
respectively, which shall be incorporated in and made a part of this Purchase Contract Agreement,
with such letters, numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units or Purchase Contracts, as the case may be, are (or may in
the future be) listed or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company and Note Issuer executing such Units and Purchase Contracts, as the
case may be, as evidenced by their execution thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Units and Purchase Contracts shall be issuable only in registered form and only in
denominations of a single Unit or Purchase Contract, as the case may be, and any integral multiple
thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Units will initially be issued in the form of one or more fully registered Global
Units as set forth in Section&nbsp;3.06. The Purchase Contracts will initially be issued as Component
Purchase Contracts substantially in the form of Attachment 3 to the form of Global Unit attached as
Exhibit&nbsp;A hereto, and will be attached to the related Global Unit and registered in the name of
Wilmington Trust Company, as attorney-in-fact of the holder(s) of such Global Unit.
</DIV>


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</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Definitive Securities shall be printed, lithographed or engraved with steel engraved
borders or may be produced in any other manner, all as determined by the officers of the Company
and Note Issuer executing the Units or Purchase Contracts, as the case may be, evidenced by such
Definitive Securities, consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Every Global Unit and Global Purchase Contract executed, authenticated on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the following form:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;THIS SECURITY IS A GLOBAL &#091;UNIT / PURCHASE CONTRACT&#093; WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE &#147;<B>DEPOSITARY</B>&#148;) TO THE NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO &#091;THE
COMPANY AND THE NOTE ISSUER / THE COMPANY&#093; OR &#091;THEIR / ITS&#093; &#091;AGENTS / AGENT&#093; FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &#038; CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE &#038; CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &#038; CO., HAS AN
INTEREST HEREIN.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.02</B><I>. Form of Certificate of Authentication. </I>The form of certificate of
authentication of the Units and Purchase Contracts shall be in substantially the form set forth in
the form of Unit or form of Purchase Contract, respectively, attached hereto.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.03</B><I>. Global Securities; Separation of Units.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;On any Business Day during the period beginning on, and including, the Business Day
immediately following the Issue Date to, but excluding, the third Scheduled Trading Day immediately
preceding the Scheduled Mandatory Settlement Date or any Early Mandatory Settlement Date, a Holder
or Beneficial Holder of a Unit may separate such Unit into its constituent Purchase Contract and
Note (each such separated Purchase Contract and separated Note, a &#147;<B>Separate Purchase Contract</B>&#148; and
&#147;<B>Separate Note</B>,&#148; respectively), which will thereafter trade under their respective CUSIP numbers
(442487 138) and (442488 201), and that Unit will cease to exist. Beneficial interests in a Unit,
and after separation, the Separate Purchase Contract and Separate Note, will be shown on and
transfers will be effected through direct or indirect participants in DTC. Beneficial interests in
Units, Separate Purchase Contracts and Separate Notes will be evidenced by Global Units, Global
Purchase Contracts and Global Notes, respectively. In order to separate a Unit into its component
parts, a Beneficial Holder must deliver written instruction to the broker or other direct or
indirect participant (the &#147;<B>Participant</B>&#148;) through which it holds an interest in such Unit to notify
DTC through DTC&#146;s Deposit/Withdrawal at Custodian System (the &#147;<B>DWAC System</B>&#148;) of such Beneficial
Holder&#146;s election to separate such Unit, following which the Purchase Contract Agent or Trustee, as
applicable, shall register (i)&nbsp;a decrease in the number of Units represented by the Global Unit and
the number of Purchase Contracts and Notes represented by the Component Purchase Contract and the
Component Note attached to the Global Unit as Attachments 3 and 4, respectively, as set forth in
Schedule&nbsp;A to each such attachment, and (ii)&nbsp;a corresponding increase in the number of Purchase
Contracts and Notes represented by the Global Purchase Contract and the Global Note, respectively.
If, however, such Unit is in the form of a Definitive Security in accordance with Section&nbsp;3.09, the
Holder thereof must deliver to the Purchase Contract Agent such Unit, together with a separation
notice, in the form set forth in Attachment 1 to the form of Unit attached hereto as Exhibit&nbsp;A.
Upon the receipt of such separation notice, the Company shall promptly cause delivery, in
accordance with the delivery instructions set forth in such separation notice, of one Separate
Purchase Contract and one Separate Note for each such Unit. Separate Purchase Contracts and
Separate Notes will be transferable independently from each other.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Holders which elect to separate the Note and related Purchase Contract in accordance with
this Section&nbsp;2.03 shall be responsible for any fees or expenses payable in connection with such
separation, and neither the Company, the Purchase Contract Agent nor the Trustee shall be liable
for any such fees or expenses.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.04</B><I>. Recreation of Units.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;On any Business Day during the period beginning on, and including, the Business Day
immediately following the Issue Date to, but excluding, the third Scheduled Trading Day immediately
preceding the Mandatory Settlement Date or any Early Mandatory Settlement Date, a Holder or Beneficial Holder of a Separate
Purchase Contract and a Separate Note may recreate a Unit (which will thereafter trade under the
CUSIP number 44248W 208 for the Units), and each such Separate Purchase Contract and Separate Note
will cease to exist. In order to recreate a Separate Purchase Contract and Separate Note into a
Unit, a Beneficial Holder must deliver written instruction to the Participant through which it
holds an interest in such Separate Purchase Contract and Separate Note to notify DTC through the
DTC&#146;s DWAC System of such Beneficial Holder&#146;s election to recreate a Unit, following which the
Purchase Contract Agent or Trustee, as applicable, shall register (i)&nbsp;an increase in the number of
Units represented by the Global Unit and the number of Purchase Contracts and Notes represented by
the Component Purchase Contract and the Component Note attached to the Global Unit as Attachments 3
and 4, respectively, as set forth in Schedule&nbsp;A to each such attachment, and (ii)&nbsp;a corresponding
decrease in the number of Purchase Contracts and Notes represented by the Global Purchase Contract
and Global Note, respectively. If, however, such Separate Purchase Contract and Separate Note are
in the form of Definitive Securities, the Holder thereof must deliver to the Purchase Contract
Agent such Definitive Securities, together with a recreation notice, in the form set forth in
Attachment 2 to the form of Unit attached hereto as Exhibit&nbsp;A. Upon the receipt of such recreation
notice, the Company shall promptly cause delivery, in accordance with the delivery instructions set
forth in such recreation notice, of one Unit in definitive form for such Definitive Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Holders that recreate Units in accordance with this Section&nbsp;2.04 shall be responsible for
any fees or expenses payable in connection with such recreation, and neither the Company, the
Purchase Contract Agent nor the Trustee shall be liable for any such fees or expenses.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 3</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">The Units and Purchase Contracts </FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.01</B><I>. Amount and Denominations. </I>The aggregate number of Units and Separate
Purchase Contracts evidenced by Equity-Linked Securities executed, authenticated on behalf of the
Holders and delivered hereunder is limited to 3,000,000 (as increased by a number equal to the
aggregate number of additional Units, if any, purchased by the Underwriters pursuant to the
exercise of their option to purchase additional Units as set forth in the Underwriting Agreement),
except for Units and Separate Purchase Contracts executed, authenticated and delivered upon
registration of transfer of, in exchange for, or in lieu of, other
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Units and Separate Purchase
Contracts pursuant to Section&nbsp;3.04, Section&nbsp;3.05, Section&nbsp;3.11 or Section&nbsp;9.05.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity-Linked Securities that are not in the form of Global Securities shall be issuable in
denominations of one Equity-Linked Security and integral multiples in excess thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.02</B><I>. Rights and Obligations Evidenced by the Equity-Linked Securities.</I>
Each Equity-Linked Security shall evidence the number of Units or Separate Purchase Contracts, as
the case may be, specified therein, with (a)&nbsp;each such Unit representing the rights and obligations
of the Holder thereof and of the Company under one Purchase Contract, and the rights and
obligations of the Holder thereof and of the Note Issuer under one Note, and (b)&nbsp;each such Separate
Purchase Contract representing the rights and obligations of the Holder thereof and of the Company
under one Separate Purchase Contract. In the case of a Unit, the Holder of such Unit shall, for
all purposes hereunder and under the Indenture, be deemed to be the Holder of the Note and Purchase
Contract that are components of such Unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the close of business on the last Trading Day of the 20 Trading Day period during
which the Applicable Market Value is determined with respect to any Purchase Contract or, if
applicable, any earlier Determination Date with respect to such Purchase Contract (in each case,
whether such Purchase Contract is held as a component of a Unit or as a Separate Purchase
Contract), the shares of Class&nbsp;A Common Stock underlying such Purchase Contract shall not be
outstanding, and such Purchase Contract shall not entitle the Holder thereof to any of the rights
of a holder of Class&nbsp;A Common Stock, including, without limitation, the right to vote or receive
any dividends or other payments or to consent or to receive notice as a shareholder in respect of
the meetings of shareholders or for the election of directors for any other matter, or any other
rights whatsoever as a shareholder of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.03</B><I>. Execution, Authentication, Delivery and Dating. </I>Upon the execution
and delivery of this Agreement, and at any time and from time to time thereafter, the Company and,
in the case of Units, the Note Issuer, may deliver Equity-Linked Securities executed by the
Company, the Note Issuer (in the case of Units) and the Purchase Contract Agent as attorney-in-fact
for the Holders of Purchase Contracts from time to time (in the case of Purchase Contracts), to the
Purchase Contract Agent and Trustee for authentication on behalf of the Holders and delivery,
together with the Issuer Order for authentication of such Equity-Linked Securities, and the
Purchase Contract Agent and Trustee in accordance with such Issuer Order shall authenticate on
behalf of the Holders and deliver such Equity-Linked Securities.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Equity-Linked Securities shall be executed on behalf of the Company and the Note Issuer by
any authorized officer of the Company and the Note Issuer, respectively, and in the case of the
Purchase Contracts, shall be executed on behalf of the Holders by any authorized officer of the
Purchase Contract Agent as attorney-in-fact for the Holders of Purchase Contracts from time to
time. The signature of any such officer on the Equity-Linked Securities may be manual or facsimile.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity-Linked Securities bearing the manual or facsimile signature of an individual who was at
any time the proper officer of the Company, the Note Issuer or, in the case of the Purchase
Contracts, the Purchase Contract Agent, shall bind the Company, the Note Issuer, and the Holders of
Purchase Contracts, as the case may be, notwithstanding that such individual has ceased to hold
such offices prior to the authentication and delivery of such Equity-Linked Securities or did not
hold such offices at the date of such Equity-Linked Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Equity-Linked Security shall be dated the date of its authentication.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Equity-Linked Security shall be entitled to any benefit under this Agreement or be valid or
obligatory for any purpose unless there appears on such Equity-Linked Security a certificate of
authentication substantially in the form provided for herein executed by an authorized officer of
the Purchase Contract Agent and Trustee (if applicable) by manual signature, and such certificate
upon any Equity-Linked Security shall be conclusive evidence, and the only evidence, that such
Equity-Linked Security has been duly authenticated and delivered hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.04</B><I>. Temporary Equity-Linked Securities. </I>Pending the preparation of
Definitive Equity-Linked Securities, the Company and, in the case of Units, the Note Issuer, shall
execute and deliver to the Purchase Contract Agent and, in the case of Units, Trustee, and the
Purchase Contract Agent and, if applicable, Trustee shall authenticate on behalf of the Holders,
and deliver, in lieu of such Definitive Equity-Linked Securities, temporary Equity-Linked
Securities that are in substantially the form set forth in Exhibit&nbsp;A or Exhibit&nbsp;B hereto, as the
case may be, with such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be required by the rules
of any securities exchange on which the Units or Separate Purchase Contracts, as the case may be,
are listed, or as may, consistently herewith, be determined by the officers of the Company
executing such Equity-Linked Securities, as evidenced by their execution of the Equity-Linked
Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If temporary Equity-Linked Securities are issued, the Company and, if applicable, the Note
Issuer will cause Definitive Equity-Linked Securities to be
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">prepared without unreasonable delay.
After the preparation of Definitive Equity-Linked Securities, the temporary Equity-Linked
Securities shall be exchangeable for Definitive Equity-Linked Securities upon surrender of the
temporary Equity-Linked Securities at the Corporate Trust Office, at the expense of the Company
and, if applicable, the Note Issuer and without charge to the Holder or the Purchase Contract
Agent. Upon surrender for cancellation of any one or more temporary Equity-Linked Securities, the
Company and, if applicable, the Note Issuer shall execute and deliver to the Purchase Contract Agent and Trustee, and the Purchase
Contract Agent and, if applicable, the Trustee shall authenticate on behalf of the Holder, and
deliver in exchange therefor, one or more Definitive Equity-Linked Securities of like tenor and
denominations and evidencing a like number of Units or Separate Purchase Contracts, as the case may
be, as the temporary Equity-Linked Security or Equity-Linked Securities so surrendered. Until so
exchanged, the temporary Equity-Linked Securities shall in all respects evidence the same benefits
and the same obligations with respect to the Units or Separate Purchase Contracts, as the case may
be, evidenced thereby as Definitive Equity-Linked Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.05</B><I>. Registration; Registration of Transfer and Exchange. </I>The Company
shall cause to be kept at the Corporate Trust Office a register (the &#147;<B>Security Register</B>&#148;) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Equity-Linked Securities and of transfers of Equity-Linked Securities. The Purchase
Contract Agent is hereby initially appointed Security Registrar (the &#147;<B>Security Registrar</B>&#148;) for the
purpose of registration of Equity-Linked Securities and transfers of Equity-Linked Securities as
provided herein. The Security Registrar shall record separately the registration and transfer of
the Equity-Linked Securities evidencing Units and Separate Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon surrender for registration of transfer of any Equity-Linked Security at the Corporate
Trust Office, the Company shall execute and deliver to the Purchase Contract Agent and Trustee, and
the Purchase Contract Agent and Trustee shall authenticate on behalf of the designated transferee
or transferees, and deliver, in the name of the designated transferee or transferees, one or more
new Equity-Linked Securities of any authorized denominations, of like tenor, and evidencing a like
number of Units or Separate Purchase Contracts, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the option of the Holder, Equity-Linked Securities may be exchanged for other Equity-Linked
Securities, of any authorized numbers and evidencing a like number of Units or Separate Purchase
Contracts, as the case may be, upon surrender of the Equity-Linked Securities to be exchanged at
the Corporate Trust Office. Whenever any Equity-Linked Securities are so surrendered for exchange,
the Company and, in the case of Units, the Note Issuer shall execute and deliver
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">to the Purchase
Contract Agent and Trustee, and the Purchase Contract Agent and, in the case of Units, the Trustee
shall authenticate on behalf of the Holder, and deliver the Equity-Linked Securities which the
Holder making the exchange is entitled to receive.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Equity-Linked Securities issued upon any registration of transfer or exchange of an
Equity-Linked Security shall evidence the ownership of the same number of Units or Separate
Purchase Contracts, as the case may be, and be entitled to the same benefits and subject to the
same obligations, under this Agreement as the Units or Separate Purchase Contracts, as the case may be, evidenced by the
Equity-Linked Security surrendered upon such registration of transfer or exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every Equity-Linked Security presented or surrendered for registration of transfer or exchange
shall (if so required by the Purchase Contract Agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the Purchase Contract Agent
duly executed by the Holder thereof, or its attorney duly authorized in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No service charge shall be made for any registration of transfer or exchange of an
Equity-Linked Security, but the Company or the Purchase Contract Agent on behalf of the Company may
require payment from the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or exchange of Equity-Linked
Securities, other than any exchanges pursuant to Section&nbsp;3.06 and Section&nbsp;9.05 not involving any
transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, the Company and, in the case of Units, the Note Issuer shall
not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent and, in the case of Units, the Trustee shall not be obligated to authenticate on behalf of
the Holder or deliver any Equity-Linked Security in exchange for any other Equity-Linked Security
presented or surrendered for registration of transfer or for exchange on or after the Business Day
immediately preceding the Scheduled Mandatory Settlement Date or any earlier Settlement Date with
respect to such Equity-Linked Security. In lieu of delivery of a new Equity-Linked Security, upon
satisfaction of the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent
shall, if a Settlement Date with respect to such Equity-Linked Security has occurred, deliver or
cause to be delivered the shares of Class&nbsp;A Common Stock deliverable in respect of the Purchase
Contracts evidenced by such Equity-Linked Security (together with the Separate Note, if such
Equity-Linked Security is a Unit and if the Repurchase Right is not applicable or, if applicable,
not exercised).
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.06</B><I>. Book-Entry Interests. </I>The Units, on original issuance, will be
issued in the form of one or more fully registered Global Units, to be delivered to the Depositary
or its custodian by, or on behalf of, the Company. The Company hereby designates DTC as the initial
Depositary. Such Global Units shall initially be registered on the books and records of the Company
in the name of Cede &#038; Co., the nominee of DTC, and no Beneficial Holder will receive a Definitive
Unit representing such Beneficial Holder&#146;s interest in such Global Unit, except as provided in
Section&nbsp;3.09. Unless and until definitive, fully registered Securities have been issued to
Beneficial Holders pursuant to Section&nbsp;3.09:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the provisions of this Section&nbsp;3.06 shall be in full force and effect;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) except as contemplated in the definition of &#147;Holders&#148; in Section&nbsp;1.01(d), the
Company shall treat the Depositary for all purposes of this Agreement (including settling
the Purchase Contracts and receiving approvals, votes or consents hereunder) as the Holder
of the Global Units and Global Purchase Contracts and shall have no obligation to the
Beneficial Holders;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) to the extent that the provisions of this Section&nbsp;3.06 conflict with any other
provisions of this Agreement, the provisions of this Section&nbsp;3.06 shall control; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the rights of the Beneficial Holders shall be exercised only through the
Depositary and shall be limited to those established by law and agreements between such
Beneficial Holders and the Depositary or the Depositary Participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.07</B><I>. Notices to Holders. </I>Whenever a notice or other communication to the
Holders is required to be given under this Agreement, the Company or the Company&#146;s agent shall give
such notices and communications to the Holders and, with respect to any Units or Purchase Contracts
registered in the name of the Depositary or the nominee of the Depositary, the Company or the
Company&#146;s agent shall, except as set forth herein, have no obligations to the Beneficial Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.08</B><I>. Appointment of Successor Depositary. </I>If the Depositary elects to
discontinue its services as securities depositary with respect to the Units or Purchase Contracts,
the Company may, in its sole discretion, appoint a successor Depositary with respect to such Units
or such Purchase Contracts, as the case may be.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.09</B><I>. Definitive Securities. </I>If:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Depositary is unwilling or unable to continue as depositary for the Global
Securities and the Company is unable to find a qualified replacement for such Depository
within 90&nbsp;days;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time the Depositary ceases to be a Clearing Agency registered under the
Exchange Act; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) an Event of Default (as defined in the Indenture), or any failure on the part
of the Company or the Note Issuer to observe or perform any covenant or agreement in the
Purchase Contracts or the Purchase Contract Agreement, has occurred and is continuing and
a Beneficial Holder requests that its Securities be issued in physical, certificated
form,
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">then, in each case the Company and/or the Note Issuer, as applicable, shall execute, and the
Purchase Contract Agent and/or the Trustee, as applicable, upon receipt of an Issuer Order for the
authentication and delivery of Definitive Securities, shall authenticate and deliver Definitive
Securities representing an aggregate number of Securities with respect to the Global Security or
Securities representing such Securities (or representing an aggregate number of Securities equal to
the aggregate number of Securities in respect of which such Beneficial Holder has requested the
issuance of Definitive Securities pursuant to clause (iii)&nbsp;above) in exchange for such Global
Security or Securities (or portion thereof). Each Definitive Security so delivered shall evidence
Units or Purchase Contracts or Notes, as the case may be, of the same kind and tenor as the Global
Security so surrendered in respect thereof. Notwithstanding the foregoing, the exchange of Global
Notes for Notes in definitive form shall be governed by the Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.10</B>. <I>Section&nbsp;382 Ownership Blocker. (</I>a) Notwithstanding anything to the
contrary in this Agreement, no Person may purchase or otherwise acquire any Equity-Linked
Securities, and no Beneficial Holder of Equity-Linked Securities shall be permitted to purchase or
otherwise acquire any additional Equity-Linked Securities, if, as a result of such purchase or
acquisition, such Person or Beneficial Holder, as the case may be, would Beneficially Own 4.9% or
more of the Class&nbsp;A Common Stock then outstanding (such restriction, the &#147;<B>Section&nbsp;382 Ownership
Blocker</B>&#148;). To determine whether 4.9% or more of the Class&nbsp;A Common Stock then outstanding is
Beneficially Owned by such Person or Beneficial Holder, as the case may be, such Person or
Beneficial Holder shall:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) take into account all shares of Class&nbsp;A Common Stock Beneficially Owned by such
Person or Beneficial Holder, as the case may be;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) assume that such Person or Beneficial Holder, as the case may be, Beneficially
Owns the number of shares of Class&nbsp;A Common
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Stock issuable upon settlement of such Equity-Linked Securities based on the Maximum Settlement Rate;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) deem the number of shares of Class&nbsp;A Common Stock calculated pursuant to clause
(ii)&nbsp;above to be outstanding for purposes of the calculation with respect to such Person
or Beneficial Holder, as the case may be,
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in the case of clauses (ii)&nbsp;and (iii), without taking into account the Section&nbsp;382 Settlement
Blocker.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Notwithstanding anything to the contrary in this Agreement, if a Beneficial Holder of
Equity-Linked Securities purchases or otherwise acquires shares or additional shares of Class&nbsp;A Common Stock, as applicable, such Beneficial Holder may
not beneficially own any Equity-Linked Securities to the extent that such purchase or acquisition
of shares of Class&nbsp;A Common Stock causes such Beneficial Holder to Beneficially Own 4.9% or more of
the outstanding shares of Class&nbsp;A Common Stock, calculated for this purpose in the same manner
described in Section&nbsp;3.10(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Any purported acquisition of any Equity-Linked Security in violation of the Section&nbsp;382
Ownership Blocker shall be void as of the date of the purported acquisition (or, in the case of an
indirect acquisition, the ownership of the Beneficial Holder of such Equity-Linked Security shall
terminate simultaneously with such indirect acquisition). The purported acquirer (or, in the case
of an indirect acquisition, the Beneficial Holder) of any Equity-Linked Security purportedly
acquired in violation of the Section&nbsp;382 Ownership Blocker (such Equity-Linked Security, an &#147;<B>Excess
Equity-Linked Security</B>&#148;) shall not be recognized as the Beneficial Holder of such Excess
Equity-Linked Security for any purpose including, without limitation, for purposes of receiving (i)
any Installment Payment (if such Excess Equity-Linked Security is a Unit), or (ii)&nbsp;any other
payment on such Excess Equity-Linked Security. Any Excess Equity-Linked Security, and any
Installment Payment or other payment on such Excess Equity-Linked Security, shall be subject to
divestiture pursuant to the provisions of Paragraph&nbsp;Ninth of the Certificate of Incorporation as if
such Excess Equity-Linked Security were an &#147;Excess Security&#148; as defined in such Paragraph&nbsp;Ninth.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;If any Equity-Linked Security becomes an Excess Equity-Linked Security, or if any
Equity-Linked Security ceases to be an Excess Equity-Linked Security, the Company shall promptly
deliver written notice thereof to the Purchase Contract Agent and the Trustee. The Purchase
Contract Agent and the Trustee shall not be charged with knowledge that any Equity-Linked Security
is an Excess Equity-Linked Security, or that any Equity-Linked Security is no longer an Excess
Equity-Linked Security, in each case, unless either (i)&nbsp;a
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Responsible Officer of the Purchase
Contract Agent or the Trustee, as the case may be, shall have actual knowledge thereof or (ii)
written notice thereof has been provided to the Purchase Contract Agent and the Trustee by the
Company. The Purchase Contract Agent and the Trustee may, for purposes of this Agreement and the
Indenture, conclusively rely on any such notice from the Company in accordance with the provisions
of Section&nbsp;8.01(b)(ii).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The Board of Directors may, in its discretion, approve any acquisition of Units or
Separate Purchase Contracts that would otherwise be restricted pursuant to this Section&nbsp;3.10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.11</B><I>. Mutilated, Destroyed, Lost and Stolen Securities. </I>If any mutilated
Equity-Linked Security is surrendered to the Purchase Contract Agent, the Company and, if
applicable, the Note Issuer shall execute and deliver to the Purchase Contract Agent and Trustee,
and the Purchase Contract Agent and, if applicable, the Trustee shall authenticate on behalf of the Holder, and deliver in exchange
therefor, a new Equity-Linked Security, evidencing the same number of Units or Separate Purchase
Contracts, as the case may be, and bearing a security number not contemporaneously outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If there shall be delivered to the Company, the Note Issuer (in the case of any Units), the
Purchase Contract Agent and the Trustee (in the case of any Units) (i)&nbsp;evidence to their
satisfaction of the destruction, loss or theft of any Equity-Linked Security, and (ii)&nbsp;such
security or indemnity as may be reasonable required by them to hold each of them and any agent of
any of them harmless, then, in the absence of notice to the Company, the Note Issuer, the Purchase
Contract Agent or the Trustee that such Equity-Linked Security has been acquired by a protected
purchaser, the Company and Note Issuer (in the case of any Units) shall execute and deliver to the
Purchase Contract Agent and the Trustee (in the case of any Units), and the Purchase Contract Agent
and the Trustee (in the case of any Units) shall authenticate on behalf of the Holder, and deliver
to the Holder, in lieu of any such destroyed, lost or stolen Equity-Linked Security, a new
Equity-Linked Security, evidencing the same number of Units or Separate Purchase Contracts, as the
case may be, and bearing a security number not contemporaneously outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, the Company and, in the case of Units, the Note Issuer shall
not be obligated to execute and deliver to the Purchase Contract Agent and Trustee, and the
Purchase Contract Agent and, in the case of Units, the Trustee shall not be obligated to
authenticate on behalf of the Holder, and deliver to the Holder, an Equity-Linked Security on or
after the Business Day immediately preceding the Scheduled Mandatory Settlement Date or any earlier
Settlement Date with respect to such Equity-Linked Security. In lieu of delivery of a new
Equity-Linked Security, upon satisfaction of the applicable conditions
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">specified above in this
Section and receipt of appropriate registration or transfer instructions from such Holder, the
Purchase Contract Agent shall, if a Settlement Date with respect to such Equity-Linked Security has
occurred, deliver or arrange for delivery of the shares of Class&nbsp;A Common Stock deliverable in
respect of the Purchase Contracts evidenced by such Equity-Linked Security (together with Separate
Notes equal to the number of, and in the same form as, the Notes evidenced by such Equity-Linked
Security if such Equity-Linked Security is a Unit and if the Repurchase Right is not applicable or,
if applicable, not exercised).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the issuance of any new Equity-Linked Security under this Section&nbsp;3.11, the Company and,
in the case of any new Units, the Note Issuer and the Purchase Contract Agent may require the
payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Purchase
Contract Agent) connected therewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every new Equity-Linked Security issued pursuant to this Section&nbsp;3.11 in lieu of any
destroyed, lost or stolen Equity-Linked Security shall constitute an original additional
contractual obligation of the Company and, in the case of any new Units, the Note Issuer and of the
Holder in respect of the Unit or Separate Purchase Contract, as the case may be, evidenced thereby,
whether or not the destroyed, lost or stolen Equity-Linked Security shall be found at any time.
Such new Equity-Linked Security (and the Units or Separate Purchase Contracts, as applicable,
evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally and proportionately with
any and all other Equity-Linked Securities delivered hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Section&nbsp;3.11 are exclusive and shall preclude, to the extent lawful,
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Equity-Linked Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.12</B><I>. Persons Deemed Owners. </I>Prior to due presentment of an Equity-Linked
Security for registration of transfer, the Company and, in the case of Units, the Note Issuer, and
the Purchase Contract Agent, and any agent of the Company, the Note Issuer or the Purchase Contract
Agent, may treat the Person in whose name such Equity-Linked Security is registered as the owner of
the Unit or Purchase Contract, as the case may be, evidenced thereby, for the purpose of
performance of the Units or Purchase Contracts, as applicable, evidenced by such Equity-Linked
Securities and for all other purposes whatsoever, and none of the Company, the Note Issuer nor the
Purchase Contract Agent, nor any agent of the Company, the Note Issuer or the Purchase Contract
Agent, shall be affected by notice to the contrary.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, with respect to any Global Unit or Global Purchase Contract,
nothing contained herein shall prevent the Company, the Note Issuer, the Purchase Contract Agent or
any agent of the Company, the Note Issuer or the Purchase Contract Agent, from giving effect to any
written certification, proxy or other authorization furnished by the Depositary (or its nominee),
as a Holder, with respect to such Global Unit or Global Purchase Contract or impair, as between
such Depositary and the related Beneficial Holder, the operation of customary practices governing
the exercise of rights of the Depositary (or its nominee) as Holder of such Global Unit or Global
Purchase Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of the Purchase Contract Agent, Trustee, the Paying Agent and the Security Registrar
shall have any responsibility or obligation to any Beneficial Holder in a Global Security, an agent
member or other Person with respect to the accuracy of the records of the Depositary or its nominee
or of any agent member, with respect to any ownership interest in the Securities or with respect to
the delivery to any agent member, Beneficial Holder or other Person (other than the Depositary) of
any notice or the payment of any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders under the Securities and this Agreement shall be given or
made only to or upon the order of the registered Holders (which shall be the Depositary or its
nominee in the case of a Global Security). The rights of Beneficial Holders in Global Securities
shall be exercised only through the Depositary subject to the applicable procedures. The Purchase
Contract Agent, the Trustee, the Paying Agent and the Registrar shall be entitled to rely and shall
be fully protected in relying upon information furnished by the Depositary with respect to its
members, participants and any Beneficial Holders. The Purchase Contract Agent, the Trustee, the
Paying Agent and the Security Registrar shall be entitled to deal with the Depositary, and any
nominee thereof, that is the registered Holder of any Global Security for all purposes of this
Agreement relating to such Global Security (including the payment or delivery of amounts due
hereunder and the giving of instructions or directions by or to any Beneficial Holder) as the sole
Holder of such Global Security and shall have no obligations to the Beneficial Holders thereof.
None of the Purchase Contract Agent, the Trustee, the Paying Agent and the Security Registrar shall
have any responsibility or liability for any acts or omissions of the Depositary with respect to
such Global Security, for the records of any such Depositary, including records in respect of the
Beneficial Holders of any such Global Security, for any transactions between the Depositary and any
agent member or between or among the Depositary, any such agent member and/or any Holder or
Beneficial Holder of such Global Security, or for any transfers of beneficial interests in any such
Global Security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall
prevent the Company, the Purchase Contract Agent, the Trustee, or any agent of the Company, the
Purchase Contract Agent or the Trustee
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">from giving effect to any written certification, proxy or
other authorization furnished by any depositary (or its nominee), as a Holder, with respect to such
Global Security or shall impair, as between such Depositary and Beneficial Holders of such Global
Security, the operation of customary practices governing the exercise of the rights of such
depositary (or its nominee) as Holder of such Global Security.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of the Purchase Contract Agent, the Trustee, the Paying Agent or the Registrar shall have
any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Agreement or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among participants of DTC, members or
Beneficial Holders in any Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Agreement, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.13</B><I>. Cancellation. </I>All Securities surrendered for separation or
recreation and all Equity-Linked Securities surrendered for settlement or upon the
registration of transfer or exchange of an Equity-Linked Security shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase Contract Agent and, if
not already cancelled, be promptly cancelled by it; <I>provided</I>, <I>however</I>, that the Purchase Contract
Agent shall deliver any Notes or Separate Notes so surrendered to it to the Trustee and Paying
Agent (as defined in the Indenture) for disposition in accordance with the provisions of the
Indenture. In the case of a Unit or Units surrendered for settlement, subject to Section&nbsp;4.08
hereof, the Note Issuer shall promptly execute and the Trustee shall promptly authenticate and
deliver in accordance with the terms of the Indenture to the Holder thereof a number of Separate
Notes equal to the number of, and in the same form as, the Notes comprising part of the Units so
surrendered. The Company may at any time deliver to the Purchase Contract Agent for cancellation
any Equity-Linked Securities previously executed, authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Equity-Linked Securities so delivered
shall, upon an Issuer Order, be promptly cancelled by the Purchase Contract Agent; <I>provided</I>,
<I>however</I>, that if the Equity-Linked Securities so delivered are Units, the Purchase Contract Agent
shall deliver the Notes comprising such Units to the Trustee and Paying Agent (as defined in the
Indenture) for disposition in accordance with the provisions of the Indenture. No Equity-Linked
Securities shall be executed, authenticated on behalf of the Holder and delivered in lieu of or in
exchange for any Equity-Linked Securities cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Equity-Linked Securities held by the Purchase
Contract Agent shall be disposed of in accordance with its customary practices.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company or any Affiliate of the Company shall acquire any Equity-Linked Security, such
acquisition shall not operate as a cancellation of such Equity-Linked Security unless and until
such Equity-Linked Security is delivered to the Purchase Contract Agent for cancellation, in which
case such Equity-Linked Security shall be accompanied by an Issuer Order and cancelled in
accordance with the immediately preceding paragraph.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 4</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Settlement of the Purchase Contracts </FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.01</B><I>. Settlement Rate. </I>(a)&nbsp;Each Purchase Contract obligates the Company to
deliver, on the Mandatory Settlement Date, a number of shares of Class&nbsp;A Common Stock (subject to
Section&nbsp;4.10 and Article&nbsp;5) equal to the Settlement Rate as determined by the Company, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The &#147;<B>Settlement Rate</B>&#148; is equal to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Applicable Market Value is equal to or greater than the Threshold
Appreciation Price, 4.7655 shares of Class&nbsp;A Common Stock for each Purchase Contract (the
&#147;<B>Minimum Settlement Rate</B>&#148;);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the Applicable Market Value is greater than the Reference Price but less than
the Threshold Appreciation Price, a number of shares of Class&nbsp;A Common Stock for each
Purchase Contract equal to the Stated Amount, <I>divided by </I>the Applicable Market Value; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the Applicable Market Value is less than or equal to the Reference Price,
5.8140 shares of Class&nbsp;A Common Stock for each Purchase Contract (the &#147;<B>Maximum Settlement
Rate</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Maximum Settlement Rate, the Minimum Settlement Rate (each, a &#147;<B>Fixed Settlement Rate</B>&#148;)
and the Reference Price shall be subject to adjustment as provided in Article&nbsp;5 and rounded upward
or downward to the nearest 1/10,000th of a share (or if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share) or nearest $0.0001, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Company shall give notice of the Settlement Rate to the Purchase Contract Agent and
Holders no later than two Scheduled Trading Days prior to the Mandatory Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.02</B><I>. Representations and Agreements of Holders. </I>Each Holder of an
Equity-Linked Security, by its acceptance thereof:
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) irrevocably authorizes and directs the Purchase Contract Agent to execute and
deliver on its behalf and perform this Agreement on its behalf and appoints the Purchase
Contract Agent as its attorney-in-fact for any and all such purposes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of a Purchase Contract that is a component of a Unit, or that is
evidenced by a Global Purchase Contract, irrevocably authorizes and directs the Purchase
Contract Agent to execute, deliver and hold on its behalf the Global Purchase Contract or
the Component Purchase Contract evidencing such Purchase Contract and appoints the
Purchase Contract Agent its attorney-in-fact for any and all such purposes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) consents to the provisions hereof;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) agrees with the tax treatment provided for in Section&nbsp;11.07;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) agrees to the Section&nbsp;382 Ownership Blocker and Section&nbsp;382 Settlement Blocker
and represents and warrants to the Company that it is in compliance with the ownership
limitations of the Section&nbsp;382 Ownership Blocker (which representation and warranty is
part of the consideration for the issuance of such Equity-Linked Security); and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) agrees to be bound by the terms and provisions thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.03</B><I>. Purchase Contract Settlement Fund. </I>On the applicable Settlement
Date, the Company shall issue and deliver to the Purchase Contract Agent, for the benefit of the
Holders of the Outstanding Purchase Contracts (or, in the case of an Early Settlement, for the
benefit of the Holders of Purchase Contracts that have elected such Early Settlement), the
aggregate number of shares of Class&nbsp;A Common Stock to which such Holders of the Purchase Contracts
to be settled on such Settlement Date are entitled hereunder, registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such shares of Class&nbsp;A
Common Stock, together with any dividends or distributions for which a record date and payment date
for such dividend or distribution have occurred on or after the applicable Determination Date, the
&#147;<B>Purchase Contract Settlement Fund</B>&#148;). When any shares of Class&nbsp;A Common Stock are required to be
delivered to Holders pursuant to this Article&nbsp;4, the Purchase Contract Agent shall deliver such
shares of Class&nbsp;A Common Stock, together with any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund (but without interest thereon) to
such Holders, in accordance with the written direction of the Company, and the Company shall cause
any such shares to be registered in the name of such Holder or such Holder&#146;s designee pursuant to
Section&nbsp;4.11.
</DIV>


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</DIV>




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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.04.</B><I> Settlement Conditions. </I>A Holder&#146;s right to receive the shares of
Class&nbsp;A Common Stock, and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, upon settlement of any of its Purchase Contracts is
subject to the following conditions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;if such Purchase Contract or the Unit that includes such Purchase Contract is in the form
of a Definitive Security, surrendering the relevant Definitive Security to the Purchase Contract
Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank and with
duly completed settlement instructions in the form attached thereto, or if such Purchase Contract
is represented by a Global Security, surrendering the relevant Security in compliance with the
standing arrangements between the Depositary and the Purchase Contract Agent; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the payment of any transfer or similar taxes payable pursuant to Section&nbsp;4.11.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.05.</B><I> Mandatory Settlement on the Mandatory Settlement Date. </I>On the
Mandatory Settlement Date, subject to satisfaction of the conditions set forth in Section&nbsp;4.04 by a
Holder with respect to any of its Purchase Contracts and subject to Section&nbsp;4.10, the Company shall
cause a number of shares of Class&nbsp;A Common Stock per Purchase Contract equal to the Settlement Rate
to be issued and delivered, together with payment of (i)&nbsp;any cash payable in lieu of fractional
shares pursuant to Section&nbsp;4.13 and (ii)&nbsp;any dividends or distributions with respect
to such shares constituting part of the Purchase Contract Settlement Fund (but without any
interest thereon), to such Holder by book-entry transfer or other appropriate procedures pursuant
to Section&nbsp;4.11. The Person in whose name any shares of Class&nbsp;A Common Stock shall be issuable
upon settlement of any Purchase Contract on the Mandatory Settlement Date shall become the holder
of record of such shares as of the close of business on the last Trading Day of the 20 Trading Day
period during which the Applicable Market Value is determined; <I>provided </I>that, if delivery of any
shares of Class&nbsp;A Common Stock issuable upon settlement of any Purchase Contracts is delayed as a
result of the Section&nbsp;382 Settlement Blocker, the Person in whose name such shares shall be
issuable upon settlement of such Purchase Contracts shall become the holder of record of such
shares as of the close of business on the date that (i)&nbsp;such delivery would not result in such
Beneficial Holder being an Acquiring Person and (ii)&nbsp;such Beneficial Holder has given notice
thereof to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.06.</B><I> Early Settlement. </I>(a)&nbsp;Subject to and upon compliance with the
provisions of this Section&nbsp;4.06, on any Trading Day prior to the close of business on the third
Scheduled Trading Day immediately preceding the Scheduled Mandatory Settlement Date, a Holder may
elect to settle its Purchase
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Contracts early, in whole or in part, at the Early Settlement Rate
(&#147;<B>Early Settlement Right</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;A Holder&#146;s right to receive Class&nbsp;A Common Stock upon Early Settlement of any of its
Purchase Contracts is subject to the following conditions:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) delivery of a written and signed notice of election (an &#147;<B>Early Settlement
Notice</B>&#148;) in the form attached to the Purchase Contract to the Purchase Contract Agent
electing Early Settlement of such Purchase Contract;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) satisfaction of the conditions set forth in Section&nbsp;4.04.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If a Holder complies with the requirements set forth in Section&nbsp;4.06(b) before the close
of business on any Business Day, then that Business Day shall be considered the &#147;<B>Early Settlement
Date</B>.&#148; If a Holder complies with the requirements set forth in Section&nbsp;4.06(b) at or after the
close of business on any Business Day or at any time on a day that is not a Business Day, then the
next Business Day shall be considered the &#147;<B>Early Settlement Date</B>.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Subject to satisfaction of the conditions set forth in Section&nbsp;4.06(b) by a Holder with
respect to any of its Purchase Contracts, subject to Section&nbsp;4.10, the Company shall cause a number
of shares of Class&nbsp;A Common Stock per Purchase Contract equal to the Early Settlement Rate to be
issued and delivered, together with payment of (i)&nbsp;any cash payable in lieu of fractional shares
pursuant to Section&nbsp;4.13 and (ii)&nbsp;any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund (but without any
interest thereon), to such Holder by book-entry transfer or other appropriate procedures
pursuant to Section&nbsp;4.11 on the third Business Day following the Early Settlement Date. The Person
in whose name any shares of the Class&nbsp;A Common Stock shall be issuable upon such Early Settlement
of a Purchase Contract shall become the holder of record of such shares as of the close of business
on the relevant Early Settlement Date; <I>provided </I>that, if delivery of any shares of Class&nbsp;A Common
Stock issuable upon settlement of any Purchase Contracts is delayed as a result of the Section&nbsp;382
Settlement Blocker, the Person in whose name such shares shall be issuable upon settlement of such
Purchase Contracts shall become the holder of record of such shares as of the close of business on
the date that (i)&nbsp;such delivery would not result in such Beneficial Holder being an Acquiring
Person and (ii)&nbsp;such Beneficial Holder has given notice thereof to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;In the event that Early Settlement is effected with respect to Purchase Contracts that are
a component of Units, upon such Early Settlement, the Company shall execute and the Trustee shall
authenticate (pursuant to the Indenture) on behalf of the Holder and deliver to the Holder thereof,
at the expense of the Company, Separate Notes, in same form as the Notes comprising
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">part of the
Units, equal to the number of Purchase Contracts as to which Early Settlement was effected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;In the event that Early Settlement is effected with respect to Purchase Contracts
represented by less than all the Purchase Contracts evidenced by a Security, upon such Early
Settlement, the Company shall execute and the Purchase Contract Agent and Trustee shall
authenticate on behalf of the Holder and deliver to the Holder thereof, at the expense of the
Company, a Security evidencing the Purchase Contracts as to which Early Settlement was not
effected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Upon receipt of any Early Settlement Notice pursuant to Section&nbsp;4.06(b), the Purchase
Contract Agent shall promptly deliver a copy of such Early Settlement Notice to the Company and
Note Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.07.</B><I> Early Settlement Upon a Fundamental Change. </I>(a)&nbsp;If a Fundamental
Change occurs and a Holder exercises the option to effect Early Settlement in respect of its
Purchase Contracts in connection with such Fundamental Change in accordance with the procedures set
forth in Section&nbsp;4.06, such Holder shall receive a number of shares of Class&nbsp;A Common Stock (or
cash, securities or other property, as applicable) for each such Purchase Contract equal to the
Fundamental Change Early Settlement Rate on the date such Fundamental Change Early Settlement Right
is exercised (the &#147;<B>Fundamental Change Early Settlement Right</B>&#148;). An Early Settlement shall be deemed
for these purposes to be &#147;in connection with&#148; such Fundamental Change if the Holder delivers an
Early Settlement Notice to the Purchase Contract Agent, and otherwise satisfies the requirements
for effecting Early Settlement of its Purchase Contracts set forth in Section&nbsp;4.06 hereof, during
the period beginning on, and including, the Effective Date of the Fundamental Change and ending at
the close of business on the 30th Business Day thereafter (or, if earlier, the third Scheduled Trading Day immediately preceding
the Scheduled Mandatory Settlement Date) (the &#147;<B>Fundamental Change Early Settlement Period</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If a Holder complies with the requirements set forth in Section&nbsp;4.07(a) to exercise the
Fundamental Change Early Settlement Right before the close of business on any Business Day during
the Fundamental Change Early Settlement Period, then that Business Day shall be considered the
&#147;<B>Fundamental Change Early Settlement Date</B>.&#148; If a Holder complies with the requirements set forth in
set forth in Section&nbsp;4.07(a) to exercise the Fundamental Change Early Settlement Right at or after
the close of business on any Business Day during the Fundamental Change Early Settlement Period or
at any time on a day during the Fundamental Change Early Settlement Period that is not a Business
Day, then the next Business Day shall be considered the &#147;<B>Fundamental Change Early Settlement Date</B>.&#148;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Company shall provide the Purchase Contract Agent and the Holders of Units and
Separate Purchase Contracts with a notice of a Fundamental Change within five Business Days after
its occurrence, issue a press release announcing the Effective Date and post such press release on
its website. The notice shall set forth, among other things, (i)&nbsp;the applicable Fundamental Change
Early Settlement Rate, (ii)&nbsp;if not Class&nbsp;A Common Stock, the kind and amount of cash, securities
and other property receivable by the Holder upon settlement and (iii)&nbsp;the deadline by which each
Holder&#146;s Fundamental Change Early Settlement Right must be exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The &#147;<B>Fundamental Change Early Settlement Rate</B>&#148; shall be determined by the Company by
reference to the table below, based on the date on which the Fundamental Change occurs or becomes
effective (the &#147;<B>Effective Date</B>&#148;) and the stock price (the &#147;<B>Stock Price</B>&#148;) in the Fundamental Change,
which shall be:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of a Fundamental Change described in clause (b)&nbsp;of the definition
thereof in which holders of shares of Class&nbsp;A Common Stock receive only cash in the
Fundamental Change, the Stock Price shall be the cash amount paid per share of Class&nbsp;A
Common Stock; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in all other cases, the Stock Price shall be the average of the Closing Prices
of the Class&nbsp;A Common Stock over the 10 consecutive Trading Day period ending on the
Trading Day immediately preceding the Effective Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The Stock Prices set forth in the first column of the table below shall be adjusted as of
any date on which any Fixed Settlement Rate is otherwise adjusted. The adjusted Stock Prices shall
equal the Stock Prices applicable immediately prior to such adjustment, <I>multiplied by </I>a fraction,
the numerator of which is the Maximum Settlement Rate immediately prior to the adjustment giving rise to the
Stock Price adjustment and the denominator of which is the Maximum Settlement Rate as so adjusted.
The number of shares in the table below shall be adjusted in the same manner as the Fixed
Settlement Rates as set forth in Section&nbsp;5.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The following table sets forth the Fundamental Change Early Settlement Rate per Purchase
Contract for each Stock Price and Effective Date set forth below:
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
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    <TD width="5%">&nbsp;</TD>
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    <TD width="5%">&nbsp;</TD>
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    <TD width="5%">&nbsp;</TD>
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    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Effective Date</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>February 9,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>February 15,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>February 15,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>February 15,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Stock Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2011</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2012</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2013</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2014</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$1.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.4963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.6701</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.7660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$2.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.1312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.3749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.6578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$3.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.1021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.3896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$4.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.1226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$4.30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.0585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$4.50</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.0204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.5556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$4.75</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.2632</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$5.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.0000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$5.25</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$6.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.8353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$7.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$8.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$9.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$10.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$12.50</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$15.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$17.50</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$20.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$22.50</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$25.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.7655</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exact Stock Prices and Effective Dates may not be set forth in the table above, in which
case:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the applicable Stock Price is between two Stock Prices in the table or the
Effective Date is between two Effective Dates in the table, the Fundamental Change Early
Settlement Rate shall be determined by a straight-line interpolation between the
Fundamental Change Early Settlement Rates set forth for the higher and lower Stock Prices and the earlier and
later Effective Dates, as applicable, based on a 365-day year;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the applicable Stock Price is greater than $25.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in the column headings of the
table above), the Fundamental Change Early Settlement Rate shall be the Minimum Settlement
Rate; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the applicable Stock Price is less than $1.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the column headings of the table above, the &#147;<B>Minimum Stock Price</B>&#148;) the Fundamental Change Early Settlement Rate shall
be determined as if the Stock Price equaled the Minimum Stock Price, and using
straight-line interpolation, as described in clause (i)&nbsp;of this Section&nbsp;4.07(f), if the
Effective Date is between two Effective Dates in the table.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The maximum number of shares of Class&nbsp;A Common Stock deliverable under a Purchase Contract is
5.8140, subject to adjustment in the same manner as the Fixed Settlement Rates as set forth under
Section&nbsp;5.01.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;If a Holder exercises its Fundamental Change Early Settlement Right following the
Effective Date of a Fundamental Change described in clause (b)&nbsp;of the definition of &#147;Fundamental
Change,&#148; the Company shall deliver to such Holder or the Purchase Contract Agent on behalf of such
Holder, in accordance with the provisions of Section&nbsp;5.02, the kind and amount of securities, cash
or other property that such Holder would have been entitled to receive in such Fundamental Change
transaction as a holder of a number of shares of the Class&nbsp;A Common Stock equal to the Fundamental
Change Settlement Rate for each Purchase Contract being settled early.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Subject to satisfaction of the conditions set forth in Section&nbsp;4.06(b) by a Holder with
respect to any of its Purchase Contracts and subject to Section&nbsp;4.10, the Company shall cause to be
delivered a number of shares of Class&nbsp;A Common Stock, or securities, cash or other property, as
applicable, payable as a result of such Holder&#146;s exercise of the Fundamental Change Early
Settlement Right in accordance with the provisions set forth in Section&nbsp;4.06(d), except that (i)
such delivery shall be made on the third Business Day following the Fundamental Change Early
Settlement Date, and (ii)&nbsp;the Person in whose name any shares of Class&nbsp;A Common Stock or other
securities, if applicable, shall be issuable following exercise of a Holder&#146;s Fundamental Change
Early Settlement Right shall become the holder of record of such shares or other securities, if
applicable, as of the close of business on the date such right is exercised; <I>provided </I>that, if
delivery of any shares of Class&nbsp;A Common Stock issuable upon settlement of any Purchase Contracts
is delayed as a result of the Section&nbsp;382 Settlement Blocker, the Person in whose name such shares
shall be issuable upon settlement of such Purchase Contracts shall become the holder of record of
such shares as of the close of business on the date that (i)&nbsp;such delivery would not result in such Beneficial
Holder being an Acquiring Person and (ii)&nbsp;such Beneficial Holder has given notice thereof to the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;If a Holder exercises its Fundamental Change Early Settlement Right with respect to
Purchase Contracts that are a component of Units, upon such Early Settlement in connection with a
Fundamental Change, the Company shall execute and the Trustee shall authenticate (pursuant to the
Indenture) on behalf of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->41<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Holder and deliver to the Holder thereof, at the expense of the
Company, Separate Notes, in same form as the Notes comprising part of the Units, equal to the
number of Purchase Contracts as to which Early Settlement in connection with a Fundamental Change
was effected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;If a Holder exercises its Fundamental Change Early Settlement Right with respect to
Purchase Contracts represented by less than all the Purchase Contracts evidenced by a Security,
upon such Early Settlement in connection with a Fundamental Change, the Company shall execute and
the Purchase Contract Agent and Trustee shall authenticate on behalf of the Holder and deliver to
the Holder thereof, at the expense of the Company, a Security evidencing the Purchase Contracts as
to which Early Settlement in connection with a Fundamental Change was not effected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;If a Holder does not elect to exercise the Fundamental Change Early Settlement Right, such
Holder&#146;s Purchase Contracts shall remain outstanding and shall be subject to normal settlement on
any subsequent Settlement Date, including, if applicable, the provisions set forth in Section&nbsp;5.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.08. </B> <I>Early Mandatory Settlement at the Company&#146;s Election. </I>(a)&nbsp;The
Company has the right to settle the Purchase Contracts early, in whole but not in part (the &#147;<B>Early
Mandatory Settlement Right</B>&#148;), on a date fixed by it (the &#147;<B>Early Mandatory Settlement Date</B>&#148;) at the
Early Mandatory Settlement Rate on the Early Mandatory Settlement Notice Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If the Company elects to exercise its Early Mandatory Settlement Right, the Company shall
provide the Purchase Contract Agent and the Holders of Units, Separate Purchase Contracts and
Separate Notes with a notice of its election (the &#147;<B>Early Mandatory Settlement Notice</B>&#148;), issue a
press release announcing its election and post such press release on its website. The Early
Mandatory Settlement Notice shall specify, among other things:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Early Mandatory Settlement Rate;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Early Mandatory Settlement Date, which will be at least 5 but not more than
30 Business Days following the date of the Early Mandatory Settlement Notice (the &#147;<B>Early
Mandatory Settlement Notice Date</B>&#148;);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) that Holders of Units and Separate Notes will have the right to require the
Company to repurchase their Notes that are a component of the Units or their Separate
Notes, as the case may be, pursuant to and in accordance with the Indenture (subject to
certain exceptions as provided in the Indenture);
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->42<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Repurchase Price and Repurchase Date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the last date on which Holders may exercise their Repurchase Right; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the procedures that Holders must follow to require the Company to repurchase
their Notes (which procedures shall be in accordance with the Indenture).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;On the Early Mandatory Settlement Date, subject to satisfaction of the conditions set
forth in Section&nbsp;4.04 by a Holder with respect to any of its Purchase Contracts and subject to
Section&nbsp;4.10, the Company shall cause a number of shares of Class&nbsp;A Common Stock per Purchase
Contract equal to the Early Mandatory Settlement Rate to be issued and delivered, together with
payment of (i)&nbsp;any cash payable in lieu of fractional shares pursuant to Section&nbsp;4.13 and (ii)&nbsp;any
dividends or distributions with respect to such shares constituting part of the Purchase Contract
Settlement Fund (but without any interest thereon), to such Holder by book-entry transfer or other
appropriate procedures pursuant to Section&nbsp;4.11. The Person in whose name any shares of the Class
A Common Stock shall be issuable following exercise of the Early Mandatory Settlement Right shall
become the holder of record of such shares as of the close of business on the Early Mandatory
Settlement Notice Date; <I>provided </I>that, if delivery of any shares of Class&nbsp;A Common Stock issuable
upon settlement of any Purchase Contracts is delayed as a result of the Section&nbsp;382 Settlement
Blocker, the Person in whose name such shares shall be issuable upon settlement of such Purchase
Contracts shall become the holder of record of such shares as of the close of business on the date
that (i)&nbsp;such delivery would not result in such Beneficial Holder being an Acquiring Person and
(ii)&nbsp;such Beneficial Holder has given notice thereof to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In the event that Early Mandatory Settlement is effected with respect to Purchase
Contracts that are a component of Units, upon such Early Mandatory Settlement the Company shall
execute and the Trustee shall authenticate (pursuant to the Indenture) on behalf of the Holder and
deliver to the Holder thereof, at the expense of the Company, Separate Notes in the same form and
in the same number as the Notes comprising part of the Units; <I>provided</I>, <I>however</I>, that if the
Repurchase Date occurs prior to the Early Mandatory Settlement Date, Holders will surrender the
Units on the Repurchase Date and the Company shall execute, and the Purchase Contract Agent shall
authenticate, Separate Purchase Contracts in the same form and in the same number as the Purchase
Contracts comprising part of the Units, such Separate Purchase Contracts to be settled on the Early Mandatory
Settlement Date.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.09.</B><I> Acceleration of Mandatory Settlement Date. </I>If a Bankruptcy Event
occurs at any time on or before the last Trading Day of the 20 Trading Day period during which the
Applicable Market Value is determined (the day on which such Bankruptcy Event occurs, the
&#147;<B>Acceleration Date</B>&#148;), the Mandatory Settlement Date shall automatically be accelerated to the
Business Day immediately following the Acceleration Date and, subject to Section&nbsp;4.10, Holders of
Purchase Contracts shall be entitled to receive, upon settlement of the Purchase Contracts on such
accelerated Mandatory Settlement Date, a number of shares of Class&nbsp;A Common Stock per Purchase
Contract equal to the Maximum Settlement Rate in effect immediately prior to the Acceleration Date
(regardless of the Applicable Market Value of the Class&nbsp;A Common Stock at that time). The Company
shall, subject Section&nbsp;4.10, cause to be delivered the shares of Class&nbsp;A Common Stock, securities,
cash or other property deliverable as a result of any such acceleration of the Mandatory Settlement
Date in accordance with the provisions set forth in Section&nbsp;4.05, except that (i)&nbsp;such delivery
shall be made on the accelerated Mandatory Settlement Date, and (ii)&nbsp;the Person in whose name any
shares of Class&nbsp;A common stock shall be issuable following such acceleration shall become the
holder of record of such shares as of the close of business on the Acceleration Date; <I>provided</I>
that, if delivery of any shares of Class&nbsp;A Common Stock issuable upon settlement of any Purchase
Contracts is delayed as a result of the Section&nbsp;382 Settlement Blocker, the Person in whose name
such shares shall be issuable upon settlement of such Purchase Contracts shall become the holder of
record of such shares as of the close of business on the date that (i)&nbsp;such delivery would not
result in such Beneficial Holder being an Acquiring Person and (ii)&nbsp;such Beneficial Holder has
given notice thereof to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.10. </B> <I>Section&nbsp;382 Settlement Blocker. </I>(a)&nbsp;Notwithstanding anything to the
contrary in this Agreement, no Beneficial Holder of Units or Separate Purchase Contracts shall be
entitled to receive shares of Class&nbsp;A Common Stock upon settlement of the Purchase Contracts,
whether on any Settlement Date or otherwise, and any delivery of shares of Class&nbsp;A Common Stock
upon settlement of such Purchase Contracts shall be void and of no effect, to the extent (but only
to the extent) that such receipt or delivery would cause such Beneficial Holder to become an
Acquiring Person, unless such Beneficial Holder has received prior approval of the Board of
Directors (the &#147;<B>Section&nbsp;382 Settlement Blocker</B>&#148;). If any delivery of shares of Class&nbsp;A Common Stock
owed to a Beneficial Holder upon settlement of any Purchase Contracts is not made, in whole or in
part, as a result of the Section&nbsp;382 Settlement Blocker, the Company&#146;s obligation to make such
delivery shall not be extinguished and the Company shall deliver, or cause to be delivered, such
shares as promptly as practicable after such delivery would not result in such Beneficial Holder
being an Acquiring Person and such Beneficial Holder gives notice thereof to the Company.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Board of Directors may, in its discretion, approve delivery of any shares of Class&nbsp;A
Common Stock that would otherwise be restricted by the Section&nbsp;382 Settlement Blocker.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If the Section&nbsp;382 Settlement Blocker is applicable to any delivery of shares of Class&nbsp;A
Common Stock upon settlement of any Purchase Contract, the Company shall promptly deliver written
notice thereof to the Purchase Contract Agent. The Purchase Contract Agent shall not be charged
with knowledge that any such settlement of any Purchase Contract is subject to the Section&nbsp;382
Settlement Blocker unless either (i)&nbsp;a Responsible Officer of the Purchase Contract Agent shall
have actual knowledge thereof or (ii)&nbsp;written notice thereof has been provided to the Purchase
Contract Agent by the Company. The Purchase Contract Agent may, for purposes of this Agreement,
conclusively rely on any such notice from the Company in accordance with the provisions of Section
8.01(b)(ii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.11.</B><I> Registration of Underlying Shares and Transfer Taxes. </I>The shares of
Class&nbsp;A Common Stock underlying the Purchase Contracts shall be registered in the name of the
Holder or the Holder&#146;s designee as specified in the settlement instructions provided by the Holder
to the Purchase Contract Agent, and the Company will pay all documentary, stamp or similar issue or
transfer taxes attributable to the delivery thereof, unless any such tax is payable in respect of
any registration of such shares in a name of a Person other than the Person in whose name the
Security evidencing such Purchase Contract is registered, in which case the Company shall not be
required to pay any such tax and no such registration shall be made unless the Person requesting
such registration has paid any such taxes required by reason of such registration in a name of a
Person other than the Person in whose name the Security evidencing such Purchase Contract is
registered or has established to the satisfaction of the Company that such tax either has been paid
or is not payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.12.</B><I> Return of Purchase Contract Settlement Fund. </I>In the event a Holder
fails to effect surrender or delivery of its Units or Purchase Contracts on or following the
applicable Settlement Date in accordance with the provisions hereof, the shares of Class&nbsp;A Common
Stock underlying such Purchase Contracts, and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund, shall be held in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier
to occur of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the surrender of the relevant Units or Separate Purchase Contracts for settlement
in accordance with the provisions hereof or receipt by the Company and the Purchase
Contract Agent from such Holder of satisfactory evidence that such Units or Separate
Purchase
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Contracts have been destroyed, lost or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the passage of two years from the applicable Settlement Date, as the case may
be, following which the Purchase Contract Agent shall pay to the Company such Holder&#146;s
share of such Class&nbsp;A Common Stock and any and any dividends or distributions with respect
to such shares constituting part of the Purchase Contract Settlement Fund; <I>provided</I>,
<I>however</I>, that prior to receiving any such payment, the Company shall mail to each such
Holder notice that such property remains unclaimed and that, after a date specified
therein, which shall not be less than 30&nbsp;days from the date of such mailing, any unclaimed
balance of such property then remaining will be repaid to the Company. After payment to
the Company, (A)&nbsp;Holders entitled to such property must look to the Company for payment as
general creditors, unless applicable abandoned property law designates another Person, and
(B)&nbsp;all liability of the Purchase Contract Agent with respect to such property shall
cease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.13.</B><I> No Fractional Shares. </I>No fractional shares or scrip certificates
representing fractional shares of Class&nbsp;A Common Stock shall be issued or delivered to Holders upon
settlement of the Purchase Contracts. In lieu of any fractional shares of Class&nbsp;A Common Stock that
would otherwise be issuable upon settlement of any Purchase Contracts, a Holder of a Purchase
Contract shall be entitled to receive an amount in cash equal to the fraction of a share of Class&nbsp;A
Common Stock, calculated on an aggregate basis in respect of the Purchase Contracts being settled,
<I>multiplied by </I>the Closing Price of the Class&nbsp;A Common Stock on the Trading Day immediately
preceding the applicable Settlement Date. The Company shall provide the Purchase Contract Agent
with sufficient funds to permit the Purchase Contract Agent to make all cash payments required by
this Section&nbsp;4.13 in a timely manner.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 5</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Adjustments</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;5.01.</B><I> Adjustments to the Fixed Settlement Rates. </I>(a)&nbsp;Each Fixed
Settlement Rate shall be subject to the following adjustments, without duplication:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;<I>Stock Dividends and Distributions</I>. If the Company issues Class&nbsp;A Common Stock to
all or substantially all of the holders of Class&nbsp;A Common Stock as a dividend or other
distribution, each Fixed Settlement Rate in effect immediately prior to the close of
business on the Record Date for such dividend or distribution shall be <I>divided by </I>a
fraction:
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the numerator of which is the number of shares of Class&nbsp;A Common Stock
outstanding immediately prior to the close of business on such Record Date, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the denominator of which is equal to (i)&nbsp;the number of shares of Class
A Common Stock outstanding immediately prior to the close of business on such
Record Date, <I>plus </I>(ii)&nbsp;the total number of shares of Class&nbsp;A Common Stock
constituting such dividend or other distribution.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to this clause (i)&nbsp;will become effective immediately
after the close of business on the Record Date for such dividend or distribution. If any
dividend or distribution described in this clause (i)&nbsp;is declared but not so paid or made,
each Fixed Settlement Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to make such dividend or distribution, to
such Fixed Settlement Rate that would be in effect if such dividend or distribution had
not been declared. For the purposes of this clause (i), the number of shares of Class&nbsp;A
Common Stock outstanding immediately prior to the close of business on the Record Date for
such dividend or other distribution shall not include shares held in treasury by the
Company but shall include any shares issuable in respect of any scrip certificates issued
in lieu of fractions of shares of Class&nbsp;A Common Stock. The Company shall not pay any
dividend or make any distribution on shares of Class&nbsp;A Common Stock held in treasury by
the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;<I>Issuance of Stock Purchase Rights</I>. If the Company issues to all or
substantially all holders of Class&nbsp;A Common Stock rights, options or warrants (other than
rights, options or warrants issued pursuant to a dividend reinvestment plan, shareholder
rights plan or share purchase plan or other similar plans), entitling such holders, for a
period of up to 45 calendar days from the date of issuance of such rights, options or
warrants, to subscribe for or purchase shares of Class&nbsp;A Common Stock at a price per share
less than the Current Market Price per share of Class&nbsp;A Common Stock, each Fixed
Settlement Rate in effect immediately prior to the close of business on the Record Date
for such issuance shall be <I>multiplied by </I>a fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the numerator of which is equal to (i)&nbsp;the number of shares of Class&nbsp;A
Common Stock outstanding immediately prior to the close of business on such
Record Date, <I>plus </I>(ii)&nbsp;the number of shares of Class&nbsp;A Common Stock issuable
pursuant to such rights, options or warrants, and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the denominator of which is equal to (i)&nbsp;the number of shares of Class
A Common Stock outstanding immediately prior to the close of business on such Record Date, <I>plus </I>(ii)
the number of shares of Class&nbsp;A Common Stock equal to the quotient of the
aggregate price payable to exercise such rights, options or warrants <I>divided by</I>
the Current Market Price per share of Class&nbsp;A Common Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to this clause (ii)&nbsp;shall be made successively whenever
any such rights, options or warrants are issued and shall become effective immediately
after the close of business on the Record Date for such issuance. In the event that such
rights, options or warrants described in this clause (ii)&nbsp;are not so issued, each Fixed
Settlement Rate shall be readjusted, effective as of the date the Board of Directors
publicly announces its decision not to issue such rights, options or warrants, to such
Fixed Settlement Rate that would then be in effect if such issuance had not been declared.
To the extent that such rights, options or warrants are not exercised prior to their
expiration or shares of Class&nbsp;A Common Stock are otherwise not delivered pursuant to such
rights, options or warrants upon the exercise of such rights, options or warrants, each
Fixed Settlement Rate shall be readjusted, effective as of the date of such expiration or
the date of such exercise, as the case may be, to such Fixed Settlement Rate that would
then be in effect had the adjustment made upon the issuance of such rights, options or
warrants been made on the basis of the delivery of only the number of shares of Class&nbsp;A
Common Stock actually delivered.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining whether any rights, options or warrants entitle the Holders thereof to
subscribe for or purchase shares of Class&nbsp;A Common Stock at less than the Current Market
Price per share of Class&nbsp;A Common Stock, and in determining the aggregate price payable to
exercise such rights, options or warrants, there shall be taken into account any
consideration received by the Company for such rights, options or warrants and any amount
payable on exercise or conversion thereof (the value of such consideration, if other than
cash, to be determined by the Board of Directors).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of this clause (ii), the number of shares of Class&nbsp;A Common Stock at
the time outstanding shall not include shares held in treasury by the Company but shall
include any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Class&nbsp;A Common Stock. The Company shall not issue any such rights,
options or warrants in respect of shares of Class&nbsp;A Common Stock held in treasury by the
Company.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;<I>Subdivisions and Combinations of the Class&nbsp;A Common Stock</I>. If outstanding
shares of Class&nbsp;A Common Stock shall be subdivided into a greater number of shares of
Class&nbsp;A Common Stock or combined into a lesser number of shares of Class&nbsp;A Common Stock, each Fixed
Settlement Rate in effect immediately prior to the open of business on the effective date
of such subdivision or combination shall be <I>multiplied by </I>a fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the numerator of which is the number of shares of Class&nbsp;A Common Stock
that would be outstanding immediately after, and solely as a result of, such
subdivision or combination, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the denominator of which is the number of shares of Class&nbsp;A Common
Stock outstanding immediately prior to the open of busniess, on such effective
date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to this clause (iii)&nbsp;shall become effective immediately
after the open of business on the effective date of such subdivision or combination.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;<I>Debt or Asset Distribution</I>. (A)&nbsp;If the Company distributes to all or
substantially all holders of Class&nbsp;A Common Stock evidences of its indebtedness, shares of
Capital Stock (other than Class&nbsp;A Common Stock), securities, cash or other assets
(excluding (1)&nbsp;any dividend or distribution covered by Section&nbsp;5.01(a)(i), (2)&nbsp;any rights,
options or warrants covered by Section&nbsp;5.01(a)(ii), (3)&nbsp;any dividend or distribution
covered by Section&nbsp;5.01(a)(v) and (4)&nbsp;any Spin-Off as to which the provisions set forth in
Section&nbsp;5.01(a)(iv)(B) apply), each Fixed Settlement Rate in effect immediately prior to
the close of business on the Record Date for such distribution shall be <I>multiplied by </I>a
fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the numerator of which is the Current Market Price per share
of Class&nbsp;A Common Stock, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the denominator of which is equal to (i)&nbsp;Current Market Price
per share of Class&nbsp;A Common Stock, <I>minus </I>(ii)&nbsp;the Fair Market Value on
such Record Date of the portion of the evidences of indebtedness,
shares of Capital Stock, securities, cash or other assets so
distributed applicable to one share of Class&nbsp;A Common Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to subparagraph (A)&nbsp;of this clause (iv)&nbsp;shall
become effective immediately after the close of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">business on the Record Date for such distribution. In the event that such distribution described in subparagraph
(A)&nbsp;of this clause (iv)&nbsp;is not so made, each Fixed Settlement Rate shall be
readjusted, effective as of the date the Board of Directors publicly announces
its decision not to pay such dividend or distribution, to such Fixed
Settlement Rate that would then be in effect if such distribution had not
been declared.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) If a Spin-Off occurs, each Fixed Settlement Rate in effect immediately
prior to the close of business on the Record Date for the relevant distribution
shall instead be <I>multiplied by </I>a fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the numerator of which is equal to (i)&nbsp;the Current Market
Price per share of Class&nbsp;A Common Stock, <I>plus </I>(ii)&nbsp;the average of the
Closing Prices of Capital Stock or similar equity interests so
distributed applicable to one share of Class&nbsp;A Common Stock
(determined by reference to the definition of Closing Price as if
references therein to Class&nbsp;A Common Stock were to such Capital Stock
or similar equity interest) over the 10 consecutive Trading Day period
commencing on, and including, the effective date of the Spin-Off (the
&#147;<B>Valuation Period</B>&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the denominator of which is the Current Market Price per
share of Class&nbsp;A Common Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to subparagraph (B)&nbsp;of this clause (iv)&nbsp;shall
become effective immediately after the close of business on the last Trading Day
of the Valuation Period; <I>provided </I>that, if any Determination Date occurs during
the Valuation Period, references immediately above to 10 Trading Days shall be
deemed to be replaced with such lesser number of Trading Days as have elapsed
between the effective date of such Spin-Off and such Determination Date for
purposes of determining the Fixed Settlement Rates on such Determination Date. In
the event that such distribution described in subparagraph (B)&nbsp;of this clause
(iv)&nbsp;is not so made, each Fixed Settlement Rate shall be readjusted, effective as
of the date the Board of Directors publicly announces its decision not to pay
such distribution, to such Fixed Settlement Rate that would then be in effect if
such distribution had not been declared.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;<I>Cash Distributions</I>. If the Company distributes an amount exclusively in cash to
all or substantially all holders of Class&nbsp;A Common Stock (excluding (1)&nbsp;any cash that is
distributed in a Reorganization Event to which Section&nbsp;5.02 applies or (2)&nbsp;any dividend or
distribution in connection with the liquidation, dissolution or winding up of the
Company), each Fixed Settlement Rate in effect immediately prior to the close of business
on the Record Date for such distribution shall be <I>multiplied by </I>a fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the numerator of which is the Current Market Price per share of Class&nbsp;A
Common Stock, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the denominator of which is equal to (i)&nbsp;the Current Market Price per
share of Class&nbsp;A Common Stock, <I>minus </I>(ii)&nbsp;the amount of such distribution per
share of Class&nbsp;A Common Stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to this clause (v)&nbsp;shall become effective immediately
after the close of business on the Record Date for such distribution. In the event that
any distribution described in this clause (v)&nbsp;is not so made, each Fixed Settlement Rate
shall be readjusted, effective as of the date the Board of Directors publicly announces
its decision not to pay such distribution, to such Fixed Settlement Rate which would then
be in effect if such distribution had not been declared.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;<I>Self Tender Offers and Exchange Offers</I>. If the Company or any Subsidiary of the
Company successfully completes a tender or exchange offer pursuant to a Schedule&nbsp;TO or
registration statement on Form S-4 for the Class&nbsp;A Common Stock (excluding any securities
convertible or exchangeable for Class&nbsp;A Common Stock), where the cash and the value of any
other consideration included in the payment per share of Class&nbsp;A Common Stock validly
tendered or exchanged exceeds the Current Market Price per share of Class&nbsp;A Common Stock,
each Fixed Settlement Rate in effect immediately prior to the close of business on the
10th Trading Day immediately following, and including, the Trading Day immediately
following the last date on which tenders or exchanges may be made pursuant to such tender
or exchange offer (the &#147;<B>Tender Offer Expiration Date</B>&#148;) shall be <I>multiplied by </I>a fraction:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the numerator of which shall be equal to the sum of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the aggregate value of all cash and the Fair Market Value on
the Tender Offer Expiration Date of any other consideration paid or
payable for shares of Class&nbsp;A
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">Common Stock validly tendered or
exchanged and not withdrawn as of the Tender Offer Expiration Date; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the product of (x)&nbsp;the Current Market Price per share of Class
A Common Stock, and (y)&nbsp;the number of shares of Class&nbsp;A
Common Stock outstanding immediately after the last time tenders or exchanges may be
made pursuant to such tender or exchange offer (the &#147;<B>Tender Offer
Expiration Time</B>&#148;), after giving effect to the purchase of all shares accepted for purchase or exchange in
such tender or exchange offer; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the denominator of which shall be equal to the product of (x)&nbsp;the
Current Market Price per share of Class&nbsp;A Common Stock, and (y)&nbsp;the number of
shares of Class&nbsp;A Common Stock outstanding immediately prior to the Tender Offer
Expiration Time on the Tender Offer Expiration Date, prior to giving effect to
the purchase of all shares accepted for purchase or exchange in such tender or
exchange offer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any adjustment made pursuant to this clause (vi)&nbsp;shall become effective immediately
after the close of business on the 10th Trading Day immediately following the Tender Offer
Expiration Date; <I>provided </I>that, if any Determination Date occurs during the 10 Trading
Days immediately following, and including, the Trading Day next succeeding the Tender
Offer Expiration Date, references immediately above to 10 Trading Days shall be deemed to
be replaced with such lesser number of Trading Days as have elapsed between such Tender
Offer Expiration Date and such Determination Date for the purposes of determining the
Fixed Settlement Rates on such Determination Date. In the event that the Company or one of
its Subsidiaries is obligated to purchase shares of Class&nbsp;A Common Stock pursuant to any
such tender or exchange offer, but the Company or such Subsidiary is permanently prevented
by applicable law from effecting any such purchases, or all such purchases are rescinded,
then each Fixed Settlement Rate shall be readjusted to such Fixed Settlement Rate that
would then be in effect if such tender or exchange offer had not been made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Rights to Certain Distributions</I>. Except with respect to a Spin-Off, in cases where the
Fair Market Value of assets (including cash), debt securities or certain rights, warrants or
options to purchase securities of the Company as to which Section&nbsp;5.01(a)(iv) or Section&nbsp;5.01(a)(v)
apply, applicable to one share of Class&nbsp;A Common Stock, distributed to holders of Class&nbsp;A Common
Stock equals or exceeds the applicable Current Market Price per share of the Class&nbsp;A Common
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Stock, rather than being entitled to an adjustment in each Fixed Settlement Rate, Holders shall be
entitled to receive (without settling such Holders&#146; Purchase Contracts) on the date on which such
assets (including cash), debt securities or rights, options or warrants are distributed to holders
of Class&nbsp;A Common Stock, for each Purchase Contract, the amount of such assets or securities that
such Holder would have received had such Holder owned a number of shares of Class&nbsp;A Common Stock
equal to the Maximum Settlement Rate on the Record Date for such distribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Rights Plans</I>. To the extent that the Company has a rights plan in effect with respect to
the Class&nbsp;A Common Stock on any Determination Date,Holders shall receive, in addition to the Class&nbsp;A Common Stock, the rights under such rights
plan, unless, prior to such Determination Date, the rights have separated from the Class&nbsp;A Common
Stock, in which case each Fixed Settlement Rate shall be adjusted at the time of separation of such
rights as if the Company made a distribution to all holders of the Class&nbsp;A Common Stock as
described in Section&nbsp;5.01(a)(iv), subject to readjustment in the event of the expiration,
termination or redemption of such rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Adjustment for Tax Reasons</I>. The Company may make such increases in each Fixed Settlement
Rate, in addition to any other increases required by this Article&nbsp;5, as the Company deems advisable
to avoid or diminish any income tax to holders of the Class&nbsp;A Common Stock resulting from any
dividend or distribution of shares of Class&nbsp;A Common Stock (or issuance of rights, options or
warrants to acquire shares of Class&nbsp;A Common Stock) or from any event treated as such for income
tax purposes or for any other reasons; <I>provided </I>that the same proportionate adjustment must be made
to each Fixed Settlement Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Calculation of Adjustments</I>. All adjustments to each Fixed Settlement Rate shall be
calculated to the nearest 1/10,000th of a share of Class&nbsp;A Common Stock. No adjustment in a Fixed
Settlement Rate shall be required unless such adjustment would require an increase or decrease of
at least one percent therein. If any adjustment is not required to be made by reason of this
Section&nbsp;5.01(e), then such adjustment shall be carried forward and taken into account in any
subsequent adjustment; <I>provided </I>that on each Determination Date, adjustments to each Fixed
Settlement Rate shall be made with respect to any such adjustment carried forward and which has not
been taken into account before such Determination Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;<I>Adjustments to Reference Price and Applicable Market Value. </I>Upon each adjustment to each
Fixed Settlement Rates pursuant to Section&nbsp;5.01, an inversely proportional adjustment shall also be
made to the Reference Price solely for purposes of determining which of clauses (i), (ii)&nbsp;and (iii)
of Section&nbsp;4.01(b)
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shall be applicable with respect to the Mandatory Settlement Date. Such
adjustment shall be made by dividing the Reference Price by a fraction, the numerator of which
shall be the Minimum Settlement Rate immediately after such adjustment pursuant to Section&nbsp;5.01 and
the denominator of which shall be such Minimum Settlement Rate immediately before such adjustment.
For the avoidance of doubt, no separate inversely proportional adjustment shall be made to the
Threshold Appreciation Price because it is equal to the Stated Amount <I>divided by </I>the Minimum
Settlement Rate (such quotient rounded to the nearest $0.0001). The Company shall make appropriate
adjustments to the Closing Prices prior to the relevant issuance date, Record Date, Ex-Date,
effective date or Tender Offer Expiration Date, as the case may be, used to calculate the
Applicable Market Value to account for any adjustments to the Fixed Settlement Rates and the
Reference Price that become effective during (i)&nbsp;the 20 consecutive Trading
Day period used for calculating the Applicable Market Value, and (ii)&nbsp;any period during which
the Stock Price is calculated for purposes of determining the Fundamental Change Early Settlement
Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;<I>Limitation on Adjustments</I>. No adjustment to the Fixed Settlement Rates shall be made if
Holders of Units or any separate Purchase Contracts may participate in the transaction (at a level
based on the Maximum Settlement Rate) that would otherwise give rise to an adjustment at the same
time and on the same terms as holders of the Class&nbsp;A Common Stock without having to settle the
Purchase Contracts. In addition, the Fixed Settlement Rates shall only be adjusted as set forth
above and shall not be adjusted:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) upon the issuance of any shares of Class&nbsp;A Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on the Company&#146;s securities and the investment of additional optional
amounts in shares of Class&nbsp;A Common Stock under any plan;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) upon the issuance of any shares of Class&nbsp;A Common Stock or rights,
options or warrants to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed by the
Company or any of its subsidiaries;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) upon the issuance of any shares of Class&nbsp;A Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the Issue Date; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) for a change in the par value or no par value of the Class&nbsp;A Common
Stock.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;<I>Notice of Adjustment</I>. Whenever the Fixed Settlement Rates are adjusted, the Company
shall:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) prepare and transmit to the Purchase Contract Agent an Officers&#146; Certificate
setting forth such adjusted Fixed Settlement Rates and/or the adjusted Fundamental Change
Settlement Rates, the method of calculation thereof in reasonable detail and the facts
requiring such adjustment and upon which such adjustment is based;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) within five Business Days following the occurrence of an event that requires an
adjustment to the Fixed Settlement Rates and/or the Fundamental Change Settlement Rates
(or if the Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide, or cause to be provided, a written notice to the Holders of the
occurrence of such event; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) within five Business Days following the determination of such adjusted Fixed
Settlement Rates and/or Fundamental Change Settlement Rates provide, or cause to be
provided, to the Holders a statement setting forth in reasonable detail the method by
which the adjustment to such Fixed Settlement Rates and/or the Fundamental Change
Settlement Rates was determined and setting forth such adjusted Fixed Settlement Rates
and/or Fundamental Change Settlement Rates and the facts requiring such adjustment and
upon which such adjustment is based.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;5.02.</B><I> Reorganization Events. </I>(a)&nbsp;In the event of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any consolidation or merger of the Company with or into another Person (other
than a merger or consolidation in which the Company is the continuing or surviving
corporation and in which the Class&nbsp;A Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities or other property of the
Company or another Person);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any sale, transfer, lease or conveyance to another Person of all or
substantially all of the property and assets of the Company;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any reclassification of Class&nbsp;A Common Stock into securities including
securities other than Class&nbsp;A Common Stock; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any statutory exchange of securities of the Company with another Person (other
than in connection with a merger or acquisition),
</DIV>


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</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in each case, as a result of which the Class&nbsp;A Common Stock would be converted into, or
exchanged for, securities, cash or property (each, a &#147;<B>Reorganization Event</B>&#148;), each Purchase
Contract outstanding immediately prior to such Reorganization Event shall, without the consent of
Holders, become a contract to purchase the kind of securities, cash and other property (the
&#147;<B>Exchange Property</B>&#148;) that a holder of Class&nbsp;A Common Stock would have been entitled to receive
immediately prior to such Reorganization Event and, prior to or at the effective time of such
Reorganization Event, the Company or the successor or purchasing Person, as the case may be, shall
execute with the Note Issuer, the Purchase Contract Agent and the Trustee a supplemental agreement
permitted under Section&nbsp;9.01(iv) providing for such change in the right to settle the Purchase
Contracts. For purposes of the foregoing, the type and amount of Exchange Property in the case of
any Reorganization Event that causes the Class&nbsp;A Common Stock to be converted into, or exchanged
for, the right to receive more than a single type of consideration (determined based in part upon
any form of shareholder election) will be deemed to be the weighted average of the types and
amounts of consideration received by the holders of Class&nbsp;A Common Stock that affirmatively make
such an election. The Company shall notify the Purchase Contract Agent in writing of such weighted
average as soon as practicable after such determination is made. The number of units of Exchange
Property for each Purchase Contract settled following the effective date of such Reorganization
Event shall be determined based on the Fixed Settlement Rate then in effect on the applicable
Determination Date (without any interest thereon and without any right to dividends or
distributions thereon which have a record date that is prior to the Determination Date). Each
Fixed Settlement Rate shall be determined based upon the Applicable Market Value of a unit of
Exchange Property that a holder of one share of Class&nbsp;A Common Stock would have received in such
Reorganization Event.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Section&nbsp;5.02(a), &#147;<B>Applicable Market Value</B>&#148; shall be deemed to refer to
the Applicable Market Value of the Exchange Property and such value shall be determined (A)&nbsp;with
respect to any publicly traded securities that comprises all or part of the Exchange Property,
based on the Closing Price of such securities, (B)&nbsp;in the case of any cash that comprises all or
part of the Exchange Property, based on the amount of such cash and (C)&nbsp;in the case of any other
property that comprises all or part of the Exchange Property, based on the value of such property,
as determined by a nationally recognized independent investment banking firm retained by the
Company for this purpose. For purposes of this Section&nbsp;5.02(a), the term &#147;<B>Closing Price</B>&#148; shall be
determined by reference to the definition of Closing Price as if references therein to Class&nbsp;A
Common Stock were to such publicly traded securities that comprise all or part of the Exchange
Property. For purposes of this Section&nbsp;5.02(a), references to Class&nbsp;A Common Stock in the
definition of &#147;<B>Trading Day</B>&#148; shall be replaced by
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">references to any publicly traded securities that comprise all or part of the Exchange Property.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such supplemental agreement described in the second immediately preceding paragraph shall
provide for adjustments that shall be as nearly equivalent as is possible to the adjustments
provided for in this Article&nbsp;5. If, in the case of any Reorganization Event, the Exchange Property
includes shares of stock, securities or other property or assets (including cash or any combination
thereof) of a Person other than the successor or purchasing Person, as the case may be, in such
Reorganization Event, then such supplemental agreement shall also be executed by such other Person
and shall contain such additional provisions to protect the interests of the Holders of the
Equity-Linked Securities as the Board of Directors shall reasonably consider necessary by reason of
the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event the Company shall execute a supplemental agreement pursuant to Section
5.02(a), the Company shall promptly file with the Purchase Contract Agent an Officers&#146; Certificate
briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset
that will comprise the Exchange Property after any such Reorganization Event, any adjustment to be
made with respect thereto and that all conditions precedent have been complied with, and shall
promptly mail notice thereof to all Holders. The Company (or any successor) shall, within 20&nbsp;days
of the occurrence of any Reorganization Event or, if earlier, within 20&nbsp;days of the execution of
any supplemental agreement pursuant to Section&nbsp;5.02(a), provide written notice to the Purchase
Contract Agent and Holders of such occurrence of such event and of the kind and amount of the cash,
securities or other property that constitute the Exchange Property and of the execution of such
supplemental agreement, if applicable. Failure to deliver such notice shall not affect the
operation of this Section&nbsp;5.02 or the legality or validity of any such supplemental agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Company shall not become a party to any Reorganization Event unless its terms are
consistent with this Section&nbsp;5.02. None of the foregoing provisions shall affect the right of a
Holder of Purchase Contracts to effect Early Settlement pursuant to Section&nbsp;4.06 and Section&nbsp;4.07
prior to the effective date of such Reorganization Event.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The above provisions of this Section&nbsp;5.02(a) shall similarly apply to successive
Reorganization Events and the provisions of Section&nbsp;5.01 shall apply to any shares of Capital Stock
of the Company (or any successor) received by the holders of Class&nbsp;A Common Stock in any such
Reorganization Event.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 6</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Concerning the Holders of Purchase Contracts</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.01</B><I>. Evidence of Action Taken by Holders. </I>Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by this Agreement to be
given or taken by a specified percentage of number of Purchase Contracts may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such specified
percentage of Holders in Person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Purchase Contract Agent. Proof of execution of any instrument or
of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and
(subject to Section&nbsp;8.01 and Section&nbsp;8.03) conclusive in favor of the Purchase Contract Agent, the
Company and the Note Issuer, if made in the manner provided in this Article&nbsp;6.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.02</B><I>. Proof of Execution of Instruments and of Holding of Securities.</I>
Subject to Section&nbsp;8.01 and Section&nbsp;8.03, the execution of any instrument by a Holder or his agent
or proxy may be proved in the following manner:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The fact and date of the execution by any Holder of any instrument may be proved by the
certificate of any notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing such instruments
acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by or on behalf of any
legal entity other than an individual, such certificate or affidavit shall also constitute
sufficient proof of the authority of the Person executing the same.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The ownership of the Units and the Purchase Contracts shall be proved by the Security
Register or by a certificate of the Security Registrar.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.03</B><I>. Purchase Contracts Deemed Not Outstanding. </I>In determining whether
the Holders of the requisite number of Outstanding Purchase Contracts have concurred in any
direction, consent or waiver under this Agreement, Purchase Contracts which are owned by the
Company or by any Affiliate of the Company with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding Purchase Contracts for the purpose of any
such determination, except that for the purpose of determining whether the Purchase Contract Agent
shall be protected in relying on any such direction, consent or waiver only Purchase Contracts
which a Responsible Officer of the Purchase Contract Agent knows are so owned shall be so
disregarded. Purchase Contracts so owned which have been pledged in good faith may be
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">regarded as Outstanding Purchase Contracts if the pledgee establishes to the satisfaction of
the Purchase Contract Agent the pledgee&#146;s right so to act with respect to such Purchase Contracts
and that the pledgee is not the Company or any Affiliate of the Company. In case of a dispute as
to such right, the advice of counsel shall be full protection in respect of any decision made by
the Purchase Contract Agent in accordance with such advice. Upon request of the Purchase Contract
Agent, the Company shall furnish to the Purchase Contract Agent promptly an Officers&#146; Certificate
listing and identifying all Purchase Contracts, if any, known by the Company to be owned or held by
or for the account of any of the above described Persons; and, subject to Section&nbsp;8.01 and Section
8.03, the Purchase Contract Agent shall be entitled to accept such Officers&#146; Certificate as
conclusive evidence of the facts therein set forth and of the fact that all Purchase Contracts not
listed therein are Outstanding Purchase Contracts for the purpose of any such determination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.04</B><I>. Right of Revocation of Action Taken. </I>At any time prior to (but not
after) the evidencing to the Purchase Contract Agent, as provided in Section&nbsp;6.01, of the taking of
any action by the Holders of the percentage of the number of Purchase Contracts specified in this
Agreement in connection with such action, any Holder of a Purchase Contract the serial number of
which is shown by the evidence to be included among the serial numbers of the Purchase Contracts
the Holders of which have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article&nbsp;6, revoke such action so far as
concerns such Purchase Contract; <I>provided </I>that such revocation shall not become effective until
three Business Days after such filing. Except as aforesaid, any such action taken by the Holder of
any Purchase Contract shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Purchase Contract and of any Purchase Contracts issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon any such Purchase Contract. Any action taken by the
Holders of the percentage of the number of Purchase Contracts specified in this Agreement in
connection with such action shall be conclusively binding upon the Company, the Note Issuer, the
Purchase Contract Agent, the Trustee and the Holders of all the Purchase Contracts affected by such
action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.05</B><I>. Record Date for Consents and Waivers. </I>The Company may, but shall not
be obligated to, establish a record date for the purpose of determining the Persons entitled to
give, make or take any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given made or taken by Holders of Purchase
Contracts. If a record date is fixed, the Holders on such record date, or their duly designated
proxies, and any such Persons, shall be entitled to give, make or take any such request, demand,
authorization, direction, notice, consent, waiver or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">other action, whether or not such Holder remains a Holder after such record date; <I>provided</I>,
<I>however</I>, that unless such waiver or consent is obtained from the Holders, or duly designated
proxies, of the requisite number of Outstanding Purchase Contracts prior to the date which is the
120th day after such record date, any such waiver or consent previously given shall automatically
and, without further action by any Holder be cancelled and of no further effect.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 7</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Remedies</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.01</B><I>. Unconditional Right of Holders to Receive Shares of Class&nbsp;A Common
Stock. </I>Each Holder of a Purchase Contract (whether or not included in a Unit) shall have the
right, which is absolute and unconditional, to receive the shares of Class&nbsp;A Common Stock pursuant
to such Purchase Contract and to institute suit for the enforcement of any such right to receive
the shares of Class&nbsp;A Common Stock, and such right shall not be impaired without the consent of
such Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.02</B><I>. Notice To Purchase Contract Agent; Limitation On Proceedings.</I>
Holders of not less than 25% of Outstanding Purchase Contracts, by notice given to the Purchase
Contract Agent, may request that Purchase Contract Agent to institute proceedings with respect to a
default relating to any covenant hereunder. No Holder of Purchase Contracts may institute any
proceedings, judicial or otherwise, with respect to this Agreement or for any remedy hereunder,
except in the case of failure of the Purchase Contract Agent, for 60&nbsp;days, to act after the
Purchase Contract Agent has received a written request to institute proceedings in respect of a
default with respect to any covenant hereunder from the Holders of not less than 25% of the
Outstanding Purchase Contracts, as well as an offer of indemnity reasonably satisfactory to the
Purchase Contract Agent. This provision will not prevent any Holder of Purchase Contracts from
instituting suit for the delivery of Class&nbsp;A Common Stock deliverable upon settlement of the
Purchase Contracts on any Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.03</B><I>. Restoration of Rights and Remedies. </I>If any Holder or the Purchase
Contract Agent has instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has been determined
adversely to such Holder or the Purchase Contract Agent, then and in every such case, subject to
any determination in such proceeding, the Company and the Note Issuer, as the case may be, and such
Holder or the Purchase Contract Agent shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of such Holder shall continue as though
no such proceeding had been instituted.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.04</B><I>. Rights and Remedies Cumulative. </I>Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the
last paragraph of Section&nbsp;3.11, no right or remedy herein conferred upon or reserved to the Holders
or the Purchase Contract Agent is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.05</B><I>. Delay or Omission Not Waiver. </I>No delay or omission of any Holder or
the Purchase Contract Agent to exercise any right or remedy upon a default hereunder shall impair
any such right or remedy or constitute a waiver of any such right. Every right and remedy given by
this Article or by law to the Holders or the Purchase Contract Agent may be exercised from time to
time, and as often as may be deemed expedient, by such Holders or the Purchase Contract Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.06</B><I>. Undertaking for Costs. </I>All parties to this Agreement agree, and each
Holder of a Purchase Contract, by its acceptance of such Purchase Contract shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the enforcement of any right
or remedy under this Agreement, or in any suit against the Purchase Contract Agent for any action
taken, suffered or omitted by it as Purchase Contract Agent, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys&#146; fees and costs against any
party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; <I>provided </I>that the provisions of this Section shall not apply
to any suit instituted by (a)&nbsp;the Purchase Contract Agent, (b)&nbsp;any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding Purchase Contracts, or (c)&nbsp;any Holder for
the enforcement of the right to receive shares of Class&nbsp;A Common Stock or other Exchange Property
issuable upon settlement of the Purchase Contracts held by such Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.07</B><I>. Waiver of Stay or Execution Laws. </I>The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or assume or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such
power as though no such law had been enacted.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.08</B><I>. Control by Majority. </I>The Holders of not less than a majority in
number of the Outstanding Purchase Contracts shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Purchase Contract Agent, or of
exercising any trust or power conferred upon the Purchase Contract Agent; <I>provided </I>that the
Purchase Contract Agent has received indemnity satisfactory to it. Notwithstanding the foregoing,
the Purchase Contract Agent may refuse to follow any direction that is in conflict with any law or
the Purchase Contract Agreement, that may involve it in personal liability or that may be unduly
prejudicial to the Holders of Purchase Contracts not joining in the action.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 8</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">The Purchase Contract Agent and Trustee </FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.01</B><I>. Certain Duties and Responsibilities. </I>(a)&nbsp;Each of the Purchase
Contract Agent and Trustee undertakes to perform, with respect to the Units and Purchase Contracts,
such duties and only such duties as are specifically delegated to it and set forth in this
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;No provision of this Agreement shall be construed to relieve the Purchase Contract Agent
from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the duties and obligations of the Purchase Contract Agent with respect to the
Purchase Contracts shall be determined solely by the express provisions of this Agreement,
and the Purchase Contract Agent shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Purchase Contract
Agent or the Trustee;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the absence of bad faith on the part of the Purchase Contract Agent and/or
the Trustee, as applicable, the Purchase Contract Agent and/or the Trustee, as applicable,
may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any statements, certificates or opinions furnished to the
Purchase Contract Agent and/or the Trustee, as applicable, and conforming to the
requirements of this Agreement; but in the case of any such statements, certificates or
opinions which by any provision hereof are specifically required to be furnished to the
Purchase Contract Agent and/or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the Trustee, the Purchase Contract Agent and/or the Trustee, as applicable, shall be under
a duty to examine the same to determine whether or not they conform to the requirements of
this Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Purchase Contract Agent and/or the Trustee, as applicable, shall not be
liable for any error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Purchase Contract Agent and/or the Trustee, as applicable,
unless it shall be proved that the Purchase Contract Agent was negligent in ascertaining
the pertinent facts; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Purchase Contract Agent and/or the Trustee, as applicable, shall not be
liable with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to Section&nbsp;7.08 relating to the
time, method and place of conducting any proceeding for any remedy available to the
Purchase Contract Agent and/or the Trustee, as applicable, or exercising any right or
power conferred upon the Purchase Contract Agent and/or the Trustee, as applicable, under
this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;This Agreement shall not be deemed to create a fiduciary relationship under state or
federal law between Wilmington Trust Company, in its capacity as the Purchase Contract Agent, and
any Holder of any Equity-Linked Security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of the provisions contained in this Agreement shall require the Purchase Contract Agent
to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.02</B><I>. Notice of Default. </I>Within 90&nbsp;days after the occurrence of any
default by the Company hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the Company and the Holders
of Purchase Contracts, as their names and addresses appear in the Security Register, notice of such
default hereunder, unless such Responsible Officer of the Purchase Contract Agent has actual
knowledge that such default shall have been cured or waived.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.03</B>. <I>Certain Rights of Purchase Contract Agent</I>. Subject to the provisions
of Section&nbsp;8.01:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Purchase Contract Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, Officers&#146; Certificate or any
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officers&#146; Certificate or Issuer Order (unless other evidence in
respect thereof be herein specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Purchase Contract Agent by a Board Resolution;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the Purchase Contract Agent may consult with counsel of its selection and any advice of
such counsel promptly confirmed in writing shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and
in reliance thereon in accordance with such advice or Opinion of Counsel;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the Purchase Contract Agent shall be under no obligation to exercise any of the rights or
powers vested in it by this Agreement at the request, order or direction of any of the Holders
pursuant to the provisions of this Agreement (including, without limitation, pursuant to Section
7.08), unless such Holders shall have offered to the Purchase Contract Agent reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred therein or thereby;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;the Purchase Contract Agent shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion, rights or powers conferred
upon it by this Agreement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;the Purchase Contract Agent shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not less than a majority
in aggregate principal amount of the Outstanding Purchase Contracts; <I>provided </I>that, if the payment
within a reasonable time to the Purchase Contract Agent of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Purchase
Contract Agent, not reasonably assured to the Purchase Contract Agent by the security afforded to
it by the terms of this Agreement, the Purchase Contract Agent may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Company or, if paid by the Purchase Contract Agent or any
predecessor Purchase Contract Agent, shall be repaid by the Company upon demand;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;the Purchase Contract Agent may execute any of the rights or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys not regularly in its
employ and the Purchase Contract Agent shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it hereunder;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;the Purchase Contract Agent shall not be charged with knowledge of any default with
respect to a series of Securities unless either (i)&nbsp;a Responsible Officer of the Purchase Contract
Agent assigned to the Corporate Trust Office of the Purchase Contract Agent (or any successor
division or department of the Purchase Contract Agent) shall have actual knowledge of such default
or (ii)&nbsp;written notice of such default shall have been given to the Purchase Contract Agent by the
Company, the Note Issuer or any Holder;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the Purchase Contract Agent shall not be liable for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;the permissive rights of the Purchase Contract Agent hereunder shall not be construed as
duties;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;in no event shall the Purchase Contract Agent be liable for any consequential, special,
punitive or indirect loss or damages, even if advised of the likelihood thereof in advance and
regardless of the form of action;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;the rights, privileges, protections, immunities and benefits given to the Purchase
Contract Agent, including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Purchase Contract Agent and the Trustee (whether or not the Trustee is
expressly referred to in connection with any such rights, privileges, protections, immunities and
benefits) in each of their capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;each of the Purchase Contract Agent and the Trustee may request that the Company (on
behalf of itself and the Note Issuer) deliver an Officers&#146; Certificate setting forth the name of
the individuals and/or titles of Officers authorized at such time to take specific actions pursuant
to this Agreement, which Officers&#146; Certificate may be signed by any Person authorized to sign an
Officers&#146; Certificate, including any Person specified as so authorized in any such Officers&#146;
Certificate previously delivered and not superseded; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;neither the Purchase Contract Agent nor the Trustee shall not be responsible for delays or
failures in performance of its obligations hereunder resulting from acts beyond its reasonable
control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">governmental regulations superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes, terrorist attacks or other disasters, it being understood
that each of the Purchase Contract Agent and the Trustee shall use reasonable best efforts which
are consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.04</B><I>. Not Responsible for Recitals. </I>The recitals contained herein and in
the Certificates shall be taken as the statements of the Company or the Note Issuer, as the case
may be, and neither the Purchase Contract Agent nor the Trustee assumes any responsibility for
their accuracy. Neither the Purchase Contract Agent nor the Trustee makes any representations as to
the validity or sufficiency of either this Agreement or of the Purchase Contracts. Neither the
Purchase Contract Agent nor the Trustee shall be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.05</B><I>. May Hold Units and Purchase Contracts. </I>Any Security Registrar or any
other agent of the Company, or the Purchase Contract Agent, the Trustee and any of their
Affiliates, in their individual or any other capacity, may become the owner of Units, Separate
Purchase Contracts and Separate Notes and may otherwise deal with the Company, the Note Issuer or
any other Person with the same rights it would have if it were not Security Registrar or such other
agent, or the Purchase Contract Agent. The Company and the Note Issuer may become the owner of
Units, Separate Purchase Contracts and Separate Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.06</B><I>. Money Held in Custody. </I>Money held by the Purchase Contract Agent in
custody hereunder need not be segregated from other funds except to the extent required by law or
provided herein. The Purchase Contract Agent shall be under no obligation to invest or pay interest
on any money received by it hereunder except as specifically instructed by the Company in an Issuer
Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.07</B><I>. Compensation, Reimbursement and Indemnification. </I>The Company
covenants and agrees to pay to the Purchase Contract Agent from time to time, and the Purchase
Contract Agent shall be entitled to, such compensation as shall be agreed to in writing between the
Company and the Purchase Contract Agent and the Company covenants and agrees to pay or reimburse
the Purchase Contract Agent and each predecessor Purchase Contract Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Agreement (including the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Company also covenants to indemnify the Purchase Contract Agent
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and each predecessor Purchase Contract Agent for, and to hold it harmless against, any and all
loss, liability, damage, claim or expense, including taxes (other than taxes based on the income of
the Purchase Contract Agent), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this Agreement and its duties hereunder,
including the costs and expenses of defending itself against or investigating any claim or
liability in the premises. The obligations of the Agreement under this Section&nbsp;8.07 to compensate
and indemnify the Purchase Contract Agent and each predecessor Purchase Contract Agent and to pay
or reimburse the Purchase Contract Agent and each predecessor Purchase Contract Agent for expenses,
disbursements and advances shall survive the satisfaction and discharge of this Agreement or the
resignation or removal of the Purchase Contract Agent. The provisions of this Section&nbsp;8.07 shall
survive the resignation or removal of the Purchase Contract Agent and the termination of this
Agreement. If the Purchase Contract Agent incurs any expenses, or if the Purchase Contract Agent is
entitled to any compensation for services rendered (including fees and expenses of its agent and
counsel), in each case, in connection with the performance of its obligations under this Agreement
after the occurrence of a Bankruptcy Event, then any such expenses or compensation are intended to
constitute expenses of administration under applicable Bankruptcy Laws.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.08</B><I>. Corporate Purchase Contract Agent Required; Eligibility. </I>There shall
at all times be a Purchase Contract Agent hereunder. The Purchase Contract Agent shall at all
times be a corporation organized and doing business under the laws of the United States of America
or of any state thereof or the District of Columbia having a combined capital and surplus of at
least $25,000,000, and which is authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by federal, state or District of Columbia authority, or a
corporation or other Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any time the Purchase
Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect specified in this Article.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.09</B><I>. Resignation and Removal; Appointment of Successor. </I>(a)&nbsp;No
resignation or removal of the Purchase Contract Agent and no appointment of a successor Purchase
Contract Agent pursuant to this Article shall become effective until the acceptance of appointment
by the successor Purchase Contract Agent in accordance with the applicable requirements of Section
8.10.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Purchase Contract Agent may resign at any time by giving written notice thereof to the
Company 60&nbsp;days prior to the effective date of such resignation. If the instrument of acceptance by
a successor Purchase Contract Agent required by Section&nbsp;8.10 shall not have been delivered to the
Purchase Contract Agent within 30&nbsp;days after the giving of such notice of resignation, the
resigning Purchase Contract Agent may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Purchase Contract Agent may be removed at any time the Holders of a majority in number
of the Outstanding Purchase Contracts. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section&nbsp;8.10 shall not have been delivered to the Purchase Contract
Agent within 30&nbsp;days after evidence of such removal is delivered to the Company and Purchase
Contract Agent, the removed Purchase Contract Agent may petition, at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;If at any time:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Purchase Contract Agent shall cease to be eligible under Section&nbsp;8.08 and
shall fail to resign after written request therefor by the Company or by any such Holder;
or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Purchase Contract Agent shall be adjudged bankrupt or insolvent or a
receiver of the Purchase Contract Agent or of its property shall be appointed or any
public officer shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation, then,
in any such case, (x)&nbsp;the Company by a Board Resolution may remove the Purchase Contract
Agent, or (y)&nbsp;any Holder who has been a bona fide Holder of a Purchase Contract for at
least six months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Purchase Contract Agent and the
appointment of a successor Purchase Contract Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;If the Purchase Contract Agent shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Purchase Contract Agent for any cause, the Company shall
promptly appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section&nbsp;8.10. If no successor Purchase Contract Agent shall have been so appointed
by the Company and accepted appointment in the manner required by Section&nbsp;8.10, any Holder who has
been a bona fide Holder of a Purchase Contract for at least six months, on behalf of itself and all
others similarly situated, or the Purchase
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Contract Agent may petition at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Purchase Contract Agent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Company shall give, or shall cause such successor Purchase Contract Agent to give,
notice of each resignation and each removal of the Purchase Contract Agent and each appointment of
a successor Purchase Contract Agent by mailing written notice of such event by first-class mail,
postage prepaid, to Holders as their names and addresses appear in the applicable Security
Register. Each notice shall include the name of the successor Purchase Contract Agent and the
address of its Corporate Trust Office.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.10</B><I>. Acceptance of Appointment by Successor. </I>(a)&nbsp;In case of the
appointment hereunder of a successor Purchase Contract Agent, every such successor Purchase
Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Purchase Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, agencies and duties of the retiring Purchase Contract Agent. At the
request of the Company or the successor Purchase Contract Agent, such retiring Purchase Contract
Agent shall, upon its receipt of payment or reimbursement of any amounts due to it hereunder,
execute and deliver an instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly assign, transfer
and deliver to such successor Purchase Contract Agent all property and money held by such retiring
Purchase Contract Agent hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Upon request of any such successor Purchase Contract Agent, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to such successor
Purchase Contract Agent all such rights, powers and agencies referred to in paragraph (a)&nbsp;of this
Section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;No successor Purchase Contract Agent shall accept its appointment unless at the time of
such acceptance such successor Purchase Contract Agent shall be qualified and eligible under this
Article.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.11</B><I>. Merger; Conversion; Consolidation or Succession to Business. </I>Any
corporation into which the Purchase Contract Agent may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Purchase Contract Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder; <I>provided </I>that such
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">corporation shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of the parties
hereto. If any Equity-Linked Securities shall have been authenticated on behalf of the Holders by
the Trustee and Purchase Contract Agent then in office, but not delivered, any successor by merger,
conversion or consolidation to such Purchase Contract Agent may adopt such Purchase Contract
Agent&#146;s authentication and deliver the Equity-Linked Securities so authenticated with the same
effect as if such successor Purchase Contract Agent had itself authenticated such Equity-Linked
Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.12</B><I>. Preservation of Information; Communications to Holders. </I>(a)&nbsp;The
Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders as received by the Purchase Contract Agent in its capacity as
Security Registrar.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If three or more Holders (such three or more Holders, the &#147;<B>Applicants</B>&#148;) apply in writing
to the Purchase Contract Agent, and furnish to the Purchase Contract Agent reasonable proof that
each such Applicant has owned a Unit or Separate Purchase Contract for a period of at least six
months preceding the date of such application, and such application states that the Applicants
desire to communicate with other Holders with respect to their rights under this Agreement or under
the Units or Separate Purchase Contracts and is accompanied by a copy of the form of proxy or other
communication that such Applicants propose to transmit, then the Purchase Contract Agent shall mail
to all the Holders copies of the form of proxy or other communication that is specified in such
request, with reasonable promptness after a tender to the Purchase Contract Agent of the materials
to be mailed and of payment, or provision for the payment, of the reasonable expenses of such
mailing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.13</B><I>. No Other Obligations of Purchase Contract Agent or Trustee. </I>Except
to the extent otherwise expressly provided in this Agreement, neither the Purchase Contract Agent
nor Trustee assumes any obligations, and neither the Purchase Contract Agent nor Trustee shall be
subject to any liability, under this Agreement or any Security evidencing a Unit or Purchase
Contract in respect of the obligations of the Holder of any Unit or Purchase Contract thereunder.
The Company and the Note Issuer agree, and each Holder of a Security, by his or her acceptance
thereof, shall be deemed to have agreed, that the Purchase Contract Agent&#146;s and/or Trustee&#146;s
authentication, as applicable, of the Securities on behalf of the Holders shall be solely as agent
and attorney-in-fact for the Holders, and that neither the Purchase Contract Agent nor Trustee
shall have any obligation to perform such Purchase Contracts (whether held as components of Units
or Separate Purchase Contracts) on behalf of the Holders, except to the extent expressly provided
in Article&nbsp;3 hereof.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.14</B><I>. Tax Compliance. </I>(a)&nbsp;The Purchase Contract Agent shall comply with
all applicable certification, information reporting and withholding (including &#147;backup&#148;
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i)&nbsp;any shares of Class&nbsp;A Common Stock
delivered upon settlement of the Purchase Contracts, any amounts paid in lieu of fractional shares
of Class&nbsp;A Common Stock upon settlement of the Purchase Contracts, and any other amounts included
in the Purchase Contract Settlement Fund paid to Holders upon settlement of any Purchase Contracts
or (ii)&nbsp;the issuance, delivery, holding, transfer or exercise of rights under the Purchase
Contracts. Such compliance shall include, without limitation, the preparation and timely filing of
required returns and the timely payment of all amounts required to be withheld to the appropriate
taxing authority or its designated agent. Notwithstanding anything to the contrary, the Purchase
Contract Agent&#146;s obligations under this Section&nbsp;8.14 shall extend only to form 1099 reporting and
any applicable income withholding unless and until the Purchase Contract Agent is otherwise
notified by the Company pursuant to paragraph (b)&nbsp;below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Purchase Contract Agent shall, in accordance with the terms hereof, comply with any
written direction received from the Company with respect to the execution or certification of any
required documentation and the application of such requirements to particular payments or Holders
or in other particular circumstances, and may for purposes of this Agreement conclusively rely on
any such direction in accordance with the provisions of Section&nbsp;8.01(b)(ii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Purchase Contract Agent shall maintain all appropriate records documenting compliance
with such requirements, and shall make such records available, on written request, to the Company
or its authorized representative within a reasonable period of time after receipt of such request.
For the avoidance of doubt, any costs or expenses incurred by the Purchase Contract Agent in
connection with complying with its obligations under this Section&nbsp;8.14 shall be covered by Section
8.07.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 9</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Supplemental Agreements</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.01</B><I>. Supplemental Agreements Without Consent of Holders. </I>Without the
consent of any Holders, the Company, the Note Issuer, the Purchase Contract Agent and the Trustee
at any time and from time to time, may enter into one or more agreements supplemental hereto, in
form satisfactory to the Company, the Note Issuer and the Purchase Contract Agent, to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) evidence the succession of another Person to the Company or the Note Issuer, and
the assumption by any such successor of the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">covenants and obligations of the Company or
the Note Issuer under this Agreement and the Units and Separate Purchase Contracts, if
any;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) add to the covenants for the benefit of Holders or to surrender any of the
Company&#146;s or Note Issuer&#146;s rights or powers;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) evidence and provide for the acceptance of appointment of a successor Purchase
Contract Agent;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) make provision with respect to the rights of Holders pursuant to adjustments in
the Settlement Rate due to Reorganization Events;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) conform the terms of the Purchase Contracts or the provisions of this Agreement
to the &#147;Description of the Purchase Contracts,&#148; &#147;Description of the Units&#148; and &#147;Limitation
on Beneficial Ownership of Class&nbsp;A Common Stock, Units and Separate Purchase Contracts&#148;
sections in the Prospectus Supplement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) cure any ambiguity or manifest error, to correct or supplement any provisions
that may be inconsistent, so long as such action does not adversely affect the interest of
the Holders; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) to make any other provisions with respect to such matters or questions, so long
as such action does not adversely affect the interest of the Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.02</B><I>. Supplemental Agreements With Consent of Holders. </I>With the consent of
the Holders of not less than a majority in number of the Outstanding Purchase Contracts, the
Purchase Contract Agent and the Trustee, the Company, when authorized by a Board Resolution, and
the Note Issuer, the Purchase Contract Agent and Trustee may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts,
or the provisions of this Agreement or the rights of the Holders in respect of the Purchase
Contracts; <I>provided</I>, <I>however</I>, that, except as contemplated herein, no such supplemental agreement
shall, without the consent of each Holder of an Outstanding Purchase Contract affected thereby:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) reduce the number of shares of Class&nbsp;A Common Stock deliverable upon settlement
of the Purchase Contracts (except to the extent expressly provided in Section&nbsp;5.01);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) change the Mandatory Settlement Date, the right to settle Purchase Contracts
early or the Fundamental Change Early Settlement Right;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) reduce the above-stated percentage of Outstanding Purchase Contracts the
consent of the Holders of which is required for the modification or amendment of the
provisions of the Purchase Contracts or the Purchase Contract Agreement; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) impair the right to institute suit for the enforcement of the Purchase Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It shall not be necessary for any consent of Holders under this Section to approve the
particular form of any proposed supplemental agreement, but it shall be sufficient if such consent
shall approve the substance thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.03</B><I>. Execution of Supplemental Agreements. </I>In executing, or accepting the
additional agencies created by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement, the Purchase Contract Agent and
Trustee shall be provided, and (subject to Section&nbsp;8.01) shall be fully protected in relying upon,
an Officers&#146; Certificate and an Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement and does not violate the Indenture, and that
any and all conditions precedent to the execution and delivery of such supplemental agreement have
been satisfied. The Purchase Contract Agent and Trustee may, but shall not be obligated to, enter
into any such supplemental agreement that affects the Purchase Contract Agent&#146;s or Trustee&#146;s own
rights, duties or immunities under this Agreement or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.04</B><I>. Effect of Supplemental Agreements. </I>Upon the execution of any
supplemental agreement under this Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Securities theretofore or thereafter authenticated on behalf of the Holders and
delivered hereunder, shall be bound thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.05</B><I>. Reference to Supplemental Agreements. </I>Securities authenticated on
behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent as to any matter provided for in such supplemental
agreement. If the Company and the Note Issuer shall so determine, new Securities so modified as to
conform, in the opinion of the Purchase Contract Agent, the Trustee and the Company and the Note
Issuer, to any such supplemental agreement may be prepared and executed by the Company the Note
Issuer and authenticated on behalf of the Holders and delivered by the Purchase Contract Agent in
exchange for outstanding Securities.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.06</B><I>. Notice of Supplemental Agreements. </I>After any supplemental agreement
under this Article becomes effective, the Company shall mail to the Holders a notice briefly
describing such supplemental agreement; <I>provided</I>, <I>however</I>, that the failure to give such notice to
all Holders, or any defect therein, shall not impair or affect the validity of such supplemental
agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 10</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Consolidation, Merger, Conveyance, Transfer or Lease </FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;10.01</B><I>. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease
Property Except Under Certain Conditions. </I>The Company covenants that it will not merge with and
into, consolidate with any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person, unless:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the resulting, surviving or transferee entity (if not the Company) is a
corporation or limited liability company that is treated as a corporation for U.S. federal
income tax purposes, organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, and such corporation or limited
liability company (if not the Company) expressly assumes in writing all of the Company&#146;s
obligations under the Units, the Purchase Contracts and this Agreement; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) immediately after the merger, consolidation, sale, assignment, transfer, lease
or conveyance, no default has occurred and is continuing under the Units, the Purchase
Contracts or this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;10.02</B><I>. Rights and Duties of Successor Entity. </I>In case of any such merger,
consolidation, sale, assignment, transfer or conveyance (but not any such lease) and upon any such
assumption by a successor entity in accordance with Section&nbsp;10.01, such successor entity shall
succeed to and be substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor entity thereupon may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities evidencing Units or Purchase
Contracts issuable hereunder which theretofor shall not have been signed by the Company and the
Note Issuer (if applicable) and delivered to the Purchase Contract Agent; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms, conditions and
limitations in this Agreement prescribed, the Purchase Contract Agent and Trustee (if applicable)
shall authenticate on behalf of the Holders and deliver any Securities that previously shall have
been signed and delivered by the officers of the Company and the Note Issuer to the Purchase
Contract Agent and Trustee for
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">authentication, and any Security evidencing Units or Purchase
Contracts that such successor corporation thereafter shall cause to be signed and delivered to the
Purchase Contract Agent and Trustee for that purpose. All the Securities issued shall in all
respects have the same legal rank and benefit under this Agreement as the Securities theretofor or
thereafter issued in accordance with the terms of this Agreement as though all of such Securities
had been issued at the date of the execution hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any such merger, consolidation, sale, assignment, transfer, lease or
conveyance, such change in phraseology and form (but not in substance) may be made in the
Securities evidencing Units or Purchase Contracts thereafter to be issued as may be appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;10.03</B><I>. Officers&#146; Certificate and Opinion of Counsel Given to Purchase
Contract Agent. </I>The Purchase Contract Agent, subject to Section&nbsp;8.01 and Section&nbsp;8.03, shall
receive an Officers&#146; Certificate and an Opinion of Counsel as conclusive evidence that any such
merger, consolidation, sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, sale, assignment, transfer, lease or conveyance have been met.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 11</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Covenants of the Company and the Note Issuer</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.01</B><I>. Performance Under Purchase Contracts. </I>Each of the Company and the
Note Issuer covenants and agrees for the benefit of the Holders from time to time of the Units and
Purchase Contracts, as the case may be, that it will duly and punctually perform its obligations
under the Units and Purchase Contracts, as they case may be, in accordance with the terms of the
Units and Purchase Contracts and this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.02</B><I>. Maintenance of Office Or Agency. </I>The Company will maintain in the
Borough of Manhattan, New York City or in Delaware an office or agency where Securities may be
presented or surrendered for acquisition of shares of Class&nbsp;A Common Stock upon settlement of the
Purchase Contracts on any Settlement Date, and where notices and demands to or upon the Company in
respect of the Purchase Contracts and this Agreement may be served. The Company will give prompt
written notice to the Purchase Contract Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Corporate Trust Office,
and the Company hereby appoints the Purchase Contract Agent as its agent to receive all such
presentations, surrenders, notices and demands.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may also from time to time designate one or more other offices or agencies where
Securities may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; <I>provided</I>, <I>however</I>, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City or in Delaware for such purposes. The Company will
give prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency. The Company hereby
designates as the place of payment for the Purchase Contracts the Corporate Trust Office and
appoints the Purchase Contract Agent at its Corporate Trust Office as paying agent in such city.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.03</B><I>. Statements of Officers of the Company as to Default; Notice of
Default.. </I>(a)&nbsp;The Company will deliver to the Purchase Contract Agent, within 120&nbsp;days after the
end of each fiscal year of the Company (which as of the Issue Date is October&nbsp;31) ending after the
date hereof, an Officers&#146; Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the Company), stating
whether or not to the knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions hereof, and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of which they may have
knowledge and what action the Company is taking or proposes to take with respect thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Company shall promptly deliver to the Purchase Contract Agent written notice of the
occurrence of any default in the performance and observance of any of the terms, provisions and
conditions hereof and the status thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.04</B><I>. Existence. </I>The Company and the Note Issuer shall each do or cause
to be done all things necessary to preserve and keep in full force and effect its existence in
accordance with their respective organizational documents, and the material rights, licenses and
franchises of the Company and the Note Issuer; <I>provided </I>that this Section&nbsp;11.04 shall not prohibit
any transaction otherwise permitted by Article&nbsp;10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.05</B><I>. Company to Reserve Class&nbsp;A Common Stock. </I>The Company shall at all
times reserve and keep available out of its authorized but unissued Class&nbsp;A Common Stock, solely
for issuance upon settlement of the Purchase Contracts, that number of shares of Class&nbsp;A Common
Stock as shall from time to time be issuable upon the settlement of all Outstanding Purchase
Contracts
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->76<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(whether or not included in a Unit), assuming settlement at the Maximum Settlement Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.06</B><I>. Covenants as to Class&nbsp;A Common Stock. </I>(a)&nbsp;The Company covenants
that all shares of Class&nbsp;A Common Stock issuable upon settlement of any Outstanding Purchase
Contract will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable,
free from all taxes, liens and charges and not subject to any preemptive rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company further covenants that, if at any time the Class&nbsp;A Common Stock shall be listed on
the NYSE or any other national securities exchange, the Company will, if permitted by the rules of
such exchange, list and keep listed, so
long as the Class&nbsp;A Common Stock shall be so listed on such exchange, all Class&nbsp;A Common Stock
issuable upon settlement of the Purchase Contracts; <I>provided</I>, <I>however</I>, that, if the rules of such
exchange system permit the Company to defer the listing of such Class&nbsp;A Common Stock until the
first delivery of Class&nbsp;A Common Stock upon settlement of Purchase Contracts in accordance with the
provisions of this Agreement, the Company covenants to list such Class&nbsp;A Common Stock issuable upon
settlement of the Purchase Contracts in accordance with the requirements of such exchange at such
time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Company shall apply to list the Units on the NYSE, subject to satisfaction of the
NYSE&#146;s minimum listing standards with respect to the Units. In addition, if (i)&nbsp;a sufficient
number of Units are separated into Separate Purchase Contracts and Separate Notes and traded
separately such that applicable listing requirements are met and (ii)&nbsp;the Holders of a sufficient
number of such Separate Purchase Contracts and Separate Notes request that the Company list such
Separate Purchase Contracts and Separate Notes, the Company may endeavor to list such Separate
Purchase Contracts and Separate Notes on an exchange of the Company&#146;s choosing (which may or may
not be the NYSE) subject to applicable listing requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.07</B><I>. Tax Treatment. </I>The Company and the Note Issuer agree, and by
purchasing a Unit each Beneficial Holder agrees, for United States federal income tax purposes, to
(a)&nbsp;treat a Unit as an investment unit composed of two separate instruments, in accordance with its
form, (b)&nbsp;treat the Notes as indebtedness of the Note Issuer and (c)&nbsp;in the case of each Beneficial
Holder acquiring the Units at original issuance, allocate the Stated Amount of each Unit between
the Note and the Purchase Contract so that such Beneficial Holder&#146;s initial tax basis in each Note
will be $4.526049 and each such Beneficial Holder&#146;s initial tax basis in each Purchase Contract
will be $20.473951.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->77<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President
and <br>Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President
and <br>Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase Contract
Agent<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joshua C. Jones
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joshua C. Jones&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Financial Services Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trustee under the
Indenture<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joshua C. Jones
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joshua C. Jones&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Financial Services Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorney-in-Fact of the Holders from<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;time to time as provided under the<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase Contract Agreement<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joshua C. Jones
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joshua C. Jones&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Financial Services Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->79<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF FACE OF UNIT&#093;
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;THIS SECURITY IS A GLOBAL UNIT WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY
OR A SUCCESSOR DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (THE &#147;<B>DEPOSITARY</B>&#148;) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
COMPANY AND THE NOTE ISSUER OR THEIR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &#038; CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &#038; CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE &#038; CO., HAS AN INTEREST HEREIN.&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include if a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt">HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">and
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">7.25% TANGIBLE EQUITY UNITS
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%"></TD>
    <TD width="3%"></TD>
    <TD width="48%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">CUSIP No.&nbsp;44248W 208</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">ISIN No.&nbsp;US44248W2089</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">No. &#95;&#95;&#95;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#091;Initial&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> Number of Units &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Unit certifies that &#091;CEDE &#038; CO., as nominee of The Depository Trust Company&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>&#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP>
(the &#147;<B>Holder</B>&#148;), or registered assigns, is the registered owner of the
number of Units set forth above&#091;, which number may from time to time be reduced or increased, as
set forth on Schedule&nbsp;A, as appropriate, in accordance with the terms of the Purchase Contract
Agreement (as defined below), but which number, taken together with the number of all other
outstanding Units, shall not exceed 3,000,000 Units at any time (as increased by a number equal to
the aggregate number of any additional Units purchased by the Underwriters pursuant to the exercise
of their option to purchase additional Units as set forth in the Underwriting
Agreement)&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Unit consists of (i)&nbsp;a Purchase Contract issued by the Company, and (ii)&nbsp;a Note issued by
the Note Issuer. Each Unit evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February&nbsp;9, 2011 (as may be supplemented from time to time, the &#147;<B>Purchase Contract Agreement</B>&#148;),
among the Company, the Note Issuer and Wilmington Trust Company, as Purchase Contract Agent
(including its successors hereunder, the &#147;<B>Purchase Contract Agent</B>&#148;), as Trustee (including its
successors hereunder, the &#147;<B>Trustee</B>&#148;) under the Indenture and as attorney-in-fact for the Holders of
Purchase Contracts from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is hereby made to the Purchase Contract Agreement and the Indenture and, in each
case supplemental agreements thereto, for a description of the respective rights, limitations of
rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Trustee,
the Company, the Note Issuer and the Holders and of the terms upon which the Units are, and are to
be, executed and delivered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the conditions and under the circumstances set forth in the Purchase Contract Agreement,
Holders of Units shall have the right to separate a Unit into its component parts, and a Holder of
a Separate Purchase Contract and Separate Note shall have the right to re-create a Unit.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Note Issuer agree, and by purchasing a Unit each Beneficial Holder agrees,
for United States federal income tax purposes, to (1)
treat each Unit as an investment unit composed of two separate instruments, in accordance with
its form, (2)&nbsp;treat each Note as indebtedness of the Note Issuer and (3)&nbsp;in the case of each
Beneficial Holder acquiring the Units at original issuance, allocate the Stated Amount of each Unit
between the Note and the Purchase Contract so that such Beneficial Holder&#146;s initial tax basis in
each Note will be $4.526049 and each such Beneficial Holder&#146;s initial tax basis in each Purchase
Contract will be $20.473951.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Unit is subject to the Section&nbsp;382 Ownership Blocker and Section&nbsp;382 Settlement Blocker,
in each case, as provided in the Purchase Contract Agreement. Each Beneficial Holder of this Unit,
by acquiring an interest in this Unit, represents and warrants to the Company that it is in
compliance with the ownership limitations of the Section&nbsp;382 Ownership Blocker (which
representation and warranty is part of the consideration for the issuance of this Unit). Any
purported violation of the Section&nbsp;382 Ownership Blocker shall be subject to the consequences
provided in the Purchase Contract Agreement and the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Units, and any claim, controversy or dispute arising under or related to the Units, shall
be governed by, and construed in accordance with, the laws of the State of New York.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms used herein and not defined have the meanings given to such terms in the
Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Unit and the provisions of
the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company and the Note Issuer have caused this instrument to be
duly executed.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated:&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br> Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br> Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">UNIT CERTIFICATE OF AUTHENTICATION<BR>
OF PURCHASE CONTRACT AGENT AND TRUSTEE UNDER THE INDENTURE
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is one of the Units referred to in the within mentioned Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase Contract Agent<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trustee under the Indenture<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF REVERSE OF UNIT&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;Intentionally Blank&#093;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SCHEDULE OF INCREASES OR DECREASES IN GLOBAL UNIT&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial number of Units evidenced by this Global Unit is 3,000,000. The following
increases or decreases in this Global Unit have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>evidenced by the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Signature of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of decrease</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Global Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>authorized</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in number of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in number of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>following such</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>signatory of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>evidenced by the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>evidenced by the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>decrease or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Purchase Contract</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Global Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Global Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Agent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>ATTACHMENT 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF SEPARATION NOTICE&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">WILMINGTON TRUST COMPANY<BR>
Rodney Square North<BR>
1100 North Market Street<BR>
Wilmington, DE 19890-1600<BR>
Facsimile: 302-636-4145<BR>
Attention: Corporate Client Services

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Re: Separation of &#091;Global&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> Units
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned &#091;Beneficial Holder&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> hereby notifies you that it wishes to separate
&#95;&#95;&#95;&#95;&#95; Units &#091;as to which it holds a Book-Entry Interest&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> (the &#147;<B>Relevant Units</B>&#148;) into a
number of Notes equal to the number of Relevant Units and a number of Purchase Contracts equal to
the number of Relevant Units in accordance with the Purchase Contract Agreement (the &#147;<B>Purchase
Contract Agreement</B>&#148;) dated February&nbsp;9, 2011 among the Company, the Note Issuer and Wilmington Trust
Company, as Purchase Contract Agent, as Trustee under the Indenture and as attorney-in-fact for the
Holders of Purchase Contracts from time to time. Terms used and not defined herein have the meaning
assigned to such terms in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned &#091;includes herewith&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Beneficial Holder has instructed the undersigned
Depository Participant to transfer to you its Book-Entry Interests in&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> the number of
Units specified in the immediately succeeding paragraph. The undersigned &#091;includes
herewith&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Beneficial Holder has furnished the undersigned Depository Participant
with&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> the appropriate endorsements and documents and paid all applicable transfer or
similar taxes, if any, to the extent required by the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please &#091;deliver to the undersigned&#146;s address specified below&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;transfer to the account
of the undersigned Beneficial Holder with the undersigned Depositary Participant the beneficial
interests in&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> (i)&nbsp;the number of Separate Notes and (ii)&nbsp;number of Separate Purchase
Contracts represented by the number of Units specified above.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the &#091;undersigned has caused this instrument to be duly
executed&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Depository Participant has caused this instrument to be duly executed on
behalf of itself and the undersigned Beneficial Holder&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&#091;NAME OF BENEFICIAL HOLDER&#093;<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Address:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>

    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">&#091;NAME OF DEPOSITORY PARTICIPANT&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Address:&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>    <TD>&nbsp;</TD></TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Attest By:
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 24pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>ATTACHMENT 2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF RECREATION NOTICE&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">WILMINGTON TRUST COMPANY<BR>
Rodney Square North<BR>
1100 North Market Street<BR>
Wilmington, DE 19890-1600<BR>
Facsimile: 302-636-4145<BR>
Attention: Corporate Client Services

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Re: Recreation of &#091;Global&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> Units
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned &#091;Beneficial Holder&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> hereby notifies you that it wishes to recreate
&#95;&#95;&#95;&#95;&#95;&#95; Units &#091;as to which it holds a Book-Entry Interest&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> (the &#147;<B>New Units</B>&#148;) from a
number of Separate Notes equal to the number of New Units and a number of Separate Purchase
Contracts equal to the number of New Units in accordance with the Purchase Contract Agreement (the
&#147;<B>Purchase Contract Agreement</B>&#148;) dated as of February&nbsp;9, 2011 among the Company, the Note Issuer and
Wilmington Trust Company, as Purchase Contract Agent, as Trustee under the Indenture and as
attorney-in-fact for the Holders of Purchase Contracts from time to time. Terms used and not
defined herein have the meaning assigned to such terms in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned &#091;includes herewith&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Beneficial Holder has instructed the undersigned
Depository Participant to transfer to you its Book-Entry Interests in&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP>the applicable
number of Separate Notes and the applicable number of Separate Purchase Contracts sufficient for
the recreation of the number of Units specified above. The undersigned &#091;includes
herewith&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Beneficial Holder has furnished the undersigned Depository Participant
with&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> the appropriate endorsements and documents and paid all applicable transfer or
similar taxes, if any, to the extent required by the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please &#091;deliver to the undersigned&#146;s address specified below&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;transfer to the account
of the undersigned Beneficial Holder with the undersigned Depositary Participant the beneficial
interests in&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> the number of Units specified above.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">







<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the &#091;undersigned has caused this instrument to be duly
executed&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP> &#091;Depository Participant has caused this instrument to be duly executed on
behalf of itself and the undersigned Beneficial Holder&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&#091;NAME OF BENEFICIAL HOLDER&#093;<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Address:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>

    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">&#091;NAME OF DEPOSITORY PARTICIPANT&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Address:&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Attest By:
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 24pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Unit.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Unit.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-11<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>ATTACHMENT 3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">PURCHASE CONTRACTS
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%"></TD>
    <TD width="3%"></TD>
    <TD width="48%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">No. &#95;&#95;&#95;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Initial Number of Purchase Contracts: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Purchase Contract certifies that, Wilmington Trust Company, as attorney-in-fact of
holder(s) of the Purchase Contracts evidenced hereby, or its registered assigns (the &#147;<B>Holder</B>&#148;) is
the registered owner of the number of Purchase Contracts set forth above, which number may from
time to time be reduced or increased as set forth on Schedule&nbsp;A hereto, as appropriate, in
accordance with the terms of the Purchase Contract Agreement (as defined below), but which number
of Purchase Contracts, taken together with the number of all other Outstanding Purchase Contracts,
shall not exceed 3,000,000 Purchase Contracts at any time (as increased by a number equal to the
aggregate number of any additional Units purchased by the Underwriters pursuant to the exercise of
their option to purchase additional Units as set forth in the Underwriting Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract consists of the rights of the Holder under such Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase Contract Agreement
(as defined on the reverse hereof) have the meaning set forth therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract on the Mandatory Settlement Date a number shares of Class&nbsp;A common stock, $0.01
par value (&#147;<B>Class&nbsp;A Common Stock</B>&#148;), of the Company equal to the Settlement Rate, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Purchase Contract is subject to the Section&nbsp;382 Ownership Blocker and Section&nbsp;382
Settlement Blocker, in each case, as provided in the Purchase Contract Agreement. Each Beneficial
Holder of this Purchase Contract, by acquiring an interest in this Purchase Contract, represents
and warrants to the Company that it is in compliance with the ownership limitations of the Section
382 Ownership Blocker (which representation and warranty is part of the consideration for the
issuance of this Purchase Contract). Any purported violation of the Section&nbsp;382 Ownership Blocker
shall be subject to the consequences provided in the Purchase Contract Agreement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-12<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is hereby made to the further provisions set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-13<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and <br>Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->A-14<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">REGISTERED HOLDER(S) (as to <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;obligations of such holder(s) under the<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase Contracts evidenced hereby)<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 0px solid #000000" align="left">WILMINGTON TRUST COMPANY,<br> not individually but solely as Attorney-in-Fact of such holder(s)
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-15<!-- /Folio -->
</DIV>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">PURCHASE CONTRACT CERTIFICATE OF AUTHENTICATION OF<br> PURCHASE CONTRACT AGENT
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is one of the Purchase Contracts referred to in the within-mentioned Purchase Contract
Agreement.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase Contract Agent<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REVERSE OF PURCHASE CONTRACT&#093;
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February&nbsp;9, 2011 (as may be supplemented from time to time, the &#147;<B>Purchase Contract Agreement</B>&#148;),
among the Hovnanian Enterprises, Inc., a Delaware corporation (the &#147;<B>Company</B>&#148;), K. Hovnanian
Enterprises, Inc., a California corporation (the &#147;<B>Note Issuer</B>&#148;) and Wilmington Trust Company, as
Purchase Contract Agent (including its successors hereunder, the &#147;<B>Purchase Contract Agent</B>&#148;), as
Trustee under the Indenture and as attorney-in-fact for the Holders of Purchase Contracts from time
to time. Reference is hereby made to the Purchase Contract Agreement and supplemental agreements
thereto for a description of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms
upon which the Purchase Contracts are, and are to be, executed and delivered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract, on the Mandatory Settlement Date, a number of shares of Class&nbsp;A Common Stock
equal to the Settlement Rate, unless such Purchase Contract has settled prior to the Mandatory
Settlement Date, in either case, pursuant to the terms of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No fractional shares of Class&nbsp;A Common Stock will be issued upon settlement of Purchase
Contracts, as provided in Section&nbsp;4.13 of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts are issuable only in registered form and only in denominations of a
single Purchase Contract and any integral multiple thereof. The transfer of any Purchase Contract
will be registered and Purchase Contracts may be exchanged as provided in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts are initially being issued as part of the 7.25% Tangible Equity Units
(the &#147;<B>Units</B>&#148;) issued by the Company and the Note Issuer pursuant to the Purchase Contract
Agreement. Holders of the Units have the right to separate such Units into their constituent
parts, consisting of Separate Notes and Separate Purchase Contracts, during the times, and under
the circumstances, described in the Purchase Contract Agreement. Following separation of any Unit
into its constituent parts, the Separate Purchase Contracts are transferable independently from the
Separate Notes. In addition, Separate Purchase Contracts can be recombined with Separate Notes to
recreate Units, as provided for in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Holder of this Purchase Contract, by its acceptance hereof, authorizes the Purchase
Contract Agent to enter into and perform the Purchase Contract
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Agreement on its behalf as its attorney-in-fact and agrees to be bound by the terms and provisions thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain exceptions set forth in the Purchase Contract Agreement, the provisions of
the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Purchase Contracts, and any claim, controversy or dispute arising under or related to the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company, the Purchase Contract Agent, and any agent of the Company or the Purchase
Contract Agent, may treat the Person in whose name this Purchase Contract is registered as the
owner of the Purchase Contracts, evidenced hereby, for the purpose of performance of the Purchase
Contracts evidenced by such Purchase Contracts and for all other purposes whatsoever, and neither
the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts shall not entitle the Holder to any of the rights of a holder of the
Class&nbsp;A Common Stock or other Exchange Property, except as provided by the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract (whether or not included in a Unit) is a security governed by Article&nbsp;8
of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Purchase Contract Agreement is available for inspection at the offices of the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Purchase Contract and the
provisions of the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-3<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ABBREVIATIONS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">TEN COM:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">as tenants in common</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR>    <TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">UNIF GIFT MIN ACT:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Custodian</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(cust)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(minor)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">Under Uniform Gifts to Minors</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Act of</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">TENANT:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">as tenants by the entireties</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR>    <TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top">JT TEN:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left">as joint tenants with rights of survivorship and not as <br>
tenants in common</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additional abbreviations may also be used though not in the above list.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the within Purchase Contracts and all rights thereunder, hereby irrevocably constituting and
appointing attorney &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, to transfer said Purchase Contracts on the
books of the Company with full power of substitution in the premises.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" nowrap colspan="3"><DIV style="margin-left:0px; text-indent:-0px">
DATED:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Signature</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size:1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 0pt; border-top: 0px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"  style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Notice : The signature to this assignment must correspond with the
name as it appears upon the face of the within Purchase Contracts
in every particular, without alteration or enlargement or any
change whatsoever.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2" valign="top" align="left" nowrap>Signature Guarantee:</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>


    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SETTLEMENT INSTRUCTIONS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Holder directs that a certificate for shares of Class&nbsp;A Common Stock or other
securities, as applicable, deliverable upon settlement of the number of Purchase Contracts
evidenced by this Purchase Contract be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address indicated below unless
a different name and address have been indicated below. If shares of Class&nbsp;A Common Stock or other
securities, as applicable, are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incidental thereto, as provided in the Purchase
Contract Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature Guarantee: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(if assigned to another Person)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If shares are to be registered in the name of and delivered to a Person other than the Holder,
please (i)&nbsp;print such Person&#146;s name and address and (ii)&nbsp;provide a guarantee of your signature:
</DIV>

<DIV align="center" style="margin-top:12pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Social Security or other Taxpayer
Identification Number, if any
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"  style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ELECTION TO SETTLE EARLY
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Holder of this Purchase Contract hereby irrevocably exercises the option to
effect Early Settlement (which Early Settlement may, as applicable, be deemed to be in connection
with a Fundamental Change pursuant to Section&nbsp;4.07 of the Purchase Contract Agreement) in
accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts
evidenced by this Purchase Contract as specified below. The undersigned Holder directs that a
certificate for shares of Class&nbsp;A Common Stock or other securities, as applicable, deliverable upon
such Early Settlement be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Purchase Contract representing any Purchase Contracts evidenced
hereby as to which Early Settlement is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares of Class&nbsp;A Common
Stock or other securities, as applicable, are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident thereto, as provided in
the Purchase Contract Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px">Dated:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Signature
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signature Guarantee: <div style="border-top:1px solid #000000; width:50%;margin-left:15%"></DIV>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of Purchase Contracts evidenced hereby as to which Early Settlement is being elected:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">If shares of Class&nbsp;A Common Stock or
Purchase Contracts are to be
registered in the name of and delivered to a Person other than the
Holder, please print such Person&#146;s
name and address:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">REGISTERED HOLDER<br><br>
Please print name and address of
Registered Holder:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Social Security or other Taxpayer
Identification Number, if any
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->A-7<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt">SCHEDULE OF INCREASES OR DECREASES<BR>
IN THE PURCHASE CONTRACT
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial number of Purchase Contracts evidenced by this certificate is &#95;&#95;&#95;&#95;&#95;&#95;&#95;. The
following increases or decreases in this certificate have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Purchase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Signature of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of decrease</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Contracts evidenced</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>authorized</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>hereby following</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>signatory of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Purchase Contracts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Purchase Contracts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>such decrease or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Purchase Contract</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Agent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>ATTACHMENT 4</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">12.072% SENIOR SUBORDINATED AMORTIZING NOTES DUE 2014
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">No.<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Initial Number of Notes:<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K.&nbsp;HOVNANIAN ENTERPRISES, INC., a California corporation (the &#147;<B>Issuer</B>&#148;, which term includes
any successor under the Indenture hereinafter referred to), for value received, hereby promises to
pay to Wilmington Trust Company, as attorney-in-fact of holder(s) of the Notes evidenced hereby, or
its registered assigns (the &#147;<B>Holder</B>&#148;), the initial principal amount of $4.526049 for each of the
number of Notes set forth above, which number of Notes may from time to time be reduced or
increased as set forth in Schedule&nbsp;A hereto, as appropriate, in accordance with the terms of the
Indenture, but which number of Notes, taken together with the number of all other outstanding
Notes, shall not exceed 3,000,000 Notes at any time (as increased by a number of Notes equal to the
number of any additional Units purchased by the Underwriters pursuant to the exercise of their
option to purchase additional Units as set forth in the Underwriting Agreement), in equal quarterly
installments (except for the first such payment) (each such payment, an &#147;<B>Installment Payment</B>,&#148;
constituting a payment of interest at the rate per year of 12.072% and a partial repayment of
principal) payable on each February&nbsp;15, May&nbsp;15, August&nbsp;15 and November&nbsp;15 commencing on May&nbsp;15,
2011 (each such date, an &#147;<B>Installment Payment Date</B>&#148; and the period from, and including, February&nbsp;9,
2011 to, but excluding, the first Installment Payment Date and each subsequent full quarterly
period from, and including, an Installment Payment Date to, but excluding, the immediately
succeeding Installment Payment Date, an &#147;<B>Installment Payment Period</B>&#148;), all as set forth on the
reverse hereof, with the final Installment Payment due and payable on February&nbsp;15, 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Installment Payment on any Installment Payment Date shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If an Installment Payment for any period shorter
than a full Installment Payment Period, such Installment Payment shall be computed on the basis of
the actual number of days elapsed per 30-day month. In the event that any Installment Payment Date
is not a Business Day, then payment of the Installment Payment on such date will be made on the
next succeeding day that is a Business Day, and without any interest or other payment in respect of
any such delay. However, if such Business Day is in the next succeeding calendar year, then such
installment payment shall be made on the immediately preceding Business Day, in each case
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">with the same force and effect as if made on the date when such Installment Payment was originally due.
Installment Payments shall be paid to the Person in whose name the Note is registered, with limited exceptions, at the close of business on the
Business Day immediately preceding the related Installment Payment Date (each, a &#147;<B>Regular Record
Date</B>&#148;). If the Notes do not remain in book-entry only form, the Issuer shall have the right to
select Regular Record Dates, noticed in writing in advance, to the Trustee and Holders, which will
be more than 14&nbsp;days but less than 60&nbsp;days prior to the relevant Installment Payment Date.
Installment Payments shall be payable at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York or in Delaware; <I>provided</I>, <I>however</I>, that
payment of Installment Payments may be made at the option of the Issuer by check mailed to the
registered Holder at such address as shall appear in the Security Register or by wire transfer to
an account appropriately designated by the Holder entitled to payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or
be valid or obligatory for any purpose until the Certificate of Authentication shall have been
manually signed by or on behalf of the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which will for all purposes have the same effect as if set forth at this place.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->A-10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br> Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%"></TD>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="35%"></TD>
    <TD width="63%"></TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">
<BR>
CERTIFICATE OF AUTHENTICATION<BR>
<BR>
Wilmington Trust Company, as Trustee, certifies that this is one of the
Securities of the series designated herein referred to in the within mentioned
Indenture.<BR>
<BR>
Dated:<BR>
<BR>
WILMINGTON TRUST COMPANY, as<BR>
Trustee<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">REVERSE OF NOTE
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">12.072% Senior Subordinated Amortizing Notes due 2014
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is one of a duly authorized series of Securities of the Note Issuer designated as
its 12.072% Senior Subordinated Amortizing Notes due 2014 (herein sometimes referred to as the
&#147;<B>Notes</B>&#148;), issued under the Senior Subordinated Indenture, dated as of February&nbsp;9, 2011, among the
Issuer, Hovnanian Enterprises, Inc. (&#147;<B>Hovnanian</B>&#148;) and Wilmington Trust Company, as trustee (the
&#147;<B>Trustee</B>,&#148; which term includes any successor trustee under the Indenture) (including any provisions
of the TIA that are deemed incorporated therein) (the &#147;<B>Base Indenture</B>&#148;), as supplemented by the
First Supplemental Indenture, dated as of February&nbsp;9, 2011 (the &#147;<B>First Supplemental Indenture</B>&#148;),
among the Issuer, Hovnanian, the other Guarantors from time to time party thereto, and the Trustee
(the Base Indenture and, as supplemented by the First Supplemental Indenture, the &#147;<B>Indenture</B>&#148;), to
which Indenture reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders. The terms
of other series of Securities issued under the Indenture may vary with respect to interest rates,
issue dates, maturity, redemption, repayment, currency of payment and otherwise as provided in the
Indenture. The Indenture further provides that securities of a single series may be issued at
various times, with different maturity dates and may bear interest at different rates. This series
of Securities is limited in initial aggregate principal amount as specified in the First
Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each installment shall constitute a payment of interest (at a rate of 12.072% per annum) and a
partial repayment of principal on the Note, allocated as set forth in the schedule below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Installment Payment Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Interest</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.337631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.145703</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.326719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.126406</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.336579</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.116546</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.346737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.106388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.357201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.095924</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.367982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.085143</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.379087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.074038</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.390528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.062597</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.402314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.050811</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Installment Payment Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Interest</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.414456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.038669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.426965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.026160</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.439850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.013275</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes shall not be subject to redemption at the option of the Issuer. However, a Holder
shall have the right to require the Issuer to repurchase some or all of its Notes for cash at the
Repurchase Price per Note and on the Repurchase Date, upon the occurrence of certain events and
subject to the conditions set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is not entitled to the benefit of any sinking fund. The Indenture contains
provisions for defeasance and covenant defeasance at any time of the indebtedness on this Note upon
compliance by the Issuer with certain conditions set forth therein, which provisions apply to this
Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default with respect to the Notes shall occur and be continuing, then (unless
no declaration of acceleration or notice is required for such Event of Default) either the Trustee
or the Holders of not less than 25% in principal amount of the Notes then outstanding may declare
the aggregate principal amount of the Notes, and all interest accrued thereon, to be due and
payable immediately, in the manner, subject to the conditions and with the effect provided in the
Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture permits, with certain exceptions as therein provided, the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in principal amount of the
Securities at the time outstanding, to execute supplemental indentures for certain purposes as
described therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No provision of this Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay Installment Payments on this Note at the time,
place and rate, and in the coin or currency, herein and in the Indenture prescribed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are guaranteed, on a senior subordinated basis, by the Guarantors as set forth in
the Indenture and the Guarantee endorsed hereon.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are originally being issued as part of the 7.25% Tangible Equity Units (the &#147;<B>Units</B>&#148;)
issued by Hovnanian and the Issuer pursuant to that certain Purchase Contract Agreement, dated as
of February&nbsp;9, 2011, between Hovnanian, the Issuer and Wilmington Trust Company, as Purchase
Contract Agent, as Trustee under the Indenture and as attorney-in-fact for the holders of Purchase
Contracts from time to time (the &#147;<B>Purchase Contract Agreement</B>&#148;). Holders of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Units have the right to separate such Units into their constituent parts, consisting of Separate Purchase
Contracts (as defined in the Purchase Contract Agreement) and Separate Notes, during the times, and
under the circumstances,described in the Purchase Contract Agreement. Following separation of any Unit into its
constituent Separate Note and Separate Purchase Contract, the Separate Notes are transferable
independently from the Separate Purchase Contracts. In addition, Separate Notes can be recombined
with Separate Purchase Contracts to recreate Units, as provided for in the Purchase Contract
Agreement. Reference is hereby made to the Purchase Contract Agreement for a more complete
description of the terms thereof applicable to the Units and Notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note shall be registered on the Security register of the Issuer, upon due
presentation of this Note for registration of transfer at the office or agency of the Issuer in the
Borough of Manhattan, The City of New York or in Delaware, duly endorsed by, or accompanied by a
written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon
the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Note or Notes in authorized denominations and for a like aggregate
principal amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are initially issued in registered, global form without coupons in denominations
initially equal to $4.526049 and integral multiples in excess thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer or Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer of this
Note. No service charge shall be made for any such transfer or for any exchange of this Note as
contemplated by the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered upon the Security register for the Notes as the
absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving payment of or on
account of the principal of and, subject to the provisions of the Indenture, interest, if any, on
this Note and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This Note and the Indenture, and any claim, controversy or dispute arising under or related to
the Indenture or this Note, shall for all purposes be governed by, and construed in accordance
with, the laws of the State of New York.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms used but not defined in this Note shall have the meanings ascribed to such
terms in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No recourse shall be had for the payment of any Installment Payment on this Note, or for any
claim based hereon, or upon any obligation, covenant or agreement of the Issuer in the Indenture,
against any incorporator, stockholder, officer or director, past, present or future of the Issuer
or of any predecessor or successor, either directly or through the Issuer or of any successor,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment of penalty or otherwise; and all such personal liability is expressly released and
waived as a condition of, and as part of the consideration for, the issuance of this Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer and each Holder agrees, for United States federal income tax purposes, to treat the
Notes as indebtedness of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Note is a component of a Unit, it shall be subject to the Section&nbsp;382 Ownership
Blocker (as defined in the Purchase Contract Agreement), and any purported violation of the Section
382 Ownership Blocker shall be subject to the consequences provided in the Indenture and the
Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Note and the provisions of
the Indenture, the Indenture shall prevail.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-15<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">NOTATION ON NOTE RELATING TO GUARANTEE
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">GUARANTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned (the &#147;<B>Guarantors</B>&#148;) hereby unconditionally guarantee, jointly and severally, to
each Holder and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Issuer thereunder or under the
Notes, that (i)&nbsp;the due and punctual payment of the principal of, interest on the Notes (including,
without limitation, Installment Payments and the Repurchase Price of any Notes payable pursuant to
Article&nbsp;11 of the First Supplemental Indenture, if applicable), and all other amounts owing with
respect to the Notes, whether on the Maturity Date, on any Repurchase Date or on any Installment
Payment Date, by acceleration or otherwise, if lawful, and all other obligations of the Issuer to
the Holders or the Trustee thereunder or under the Notes shall be promptly paid in full when due or
performed in accordance with the terms of the Indenture and the Notes, including all amounts
payable to the Trustee, and (ii)&nbsp;in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same shall be promptly paid in full when due or to be
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise (each such guarantee, a &#147;<B>Guarantee</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Guarantors under this Guarantee are subordinated to all Senior
Indebtedness of a Guarantor, as set forth in Article&nbsp;7 of the First Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No past, present or future stockholder, officer, director, employee or incorporator, as such,
of any of the Guarantors shall have any liability under the Guarantee by reason of such Person&#146;s
status as stockholder, officer, director, employee or incorporator. Each Holder of a Note by
accepting a Note waives and releases all such liability. This waiver and release are part of the
consideration for the issuance of the Guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Holder of a Note by accepting a Note agrees that any Guarantor named below shall have no
further liability with respect to its Guarantee if such Guarantor otherwise ceases to be liable in
respect of its Guarantee in accordance with the terms of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication on the Notes upon which the Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Guarantee and the provisions
of the Indenture, the Indenture shall prevail.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Guarantors have caused this instrument to be executed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">AUDDIE ENTERPRISES, L.L.C.<BR>
BUILDER SERVICES NJ, L.L.C.<BR>
BUILDER SERVICES NY, L.L.C.<BR>
BUILDER SERVICES PA, L.L.C.<BR>
DULLES COPPERMINE, L.L.C.<BR>
EASTERN NATIONAL TITLE AGENCY, LLC<BR>
EASTERN TITLE AGENCY, INC.<BR>
F&#038;W MECHANICAL SERVICES, L.L.C.<BR>
FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.<BR>
FOUNDERS TITLE AGENCY, INC.<BR>
GOVERNOR&#146;S ABSTRACT CO., INC.<BR>
HOMEBUYERS FINANCIAL SERVICES, L.L.C.<BR>
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.<BR>
HOVNANIAN ENTERPRISES, INC.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC<BR>
HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP, L.L.C.<BR>

K. HOV INTERNATIONAL, INC.<BR>
K. HOV IP, INC.<BR>
K. HOV IP, II, INC.<BR>
K. HOVNANIAN ACQUISITIONS, INC.<BR>
K. HOVNANIAN AT 4S, LLC<BR>
K. HOVNANIAN AT ACQUA VISTA, LLC<BR>
K. HOVNANIAN AT ALISO, LLC<BR>
K. HOVNANIAN AT ALLENTOWN, L.L.C.<BR>
K. HOVNANIAN AT ALMOND ESTATES, LLC<BR>
K. HOVNANIAN AT ANDALUSIA, LLC<BR>
K. HOVNANIAN AT ARBOR HEIGHTS, LLC<BR>
K. HOVNANIAN AT AVENUE ONE, L.L.C.<BR>
K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT I, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT II, L.L.C.<BR>
K. HOVNANIAN AT BELLA LAGO, LLC<BR>
K. HOVNANIAN AT BERKELEY, L.L.C.<BR>
K. HOVNANIAN AT BERNARDS V, L.L.C.<BR>
K. HOVNANIAN AT BLUE HERON PINES, L.L.C.<BR>
K. HOVNANIAN AT BRANCHBURG, L.L.C.<BR>
K. HOVNANIAN AT BRIDGEPORT, INC.<BR>
K. HOVNANIAN AT BRIDGEWATER I, L.L.C.<BR>
K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.<BR>
K. HOVNANIAN AT CALABRIA, INC.<BR>
K. HOVNANIAN AT CAMDEN I, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT CAMERON CHASE, INC.<BR>
K. HOVNANIAN AT CAMP HILL, L.L.C.<BR>
K. HOVNANIAN AT CAPISTRANO, L.L.C.<BR>
K. HOVNANIAN AT CARLSBAD, LLC<BR>
K. HOVNANIAN AT CARMEL DEL MAR, INC.<BR>
K. HOVNANIAN AT CARMEL VILLAGE, LLC<BR>
K. HOVNANIAN AT CASTILE, INC.<BR>
K. HOVNANIAN AT CEDAR GROVE III, L.L.C.<BR>
K. HOVNANIAN AT CEDAR GROVE V, L.L.C.<BR>
K. HOVNANIAN AT CHAPARRAL, INC.<BR>
K. HOVNANIAN AT CHARTER WAY, LLC<BR>
K. HOVNANIAN AT CHESTER I, L.L.C.<BR>
K. HOVNANIAN AT CHESTERFIELD, L.L.C.<BR>
K. HOVNANIAN AT CIELO, L.L.C.<BR>
K. HOVNANIAN AT CLIFTON, L.L.C.<BR>
K. HOVNANIAN AT COASTLINE, L.L.C.<BR>
K. HOVNANIAN AT CORTEZ HILL, LLC<BR>
K. HOVNANIAN AT CRANBURY, L.L.C.<BR>
K. HOVNANIAN AT CRESTLINE, INC.<BR>
K. HOVNANIAN AT CURRIES WOODS, L.L.C.<BR>
K. HOVNANIAN AT DENVILLE, L.L.C.<BR>
K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT DOMINGUEZ HILLS, INC.<BR>
K. HOVNANIAN AT DOVER, L.L.C.<BR>
K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.<BR>
K. HOVNANIAN AT EASTLAKE, LLC<BR>
K. HOVNANIAN AT EDGEWATER II, L.L.C.<BR>
K. HOVNANIAN AT EDGEWATER, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH, L.L.C.<BR>
K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT ENCINITAS RANCH, LLC<BR>
K. HOVNANIAN AT EVERGREEN, L.L.C.<BR>
K. HOVNANIAN AT EWING, L.L.C.<BR>
K. HOVNANIAN AT FAIR OAKS, L.L.C.<BR>
K. HOVNANIAN AT FIDDYMENT RANCH, LLC<BR>
K. HOVNANIAN AT FIFTH AVENUE, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE I, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE II, L.L.C.<BR>
K. HOVNANIAN AT FOREST MEADOWS, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN II, L.L.C.<BR>
K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT FRESNO, LLC<BR>
K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.<BR>
K. HOVNANIAN AT GILROY, LLC<BR>
K. HOVNANIAN AT GREAT NOTCH, L.L.C.<BR>
K. HOVNANIAN AT GRIDLEY, LLC<BR>
K. HOVNANIAN AT GUTTENBERG, L.L.C.<BR>
K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT HAMBURG, L.L.C.<BR>
K. HOVNANIAN AT HAWTHORNE, L.L.C.<BR>
K. HOVNANIAN AT HAZLET, L.L.C.<BR>
K. HOVNANIAN AT HERSHEY&#146;S MILL, INC.<BR>
K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.<BR>
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.<BR>
K. HOVNANIAN AT HILLTOP, L.L.C.<BR>
K. HOVNANIAN AT HUDSON POINTE, L.L.C.<BR>
K. HOVNANIAN AT JACKSON I, L.L.C.<BR>
K. HOVNANIAN AT JACKSON, L.L.C.<BR>
K. HOVNANIAN AT JAEGER RANCH, LLC<BR>
K. HOVNANIAN AT JERSEY CITY IV, L.L.C.<BR>
K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT KEYPORT, L.L.C.<BR>
K. HOVNANIAN AT KING FARM, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA GREENS, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA, LLC<BR>
K. HOVNANIAN AT LA HABRA KNOLLS, LLC<BR>
K. HOVNANIAN AT LA LAGUNA, L.L.C.<BR>
K. HOVNANIAN AT LA PAZ, LLC<BR>
K. HOVNANIAN AT LA TERRAZA, INC.<BR>
K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.<BR>
K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC<BR>
K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.<BR>
K. HOVNANIAN AT LANDMARK, LLC<BR>
K. HOVNANIAN AT LARKSPUR, LLC<BR>
K. HOVNANIAN AT LAWRENCE V, L.L.C.<BR>
K. HOVNANIAN AT LEE SQUARE, L.L.C.<BR>
K. HOVNANIAN AT LINWOOD, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.<BR>
K. HOVNANIAN AT LIVE OAK II, LLC<BR>
K. HOVNANIAN AT LONG BRANCH I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND III, L.L.C.<BR>
K. HOVNANIAN AT MACUNGIE, L.L.C.<BR>
K. HOVNANIAN AT MAHWAH VI, INC.<BR>
K. HOVNANIAN AT MALAN PARK, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN III, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD I, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD II, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD III, L.L.C.<BR>
K. HOVNANIAN AT MANTECA, LLC<BR>
K. HOVNANIAN AT MAPLE AVENUE, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT MARLBORO VI, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VII, L.L.C.<BR>
K. HOVNANIAN AT MATSU, L.L.C.<BR>
K. HOVNANIAN AT MELANIE MEADOWS, LLC<BR>
K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MENIFEE, LLC<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MIDDLETOWN II, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE I, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE II, L.L.C.<BR>
K. HOVNANIAN AT MONROE II, INC.<BR>
K. HOVNANIAN AT MONROE IV, L.L.C.<BR>
K. HOVNANIAN AT MONROE NJ, L.L.C.<BR>
K. HOVNANIAN AT MONTVALE, LLC<BR>
K. HOVNANIAN AT MONTVALE II, L.L.C.<BR>
K. HOVNANIAN AT MOSAIC, LLC<BR>
K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MUIRFIELD, LLC<BR>
K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT NEW WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT NORTH BERGEN. L.L.C.<BR>
K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL, L.L.C.<BR>
K. HOVNANIAN AT NORTH HALEDON, L.L.C.<BR>
K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.<BR>
K. HOVNANIAN AT NORTHAMPTON, L.L.C.<BR>
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.<BR>
K. HOVNANIAN AT NORTHFIELD, L.L.C.<BR>
K. HOVNANIAN AT NORTHLAKE, INC.<BR>
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.<BR>
K. HOVNANIAN AT OCEAN WALK, INC.<BR>
K. HOVNANIAN AT OCEANPORT, L.L.C.<BR>
K. HOVNANIAN AT OLD BRIDGE, L.L.C.<BR>
K. HOVNANIAN AT OLDE ORCHARD, LLC<BR>
K. HOVNANIAN AT PACIFIC BLUFFS, LLC<BR>
K. HOVNANIAN AT PARAMUS, L.L.C.<BR>
K. HOVNANIAN AT PARK LANE, LLC<BR>
K. HOVNANIAN AT PARKSIDE, LLC<BR>
K. HOVNANIAN AT PARSIPPANY, L.L.C.<BR>
K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.<BR>
K. HOVNANIAN AT PERKIOMEN II, INC.<BR>
K. HOVNANIAN AT PHILADELPHIA II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA III, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA D&#146;ORO, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA SERENA, L.L.C.<BR>
K. HOVNANIAN AT PITTSGROVE, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.<BR>
K. HOVNANIAN AT POSITANO, LLC<BR>
K. HOVNANIAN AT PRADO, L.L.C.<BR>
K. HOVNANIAN AT RANCHO 79, LLC<BR>
K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.<BR>
K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC<BR>
K. HOVNANIAN AT RANDOLPH I, L.L.C.<BR>
K. HOVNANIAN AT RAPHO, L.L.C.<BR>
K. HOVNANIAN AT READINGTON II, L.L.C.<BR>
K. HOVNANIAN AT RED BANK, L.L.C.<BR>
K. HOVNANIAN AT RIDGEMONT, L.L.C.<BR>
K. HOVNANIAN AT RIDGESTONE, L.L.C.<BR>
K. HOVNANIAN AT RIVERBEND, LLC<BR>
K. HOVNANIAN AT RIVERCREST, LLC<BR>
K. HOVNANIAN AT RODERUCK, L.L.C.<BR>
K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.<BR>
K. HOVNANIAN AT ROWLAND HEIGHTS, LLC<BR>
K. HOVNANIAN AT SAGE, L.L.C.<BR>
K. HOVNANIAN AT SAN SEVAINE, INC.<BR>
K. HOVNANIAN AT SANTA FE SPRINGS, LLC<BR>
K. HOVNANIAN AT SANTA NELLA, LLC<BR>
K. HOVNANIAN AT SARATOGA, INC.<BR>
K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.<BR>
K. HOVNANIAN AT SAWMILL, INC.<BR>
K. HOVNANIAN AT SAYREVILLE, L.L.C.<BR>
K. HOVNANIAN AT SHELDON GROVE, LLC<BR>
K. HOVNANIAN AT SHREWSBURY, LLC<BR>
K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.<BR>
K. HOVNANIAN AT SIERRA ESTATES, LLC<BR>
K. HOVNANIAN AT SILVER SPRING, L.L.C.<BR>
K. HOVNANIAN AT SKYE ISLE, LLC<BR>
K. HOVNANIAN AT SMITHVILLE III, L.L.C.<BR>
K. HOVNANIAN AT SMITHVILLE, INC<BR>
K. HOVNANIAN AT SOMERS POINT, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.<BR>
K. HOVNANIAN AT SPARTA, L.L.C.<BR>
K. HOVNANIAN AT SPRINGCO, L.L.C.<BR>
K. HOVNANIAN AT STANTON, LLC<BR>
K. HOVNANIAN AT STATION SQUARE, L.L.C.<BR>
K. HOVNANIAN AT STONE CANYON, INC.<BR>
K. HOVNANIAN AT SUNRIDGE PARK, LLC<BR>
K. HOVNANIAN AT SUNSETS, LLC<BR>
K. HOVNANIAN AT SYCAMORE, INC.<BR>
K. HOVNANIAN AT TEANECK, L.L.C.<BR>
K. HOVNANIAN AT THE CLIFFS, LLC<BR>
K. HOVNANIAN AT THE CROSBY, LLC<BR>
K. HOVNANIAN AT THE GABLES, LLC<BR>
K. HOVNANIAN AT THE MONARCH, L.L.C.<BR>
K. HOVNANIAN AT THE PRESERVE, LLC<BR>
K. HOVNANIAN AT THOMPSON RANCH, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT THORNBURY, INC.<BR>
K. HOVNANIAN AT TRAIL RIDGE, LLC<BR>
K. HOVNANIAN AT TRENTON, L.L.C.<BR>
K. HOVNANIAN AT TROVATA, INC.<BR>
K. HOVNANIAN AT UNION TOWNSHIP I, INC.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.<BR>
K. HOVNANIAN AT UPPER MAKEFIELD I, INC.<BR>
K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.<BR>
K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.<BR>
K. HOVNANIAN AT VAIL RANCH, INC.<BR>
K. HOVNANIAN AT VALLE DEL SOL, LLC<BR>
K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT VICTORVILLE, L.L.C.<BR>
K. HOVNANIAN AT VINELAND, L.L.C.<BR>
K. HOVNANIAN AT VISTA DEL SOL, L.L.C.<BR>
K. HOVNANIAN AT WANAQUE, L.L.C.<BR>
K. HOVNANIAN AT WARMINSTER, LLC<BR>
K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT WASHINGTON, L.L.C.<BR>
K. HOVNANIAN AT WATERSTONE, LLC<BR>
K. HOVNANIAN AT WAYNE IX, L.L.C.<BR>
K. HOVNANIAN AT WAYNE, VIII, L.L.C.<BR>
K. HOVNANIAN AT WEST BRADFORD, L.L.C.<BR>
K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WEST WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT WESTSHORE, LLC<BR>
K. HOVNANIAN AT WHEELER RANCH, LLC<BR>
K. HOVNANIAN AT WILDROSE, INC.<BR>
K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.<BR>
K. HOVNANIAN AT WILLOW BROOK, L.L.C.<BR>
K. HOVNANIAN AT WINCHESTER, LLC<BR>
K. HOVNANIAN AT WOODCREEK WEST, LLC<BR>
K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WOOLWICH I, L.L.C.<BR>
K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.<BR>
K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CLASSICS CIP, L.L.C.<BR>
K. HOVNANIAN CLASSICS, L.L.C.<BR>
K. HOVNANIAN COMMUNITIES, INC.<BR>
K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.<BR>
K. HOVNANIAN COMPANIES NORTHEAST, INC.<BR>
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF MARYLAND, INC.<BR>
K. HOVNANIAN COMPANIES OF NEW YORK, INC.<BR>
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF VIRGINIA, INC.<BR>
K. HOVNANIAN COMPANIES, LLC<BR>
K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CONSTRUCTION II, INC<BR>
K. HOVNANIAN CONSTRUCTION III, INC<BR>
K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-22<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.<BR>
K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF D.C., INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.<BR>
K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN FIRST HOMES, L.L.C.<BR>
K. HOVNANIAN FLORIDA REALTY, L.L.C.<BR>
K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC<BR>
K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC<BR>
K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC<BR>
K. HOVNANIAN GREAT WESTERN HOMES, LLC<BR>
K. HOVNANIAN HOLDINGS NJ, L.L.C.<BR>
K. HOVNANIAN HOMES &#151; DFW, L.L.C.<BR>
K. HOVNANIAN HOMES AT CAMERON STATION, LLC<BR>
K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.<BR>
K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.<BR>
K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.<BR>
K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.<BR>
K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.<BR>
K. HOVNANIAN HOMES AT PRIMERA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RUSSETT, L.L.C.<BR>
K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC<BR>
K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN HOMES OF D.C., L.L.C.<BR>
K. HOVNANIAN HOMES OF DELAWARE, L.L.C.<BR>
K. HOVNANIAN HOMES OF GEORGIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF HOUSTON, L.L.C.<BR>
K. HOVNANIAN HOMES OF INDIANA, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-23<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN HOMES OF MARYLAND, L.L.C.<BR>
K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.<BR>
K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC<BR>
K. HOVNANIAN HOMES OF VIRGINIA, INC.<BR>
K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC<BR>
K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTHEAST SERVICES, L.L.C.<BR>
K. HOVNANIAN OF HOUSTON II, L.L.C.<BR>
K. HOVNANIAN OHIO REALTY, L.L.C.<BR>
K. HOVNANIAN OSTER HOMES, L.L.C.<BR>
K. HOVNANIAN PA REAL ESTATE, INC.<BR>
K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.<BR>
K. HOVNANIAN PROPERTIES OF RED BANK, INC.<BR>
K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.<BR>
K. HOVNANIAN STANDING ENTITY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT FLORIDA, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT ILLINOIS, L.L.C.<BR>
K. HOVNANIAN T&#038;C INVESTMENT, L.L.C.<BR>
K. HOVNANIAN T&#038;C MANAGEMENT CO., L.L.C.<BR>
K. HOVNANIAN TIMBRES AT ELM CREEK, LLC<BR>
K. HOVNANIAN VENTURE I, L.L.C.<BR>
K. HOVNANIAN WINDWARD HOMES, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAILEY&#146;S GLENN, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAKERSFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BEAUMONT, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HEMET, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HUNTFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT LOS BANOS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT MORENO VALLEY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT PALM SPRINGS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RENAISSANCE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK II, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN&#146;S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT VINT HILL, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS, LLC<BR>
K. HOVNANIAN&#146;S PARKSIDE AT TOWNGATE, L.L.C.<BR>
K. HOVNANIAN&#146;S PRIVATE HOME PORTFOLIO, L.L.C.<BR>
KHIP, L.L.C.<BR>
LANDARAMA, INC.<BR>
M&#038;M AT CHESTERFIELD, LLC<BR>
M&#038;M AT CRESCENT COURT, L.L.C.<BR>
M&#038;M AT WEST ORANGE, L.L.C.<BR>
M&#038;M AT WHEATENA URBAN RENEWAL, L.L.C.<BR>
MATZEL &#038; MUMFORD AT EGG HARBOR, L.L.C.<BR>
MATZEL &#038; MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.<BR>
MCNJ, INC.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF KENTUCKY, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF MICHIGAN, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES, L.L.C.<BR>
MMIP, L.L.C.<BR>
NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.<BR>
NEW LAND TITLE AGENCY, L.L.C.<BR>
PADDOCKS, L.L.C.<BR>
PARK TITLE COMPANY, LLC<BR>
PINE AYR, LLC<BR>
REAL PROPERTY HOLDING &#151; PRINCE GEORGE&#146;S COUNTY, MD, LLC<BR>
RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.<BR>
RIDGEMORE UTILITY, L.L.C.<BR>
SEABROOK ACCUMULATION CORPORATION<BR>
STONEBROOK HOMES, INC.<BR>
TERRAPIN REALTY, L.L.C.<BR>
THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.<BR>
THE MATZEL &#038; MUMFORD ORGANIZATION, INC<BR>
THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC<BR>
THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.<BR>
WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.<BR>
WASHINGTON HOMES, INC.<BR>
WESTMINSTER HOMES OF ALABAMA, L.L.C.<BR>
WESTMINSTER HOMES OF MISSISSIPPI, LLC<BR>
WESTMINSTER HOMES OF TENNESSEE, INC.<BR>
WESTMINSTER HOMES, INC.<BR>
WH LAND I, INC.<BR>
WH PROPERTIES, INC.<BR>
WH/PR LAND COMPANY, L.L.C.<BR>
WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-25<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ASSIGNMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Insert assignee&#146;s social security or tax identification number)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Insert address and zip code of assignee)<BR>
and irrevocably appoints

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">agent to transfer this Note on the books of the Issuer. The agent may substitute another to
act for him or her.

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Signature:<BR>
<BR>
Signature Guarantee:<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">(Sign exactly as your name appears on the other side of this Note)
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->A-27<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURE GUARANTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signatures must be guaranteed by an &#147;eligible guarantor institution&#148; meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (&#147;STAMP&#148;) or such other &#147;signature guarantee program&#148; as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>

    <TD colspan="4" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>

    <TD colspan="4" align="left">as Trustee&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Attest
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-28<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF REPURCHASE NOTICE&#093;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">TO:&nbsp;&nbsp;&nbsp;K. HOVNANIAN ENTERPRISES, INC.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WILMINGTON TRUST COMPANY, as Trustee
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registered Holder hereby irrevocably acknowledges receipt of a notice from K.
Hovnanian Enterprises, Inc. (the &#147;<B>Issuer</B>&#148;) regarding the right of Holders to elect to require the
Issuer to repurchase the Notes and requests and instructs the Issuer to pay, for each Note
designated below, the Repurchase Price for the such Note (determined as set forth in the
Indenture), in accordance with the terms of the Indenture and the Notes, to the registered holder
hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. The Notes shall be repurchased by the Issuer as of the Repurchase Date
pursuant to the terms and conditions specified in the Indenture.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 50%; margin-top: 6pt">Signature: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
<BR>
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE: The above signature of the Holder hereof must correspond with the name as written upon
the face of the Notes in every particular without alteration or enlargement or any change whatever.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes Certificate Number (if applicable): &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Number of Notes to be repurchased (if less than all, must be one Note or integral multiples in
excess thereof): &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Social Security or Other Taxpayer Identification Number: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->A-29<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE
A</B></div>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt">SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
initial number of Notes evidenced by this Global Note is
&#95;&#95;&#95;&#95;&#95;&#95;. <br>The following increases
or decreases in this Global Note have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount of decrease</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount of increase</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>following such</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Signature of</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>in number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>in number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>decrease (or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>authorized officer</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>increase)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>of Trustee</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-30<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT B</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF FACE OF PURCHASE CONTRACT&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;THIS SECURITY IS A GLOBAL PURCHASE CONTRACT WITHIN THE MEANING OF THE PURCHASE CONTRACT
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE &#147;<B>DEPOSITARY</B>&#148;) TO THE NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE &#038; CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &#038; CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE &#038; CO., HAS AN INTEREST HEREIN.&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP></TD>
    <TD>&nbsp;</TD>
    <TD> Include only if a Global Purchase Contract.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt">HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">PURCHASE CONTRACTS
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CUSIP No.&nbsp;442487 138<BR>
ISIN No. US4424871386<BR>
No. &#95;&#95;&#95;&#95;&#95;&#95;&#95; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#091;Initial&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> Number of Purchase Contracts: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Purchase Contract certifies that &#091;CEDE &#038; CO., as nominee of The Depository Trust
Company&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> &#091;&#95;&#95;&#95;&#95;&#95;&#95;&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP>, or its registered assigns (the &#147;<B>Holder</B>&#148;) is the
registered owner of the number of Purchase Contracts set forth above&#091;, which number may from time
to time be reduced or increased as set forth on Schedule&nbsp;A hereto, as appropriate, in accordance
with the terms of the Purchase Contract Agreement (as defined below), but which number of Purchase
Contracts, taken together with the number of all other Outstanding Purchase Contracts, shall not
exceed 3,000,000 Purchase Contracts at any time (as increased by a number equal to the aggregate
number of any additional Units purchased by the Underwriters pursuant to the exercise of their
option to purchase additional Units as set forth in the Underwriting Agreement)&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract consists of the rights of the Holder under such Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase Contract Agreement
(as defined on the reverse hereof) have the meaning set forth therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract on the Mandatory Settlement Date a number shares of Class&nbsp;A common stock, $0.01
par value (&#147;<B>Class&nbsp;A Common Stock</B>&#148;), of the Company equal to the Settlement Rate, unless such
Purchase Contract has settled prior to the Mandatory Settlement Date, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Purchase Contract is subject to the Section&nbsp;382 Ownership Blocker and Section&nbsp;382
Settlement Blocker, in each case, as provided in the Purchase Contract Agreement. Each Beneficial
Holder of this Purchase Contract, by acquiring an interest in this Purchase Contract, represents
and warrants to the Company that it is in compliance with the ownership limitations of the Section
382 Ownership Blocker (which representation and warranty is part of the consideration for the
issuance of this Purchase Contract). Any purported violation of the Section&nbsp;382 Ownership Blocker
shall be subject to the consequences provided in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is hereby made to the further provisions set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP> </TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Purchase Contract.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">** </SUP> </TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Purchase Contract.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and <br> Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->B-4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">REGISTERED HOLDER(S) (as to <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; obligations of such holder(s) under the <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
Contracts evidenced hereby)<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" align="left">WILMINGTON TRUST
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">COMPANY, not individually but&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">solely as Attorney-in-Fact of such
holder(s)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">PURCHASE CONTRACT CERTIFICATE OF AUTHENTICATION OF<BR>
PURCHASE CONTRACT AGENT
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is one of the Purchase Contracts referred to in the within-mentioned Purchase Contract
Agreement.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as
Purchase <br>&nbsp;&nbsp;&nbsp;&nbsp;Contract Agent<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->B-6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REVERSE OF PURCHASE CONTRACT&#093;
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as
of February&nbsp;9, 2011 (as may be supplemented from time to time, the &#147;<B>Purchase Contract Agreement</B>&#148;),
among Hovnanian Enterprises, Inc., a Delaware corporation (the &#147;<B>Company</B>&#148;), K. Hovnanian
Enterprises, Inc., a California corporation (the &#147;<B>Note Issuer</B>&#148;) and Wilmington Trust Company, as
Purchase Contract Agent (including its successors hereunder, the &#147;<B>Purchase Contract Agent</B>&#148;), as
Trustee under the Indenture and as attorney-in-fact for the Holders of Purchase Contracts from time
to time. Reference is hereby made to the Purchase Contract Agreement and supplemental agreements
thereto for a description of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms
upon which the Purchase Contracts are, and are to be, executed and delivered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract evidenced hereby obligates the Company to deliver to the Holder of this
Purchase Contract, on the Mandatory Settlement Date, a number of shares of Class&nbsp;A Common Stock
equal to the Settlement Rate, unless such Purchase Contract has settled prior to the Mandatory
Settlement Date, in either case, pursuant to the terms of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No fractional shares of Class&nbsp;A Common Stock will be issued upon settlement of Purchase
Contracts, as provided in Section&nbsp;4.13 of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts are issuable only in registered form and only in denominations of a
single Purchase Contract and any integral multiple thereof. The transfer of any Purchase Contract
will be registered and Purchase Contracts may be exchanged as provided in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts are initially being issued as part of the 7.25% Tangible Equity Units
(the &#147;<B>Units</B>&#148;) issued by the Company and the Note Issuer pursuant to the Purchase Contract
Agreement. Holders of the Units have the right to separate such Units into their constituent
parts, consisting of Separate Notes and Separate Purchase Contracts, during the times, and under
the circumstances, described in the Purchase Contract Agreement. Following separation of any Unit
into its constituent parts, the Separate Purchase Contracts are transferable independently from the
Separate Notes. In addition, Separate Purchase Contracts can be recombined with Separate Notes to
recreate Units, as provided for in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Holder of this Purchase Contract, by its acceptance hereof, authorizes the Purchase
Contract Agent to enter into and perform the Purchase Contract
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Agreement on its behalf as its
attorney-in-fact and agrees to be bound by the terms and provisions thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain exceptions set forth in the Purchase Contract Agreement, the provisions of
the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Purchase Contracts, and any claim, controversy or dispute arising under or related to the
Purchase Contracts, shall be governed by, and construed in accordance with, the laws of the State
of New York.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company, the Purchase Contract Agent, and any agent of the Company or the Purchase
Contract Agent, may treat the Person in whose name this Purchase Contract is registered as the
owner of the Purchase Contracts, evidenced hereby, for the purpose of performance of the Purchase
Contracts evidenced by such Purchase Contracts and for all other purposes whatsoever, and neither
the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Purchase Contracts shall not entitle the Holder to any of the rights of a holder of the
Class&nbsp;A Common Stock or other Exchange Property, except as provided by the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Purchase Contract (whether or not included in a Unit) is a security governed by Article&nbsp;8
of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Purchase Contract Agreement is available for inspection at the offices of the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Purchase Contract and the
provisions of the Purchase Contract Agreement, the Purchase Contract Agreement shall prevail.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ABBREVIATIONS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">TEN COM:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left">as tenants in common</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">UNIF GIFT MIN ACT:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Custodian</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(cust)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(minor)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left">Under Uniform Gifts to Minors</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Act of</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">TENANT:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left">as tenants by the entireties</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top">JT TEN:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left">as joint tenants with rights of
survivorship and not as tenants in common</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additional abbreviations may also be used though not in the above list.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the within Purchase Contracts and all rights thereunder, hereby irrevocably constituting and
appointing attorney&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, to transfer said Purchase Contracts on the
books of the Company with full power of substitution in the premises.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DATED: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Notice : The signature to this assignment must correspond with the
name as it appears upon the face of the within Purchase Contracts
in every particular, without alteration or enlargement or any
change whatsoever.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signature Guarantee: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->B-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SETTLEMENT INSTRUCTIONS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Holder directs that a certificate for shares of Class&nbsp;A Common Stock or other
securities, as applicable, deliverable upon settlement of the number of Purchase Contracts
evidenced by this Purchase Contract be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address indicated below unless
a different name and address have been indicated below. If shares of Class&nbsp;A Common Stock or other
securities, as applicable, are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incidental thereto, as provided in the Purchase
Contract Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature Guarantee:&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(if assigned to another Person)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If shares are to be registered in the name of and delivered to a Person other than the Holder,
please (i)&nbsp;print such Person&#146;s name and address and (ii)&nbsp;provide a guarantee of your signature:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Social Security or other Taxpayer Identification Number, if any</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ELECTION TO SETTLE EARLY
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Holder of this Purchase Contract hereby irrevocably exercises the option to
effect Early Settlement (which Early Settlement may, as applicable, be deemed to be in connection
with a Fundamental Change pursuant to Section&nbsp;4.07 of the Purchase Contract Agreement) in
accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts
evidenced by this Purchase Contract as specified below. The undersigned Holder directs that a
certificate for shares of Class&nbsp;A Common Stock or other securities, as applicable, deliverable upon
such Early Settlement be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Purchase Contract representing any Purchase Contracts evidenced
hereby as to which Early Settlement is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares of Class&nbsp;A Common
Stock or other securities, as applicable, are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident thereto, as provided in
the Purchase Contract Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signature Guarantee: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->B-11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of Purchase Contracts evidenced hereby as to which Early Settlement is being elected:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">If shares of Class&nbsp;A Common Stock or
Purchase Contracts are to be
registered in the name of and delivered to a Person other than the
Holder, please print such Person&#146;s
name and address:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">REGISTERED HOLDER<br><br>
Please print name and address of
Registered Holder:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Social Security or other Taxpayer Identification Number, if any</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-12<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#091;SCHEDULE OF INCREASES OR DECREASES<BR>
IN THE PURCHASE CONTRACT&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial number of Purchase Contracts evidenced by this certificate is &#95;&#95;&#95;&#95;&#95;&#95;&#95;. The
following increases or decreases in this certificate have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Number of Purchase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Signature of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of decrease</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Contracts evidenced</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>authorized</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>in number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>in number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>hereby following</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>signatory of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Purchase Contracts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Purchase Contracts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>such decrease or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Purchase Contract</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Agent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Purchase Contract.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">** </SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if not a Global Purchase Contract.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->B-13<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.27
<SEQUENCE>3
<FILENAME>y89643exv4w27.htm
<DESCRIPTION>EX-4.27
<TEXT>
<HTML>
<HEAD>
<TITLE>exv4w27</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;4.27</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXECUTION VERSION</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>K. HOVNANIAN ENTERPRISES, INC.<BR>
HOVNANIAN ENTERPRISES, INC.<BR>
AND THE OTHER GUARANTORS PARTY HERETO</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>12.072% Senior Subordinated Amortizing Notes due 2014</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>First Supplemental Indenture</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Dated as of February&nbsp;9, 2011<BR>
Supplement to Indenture Dated as of February&nbsp;9, 2011</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>WILMINGTON TRUST COMPANY,</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>as Trustee</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
<DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 6pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center">ARTICLE 1<BR><FONT style="FONT-variant: SMALL-CAPS">Scope of Supplemental Indenture; General</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;1.01. <I>Scope of Supplemental Indenture; General</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 2<BR><FONT style="FONT-variant: SMALL-CAPS">Certain Definitions</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;2.01. <I>Certain Definitions</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;2.02<I>. Rules of Construction</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 3<BR><FONT style="FONT-variant: SMALL-CAPS">Covenants</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.01<I>. Existence</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.02<I>. Payment of Taxes and Other Claims</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.03<I>. Maintenance of Properties and Insurance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.04<I>. Limitations on Senior Subordinated Indebtedness</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.05<I>. Annual Reports</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.06<I>. Guarantees by Subsidiaries</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.07<I>. Limitations on Mergers, Consolidations and Sales of Assets</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;3.08<I>. Applicability of Covenants Contained in the Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 4<BR><FONT style="FONT-variant: SMALL-CAPS">Defaults and Remedies</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;4.01. <I>Amendments to Article&nbsp;Five of the Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;4.02<I>. Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;4.03<I>. Notice of Defaults</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;4.04. <I>Additional Provisions Related to Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 5<BR><FONT style="FONT-variant: SMALL-CAPS">Guarantees; Release of Guarantor</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.01<I>. Base Indenture Guarantee</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.02<I>. Unconditional Guarantee</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.03<I>. Obligations of Each Guarantor Unconditional</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.04<I>. Release of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.05<I>. Execution and Delivery of Guarantee</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.06<I>. Limitation on Guarantor Liability</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="0" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.07<I>. Article&nbsp;5 Not to Prevent Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.08<I>. Waiver by the Guarantors</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.09<I>. Subrogation and Contribution</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;5.10<I>. Stay of Acceleration</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"> Section&nbsp;5.11. <I>Guarantors as &#147;obligors&#148; for Provisions Included in the Indenture Pursuant to the TIA</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 6<BR><FONT style="FONT-variant: SMALL-CAPS">Subordination of Notes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.01<I>. Applicability of Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.02<I>. Notes Subordinated to Senior Indebtedness of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.03<I>. Issuer Not To Make Payments with Respect to Notes in Certain Circumstances</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.04<I>. Notes Subordinated to Prior Payment of All Senior Indebtedness of the Issuer on Dissolution, Winding Up, Liquidation or Reorganization of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.05<I>. Holders to be Subrogated to Rights of Holders of Senior Indebtedness of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.06<I>. Obligations of the Issuer Unconditional</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.07<I>. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.08<I>. Application by Trustee of Monies Deposited With it</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.09<I>. Subordination Rights Not Impaired by Acts or Omissions of Issuer or Holders of Senior Indebtedness of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.10<I>. Holders Authorize Trustee to Effectuate Subordination of Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.11<I>. Right of Trustee to Hold Senior Indebtedness of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.12<I>. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.13<I>. Article&nbsp;6 Not to Prevent Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;6.14<I>. Officers&#146; Certificate</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 7<BR><FONT style="FONT-variant: SMALL-CAPS">Subordination of Guarantees</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.01<I>. Applicability of Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.02<I>. Guarantees Subordinated to Senior Indebtedness of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.03<I>. Guarantor Not to Make Payments with Respect to Notes in Certain Circumstances</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.04<I>. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of a Guarantor on Dissolution, Winding Up, Liquidation or Reorganization of such Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->ii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="0" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.05<I>. Holders to be Subrogated to Rights of Holders of Senior Indebtedness of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.06<I>. Obligations of the Guarantors Unconditional</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.07<I>. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.08. <I>Application by Trustee of Monies Deposited With it</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.09<I>. Subordination Rights Not Impaired by Acts or Omissions of Any Guarantor or Holders of Senior Indebtedness of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.10<I>. Holders Authorize Trustee to Effectuate Subordination of Guarantees</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.11<I>. Right of Trustee to Hold Senior Indebtedness of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.12<I>. Trustee Not Fiduciary for Holders of Senior Indebtedness of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.13<I>. Article&nbsp;7 Not to Prevent Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.14<I>. Subordination of Indebtedness Owed by the Issuer to a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;7.15<I>. Officers&#146; Certificate</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 8<BR><FONT style="FONT-variant: SMALL-CAPS">Defeasance</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;8.01<I>. Defeasance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;8.02. <I>Additional Provisions to Survive Legal Defeasance and Discharge</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;8.03<I>. Provisions to Survive Covenant Defeasance and Discharge</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;8.04<I>. Additional Covenant Defeasance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;8.05<I>. Section&nbsp;10.4</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 9<BR><FONT style="FONT-variant: SMALL-CAPS">The Notes</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.01<I>. Form of Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.02. <I>Installment Payments</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.03<I>. Section&nbsp;382 Ownership Blocker</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.04. <I>Maturity Date</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.05<I>. Depositary</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;9.06<I>. Certificated Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 10<BR><FONT style="FONT-variant: SMALL-CAPS">Redemption</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;10.01<I>. Article&nbsp;Twelve of the Base Indenture Inapplicable</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->iii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="0" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center">ARTICLE 11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><FONT style="FONT-variant: SMALL-CAPS">Repurchase of Notes at the Option of the Holder</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.01. <I>Offer to Repurchase</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.02<I>. Early Mandatory Settlement Notice</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.03<I>. Procedures for Exercise</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.04<I>. Withdrawal of Repurchase Notice</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.05<I>. Effect of Repurchase</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;11.06<I>. No Sinking Fund</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 12<BR><FONT style="FONT-variant: SMALL-CAPS">Tax Treatment</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;12.01<I>. Tax Treatment</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 13<BR><FONT style="FONT-variant: SMALL-CAPS">Amendments, Supplements And Waivers</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;13.01<I>. Amendments, Supplements and Waivers</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;13.02<I>. Payments for Consents</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 14<BR><FONT style="FONT-variant: SMALL-CAPS">Release Of Issuer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;14.01<I>. Release of Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ARTICLE 15<BR><FONT style="FONT-variant: SMALL-CAPS">Miscellaneous</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
<TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.01<I>. GOVERNING LAW</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.02<I>. No Adverse Interpretation of Other Agreements</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.03<I>. Successors and Assigns</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.04<I>. Counterparts</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.05<I>. Severability</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.06. <I>Effect of Headings</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.07. <I>Conflict of Any Provision of Indenture with TIA</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Section&nbsp;15.08. <I>Ratification of Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">SCHEDULE:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Guarantors
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">EXHIBIT:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A. Form of Note
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">B. Form of Supplemental Indenture
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->iv<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST SUPPLEMENTAL INDENTURE dated as of February&nbsp;9, 2011 (&#147;<B>Supplemental Indenture</B>&#148;) by and
among K. HOVNANIAN ENTERPRISES, INC., a California corporation (the &#147;<B>Issuer</B>&#148;), HOVNANIAN
ENTERPRISES, INC., a Delaware Corporation (&#147;<B>Hovnanian</B>&#148;), each of the Guarantors (as defined herein)
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the &#147;<B>Trustee</B>&#148;),
supplementing the Senior Subordinated Indenture dated as of February&nbsp;9, 2011 by and among the
Issuer, Hovnanian and Wilmington Trust Company (the &#147;<B>Base Indenture</B>&#148; and, as supplemented by this
Supplemental Indenture, the &#147;<B>Indenture</B>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">RECITALS OF THE ISSUER:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Hovnanian and the Issuer have duly authorized the execution and delivery of the Base
Indenture to provide for the issuance from time to time of the Issuer&#146;s unsecured senior
subordinated debt securities (the &#147;<B>Securities</B>&#148;) and the Guarantees thereof to be issued in one or
more series as in the Indenture provided;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer, Hovnanian and the other Guarantors desire and have requested the Trustee
to join them in the execution and delivery of this Supplemental Indenture in order to establish and
provide for the issuance by the Issuer of a series of Securities designated as its 12.072% Senior
Subordinated Amortizing Notes due 2014 (the &#147;<B>Notes,</B>&#148; and each $4.526049 of initial principal amount
of such Securities, a &#147;<B>Note</B>&#148;), substantially in the form attached hereto as Exhibit&nbsp;A and
guaranteed by Hovnanian and the other Guarantors (as defined herein), on the terms set forth
herein;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer now wishes to issue Notes in an initial aggregate principal amount of
$13,578,147 (as increased by an amount equal to the Initial Principal Amount <I>multiplied by </I>the
number of any additional Units purchased by the Underwriters pursuant to the exercise of their
option to purchase additional Units as set forth in the Underwriting Agreement), each Note
initially to be issued as a component of the Units (as defined herein) being issued on the date
hereof by Hovnanian and the Issuer pursuant to the Purchase Contract Agreement, dated as of
February&nbsp;9, 2011, among Hovnanian, the Issuer and Wilmington Trust Company, as Purchase Contract
Agent, as Trustee and as attorney-in-fact for the holders of Purchase Contracts from time to time
(the &#147;<B>Purchase Contract Agreement</B>&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Section&nbsp;8.1 of the Base Indenture provides that a supplemental indenture may be
entered into without the consent of the holders of any Securities by the Issuer, Hovnanian and the
other Guarantors, and the Trustee for such purpose provided certain conditions are met;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the conditions set forth in the Base Indenture for the execution and delivery of this
Supplemental Indenture have been complied with; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the
Issuer, Hovnanian and the other Guarantors, and the Trustee, in accordance with its terms, and a
valid amendment of, and supplement to, the Base Indenture have been done;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of the premises and the purchase and acceptance of the Notes by the Holders
thereof, the Issuer, Hovnanian and the other Guarantors mutually covenant and agree with the
Trustee, for the equal and ratable benefit of the Holders of the Notes, that the Base Indenture is
supplemented and amended, to the extent expressed herein, as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 1<BR>
<FONT style="FONT-variant: SMALL-CAPS">Scope of Supplemental Indenture; General</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.01. <I>Scope of Supplemental Indenture; General. </I>This Supplemental Indenture
supplements, and to the extent inconsistent therewith, replaces the provisions of the Base
Indenture, to which provisions reference is hereby made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The changes, modifications and supplements to the Base Indenture effected by this Supplemental
Indenture shall be applicable only with respect to, and govern the terms of, the Notes (which shall
be initially in the aggregate principal amount of $13,578,147 (as increased by an amount equal to
the Initial Principal Amount <I>multiplied by </I>the number of any additional Units purchased by the
Underwriters pursuant to the exercise of their option to purchase additional Units as set forth in
the Underwriting Agreement)) and shall not apply to any other Securities that may be issued under
the Indenture unless a supplemental indenture with respect to such other Securities specifically
incorporates such changes, modifications and supplements. Pursuant to this Supplemental Indenture,
there is hereby created and designated a series of Securities under the Indenture entitled &#147;12.072%
Senior Subordinated Amortizing Notes due 2014.&#148; The Notes may be issued in accordance with the
provisions of Article&nbsp;Two of the Base Indenture, as modified pursuant to the terms hereof. The
Notes shall be guaranteed by the Guarantors as provided in such form and the Indenture.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 2<BR>
<FONT style="FONT-variant: SMALL-CAPS">Certain Definitions</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.01. <I>Certain Definitions. </I>Section&nbsp;1.1 of the Base Indenture is hereby amended by
adding the following definitions in their proper alphabetical order which, in the event of a
conflict with the definition of terms in the Base Indenture, shall govern. Capitalized terms used
but not defined herein have the meanings ascribed to such terms in the Base Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Affiliate</B>&#148; means, when used with reference to a specified Person, any Person directly or
indirectly controlling, or controlled by or under direct or indirect common control with the Person
specified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Applicable Debt</B>&#148; means all Indebtedness of Hovnanian or the Issuer under the Issuer&#146;s or
Hovnanian&#146;s senior notes and senior subordinated notes outstanding on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Attributable Debt</B>&#148; means, with respect to any Capitalized Lease Obligations, the capitalized
amount thereof determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bankruptcy Law</B>&#148; means title 11 of the United States Code, as amended, or any similar federal
or state law for the relief of debtors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Base Indenture</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Business Day</B>&#148; means any day other than a Saturday, Sunday or any day on which banking
institutions in New York, New York are authorized or obligated by applicable law or executive order
to close or be closed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Capitalized Lease Obligations</B>&#148; of any Person means the obligations of such Person to pay rent
or other amounts under a lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of such obligations will be the capitalized amount thereof
determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Capital Stock</B>&#148; means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person&#146;s capital stock or
other equity interests, and options, rights or warrants to purchase such capital stock or other
equity interests, whether now outstanding or issued after the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Certificated Note</B>&#148; means a Note definitive registered form without interest coupons.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Certificate of Incorporation</B>&#148; means the Certificate of Incorporation of the Issuer as in
effect on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Class&nbsp;A Common Stock</B>&#148; means the Class&nbsp;A common stock, par value $0.01 per share, of Hovnanian
as it existed on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>close of business</B>&#148; means 5:00 p.m. (New York City time).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Component Note</B>&#148; means a Note in global form and attached to a Global Unit that (a)&nbsp;shall
evidence the number of Notes specified therein that are components of the Units evidenced by such
Global Unit, (b)&nbsp;shall be registered on the security register for the Notes in the name of
Wilmington Trust Company, as attorney-in-fact of holder(s) of the Units of which such Notes form a
part, and (c)&nbsp;shall be held by the Purchase Contract Agent as attorney-in-fact for such holder(s),
together with the Global Unit, as custodian of such Global Unit for the Depositary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>control</B>&#148; when used with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms &#147;<B>controlling</B>&#148; and &#147;<B>controlled</B>&#148; have meanings
correlative to the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Currency Agreement</B>&#148; of any Person means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Custodian</B>&#148; means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Default</B>&#148; means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>DTC</B>&#148; has the meaning ascribed to such term in Section&nbsp;9.05 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Date</B>&#148; has the meaning ascribed to it in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Notice</B>&#148; has the meaning ascribed to it in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Rate</B>&#148; has the meaning ascribed to it in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Early Mandatory Settlement Right</B>&#148; has the meaning ascribed to it in the Purchase Contract
Agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Event of Default</B>&#148; means any event specified as such in Section&nbsp;4.02(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Exchange Act</B>&#148; means the Securities Exchange Act of 1934, as amended, and any statute
successor thereto, in each case as amended from time to time, together with the rules and
regulations promulgated thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Excess Equity-Linked Securities</B>&#148; has the meaning ascribed to it in the Purchase Contract
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fair Market Value</B>&#148; means, with respect to any asset, the price (after taking into account any
liabilities relating to such assets) that would be negotiated in an arm&#146;s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction, as such price is determined in good faith by the Board of
Directors of Hovnanian, as evidenced by a resolution of such Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fundamental Change</B>&#148; has the meaning ascribed to such term in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>GAAP</B>&#148; means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Note</B>&#148; has the meaning ascribed to such term in Section&nbsp;9.01(b) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Note Holder</B>&#148; has the meaning ascribed to such term in Section&nbsp;9.05 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Unit</B>&#148; has the meaning ascribed to such term in the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>guarantee</B>&#148; means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">securities or services, to take-or-pay, or to maintain financial statement conditions or
otherwise); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;entered into for purposes of assuring in any other manner the obligee of such Indebtedness
of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in
part;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided </I>that the term &#147;<B>guarantee</B>&#148; does not include endorsements for collection or deposit in the
ordinary course of business. The term &#147;<B>guarantee</B>&#148; used as a verb has a corresponding meaning.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantee</B>&#148; has the meaning ascribed to it in Section&nbsp;5.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantee Initial Period</B>&#148; has the meaning ascribed to it in Section&nbsp;7.03(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantee Notation</B>&#148; means a Guarantee Notation substantially in the form included in the form
of Note attached as Exhibit&nbsp;A hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantee Payment Blockage Period</B>&#148; has the meaning ascribed to it in Section&nbsp;7.03(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantors</B>&#148; means (a)&nbsp;initially, Hovnanian and each of the other Guarantors signatory hereto
as set forth on Schedule&nbsp;1 hereto, and (b)&nbsp;each of Hovnanian&#146;s Subsidiaries that executes a
supplemental indenture in the form of Exhibit&nbsp;B to this Supplemental Indenture providing for the
guarantee of the payment of the Notes, or any successor obligor under its Guarantee pursuant to
Article&nbsp;Nine of the Base Indenture (as modified by Section&nbsp;3.07), in each case, unless and until
such Guarantor is released from its Guarantee pursuant to the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Holder</B>&#148;, &#147;<B>Holder of Securities</B>&#148;, &#147;<B>securityholder</B>&#148; and similar terms mean in the case of a
Note, the Person in whose name such Note is registered in the books of the security register for
the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Hovnanian</B>&#148; has the meaning ascribed to it in the preamble hereof and shall also refer to any
successor under the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Indebtedness</B>&#148; of any Person means, without duplication,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;any liability of such Person (i)&nbsp;for borrowed money or under any reimbursement
obligation relating to a letter of credit or other similar instruments (other than standby letters
of credit or similar instruments issued for the benefit of, or surety, performance, completion or
payment bonds, earnest money notes or similar purpose undertakings or indemnifications issued by,
such Person in the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ordinary course of business), (ii)&nbsp;evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation) given in connection with the acquisition of any businesses,
properties or assets of any kind or with services incurred in connection with capital expenditures
(other than any obligation to pay a contingent purchase price which, as of the date of incurrence
thereof is not required to be recorded as a liability in accordance with GAAP), or (iii)&nbsp;in respect
of Capitalized Lease Obligations (to the extent of the Attributable Debt in respect thereof);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any Indebtedness of others that such Person has guaranteed to the extent of the
guarantee, <I>provided</I>, <I>however</I>, that Indebtedness of the Issuer or any Guarantor will not include the
obligations of the Issuer or such Guarantor under warehouse lines of credit of Mortgage
Subsidiaries to repurchase mortgages at prices no greater than 98% of the principal amount thereof;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;to the extent not otherwise included, the obligations of such Person under Currency
Agreements or Interest Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such agreements, in accordance
with GAAP; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;all Indebtedness of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided </I>that Indebtedness shall not include accounts payable, liabilities to trade creditors of
such Person or other accrued expenses arising in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be (i)&nbsp;the outstanding balance at such date of all
unconditional obligations as described above, net of any unamortized discount to be accounted for
as Interest Expense, in accordance with GAAP, (ii)&nbsp;the maximum liability of such Person for any
contingent obligations under clause (a)&nbsp;above at such date, net of an unamortized discount to be
accounted for as Interest Expense in accordance with GAAP, and (iii)&nbsp;in the case of clause (d)
above, the lesser of (x)&nbsp;the Fair Market Value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (y)&nbsp;the amount of the Indebtedness
secured.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Indenture</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Initial Period</B>&#148; has the meaning ascribed to it in Section&nbsp;6.03(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Initial Principal Amount</B>&#148; means $4.526049 per Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Installment Payment</B>&#148; has the meaning ascribed to it in Section&nbsp;9.02(a).
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Installment Payment Date</B>&#148; means each February&nbsp;15, May&nbsp;15, August&nbsp;15 and November&nbsp;15,
commencing on May&nbsp;15, 2011 and ending on the Maturity Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Installment Payment Period</B>&#148; means the period from, and including, the Issue Date to, but
excluding, the first Installment Payment Date and each subsequent full quarterly period from, and
including, an Installment Payment Date to, but excluding, the immediately succeeding Installment
Payment Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Expense</B>&#148; of any Person for any period means, without duplication, the aggregate
amount of (a)&nbsp;interest which, in conformity with GAAP, would be set opposite the caption &#147;interest
expense&#148; or any like caption on an income statement for such Person (including, without limitation,
imputed interest included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers&#146; acceptance financing, the net
costs (but reduced by net gains) associated with Currency Agreements and Interest Protection
Agreements, amortization of other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest and other charges amortized to cost of sales)), and (b)&nbsp;all interest
actually paid by the Issuer or any Guarantor under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination thereof) of any Person
other than the Issuer or any Guarantor during such period; <I>provided </I>that Interest Expense shall
exclude any expense associated with the complete write-off of financing fees and expenses in
connection with the repayment of any Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Incurred</B>&#148; of any Person for any period means, without duplication, the aggregate
amount of (a)&nbsp;Interest Expense and (b)&nbsp;all capitalized interest and amortized debt issuance costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Protection Agreement</B>&#148; of any Person means any interest rate swap agreement, interest
rate collar agreement, option or futures contract or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries against fluctuations in interest rates
with respect to Indebtedness permitted to be incurred under the indentures governing the Applicable
Debt then outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issue Date</B>&#148; means February&nbsp;9, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issuer</B>&#148; has the meaning ascribed to it in the preamble hereof and shall also refer to any
successor obligor under the Indenture.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Lien</B>&#148; means, with respect to any Property, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such Property. For purposes of this definition, a
Person shall be deemed to own, subject to a Lien, any Property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such Property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Maturity Date</B>&#148; means February&nbsp;15, 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Mortgage Subsidiary</B>&#148; means any Subsidiary of Hovnanian substantially all of whose operations
consist of the mortgage lending business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Non-Payment Default</B>&#148; means any event (other than a Payment Default), the occurrence of which
entitles one or more Persons to accelerate the maturity of any Senior Indebtedness of the Issuer or
any Senior Indebtedness of a Guarantor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Non-Recourse Indebtedness</B>&#148; with respect to any Person means Indebtedness of such Person for
which (a)&nbsp;the sole legal recourse for collection of principal and interest on such Indebtedness is
against the specific property identified in the instruments evidencing or securing such
Indebtedness and such property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90&nbsp;days after the acquisition of such property and (b)&nbsp;no other
assets of such Person may be realized upon in collection of principal or interest on such
Indebtedness. Indebtedness that is otherwise Non-Recourse Indebtedness will not lose its character
as Non-Recourse Indebtedness because there is recourse to the borrower, any guarantor or any other
Person for (i)&nbsp;environmental warranties and indemnities, or (ii)&nbsp;indemnities for and liabilities
arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, insurance
and condemnation proceeds and other sums actually received by the borrower from secured assets to
be paid to the lender, waste and mechanics&#146; liens.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Note</B>&#148; and &#147;<B>Notes</B>&#148; have the respective meanings ascribed to such terms in the preamble hereof
and includes, for the avoidance of doubt, both Separate Notes and Notes that constitute part of a
Unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Paying Agent</B>&#148; refers to a Person engaged to perform the obligations of the Trustee in respect
of payments made or funds held hereunder in respect of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Payment Blockage Period</B>&#148; has the meaning ascribed to it in Section&nbsp;6.03(c).
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Payment Default</B>&#148; means any default in the payment of principal of or interest on any Senior
Indebtedness of the Issuer or any Senior Indebtedness of a Guarantor beyond any applicable grace
period with respect thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Property</B>&#148; of any Person means all types of real, personal, tangible, intangible or mixed
property owned by such Person, whether or not included in the most recent consolidated balance
sheet of such Person and its Subsidiaries under GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract</B>&#148; means a prepaid stock purchase contract obligating Hovnanian to deliver
shares of Class&nbsp;A Common Stock on the terms and subject to the conditions set forth in the Purchase
Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract Agent</B>&#148; means Wilmington Trust Company until a successor Purchase Contract
Agent shall have become such pursuant to the applicable provisions of the Purchase Contract
Agreement, and thereafter &#147;<B>Purchase Contract Agent</B>&#148; shall mean such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Contract Agreement</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Registrar</B>&#148; means a Person engaged to maintain the security register for the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Regular Record Date</B>&#148; means, with respect to any Installment Payment Date (a)&nbsp;the close of
business on the Business Day immediately preceding such Installment Payment Date, or (b)&nbsp;if the
Notes are not then in book-entry form, a date selected by the Issuer, and notified in writing, in
advance, to the Trustee and Holders, which date shall be more than 14&nbsp;days but less than 60&nbsp;days
prior to such Installment Payment Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Date</B>&#148; shall be a date specified by Hovnanian in the Early Mandatory Settlement
Notice, which date shall be at least 20 but not more than 45 Business Days following the date of
the Early Mandatory Settlement Notice and which may or may not fall on the Early Mandatory
Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Notice</B>&#148; means a notice in the form entitled &#147;Form of Repurchase Notice&#148; on the
reverse side of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Price</B>&#148; means, with respect to a Note to be repurchased pursuant to Article&nbsp;11, an
amount equal to the principal amount of such Note as of the Repurchase Date, <I>plus </I>accrued and
unpaid interest, if any, on such principal amount from, and including, the most recent Installment
Payment Date (or, if none, from, and including, the Issue Date) to, but excluding, such Repurchase
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date, calculated at a rate of 12.072% per annum; <I>provided </I>that, if the Notes are Certificated
Notes and the Repurchase Date falls after a Regular Record Date and on or prior to the immediately
succeeding Installment Payment Date, the Installment Payment payable on such Installment Payment
Date will be paid on such Installment Payment Date to the Holder as of such Regular Record Date and
shall not be included in the Repurchase Price per Note.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Right</B>&#148; has the meaning ascribed to it in Section&nbsp;11.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Securities</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Senior Indebtedness</B>&#148; of any Person means:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;all Indebtedness of such Person;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;lease obligations of such Person;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;all Indebtedness, secured or unsecured, in connection with the acquisition or
improvement of any Property or asset or acquisition of any business by such Person;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;all Indebtedness secured by a mortgage, Lien, pledge, charge or encumbrance upon
Property owned by such Person and all Indebtedness secured in the manner specified in this clause
(d)&nbsp;even if such Person has not assumed or become liable for the payment thereof;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;all customer deposits held in escrow accounts by such Person pending closing of the
related sales;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;all Indebtedness of such Person created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person or otherwise
representing the deferred and unpaid balance of the purchase price of any such Property, including
all Indebtedness created or arising in the manner specified in this clause (f)&nbsp;even though the
rights and remedies of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such Property;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;guarantees by such Person, direct or indirect, of any Indebtedness of another Person
of the types referred to in clauses (a)&nbsp;through (f); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;contingent obligations of such Person in respect of, or to purchase or otherwise
acquire or be responsible or liable for through the purchase of products or services irrespective
of whether such products are delivered or such services are rendered, any such Indebtedness
referred to in clauses (a)&nbsp;through (f);
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">which Indebtedness, lease obligation, deposit, guarantee or contingent obligation such Person has
directly or indirectly created, incurred, assumed, guaranteed or otherwise become liable or
responsible for, whether currently outstanding or hereafter created. All references to Indebtedness
include any Indebtedness that renews, extends, refunds, amends or modifies any such Indebtedness;
<I>provided</I>, <I>however, </I>that, with respect to the Issuer and the Guarantors, &#147;<B>Senior Indebtedness</B>&#148; does
not include, without limitation:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Notes and the Guarantees;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Issuer&#146;s 8&#8542;% Senior Subordinated Notes due 2012 and related senior
subordinated guarantees;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Issuer&#146;s 7&#190;% Senior Subordinated Notes due
2013 and related senior subordinated guarantees;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>accounts payable or any other indebtedness to trade creditors created
or assumed by the Issuer or a Guarantor in the ordinary course of business in
connection with the obtaining of materials or services;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any liability for federal, state or local taxes owed or owing by the
Issuer or a Guarantor;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all obligations of the Issuer or a Guarantor (other than Hovnanian)
owed to Hovnanian or any Subsidiary of Hovnanian; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any Indebtedness as to which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
Indebtedness is on a parity with or otherwise not superior in right of payment to the
Notes or the Guarantees, as applicable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Separate Note</B>&#148; means a Note that has been separated from a Unit in accordance with the terms
of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Separate Purchase Contract</B>&#148; means a Purchase Contract that has been separated from a Unit in
accordance with the terms of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Significant Subsidiary</B>&#148; means any Subsidiary of Hovnanian which would constitute a
&#147;significant subsidiary&#148; as defined in Rule&nbsp;1-02(w)(1) or (2)&nbsp;of Regulation&nbsp;S-X under the
Securities Act and the Exchange Act as in effect on the Issue Date.
</DIV>

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</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Subsidiary</B>&#148; of any Person means any corporation or other entity of which a majority of the
Capital Stock having ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions of such corporation or other entity is at the time directly or
indirectly owned or controlled by such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Successor</B>&#148; has the meaning ascribed to it in Section&nbsp;3.07(b)(i).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Supplemental Indenture</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>TIA</B>&#148; means the Trust Indenture Act of 1939, as amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Trustee</B>&#148; means the party named in the preamble hereof until a successor replaces such party
in accordance with the applicable provisions of the Indenture and thereafter means the successor
serving hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Underwriters</B>&#148; has the meaning ascribed to it in the Underwriting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Underwriting Agreement</B>&#148; means the Underwriting Agreement, dated as of February&nbsp;3, 2011,
between Hovnanian, the Issuer, the Guarantors named in Schedule&nbsp;B thereto and the Underwriters
named therein, relating to the Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Unit</B>&#148; means the collective rights of a Holder of a 7.25% Tangible Equity Unit, with a stated
amount of $25, issued by Hovnanian and the Issuer pursuant to the Purchase Contract Agreement, each
consisting of a single Purchase Contract and a single Note prior to separation or subsequent to
recreation thereof pursuant to the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.02<I>. Rules of Construction. </I>Unless the context otherwise requires or except as
otherwise expressly provided, an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 3<BR>
<FONT style="FONT-variant: SMALL-CAPS">Covenants</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.01<I>. Existence. </I>Hovnanian and the Issuer shall each do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and the existence of
each of the other Guarantors in accordance with their respective organizational documents, and the
material rights, licenses and franchises of Hovnanian, the Issuer and each other Guarantor;
<I>provided </I>that
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hovnanian and the Issuer are not required to preserve any such right, license or franchise, or
the existence of any other Guarantor, if the maintenance or preservation thereof is no longer
desirable in the conduct of the business of Hovnanian, the Issuer and the other Guarantors taken as
a whole; and <I>provided further </I>that this Section&nbsp;3.01 shall not prohibit any transaction otherwise
permitted by Section&nbsp;3.07.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.02<I>. Payment of Taxes and Other Claims. </I>Hovnanian shall pay or discharge, and cause
each of its Subsidiaries to pay or discharge before the same become delinquent (a)&nbsp;all material
taxes, assessments and governmental charges levied or imposed upon Hovnanian or any Subsidiary or
its income or profits or property, and (b)&nbsp;all material lawful claims for labor, materials and
supplies that, if unpaid, might by law become a Lien upon the property of Hovnanian or any
Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability or
validity of which is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.03<I>. Maintenance of Properties and Insurance. </I>(a)&nbsp;Hovnanian shall cause all
properties used or useful in the conduct of its business or the business of any other Guarantor to
be maintained and kept in good condition, repair and working order as in the judgment of Hovnanian
may be necessary so that the business of Hovnanian and the other Guarantors may be properly and
advantageously conducted at all times; <I>provided </I>that nothing in this Section prevents Hovnanian or
any other Guarantor from discontinuing the use, operation or maintenance of any of such properties
or disposing of any of them, if such discontinuance or disposal is, in the judgment of Hovnanian,
desirable in the conduct of the business of Hovnanian and the other Guarantors taken as a whole.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Hovnanian shall provide or cause to be provided, for itself and the other Guarantors,
insurance (including appropriate self-insurance) against loss or damage of the kinds customarily
insured against by corporations similarly situated and owning like properties, including, but not
limited to, products liability insurance and public liability insurance, with reputable insurers,
in such amounts, with such deductibles and by such methods as are customary for corporations
similarly situated in the industry in which Hovnanian and the other Guarantors are then conducting
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.04<I>. Limitations on Senior Subordinated Indebtedness. </I>Hovnanian and the Issuer
shall not, and shall not cause or permit any other Guarantor to, incur any Indebtedness that is
subordinate in right of payment to any Senior Indebtedness of the Issuer or of a Guarantor, as the
case may be, unless such Indebtedness is <I>pari passu </I>with, or subordinated in right of payment to,
the Notes or any Guarantee; <I>provided </I>that the foregoing limitation shall not
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">apply to distinctions between categories of Senior Indebtedness of the Issuer or of a
Guarantor, as the case may be, that exist by reason of any Liens or guarantees arising or created
in respect of some but not all such Senior Indebtedness of the Issuer or of a Guarantor, as the
case may be, or priorities of paydown, from proceeds of collateral or otherwise, among classes or
tranches of any issue of Senior Indebtedness of the Issuer or of a Guarantor, as the case may be.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.05<I>. Annual Reports. </I>Hovnanian is required to deliver to the Trustee an annual
statement regarding compliance with the Indenture, and include in such statement, if any officer of
Hovnanian or the Issuer is aware of any Default or Event of Default, a statement specifying such
Default or Event of Default and what action Hovnanian is taking or proposes to take with respect
thereto. In addition, Hovnanian is required to deliver to the Trustee prompt written notice of the
occurrence of any Default or Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.06<I>. Guarantees by Subsidiaries. </I>Hovnanian and each Subsidiary set forth on
Schedule&nbsp;1 hereto shall provide a Guarantee. Hovnanian shall be permitted to cause any other
Subsidiary of Hovnanian to provide a Guarantee. If any Subsidiary of Hovnanian that is not a
Guarantor at any time after the date of this Supplemental Indenture guarantees the Issuer&#146;s
obligations under any Applicable Debt then outstanding, such Subsidiary must provide a Guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Subsidiary required to provide a Guarantee pursuant to Section&nbsp;5.04 or the immediately
preceding sentence shall execute a Guarantee Notation, execute a supplemental indenture in the form
of Exhibit&nbsp;B hereto, and deliver an Opinion of Counsel to the Trustee to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and
constitutes a valid and binding obligation of such Subsidiary, enforceable against such Subsidiary
in accordance with its terms (subject to customary exceptions).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.07<I>. Limitations on Mergers, Consolidations and Sales of Assets. </I>(a)&nbsp;This Section
3.07 shall replace the provisions contained in Sections&nbsp;9.1 and 9.2 of the Base Indenture in their
entirety and all references to Sections&nbsp;9.1 and 9.2 in the Base Indenture or any provision thereof
shall be deemed, for the purposes of the Notes, to be references to this Section&nbsp;3.07.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Neither the Issuer nor any Guarantor shall consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets (including, without
limitation, by way of liquidation or dissolution), or assign any of its obligations under the
Notes, the Guarantees or the Indenture (as an entirety or substantially as an entirety in one
transaction or in a series of related transactions), to any Person (in each case other than in a
transaction in which the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Issuer or a Guarantor is the survivor of a consolidation or merger, or the transferee in a
sale, lease, conveyance or other disposition) unless:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Person formed by or surviving such consolidation or merger (if other than
the Issuer or the Guarantor, as the case may be), or to which such sale, lease, conveyance
or other disposition or assignment will be made (collectively, the &#147;<B>Successor</B>&#148;), is a
corporation or other legal entity organized and existing under the laws of the United
States or any state thereof or the District of Columbia, and the Successor assumes by
supplemental indenture in a form reasonably satisfactory to the Trustee all of the
obligations of the Issuer or the Guarantor, as the case may be, under the Notes or a
Guarantee, as the case may be, and the Indenture; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing provisions shall not apply to (A)&nbsp;a transaction involving the sale or
disposition of Capital Stock of a Guarantor, or the consolidation or merger of a Guarantor, or the
sale, lease, conveyance or other disposition of all or substantially all of the assets of a
Guarantor, that in any such case results in such Guarantor being released from its Guarantee
pursuant to Section&nbsp;5.04, or (B)&nbsp;a transaction the sole purpose of which is to change the state of
incorporation of the Issuer or any Guarantor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;3.08<I>. Applicability of Covenants Contained in the Base Indenture. </I>Each of the
agreements and covenants of the Issuer and/or Hovnanian, as applicable, contained in Article&nbsp;Three
of the Base Indenture shall apply to the Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 4<BR>
<FONT style="FONT-variant: SMALL-CAPS">Defaults and Remedies</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.01. <I>Amendments to Article&nbsp;Five of the Base Indenture. </I>Article&nbsp;Five of the Base
Indenture is modified as set forth in this Article&nbsp;4. All references in the Base Indenture to
Article&nbsp;Five of the Base Indenture or any provision thereof shall be deemed, for the purposes of
the Notes, to be references to such provision of the Base Indenture as modified by this Article&nbsp;4.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.02<I>. Events of Default.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&#147;<B>Event of Default</B>&#148; means any one or more of the following events (and shall not
include any of the events set forth in the first paragraph of Section&nbsp;5.1 of the Base Indenture):
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the failure by the Issuer and the Guarantors to pay the Repurchase Price of
any Notes when the same shall become due and payable;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;the failure by the Issuer and the Guarantors to pay any Installment Payment
on any Notes as and when the same shall become due and payable and continuance of such
failure for a period of 30&nbsp;days;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;the failure by Hovnanian to give notice of a Fundamental Change when any
such notice is due pursuant to the terms of the Purchase Contract Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;the failure by the Issuer or any Guarantor to comply with any of its other
agreements or covenants in, or provisions of, the Notes, the Guarantees or the Indenture
and such failure continues for the period and after the notice specified in Section
4.02(b) below (except in the case of a default under Section&nbsp;3.07, which will constitute
an Event of Default with notice but without passage of time);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;the acceleration of any Indebtedness (other than Non-Recourse Indebtedness)
of the Issuer or any Guarantor that has an outstanding principal amount of $10&nbsp;million or
more, individually or in the aggregate, and such acceleration does not cease to exist, or
such Indebtedness is not satisfied, in either case within 30&nbsp;days after such acceleration;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;the failure by the Issuer or any Guarantor to make any principal or interest
payment in an amount of $10&nbsp;million or more, individually or in the aggregate, in respect
of Indebtedness (other than Non-Recourse Indebtedness) of the Issuer or any Guarantor
within 30&nbsp;days of such principal or interest becoming due and payable (after giving effect
to any applicable grace period set forth in the documents governing such Indebtedness);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;a final judgment or judgments that exceed $10&nbsp;million or more, individually
or in the aggregate, for the payment of money having been entered by a court or courts of
competent jurisdiction against the Issuer or any Guarantor and such judgment or judgments
is not satisfied, stayed, annulled or rescinded within 60&nbsp;days of being entered;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;the Issuer or any Guarantor that is a Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) commences a voluntary case;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) consents to the entry of an order for relief against it in an
involuntary case;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) makes a general assignment for the benefit of creditors;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) is for relief against the Issuer or any Guarantor that is a
Significant Subsidiary as debtor in an involuntary case;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) appoints a Custodian of the Issuer or any Guarantor that is a
Significant Subsidiary or a Custodian for all or substantially all of the
property of the Issuer or any Guarantor that is a Significant Subsidiary; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) orders the liquidation of the Issuer or any Guarantor that is a
Significant Subsidiary,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and the order or decree remains unstayed and in effect for 60&nbsp;days; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) any Guarantee of a Guarantor that is a Significant Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such Guarantee and the
Indenture) or is declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Guarantee (other than by reason of release of a
Guarantor from its Guarantee in accordance with the terms of the Indenture and the
Guarantee).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;A Default as described in Section&nbsp;4.02(a)(iv) above shall not be deemed an Event of
Default until the Trustee notifies the Issuer, or the Holders of at least 25% in principal amount
of the then outstanding Notes notify the Issuer and the Trustee, of the Default (except in the case
of a default with respect to Section&nbsp;3.07 hereof) and the Issuer does not cure the Default within
60&nbsp;days after receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a &#147;Notice of Default.&#148; If such a Default is cured within such
time period, it ceases.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The second and third paragraphs of Section&nbsp;5.1 of the Base Indenture shall be deemed
to be replaced, with respect to the Notes, in their entirety, with the following:
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;If an Event of Default (other than an Event of Default with respect to Hovnanian or the
Issuer resulting from Section&nbsp;4.02(a)(viii) or (ix)), shall have occurred and be continuing under
the Indenture, the Trustee by notice to the Issuer, or the Holders of at least 25% in principal
amount of the Notes then outstanding by notice to the Issuer and the Trustee, may declare all Notes
to be due and payable immediately. Upon such declaration of acceleration, the amounts due and
payable on the Notes shall be due and payable immediately. If an Event of Default with respect to
Hovnanian or the Issuer specified in Section&nbsp;4.02(a)(viii) or (ix)&nbsp;occurs, such an amount shall
<I>ipso facto </I>become and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee, the Issuer, any Guarantor or any Holder. This provision, however, is
subject to the condition that, if at any time after the unpaid principal amount (or such specified
amount) of the Notes shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the
Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured Installments
Payments, if any, upon all of the Notes and the principal of any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue amounts, if any, to the extent
that payment of such interest is enforceable under applicable law and on such principal at the rate
borne by the Notes to the date of such payment or deposit) and the reasonable compensation,
disbursements, expenses and advances of the Trustee and all other amounts due the Trustee under
Section&nbsp;6.6 of the Base Indenture, and if (i)&nbsp;rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii)&nbsp;any and all existing Events of Default, other
than the nonpayment of any principal of and interest on the Notes (including, without limitation,
Installment Payments) that shall have become due by acceleration, shall have been cured or shall
have been waived in accordance with Section&nbsp;5.7 of the Base Indenture, then and in every such case
(except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate
principal amount of the Notes then Outstanding, by written notice to the Issuer and to the Trustee,
may rescind and annul such declaration and its consequences; but no such rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair any right consequent
thereon. Notwithstanding the previous sentence, no waiver shall be effective against any Holder
for any Event of Default or event which with notice or lapse of time or both would be an Event of
Default with respect to any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Note affected thereby, unless all such affected Holders
agree, in writing, to waive such Event of Default or other event.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The fifth paragraph of Section&nbsp;5.1 of the Base Indenture shall be deemed to be
replaced, with respect to the Notes, in its entirety, with the following:
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Except with respect to an Event of Default pursuant to Section&nbsp;4.02(a)(i) or (ii), the
Trustee shall not be charged with knowledge of any Default or Event of Default unless a Responsible
Officer of the Trustee has actual knowledge of such Default or Event of Default, or written notice
thereof shall have been given to a Responsible Officer by the Issuer or any Holder of the Notes.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.03<I>. Notice of Defaults. </I>This Section&nbsp;4.03 replaces Section&nbsp;5.8 of the Base
Indenture in its entirety. The Trustee shall, within 90&nbsp;days after the occurrence of a default,
with respect to the Notes, mail to all Holders of the Notes, as the names and the addresses of such
Holders appear upon the Securities register, at the Issuer&#146;s expense, notice of all defaults known
to the Trustee with respect to the Notes, unless such defaults shall have been cured before the
giving of such notice (the term &#147;<B>defaults</B>&#148; for the purpose of this Section&nbsp;4.03 being hereby
defined to be any Event of Default defined in Section&nbsp;4.02, not including periods of grace, if any,
provided for therein and irrespective of the giving of the written notice specified in Section
4.02(a)(iv) but in the case of any default of the character specified in Section&nbsp;4.02(a)(iv) no
such notice to Holders shall be given until at least 60&nbsp;days after the giving of written notice
thereof to the Issuer pursuant to Section&nbsp;4.02(a)(iv)); <I>provided</I>, <I>however</I>, that, except in the case
of default in the payment of any Installment Payment or any default resulting from a failure to
comply with any obligation under Article&nbsp;11, the Trustee shall be protected in withholding such
notice if and so long as the Trustee determines that the withholding of such notice is in the
Holders&#146; interests.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.04. <I>Additional Provisions Related to Events of Default. </I>The provisions of Sections
5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, and 5.9 of the Base Indenture shall apply to the Notes, in each
case, except as provided above.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 5<BR>
<FONT style="FONT-variant: SMALL-CAPS">Guarantees; Release of Guarantor</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.01<I>. Base Indenture Guarantee. </I>Article&nbsp;Fourteen of the Base Indenture is hereby
replaced in its entirety by this Article&nbsp;5 and by Article&nbsp;7 herein. All references in the Base
Indenture to Article&nbsp;Fourteen or any provision thereof shall be deemed, for the purposes of the
Notes, to be references to this Article&nbsp;5 (to the extent that such references relate to the
Guarantees) and to Article&nbsp;7 (to the extent that such references relate to subordination of the
Guarantees), and all references in the Base Indenture to &#147;Guarantees&#148; shall be deemed, for the
purposes of the Notes, to be references to the Guarantees as defined herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.02<I>. Unconditional Guarantee. </I>Each of the Guarantors hereby unconditionally
guarantees, jointly and severally, to each Holder and to the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Trustee and its successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that (i)&nbsp;the due and
punctual payment of the principal of, interest on the Notes (including, without limitation,
Installment Payments and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if
applicable), and all other amounts owing with respect to the Notes, whether on the Maturity Date,
on any Repurchase Date or on any Installment Payment Date, by acceleration or otherwise, if lawful,
and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder shall
be promptly paid in full when due or performed in accordance with the terms hereof and thereof,
including all amounts payable to the Trustee, and (ii)&nbsp;in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full
when due or to be performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise (each such guarantee, a &#147;<B>Guarantee</B>&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Issuer fails to make any payment when due of any amount so guaranteed for whatever
reason, each Guarantor shall be obligated to pay the same immediately. Each Guarantor hereby
agrees that its obligations hereunder shall be continuing, absolute and unconditional, irrespective
of, and shall be unaffected by, the validity or enforceability of the Notes, the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder or the Trustee with
respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of such Guarantor. If any Holder is required by any court or
otherwise to return to the Issuer or any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Issuer or such Guarantor, any amount paid by the Issuer
or any Guarantor to the Trustee or such Holder, this Article&nbsp;5, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Guarantee set forth in this Section&nbsp;5.02 shall not be valid or become obligatory for any
purpose with respect to a Note until the certificate of authentication on such Note shall have been
signed by the Trustee or any duly appointed agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.03<I>. Obligations of Each Guarantor Unconditional. </I>Nothing contained in this Article
5 or elsewhere in the Indenture or in any Note is intended to or shall impair, as between each
Guarantor and the Holders, which are absolute and unconditional, to pay to the Holders the
principal of and interest on the Notes (including, without limitation, Installment Payments and the
Repurchase Price of
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">any Notes payable pursuant to Article&nbsp;11, if applicable) as and when the same shall become due
and payable in accordance with the provisions of the Guarantee or is intended to or shall affect
the relative rights of the Holders and creditors of the Issuer, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon any Default under the Indenture in respect of cash, property or securities of
such Guarantor received upon the exercise of any such remedy.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any distribution of assets of a Guarantor referred to in this Article&nbsp;5, the Trustee and
the Holders shall be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of other indebtedness of such Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article&nbsp;5.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.04<I>. Release of a Guarantor. </I>Upon the release of the guarantee by a Guarantor under
all then outstanding Applicable Debt, the Guarantee of such Guarantor under the Indenture shall be
automatically and unconditionally released and discharged from all obligations in respect of the
Notes upon notice from Hovnanian to the Trustee to such effect, without any further action required
on the part of the Trustee or any Holder of the Notes. If any such released Guarantor thereafter
guarantees any Applicable Debt (or if any released guarantee under any Applicable Debt is
reinstated or renewed), then such released Guarantor shall guarantee the Notes on the terms and
conditions set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.05<I>. Execution and Delivery of Guarantee. </I>The execution by each Guarantor of the
Indenture (or a supplemental indenture in the form of Exhibit&nbsp;B) together with an executed
Guarantee Notation substantially in the form included in the form of Note attach as Exhibit&nbsp;A
hereto evidences the Guarantee of such Guarantor, whether or not the person signing as an officer
of the Guarantor still holds that office at the time of authentication of any Note. The delivery
of any Note by the Trustee after authentication constitutes due delivery of the Guarantee set forth
in the Indenture on behalf of each Guarantor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.06<I>. Limitation on Guarantor Liability. </I>Notwithstanding anything to the contrary in
this Article, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Guarantee of such Guarantor not constitute a
fraudulent conveyance under applicable fraudulent conveyance provisions of the Bankruptcy Law or
any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and
the Guarantors hereby irrevocably agree that the obligations of each
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Guarantor under its Guarantee are limited to the maximum amount that, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations
under the Indenture, will result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor other than Hovnanian that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in an amount <I>pro rata</I>, based on the net assets
of each Guarantor, determined in accordance with GAAP.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.07<I>. Article&nbsp;5 Not to Prevent Events of Default. </I>The failure by the Guarantors to
make a payment on account of principal or interest (including, without limitation, Installment
Payments and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable), on
the Notes by reason of any provision in this Article&nbsp;5 shall not be construed as preventing the
occurrence of any Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.08<I>. Waiver by the Guarantors. </I>Each Guarantor hereby irrevocably waives diligence,
presentment, demand of payment, demand of performance, filing of claims with a court in the event
of insolvency of bankruptcy of the Issuer, any right to require a proceeding first against the
Issuer, the benefit of discussion, protest, notice and all demand whatsoever and covenants that
this Guarantee shall not be discharged except by complete performance of the obligations contained
in the Notes, in the Indenture and in this Article&nbsp;5.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.09<I>. Subrogation and Contribution. </I>Upon making any payment with respect to any
obligation of the Issuer under this Article&nbsp;5, the Guarantor making such payment shall be
subrogated to the rights of the payee against the Issuer with respect to such obligation; <I>provided</I>
that the Guarantor may not enforce either any right of subrogation, or any right to receive payment
in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment
so long as any amount payable by the Issuer hereunder or under the Notes remains unpaid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.10<I>. Stay of Acceleration. </I>If acceleration of the time for payment of any amount
payable by the Issuer under the Indenture or the Notes is stayed upon the insolvency, bankruptcy or
reorganization of the Issuer, all such amounts otherwise subject to acceleration under the terms of
the Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the
Trustee or the Holders.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.11. <I>Guarantors as &#147;obligors&#148; for Provisions Included in the Indenture Pursuant to
the TIA. </I>Each provision included in the Indenture which is required to be included by any of
Sections&nbsp;310 to 317 of the TIA, inclusive, or is deemed applicable to the Indenture by virtue of
the provisions of the TIA, and which applies to an &#147;obligor,&#148; as that term is defined under the
TIA, shall apply to each of the Guarantors.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 6<BR>
<FONT style="FONT-variant: SMALL-CAPS">Subordination of Notes</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.01<I>. Applicability of Base Indenture. </I>Article&nbsp;Thirteen of the Base Indenture is
hereby replaced in its entirety by this Article&nbsp;6. All references in the Base Indenture to Article
Thirteen or any provision thereof shall be deemed, for the purposes of the Notes, to be references
to this Article&nbsp;6.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.02<I>. Notes Subordinated to Senior Indebtedness of the Issuer. </I>The Issuer covenants
and agrees, and each Holder of the Notes by its acceptance thereof likewise covenants and agrees,
that the payment of the principal and interest (including, without limitation, Installment Payments
and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable) on the Notes
shall be subordinated in right of payment, to the extent provided in this Article&nbsp;6, to the prior
payment in full when due of all Senior Indebtedness of the Issuer. The obligations of the Issuer in
respect of the Notes shall rank on a parity with the obligations of the Issuer under the Issuer&#146;s
8&#8542;% Senior Subordinated Notes due 2012 and 7&#190;% Senior Subordinated Notes due
2013.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Article&nbsp;6 shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness of the Issuer, and such
provisions are made for the benefit of the holders of Senior Indebtedness of the Issuer, and such
holders are made obligees hereunder and any one or more of them may enforce such provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.03<I>. Issuer Not To Make Payments with Respect to Notes in Certain Circumstances.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Upon the maturity of the principal of any Senior Indebtedness of the Issuer (other
than payment of sinking fund installments) by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior Indebtedness of the Issuer,
before any payment is made on account of the principal of or interest on the Notes (including,
without limitation, any Installment Payments) or on account of the repurchase or other acquisition
of the Notes (including, without limitation, the Repurchase Price
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">payable with respect to any Notes pursuant to Article&nbsp;11, if applicable) or any deposit is
made pursuant to Article&nbsp;8 hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Unless Section&nbsp;6.04 shall be applicable, upon (i)&nbsp;the occurrence of a Payment Default
with respect to any Senior Indebtedness of the Issuer and receipt by the Issuer and the Trustee of
written notice of such occurrence or (ii)&nbsp;upon the acceleration of such Senior Indebtedness of the
Issuer, then no payment or distribution of any assets of the Issuer of any kind or character shall
be made by the Issuer or the Trustee on account of principal of or interest on the Notes
(including, without limitation, any Installment Payment) or on account of the repurchase or other
acquisition of the Notes (including, without limitation, the Repurchase Price payable with respect
to any Notes pursuant to Article&nbsp;11, if applicable) and no deposit shall be made pursuant to
Article&nbsp;8 hereof, unless and until such Payment Default shall have been cured or waived in writing
or shall have ceased to exist or such Senior Indebtedness of the Issuer shall have been discharged,
after which the Issuer shall resume making any and all required payments in respect of the Notes,
including any missed payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Unless Section&nbsp;6.04 shall be applicable, upon (i)&nbsp;the occurrence of a Non-Payment
Default and (ii)&nbsp;receipt by the Trustee of written notice of such occurrence, then no payment or
distribution of any assets of the Issuer of any kind or character shall be made by the Issuer or
the Trustee on account of any principal of or interest on the Notes (including, without limitation,
any Installment Payment) or on account of the repurchase or other acquisition of the Notes
(including, without limitation, the Repurchase Price payable with respect to any Notes pursuant to
Article&nbsp;11, if applicable) and no deposit shall be made pursuant to Article&nbsp;8 hereof for a period
(&#147;<B>Payment Blockage Period</B>&#148;) commencing upon receipt by the Trustee of such written notice from the
holders of Senior Indebtedness of the Issuer or any representative of a holder of Senior
Indebtedness of the Issuer unless and until (subject to any blockage of payment that may then be in
effect under subsection (a)&nbsp;or (b)&nbsp;of this Section&nbsp;6.03) the earlier of (A)&nbsp;more than 120&nbsp;days
shall have elapsed since receipt of such written notice by the Trustee, (B)&nbsp;such Non-Payment
Default shall have been cured or waived in writing or shall have ceased to exist or such Senior
Indebtedness of the Issuer shall have been discharged or (C)&nbsp;such Payment Blockage Period shall
have been terminated by written notice to the Issuer or to the Trustee from the holders of the
Senior Indebtedness of the Issuer or any representative of the holders of the Senior Indebtedness
of the Issuer that initiated such Payment Blockage Period, after which, in the case of clause (A),
(B)&nbsp;or (C), the Issuer shall promptly resume making any and all required payments in respect of the
Notes, including any missed payments. In no event shall a Payment Blockage Period extend beyond
120&nbsp;days from the date of the receipt by the Trustee of the notice referred to in clause (ii)
hereof (the &#147;<B>Initial Period</B>&#148;). Any number of additional Payment Blockage Periods may be commenced
during the Initial Period;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided</I>, <I>however</I>, that no such additional period shall extend beyond the Initial Period.
After the expiration of the Initial Period, no Payment Blockage Period may be commenced on the
basis of a Non-Payment Default on the Senior Indebtedness of the Issuer that was the basis of a
Payment Blockage Period commenced during the Initial Period until at least 270 consecutive days
have elapsed from the last day of the Initial Period. No Non-Payment Default with respect to
Senior Indebtedness of the Issuer that existed or was continuing on the date of the commencement of
any Payment Blockage Period and of which the applicable holder(s) of Senior Indebtedness of the
Issuer are aware shall be, or can be made, the basis for the commencement of a second Payment
Blockage Period whether or not within a period of 270 consecutive days unless such event of default
shall have been cured or waived for a period of not less than 90 consecutive days.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In the event that notwithstanding the provisions of this Section&nbsp;6.03 the Issuer shall
make any payment or distribution of any character to the Trustee on account of the principal of or
interest on the Notes (including, without limitation, any Installment Payment) or on account of the
repurchase or other acquisition of the Notes (including, without limitation, the Repurchase Price
payable with respect to any Notes pursuant to Article&nbsp;11, if applicable) or any deposit pursuant to
Article&nbsp;8 hereof after the happening of an event of default with respect to any Senior Indebtedness
of the Issuer based on a default in the payment of the principal of or interest on Senior
Indebtedness of the Issuer, or after receipt by the Trustee of written notice as provided in this
Section&nbsp;6.03 of an event of default with respect to any Senior Indebtedness of the Issuer, or after
the acceleration of the Notes, then, but only if the Trustee is in receipt of the notice specified
in Section&nbsp;6.07, unless and until such default or event of default shall have been cured or waived
or shall have ceased to exist, or such acceleration shall have been rescinded, such payment or
deposit (subject to the provisions of Section&nbsp;6.06 and 6.07) shall be held by the Trustee in trust
for the benefit of, and, if the Senior Indebtedness of the Issuer shall have been declared
immediately due and payable, shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness of the Issuer (<I>pro rata </I>as to each of such holders on the basis of the respective
amounts of Senior Indebtedness of the Issuer held by them) or their representative or the trustee
under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of the Issuer
may have been issued, as their respective interests may appear, such payments to be made in
accordance with an Officers&#146; Certificate as provided in Section&nbsp;6.14 (on which the Trustee may
conclusively rely) identifying all holders of Senior Indebtedness of the Issuer and the principal
amount of Senior Indebtedness of the Issuer then outstanding held by each and stating the reasons
why such Officers&#146; Certificate is being delivered to the Trustee, for application to the payment of
all Senior Indebtedness of the Issuer remaining unpaid to the extent necessary to pay all Senior
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indebtedness of the Issuer in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness of the Issuer. In
the event of the failure of any Holder of a Note to endorse or assign any such payment or
distribution, each holder of Senior Indebtedness of the Issuer is hereby irrevocably authorized to
endorse or assign the same. The Issuer shall give prompt written notice to the Trustee of any
default under any Senior Indebtedness of the Issuer or under any agreement pursuant to which Senior
Indebtedness of the Issuer may have been issued, as required under the Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.04<I>. Notes Subordinated to Prior Payment of All Senior Indebtedness of the Issuer on
Dissolution, Winding Up, Liquidation or Reorganization of the Issuer. </I>In the event of (i)&nbsp;any
insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or
other similar proceeding relating to the Issuer, its creditors or its property, (ii)&nbsp;any case or
proceeding for the liquidation, dissolution or other winding-up of the Issuer, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (iii)&nbsp;any assignment by
the Issuer for the benefit of creditors, or (iv)&nbsp;any other marshalling of the assets of the Issuer:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the holders of all Senior Indebtedness of the Issuer shall first be entitled to
receive payment in full (or to have such payment duly provided for) of the principal and interest
due thereon (including any interest thereon accruing after commencement of any such proceeding)
before the Holders of the Notes are entitled to receive any payment or any distribution, whether in
cash, securities or other property, on account of the principal of or interest on the Notes
(including, without limitation, Installment Payments and the Repurchase Price of any Notes payable
pursuant to Article&nbsp;11, if applicable);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any payment or distribution of assets of the Issuer of any kind or character, whether
in cash, property or securities (other than securities of the Issuer as reorganized or readjusted
or securities of the Issuer or any other issuer, trust or corporation provided for by a plan of
reorganization or readjustment, junior, or the payment of which is otherwise subordinate, at least
to the extent provided in this Article&nbsp;6, to the payment of all Senior Indebtedness of the Issuer
at the time outstanding and to the payment of all securities issued in exchange therefor to the
holders of the Senior Indebtedness of the Issuer at the time outstanding), to which the Holders of
the Notes or the Trustee on behalf of the Holders of the Notes would be entitled except for the
provisions of this Article&nbsp;6, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to
the payment of the Notes, shall be paid by the liquidating trustee or agent or other Person making
such payment or distribution directly to the holders of Senior Indebtedness of the Issuer or their
representative(s), or to the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">trustee under any indenture under which Senior Indebtedness of the Issuer may have been issued
(<I>pro rata </I>as to each such holder, representative or trustee on the basis of the respective amounts
of unpaid Senior Indebtedness of the Issuer held or represented by each), to the extent necessary
to make payment in full of all Senior Indebtedness of the Issuer remaining unpaid after giving
effect to any concurrent payment or distribution or provision therefor to the holders of such
Senior Indebtedness of the Issuer; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;in the event that notwithstanding the foregoing provisions of this Article&nbsp;6, any
payment or distribution of assets of the Issuer of any kind or character, whether in cash, property
or securities shall be received by the Trustee or the Holders of the Notes on account of principal
or interest on the Notes (including, without limitation, Installment Payments and the Repurchase
Price of any Notes payable pursuant to Article&nbsp;11, if applicable) before all Senior Indebtedness of
the Issuer is paid in full, or effective provisions made for its payment, such payment or
distribution (subject to the provisions of Section&nbsp;6.06 and 6.07) shall be received and held in
trust for and shall be paid over or delivered forthwith to the liquidating trustee, agent or other
Person making such payment or distribution or to the holders of the Senior Indebtedness of the
Issuer remaining unpaid or unprovided for or their representative, or to the trustee under any
indenture under which Senior Indebtedness of the Issuer may have been issued (<I>pro rata </I>as provided
in subsection (b)&nbsp;above), for application to the payment of such Senior Indebtedness of the Issuer
until all such Senior Indebtedness of the Issuer shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders of such Senior
Indebtedness of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Issuer effects a transaction permitted by Article&nbsp;Nine of the Base Indenture (as
modified by Section&nbsp;3.07), such transaction shall not be deemed to be a dissolution, winding up,
liquidation or reorganization of the Issuer for purposes of this Section&nbsp;6.04.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer shall give prompt written notice to the Trustee of any dissolution, winding up,
liquidation or reorganization of the Issuer, assignment for the benefit of creditors by the Issuer
or any other marshalling of assets of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.05<I>. Holders to be Subrogated to Rights of Holders of Senior Indebtedness of the
Issuer. </I>Subject to the payment in full of all Senior Indebtedness of the Issuer, the Holders of
the Notes shall be subrogated to the rights of the holders of Senior Indebtedness of the Issuer to
receive payments or distributions of assets of the Issuer applicable to the Senior Indebtedness of
the Issuer until all amounts owing on the Notes shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of Senior
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indebtedness of the Issuer by virtue of this Article&nbsp;6 which otherwise would have been made to
the Holders of the Notes shall, as among the Issuer, its creditors other than the holders of Senior
Indebtedness of the Issuer and the Holders of the Notes, be deemed to be payment by the Issuer to
or on account of the Senior Indebtedness of the Issuer, it being understood that the provisions of
this Article&nbsp;6 are intended solely for the purpose of defining the relative rights of the Holders
of the Notes, on the one hand, and the holders of the Senior Indebtedness of the Issuer, on the
other hand.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any payment or distribution to which the Holders would otherwise have been entitled but for
the provisions of this Article&nbsp;6 shall have been applied, pursuant to the provisions of this
Article&nbsp;6, to the payment of all amounts payable under the Senior Indebtedness of the Issuer, then
and in such case, the Holders shall be entitled to receive from the holders of such Senior
Indebtedness of the Issuer at the time outstanding any payments or distributions received by such
holders of Senior Indebtedness of the Issuer in excess of the amount sufficient to pay all amounts
payable under or in respect of the Senior Indebtedness of the Issuer in full.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.06<I>. Obligations of the Issuer Unconditional. </I>Nothing contained in this Article&nbsp;6
or elsewhere in the Indenture or in any Note is intended to or shall impair, as among the Issuer,
its creditors other than holders of Senior Indebtedness of the Issuer and the Holders of the Notes,
the obligation of the Issuer, which is absolute and unconditional, to pay to the Holders of the
Notes the principal of and interest on the Notes (including, without limitation, Installment
Payments and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable) as
and when the same shall become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Notes and creditors of the Issuer other than
the holders of the Senior Indebtedness of the Issuer, nor shall anything herein or therein prevent
the Trustee or the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon the occurrence of a Default or an Event of Default under the Indenture, subject
to the rights, if any, under this Article&nbsp;6 of the holders of Senior Indebtedness of the Issuer in
respect of cash, property or securities of the Issuer received upon the exercise of any such
remedy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any distribution of assets of the Issuer referred to in this Article&nbsp;6, the Trustee,
subject to the provisions of Article&nbsp;Six of the Base Indenture, and the Holders of the Notes shall
be entitled to rely upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Notes, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">other indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article&nbsp;6.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.07<I>. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice. </I>The
Trustee shall not at any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, and the Trustee shall not be required to
withhold payment to the Holders of Notes as provided in Section&nbsp;6.03(d), unless and until the
Trustee shall have received an Officers&#146; Certificate stating such facts at its Corporate Trust
Office from the Issuer or written notice thereof at its Corporate Trust Office from one or more
holders of Senior Indebtedness of the Issuer or from any representative thereof or trustee therefor
identifying the specific sections of the Indenture involved and describing in detail the facts that
would obligate the Trustee to withhold payments to Holders of Notes, as well as any other facts
required by the next succeeding paragraph of this Section&nbsp;6.07; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Article&nbsp;Six of the Base Indenture,
shall be entitled to assume conclusively that no such facts exist.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness of the Issuer (or a trustee on behalf of
such holder) to establish that such notice has been given by a holder of Senior Indebtedness of the
Issuer or a trustee on behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Issuer to participate in any payment or distribution pursuant to this
Article&nbsp;6, the Trustee may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of Senior Indebtedness of the Issuer held by such Person, the
extent to which such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article&nbsp;6, and if such evidence is
not furnished the Trustee may defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.08<I>. Application by Trustee of Monies Deposited With it. </I>Except as to defeasance,
any deposit of monies by the Issuer with the Trustee or any Paying Agent (whether or not in trust)
for the payment of the principal of or interest on any Notes (including, without limitation,
Installment Payments and the Repurchase Price payable with respect to any Notes pursuant to Article
11, if applicable) shall be subject to the provisions of Sections&nbsp;6.02, 6.03, 6.04 and 6.05, except
that, if prior to the opening of business at least three Business Days preceding the date on which
by the terms of the Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">either the principal or the interest on any Note (including, without limitation, Installment
Payments and the Repurchase Price payable with respect to any Notes pursuant to Article&nbsp;11, if
applicable)), the Trustee shall not have received with respect to such monies the notice provided
for in Section&nbsp;6.07, then the Trustee shall have full power and authority to receive such monies
and to apply the same to the purpose for which they were received and shall not be affected by any
notice to the contrary which may be received by it on or after such date, without, however,
limiting any rights that holders of Senior Indebtedness of the Issuer may have to recover any such
payments from the Holders in accordance with the provisions of this Article&nbsp;6.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.09<I>. Subordination Rights Not Impaired by Acts or Omissions of Issuer or Holders of
Senior Indebtedness of the Issuer. </I>No right of any present or future holders of any Senior
Indebtedness of the Issuer to enforce subordination as provided herein shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the Issuer or by any act or
failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the
terms of the Indenture, regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness of the Issuer may extend, renew, modify
or amend the terms of the Senior Indebtedness of the Issuer or any security therefor and release,
sell or exchange such security and otherwise deal freely with the Issuer, all without affecting the
liabilities and obligations of the parties to the Indenture or the Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.10<I>. Holders Authorize Trustee to Effectuate Subordination of Notes. </I>Each Holder of
the Notes by his acceptance thereof authorizes and expressly directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the subordination provided in
this Article&nbsp;6 and appoints the Trustee his attorney-in-fact for such purpose, including, in the
event of any dissolution, winding up, liquidation or reorganization of the Issuer (whether in
bankruptcy, insolvency or receivership proceedings, voluntary liquidation or upon assignment for
the benefit of creditors or otherwise) tending towards liquidation of the business and assets of
the Issuer, the timely filing of a claim for the unpaid balance of its or his Notes in the form
required in said proceedings and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding on or prior to 30&nbsp;days before
the expiration of the time to file such claim or claims, then the holders of Senior Indebtedness of
the Issuer have the right to file and are hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.11<I>. Right of Trustee to Hold Senior Indebtedness of the Issuer. </I>The Trustee, in
its individual capacity, shall be entitled to all of the rights set forth in this Article&nbsp;6 in
respect of any Senior Indebtedness of the Issuer at any time
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">held by it to the same extent as any other holder of Senior Indebtedness of the Issuer, and
nothing in the Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.12<I>. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer. </I>With
respect to the holders of Senior Indebtedness of the Issuer, the Trustee undertakes to perform or
to observe only such of its covenants and obligations as are specifically set forth in this Article
6, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of
the Issuer shall be read into the Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness of the Issuer and the Trustee shall
not be liable to any holder of Senior Indebtedness of the Issuer if it shall pay over or deliver to
Holders of Notes, the Issuer or any other Person monies or assets to which any holder of Senior
Indebtedness of the Issuer shall be entitled by virtue of this Article&nbsp;6 or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.13<I>. Article&nbsp;6 Not to Prevent Events of Default. </I>The failure to make a payment on
account of principal or interest on the Notes (including, without limitation, Installment Payments
and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable) when due or
within any applicable grace period, whether or not by reason of any provision in this Article&nbsp;6,
shall not be construed as preventing the occurrence of an Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;6.14<I>. Officers&#146; Certificate. </I>If there occurs an event referred to in the first
sentence of Section&nbsp;6.03(d) or the first sentence of Section&nbsp;6.04, the Issuer shall promptly give
to the Trustee an Officers&#146; Certificate (on which the Trustee may conclusively rely) identifying
all holders of Senior Indebtedness of the Issuer and the principal amount of Senior Indebtedness of
the Issuer then outstanding held by each such holder and stating the reasons why such Officers&#146;
Certificate is being delivered to the Trustee.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 7<BR>
<FONT style="FONT-variant: SMALL-CAPS">Subordination of Guarantees</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.01<I>. Applicability of Base Indenture. </I>Article&nbsp;Fourteen of the Base Indenture is
hereby replaced in its entirety by this Article&nbsp;7 and by Article&nbsp;5 herein. All references in the
Base Indenture to Article&nbsp;Fourteen or any provision thereof shall be deemed, for the purposes of
the Notes, to be references to this Article&nbsp;7 (to the extent that such references relate to
subordination of the Guarantees) and to Article&nbsp;5 (to the extent that such references relate to the
Guarantees).
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.02<I>. Guarantees Subordinated to Senior Indebtedness of a Guarantor. </I>Each Guarantor
covenants and agrees, and each Holder of the Notes by its acceptance thereof likewise covenants and
agrees, that the payments pursuant to the Guarantee by such Guarantor shall be subordinated in
right of payment, to the extent provided in this Article&nbsp;7, to the prior payment in full when due
of all Senior Indebtedness of such Guarantor. The obligations of the Guarantors in respect of the
Guarantees shall rank on a parity with the obligations of the Guarantors under the guarantees of
the Issuer&#146;s 8<FONT style="FONT-size: 70%"><SUP>7</SUP></FONT>/<FONT style="FONT-size: 60%">8</FONT>% Senior Subordinated Notes due 2012 and 7<FONT style="FONT-size: 70%"><SUP>3</SUP></FONT>/<FONT style="FONT-size: 60%">4</FONT>% Senior Subordinated Notes due 2013.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Article&nbsp;7 shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness of a Guarantor, and such
provisions are made for the benefit of the holders of Senior Indebtedness of a Guarantor, and such
holders are made obligees hereunder and any one or more of them may enforce such provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.03<I>. Guarantor Not to Make Payments with Respect to Notes in Certain Circumstances.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Upon the maturity of the principal of any Senior Indebtedness of a Guarantor (other
than payment of sinking fund installments) by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior Indebtedness of a Guarantor,
before any payment, pursuant to the Guarantee, is made on account of the principal of or interest
on the Notes (including, without limitation, any Installment Payments) or on account of the
repurchase or other acquisition of the Notes (including, without limitation, the Repurchase Price
payable with respect to any Notes pursuant to Article&nbsp;11, if applicable).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Unless Section&nbsp;7.04 shall be applicable, upon (i)&nbsp;the occurrence of a Payment Default
with respect to any Senior Indebtedness of a Guarantor and receipt by the relevant Guarantor and
the Trustee of written notice of such occurrence or (ii)&nbsp;upon the acceleration of such Senior
Indebtedness of such Guarantor, then no payment or distribution of any assets of such Guarantor of
any kind or character shall be made by such Guarantor or the Trustee on account of principal of or
interest on the Notes (including, without limitation, any Installment Payment) or on account of the
repurchase or other acquisition of the Notes (including, without limitation, the Repurchase Price
payable with respect to any Notes pursuant to Article&nbsp;11, if applicable), unless and until such
Payment Default shall have been cured or waived in writing or shall have ceased to exist or such
Senior Indebtedness of such Guarantor shall have been discharged, after which such Guarantor shall
resume making any and all required payments in respect of the Notes, including any missed payments.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Unless Section&nbsp;7.04 shall be applicable, upon (i)&nbsp;the occurrence of a Non-Payment
Default and (ii)&nbsp;receipt by the Trustee of written notice of such occurrence, then no payment or
distribution of any assets of the relevant Guarantor of any kind or character shall be made by such
Guarantor or the Trustee on account of any principal of or interest on the Notes (including,
without limitation, Installment Payments) or on account of the repurchase or other acquisition of
the Notes (including, without limitation, the Repurchase Price payable with respect to any Notes
pursuant to Article&nbsp;11, if applicable) for a period (&#147;<B>Guarantee Payment Blockage Period</B>&#148;)
commencing upon receipt by the Trustee of such written notice from the holders of Senior
Indebtedness of a Guarantor or any representative of a holder of Senior Indebtedness of such
Guarantor unless and until (subject to any blockage of payment that may then be in effect under
subsection (a)&nbsp;or (b)&nbsp;of this Section&nbsp;7.03) the earlier of (A)&nbsp;more than 120&nbsp;days shall have
elapsed since receipt of such written notice by the Trustee, (B)&nbsp;such Non-Payment Default shall
have been cured or waived in writing or shall have ceased to exist or such Senior Indebtedness of a
Guarantor shall have been discharged or (C)&nbsp;such Guarantee Payment Blockage Period shall have been
terminated by written notice to the relevant Guarantor or to the Trustee from the holders of the
Senior Indebtedness of a Guarantor or any representative of the holders of the Senior Indebtedness
of a Guarantor that initiated such Guarantee Payment Blockage Period, after which, in the case of
clause (A), (B)&nbsp;or (C), the relevant Guarantor shall promptly resume making any and all required
payments in respect of the Notes, including any missed payments. In no event shall a Guarantee
Payment Blockage Period extend beyond 120&nbsp;days from the date of the receipt by the Trustee of the
notice referred to in clause (ii)&nbsp;hereof (the &#147;<B>Guarantee Initial Period</B>&#148;). Any number of
additional Guarantee Payment Blockage Periods may be commenced during the Guarantee Initial Period;
<I>provided</I>, <I>however</I>, that no such additional period shall extend beyond the Guarantee Initial Period.
After the expiration of the Guarantee Initial Period, no Guarantee Payment Blockage Period may be
commenced on the basis of a Non-Payment Default on the Senior Indebtedness of a Guarantor that was
the basis of a Guarantee Payment Blockage Period commenced during the Guarantee Initial Period
until at least 270 consecutive days have elapsed from the last day of the Guarantee Initial Period.
No Non-Payment Default with respect to Senior Indebtedness of a Guarantor that existed or was
continuing on the date of the commencement of any Guarantee Payment Blockage Period and of which
the applicable holder(s) of Senior Indebtedness of a Guarantor are aware shall be, or can be made,
the basis for the commencement of a second Payment Blockage Period whether or not within a period
of 270 consecutive days unless such event of default shall have been cured or waived for a period
of not less than 90 consecutive days.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In the event that notwithstanding the provisions of this Section&nbsp;7.03 a Guarantor
shall make, pursuant to its Guarantee, any payment or distribution of any character to the Trustee
on account of the principal of or interest on the Notes (including, without limitation, any
Installment Payment) or on account of the repurchase or other acquisition of the Notes (including,
without limitation, the Repurchase Price payable with respect to any Notes pursuant to Article&nbsp;11,
if applicable) after the happening of an event of default with respect to any Senior Indebtedness
of such Guarantor based on a default in the payment of the principal of or interest on Senior
Indebtedness of such Guarantor, or after receipt by the Trustee of written notice as provided in
this Section&nbsp;7.03 of an event of default with respect to any Senior Indebtedness of such Guarantor,
or after the acceleration of the Notes, then, but only if the Trustee is in receipt of the notice
specified in Section&nbsp;7.07, unless and until such default or event of default shall have been cured
or waived or shall have ceased to exist, or such acceleration shall have been rescinded, such
payment (subject to the provisions of Sections&nbsp;7.06 and 7.07) shall be held by the Trustee in trust
for the benefit of, and, if the Senior Indebtedness of such Guarantor shall have been declared
immediately due and payable, shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness of such Guarantor (<I>pro rata </I>as to each of such holders on the basis of the respective
amounts of Senior Indebtedness of such Guarantor held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of
such Guarantor may have been issued, as their respective interests may appear, such payments to be
made in accordance with an Officers&#146; Certificate as provided in Section&nbsp;7.15 (on which the Trustee
may conclusively rely) identifying all holders of Senior Indebtedness of such Guarantor and the
principal amount of Senior Indebtedness of such Guarantor then outstanding held by each and stating
the reasons why such Officers&#146; Certificate is being delivered to the Trustee, for application to
the payment of all Senior Indebtedness of such Guarantor remaining unpaid to the extent necessary
to pay all Senior Indebtedness of such Guarantor in full in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of
such Guarantor. In the event of the failure of any Holder of a Note to endorse or assign any such
payment or distribution, each holder of Senior Indebtedness of such Guarantor is hereby irrevocably
authorized to endorse or assign the same. The relevant Guarantor shall give prompt written notice
to the Trustee of any default under any Senior Indebtedness of such Guarantor or under any
agreement pursuant to which Senior Indebtedness of such Guarantor may have been issued, as required
under the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.04<I>. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of a
Guarantor on Dissolution, Winding Up, Liquidation or Reorganization of such Guarantor. </I>In the
event of (i)&nbsp;any insolvency,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relating to a Guarantor, its creditors or its property, (ii)&nbsp;any case or
proceeding for the liquidation, dissolution or other winding-up of a Guarantor, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (iii)&nbsp;any assignment by
a Guarantor for the benefit of creditors, or (iv)&nbsp;any other marshalling of the assets of a
Guarantor:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the holders of all Senior Indebtedness of such Guarantor shall first be entitled to
receive payment in full (or to have such payment duly provided for) of the principal and interest
due thereon (including any interest thereon accruing after commencement of any such proceeding)
before the Holders of the Notes are entitled to receive, pursuant to the Guarantee of such
Guarantor, any payment or any distribution, whether in cash, securities or other property, on
account of the principal of or interest on the Notes (including, without limitation, Installment
Payments and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities (other than securities of such Guarantor as reorganized or
readjusted or securities of such Guarantor or any other issuer, trust or corporation provided for
by a plan of reorganization or readjustment, junior, or the payment of which is otherwise
subordinate, at least to the extent provided in this Article&nbsp;7, to the payment of all Senior
Indebtedness of such Guarantor at the time outstanding and to the payment of all securities issued
in exchange therefor to the holders of the Senior Indebtedness of such Guarantor at the time
outstanding), to which the Holders of the Notes or the Trustee on behalf of the Holders of the
Notes would be entitled, pursuant to the Guarantee of such Guarantor, except for the provisions of
this Article&nbsp;7, including any such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of such Guarantor being subordinated to the payment
of the Notes, shall be paid by the liquidating trustee or agent or other Person making such payment
or distribution directly to the holders of Senior Indebtedness of such Guarantor or their
representative(s), or to the trustee under any indenture under which Senior Indebtedness of such
Guarantor may have been issued (<I>pro rata </I>as to each such holder, representative or trustee on the
basis of the respective amounts of unpaid Senior Indebtedness of such Guarantor held or represented
by each), to the extent necessary to make payment in full of all Senior Indebtedness of such
Guarantor remaining unpaid after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness of such Guarantor; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;in the event that notwithstanding the foregoing provisions of this Article&nbsp;7, any
payment or distribution of assets of such Guarantor of any kind or character, whether in cash,
property or securities shall be received, pursuant to the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Guarantee of such Guarantor, by the Trustee or the Holders of the Notes on account of
principal or interest on the Notes (including, without limitation, Installment Payments and the
Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable) before all Senior
Indebtedness of such Guarantor is paid in full, or effective provisions made for its payment, such
payment or distribution (subject to the provisions of Sections&nbsp;7.06 and 7.07) shall be received and
held in trust for and shall be paid over or delivered forthwith to the liquidating trustee, agent
or other Person making such payment or distribution or to the holders of the Senior Indebtedness of
such Guarantor remaining unpaid or unprovided for or their representative, or to the trustee under
any indenture under which Senior Indebtedness of such Guarantor may have been issued (<I>pro rata </I>as
provided in subsection (b)&nbsp;above), for application to the payment of such Senior Indebtedness of
such Guarantor until all such Senior Indebtedness of such Guarantor shall have been paid in full,
after giving effect to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of such Guarantor.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Guarantor effects a transaction permitted by Article&nbsp;Nine of the Base Indenture (as
modified by Section&nbsp;3.07), such transaction shall not be deemed to be a dissolution, winding up,
liquidation or reorganization of a Guarantor for purposes of this Article&nbsp;7.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Guarantor shall give prompt written notice to the Trustee of any dissolution, winding up,
liquidation or reorganization of such Guarantor, assignment for the benefit of creditors by such
Guarantor or any other marshalling of assets of such Guarantor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.05<I>. Holders to be Subrogated to Rights of Holders of Senior Indebtedness of a
Guarantor. </I>Subject to the payment in full of all Senior Indebtedness of a Guarantor, the Holders
of the Notes shall be subrogated to the rights of the holders of Senior Indebtedness of such
Guarantor to receive payments or distributions of assets of such Guarantor applicable to the Senior
Indebtedness of such Guarantor until all amounts owing under the Guarantee of such Guarantor shall
be paid in full, and for the purpose of such subrogation no payments or distributions to the
holders of Senior Indebtedness of such Guarantor by virtue of this Article&nbsp;7 which otherwise would
have been made to the Holders of the Notes shall, as among such Guarantor, its creditors other than
the holders of Senior Indebtedness of such Guarantor and the Holders of the Notes, be deemed to be
payment by such Guarantor to or on account of the Senior Indebtedness of such Guarantor, it being
understood that the provisions of this Article&nbsp;7 are intended solely for the purpose of defining
the relative rights of the Holders of the Notes, on the one hand, and the holders of the Senior
Indebtedness of such Guarantor, on the other hand.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any payment or distribution to which the Holders would otherwise have been entitled but for
the provisions of this Article&nbsp;7 shall have been applied, pursuant to the provisions of this
Article&nbsp;7, to the payment of all amounts payable under the Senior Indebtedness of such Guarantor,
then and in such case, the Holders shall be entitled to receive from the holders of such Senior
Indebtedness of such Guarantor at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness of such Guarantor in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness of such Guarantor in full.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.06<I>. Obligations of the Guarantors Unconditional. </I>Nothing contained in this Article
7 or elsewhere in the Indenture or in any Note or Guarantee is intended to or shall impair, as
among a Guarantor, its creditors other than holders of Senior Indebtedness of such Guarantor and
the Holders of the Notes, the obligation of such Guarantor, which is absolute and unconditional, to
pay to the Holders of the Notes the principal of and interest on the Notes (including, without
limitation, Installment Payments and the Repurchase Price of any Notes payable pursuant to Article
11, if applicable) as and when the same shall become due and payable in accordance with the
provisions of the Guarantees, or is intended to or shall affect the relative rights of the Holders
of the Notes and creditors of such Guarantor other than the holders of the Senior Indebtedness of
such Guarantor, nor shall anything herein or therein prevent the Trustee or the Holder of any Note
from exercising all remedies otherwise permitted by applicable law upon the occurrence of a Default
or an Event of Default under the Indenture, subject to the rights, if any, under this Article&nbsp;7 of
the holders of Senior Indebtedness of such Guarantor in respect of cash, property or securities of
such Guarantor received upon the exercise of any such remedy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any distribution of assets of a Guarantor referred to in this Article&nbsp;7, the Trustee,
subject to the provisions of Article&nbsp;Six of the Base Indenture, and the Holders of the Notes shall
be entitled to rely upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Notes, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of
such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article&nbsp;7.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.07<I>. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice. </I>The
Trustee shall not at any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, and the Trustee shall not be required to
withhold payment to the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Notes as provided in Section&nbsp;7.03(d), unless and until the Trustee shall have
received an Officers&#146; Certificate stating such facts at its Corporate Trust Office from the Issuer
or written notice thereof at its Corporate Trust Office from one or more holders of Senior
Indebtedness of a Guarantor or from any representative thereof or trustee therefor identifying the
specific sections of the Indenture involved and describing in detail the facts that would obligate
the Trustee to withhold payments to Holders of Notes, as well as any other facts required by the
next succeeding paragraph of this Section&nbsp;7.07; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Article&nbsp;Six of the Base Indenture, shall be
entitled to assume conclusively that no such facts exist.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness of a Guarantor (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of Senior Indebtedness of
a Guarantor or a trustee on behalf of any such holder. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of a Guarantor to participate in any payment or distribution pursuant to this
Article&nbsp;7, the Trustee may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of Senior Indebtedness of a Guarantor held by such Person, the
extent to which such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article&nbsp;7, and if such evidence is
not furnished the Trustee may defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.08. <I>Application by Trustee of Monies Deposited With it</I>. Except as to defeasance,
any deposit of monies by a Guarantor with the Trustee or any Paying Agent (whether or not in trust)
for the payment of the principal of or interest on any Notes (including, without limitation,
Installment Payments and the Repurchase Price payable with respect to any Notes pursuant to Article
11, if applicable) shall be subject to the provisions of Sections&nbsp;7.02, 7.03, 7.04 and 7.05, except
that, if prior to the opening of business at least three Business Days preceding the date on which
by the terms of the Indenture any such monies may become payable for any purpose (including,
without limitation, the payment, pursuant to the Guarantee of such Guarantor, of either the
principal or the interest on any Note (including, without limitation, Installment Payments and the
Repurchase Price payable with respect to any Notes pursuant to Article&nbsp;11, if applicable)), the
Trustee shall not have received with respect to such monies the notice provided for in Section
7.07, then the Trustee shall have full power and authority to receive such monies and to apply the
same to the purpose for which they were received and shall not be affected by any notice to the
contrary which may be received by it on or after such date, without, however, limiting any rights
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">that holders of Senior Indebtedness of such Guarantor may have to recover any such payments
from the Holders in accordance with the provisions of this Article&nbsp;7.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.09<I>. Subordination Rights Not Impaired by Acts or Omissions of Any Guarantor or
Holders of Senior Indebtedness of a Guarantor. </I>No right of any present or future holders of any
Senior Indebtedness of a Guarantor to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of any Guarantor or by
any act or failure to act, in good faith, by any such holder, or by any noncompliance by any
Guarantor with the terms of the Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Indebtedness of a Guarantor
may extend, renew, modify or amend the terms of the Senior Indebtedness of a Guarantor or any
security therefor and release, sell or exchange such security and otherwise deal freely with any
Guarantor, all without affecting the liabilities and obligations of the parties to the Indenture or
the Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.10<I>. Holders Authorize Trustee to Effectuate Subordination of Guarantees. </I>Each
Holder of the Notes by his acceptance thereof authorizes and expressly directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article&nbsp;7 and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or reorganization of a
Guarantor (whether in bankruptcy, insolvency or receivership proceedings, voluntary liquidation or
upon assignment for the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the timely filing of a claim for the unpaid balance,
pursuant to the relevant Guarantee, of its Notes in the form required in said proceedings and cause
said claim to be approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding on or prior to 30&nbsp;days before the expiration of the time to file
such claim or claims, then the holders of Senior Indebtedness of such Guarantor have the right to
file and are hereby authorized to file an appropriate claim for and on behalf of the Holders of
said Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.11<I>. Right of Trustee to Hold Senior Indebtedness of a Guarantor. </I>The Trustee in
its individual capacity, shall be entitled to all of the rights set forth in this Article&nbsp;7 in
respect of any Senior Indebtedness of a Guarantor at any time held by it to the same extent as any
other holder of such Senior Indebtedness of such Guarantor, and nothing in the Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.12<I>. Trustee Not Fiduciary for Holders of Senior Indebtedness of a Guarantor. </I>With
respect to the holders of Senior Indebtedness of a Guarantor,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Trustee undertakes to perform or to observe only such of its covenants and obligations as
are specifically set forth in this Article&nbsp;7, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness of a Guarantor shall be read into the Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of a Guarantor and the Trustee shall not be liable to any holder of Senior
Indebtedness of a Guarantor if it shall pay over or deliver to Holders of Notes, the relevant
Guarantor or any other Person monies or assets to which any holder of Senior Indebtedness of a
Guarantor shall be entitled by virtue of this Article&nbsp;7 or otherwise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.13<I>. Article&nbsp;7 Not to Prevent Events of Default. </I>The failure to make a payment on
account of principal or interest on the Notes (including, without limitation, Installment Payments
and the Repurchase Price of any Notes payable pursuant to Article&nbsp;11, if applicable) when due or
within any applicable grace period, whether or not by reason of any provision in this Article&nbsp;7
shall not be construed as preventing the occurrence of an Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.14<I>. Subordination of Indebtedness Owed by the Issuer to a Guarantor. </I>Any
indebtedness owed by the Issuer to a Guarantor shall be subordinate to all obligations of the
Issuer with respect to the Notes and the Indenture to the same extent as the Notes are subordinated
to Senior Indebtedness of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.15<I>. Officers&#146; Certificate. </I>If there occurs an event referred to in the first
sentence of Section&nbsp;7.03(d) or the first sentence of Section&nbsp;7.04, the relevant Guarantor shall
promptly give to the Trustee an Officers&#146; Certificate (on which the Trustee may conclusively rely)
identifying all holders of Senior Indebtedness of a Guarantor and the principal amount of Senior
Indebtedness of a Guarantor then outstanding held by each such holder and stating the reasons why
such Officers&#146; Certificate is being delivered to the Trustee.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 8<BR>
<FONT style="FONT-variant: SMALL-CAPS">Defeasance</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;8.01<I>. Defeasance. </I>Except as stated below, the provisions of Article&nbsp;Ten of the Base
Indenture shall apply to the Notes in their entirety; <I>provided </I>that the &#147;obligations&#148; referred to
in each of Section&nbsp;10.2 and Section&nbsp;10.3 of the Base Indenture shall also apply to the
&#147;obligations&#148; of the Guarantors with respect to their Guarantees in the case of Section&nbsp;10.2 of the
Base Indenture and with respect to the covenants and Events of Default specified herein in the case
of Section&nbsp;10.3 of the Base Indenture.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;8.02. <I>Additional Provisions to Survive Legal Defeasance and Discharge. </I>Section&nbsp;10.2
of the Base Indenture is hereby amended to (x)&nbsp;delete the &#147;and&#148; following clause (c)&nbsp;and before
clause (d)&nbsp;of such section and to replace it with &#147;;&#148; and (y)&nbsp;add the following clauses (e)&nbsp;and (f)
to the end of such section, &#147;(e)&nbsp;the rights of registration of transfer and exchange of the Notes;
and (f)&nbsp;the rights of Holders of Notes that are beneficiaries with respect to property so deposited
with the Trustee payable to all or any of them&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;8.03<I>. Provisions to Survive Covenant Defeasance and Discharge. </I>Notwithstanding the
foregoing, no Covenant Defeasance or discharge pursuant Section&nbsp;10.9 of the Base Indenture shall
affect the following obligations to, or rights of, the Holders of the Notes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the rights of Holders of Outstanding Notes (including, without limitation, Installment
Payments and the Repurchase Price payable with respect to any Notes pursuant to Article&nbsp;11, if
applicable) to receive payments in respect of the principal of, and interest on, the Notes when
such payments are due from the trust referred to in Section&nbsp;10.5 of the Base Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Issuer&#146;s obligations with respect to the Notes concerning mutilated, destroyed,
lost or stolen Notes and the maintenance of an office or agency for payment and money for security
payments held in trust;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer&#146;s
obligations in connection therewith;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the rights of registration of transfer and exchange of the Notes; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;the rights of Holders of Notes that are beneficiaries with respect to property so
deposited with the Trustee payable to all or any of them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;8.04<I>. Additional Covenant Defeasance. </I>In addition to the &#147;obligations&#148; referred to
in Section&nbsp;10.3 of the Base Indenture, &#147;Covenant Defeasance&#148;, as defined in such Section, shall
also apply to the release of obligations of the Guarantors set forth in Section&nbsp;5.02 and each
Guarantor&#146;s obligations under its Guarantee, and clauses (iv) (with respect to the covenants so
defeased), (v), (vi), (vii)&nbsp;and (x)&nbsp;of Section&nbsp;4.02(a) shall no longer constitute Events of
Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;8.05<I>. Section&nbsp;10.4. </I>Section&nbsp;10.4(b) of the Base Indenture is hereby amended by
replacing the words &#147;the date of this Indenture&#148; with &#147;February&nbsp;9, 2011&#148;.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 9<BR>
<FONT style="FONT-variant: SMALL-CAPS">The Notes</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.01<I>. Form of Notes. </I>(a)&nbsp;The Notes will initially be issued as Component Notes in
the form of Attachment 4 to the form of Global Unit attached as Exhibit&nbsp;A to the Purchase Contract
Agreement, and will be attached to the related Global Unit and registered in the name of Wilmington
Trust Company, as attorney-in-fact of the holder(s) of such Global Unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Holders of Units have the right to separate such Units into their constituent parts,
consisting of Separate Purchase Contracts and Separate Notes, during the times, and under the
circumstances, described in Section&nbsp;2.03 of the Purchase Contract Agreement. Upon separation of
any Unit into its constituent parts, (i)&nbsp;if such Unit is a Global Unit, the Separate Notes will
initially be evidenced by Global Securities in the form of Exhibit&nbsp;A hereto (the &#147;<B>Global Note</B>&#148;)
deposited with the Trustee as custodian for the Depositary and registered in the name of the
Depositary or its nominee, or (ii)&nbsp;if such Unit is in definitive, registered form, the Separate
Notes will be evidenced by a Certificated Note, in each case, as provided in Section&nbsp;2.03 of the
Purchase Contract Agreement. Following separation of any Unit into its constituent Separate Note
and Separate Purchase Contract, the Separate Notes are transferable independently from the Separate
Purchase Contracts. In addition, Separate Notes can be recombined with Separate Purchase Contracts
to recreate Units, as provided for in Section&nbsp;2.04 of the Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The terms of such Notes are herein incorporated by reference and are part of this
Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Notes shall be issuable in denominations initially equal to the Initial Principal
Amount and integral multiples in excess thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.02. <I>Installment Payments. </I>(a)&nbsp;The Issuer shall pay installments on the Notes (each
such payment, an &#147;<B>Installment Payment</B>&#148;) in cash at the place, at the respective times and in the
manner provided in the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;On the first Installment Payment Date occurring on May&nbsp;15, 2011, the Issuer shall pay,
in cash, an Installment Payment with respect to each Note in an amount equal to $0.483334 per Note,
and on each Installment Payment Date thereafter, the Issuer shall pay, in cash, equal quarterly
Installment Payments with respect to each Note in an amount equal to $0.453125 per Note; <I>provided</I>
that, in respect of any Notes in definitive registered form, the final Installment Payment shall be
made only against surrender of such Note to the Paying Agent.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->43<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Each Installment Payment shall constitute a payment of interest (at a rate of 12.072%
per annum) and a partial repayment of principal on the Note, allocated as set forth in the schedule
below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Installment Payment Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Interest</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.337631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.145703</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.326719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.126406</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.336579</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.116546</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.346737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.106388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.357201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.095924</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.367982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.085143</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.379087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.074038</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.390528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.062597</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.402314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.050811</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.414456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.038669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.426965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.026160</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.439850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.013275</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Each Installment Payment for any Installment Payment Period shall be computed on the
basis of a 360-day year of twelve 30-day months. If an Installment Payment is payable for any
period shorter than a full Installment Payment Period, such Installment Payment shall be computed
on the basis of the actual number of days elapsed per 30-day month. Furthermore, if any date on
which an Installment Payment is payable is not a Business Day, then payment of the Installment
Payment on such date shall be made on the next succeeding day that is a Business Day, and without
any interest or other payment in respect of any such delay. However, if such Business Day is in the
next succeeding calendar year, then such Installment Payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made on the date when
such Installment Payment was originally due.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.03<I>. Section&nbsp;382 Ownership Blocker. </I>(a)&nbsp;If any Unit becomes an Excess
Equity-Linked Security as a result of any purported acquisition of such Unit, the purported
acquirer (or, in the case of an indirect acquisition, the direct Holder) of such Unit shall not be
recognized as the Holder of such Unit (or the Note that is a component of such Unit) for any
purpose including, without limitation, for purposes of receiving any Installment Payment or other
payment on such Note. Any Excess Equity-Linked Security (including the Note that is a component of
any Unit that is an Excess Equity-Linked Security), and any Installment Payment or other payment on
the Note that is a component of such
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Excess Equity-Linked Security, shall be subject to divestiture pursuant to the provisions of
Paragraph&nbsp;Ninth of the Certificate of Incorporation as if such Excess Equity-Linked Security were
an &#147;Excess Security&#148; as defined in such Paragraph&nbsp;Ninth.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If any Unit becomes an Excess Equity-Linked Security, or if any Unit ceases to be an
Excess Equity-Linked Security, the Issuer shall promptly deliver written notice thereof to the
Trustee. The Trustee shall not be charged with knowledge that any Unit is an Excess Equity-Linked
Security, or that any Unit is no longer an Excess Equity-Linked Security, in each case, unless
either (i)&nbsp;a Responsible Officer of the Trustee assigned to the Corporate Trust Office of the
Trustee (or any successor division or department of the Trustee) shall have actual knowledge
thereof or (ii)&nbsp;written notice thereof has been provided to the Trustee by the Company. The
Trustee may, for purposes of the Indenture, conclusively rely on any such notice from the Company
in accordance with the provisions of Section&nbsp;6.1(a)(ii) of the Base Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.04. <I>Maturity Date. </I>The date on which the final Installment Payment on the Notes
shall be due, unless the Notes are accelerated pursuant to the terms hereof or otherwise paid prior
to maturity in connection with a Holder&#146;s exercise of the Repurchase Right, shall be the Maturity
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.05<I>. Depositary. </I>The Depositary for the Global Note shall initially be The
Depository Trust Company (&#147;<B>DTC</B>&#148;). The Global Note (which shall initially have a balance of zero
Notes) shall be deposited on or about the Issue Date with, or on behalf of, DTC and registered in
the name of Cede &#038; Co., as nominee of DTC (such nominee being referred to herein as the &#147;<B>Global
Note Holder</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;9.06<I>. Certificated Notes. </I>(a)&nbsp;The seventh paragraph of Section&nbsp;2.8 of the Base
Indenture shall be deemed, with respect to the Notes, to be modified by inserting after &#147;Section
2.8&#148; in the first line thereof the parenthesis &#147;(other than in accordance with the terms of the
following paragraph)&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The eighth and ninth paragraphs of Section&nbsp;2.8 of the Base Indenture shall be deemed,
with respect to the Notes, to be replaced in their entirety with the following:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;If:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Depositary is unwilling or unable to continue as Depositary for such
Global Note and the Issuer is unable to find a qualified replacement for such Depositary
within 90&nbsp;days;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) an Event of Default, or any failure on the part of the Issuer or Hovnanian
to observe or perform any covenant or agreement in the Indenture has occurred and is
continuing and the beneficial owner of any Notes represented by a Global Note requests
that its Notes be issued in physical, certificated form,
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">then, in each case, the Issuer shall execute, and the Trustee, upon receipt of an Issuer Order for
the authentication and delivery of Certificated Notes, shall authenticate and deliver Certificated
Notes in any authorized denominations, in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such Notes (or in an aggregate principal amount
equal to the principal amount of the Notes in respect of which a beneficial owner has requested the
issuance of Notes in physical, certificated form pursuant to clause (iii)&nbsp;above) in exchange for
such Global Note or Notes (or relevant portion thereof).&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The terms of Section&nbsp;2.8 of the Base Indenture shall apply to the Notes except as
modified by this Section&nbsp;9.06.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 10<BR>
<FONT style="FONT-variant: SMALL-CAPS">Redemption</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;10.01<I>. Article&nbsp;Twelve of the Base Indenture Inapplicable. </I>The Notes shall not be
redeemable and Article&nbsp;Twelve of the Base Indenture shall not apply to the Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 11<BR>
<FONT style="FONT-variant: SMALL-CAPS">Repurchase of Notes at the Option of the Holder</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.01. <I>Offer to Repurchase. </I>If Hovnanian elects to exercise its Early Mandatory
Settlement Right pursuant to the terms of the Purchase Contract Agreement, then each Holder of
Notes (whether any such Note is a Separate Note or a component of a Unit) shall have the right (the
&#147;<B>Repurchase Right</B>&#148;) to require the Issuer to repurchase some or all of its Notes for cash at the
Repurchase Price per Note to be repurchased on the Repurchase Date, pursuant to Section&nbsp;11.03. The
Issuer shall not be required to repurchase a portion of a Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.02<I>. Early Mandatory Settlement Notice. </I>If Hovnanian elects to exercise its Early
Mandatory Settlement Right in respect of the Purchase Contracts pursuant to the terms of the
Purchase Contract Agreement, Hovnanian
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shall provide the Trustee and the Holders of the Notes with a copy of the Early Mandatory
Settlement Notice delivered pursuant to the Purchase Contract Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.03<I>. Procedures for Exercise.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;To exercise the Repurchase Right, a Holder must deliver, prior to the close of
business on the Business Day immediately preceding the Repurchase Date, the Notes to be repurchased
to the Paying Agent (or the Units to the Purchase Contract Agent, if (x)&nbsp;the Early Mandatory
Settlement Date occurs on or after the Repurchase Date and (y)&nbsp;the relevant Notes have not been
separated from the Units), together with a duly completed written Repurchase Notice, in each case
in accordance with appropriate procedures of the Depositary, unless the Notes are not in the form
of a Global Note (or the Units are not in the form of Global Units, as the case may be), in which
case such Holder must deliver the Notes to be repurchased to the Paying Agent or the Units that
include the Notes to be repurchased to the Purchase Contract Agent (if (x)&nbsp;the Early Mandatory
Settlement Date occurs on or after the Repurchase Date and (y)&nbsp;the Notes have not been separated
from the Units), duly endorsed for transfer to the Issuer, together with a Repurchase Notice, to
the Paying Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Repurchase Notice must state the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if Certificated Notes or Units have been issued, the certificate numbers of
the Notes or Units, or if the Notes or Units are in the form of a Global Note or a Global
Unit, as the case may be, the Repurchase Notice must comply with appropriate procedures of
the Depositary;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the number of Notes to be repurchased; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) that the Notes are to be repurchased by the Issuer pursuant to the
applicable provisions of the Notes and this Article&nbsp;11.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In the event that Hovnanian exercises its Early Mandatory Settlement Right with
respect to Purchase Contracts that are a component of Units prior to the Repurchase Date, upon such
exercise the Issuer shall execute and the Trustee shall authenticate on behalf of the Holder and
deliver to the Holder thereof, at the expense of the Issuer, Separate Notes in same form and in the
same number as the Notes comprising part of the Units.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.04<I>. Withdrawal of Repurchase Notice.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;A Holder may withdraw any Repurchase Notice (in whole or in part) by a written,
irrevocable notice of withdrawal delivered to the Paying Agent, with a copy to the Trustee and the
Issuer, prior to the close of business on the Business Day immediately preceding the Repurchase
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The notice of withdrawal must state the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the number of the withdrawn Notes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if Certificated Notes or Units have been issued, the certificate numbers of
the withdrawn Notes or Units, as applicable, or if the Notes or Units are in the form of a
Global Note or a Global Unit, as the case may be, the notice of withdrawal must comply
with appropriate DTC procedures; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the number of Notes, if any, that remain subject to the Repurchase Notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.05<I>. Effect of Repurchase. </I>(a)&nbsp;The Issuer shall be required to repurchase the
Notes with respect to which the Repurchase Right has been exercised on the Repurchase Date. To
effectuate such repurchase, the Issuer shall deposit immediately available funds with the Paying
Agent, on or prior to 11:00&nbsp;a.m., New York City time, on the Repurchase Date, an amount or amounts
sufficient to pay the Repurchase Price with respect to those Notes for which the Repurchase Right
has been exercised. A Holder electing to exercise the Repurchase Right shall receive payment of the
Repurchase Price on the later of (i)&nbsp;the Repurchase Date and (ii)&nbsp;the time of book-entry transfer
or the delivery of the Notes (or Units, as applicable).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If the Paying Agent holds money on the Repurchase Date sufficient to pay the
Repurchase Price with respect to those Notes for which the Repurchase Right has been exercised,
then (i)&nbsp;such Notes shall cease to be outstanding and interest shall cease to accrue threreon
(whether or not book-entry transfer of the Notes or Units, as applicable, is made or whether or not
the Notes or Units, as applicable, are delivered as required herein), and (ii)&nbsp;all other rights of
the Holder shall terminate (other than the right to receive the Repurchase Price).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Issuer shall, in connection with any repurchase offer pursuant to this Article&nbsp;11,
if required, (i)&nbsp;comply with the provisions of the tender offer rules under the Exchange Act that
may then be applicable, and (ii)&nbsp;file a Schedule&nbsp;TO or any other required schedule under the
Exchange Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Notwithstanding anything to the contrary herein, no Notes may be repurchased at the
option of Holders if the principal amount thereof has been
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">accelerated, and such acceleration has not been rescinded, on or prior to the Repurchase Date
(except in the case of an acceleration resulting from a Default by the Issuer in the payment of the
Repurchase Price with respect to such Notes).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;11.06<I>. No Sinking Fund. </I>The Notes are not entitled to the benefit of any sinking
fund.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 12<BR>
<FONT style="FONT-variant: SMALL-CAPS">Tax Treatment</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;12.01<I>. Tax Treatment. </I>The Issuer and each Holder agree, for United States federal
income tax purposes, to treat the Notes as indebtedness of the Issuer.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 13<BR>
<FONT style="FONT-variant: SMALL-CAPS">Amendments, Supplements And Waivers</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;13.01<I>. Amendments, Supplements and Waivers. </I>The Issuer, the Guarantors and the
Trustee may amend, supplement or waive the Indenture, the Notes or the Guarantees as provided in
Article&nbsp;Eight of the Base Indenture; <I>provided </I>that, in addition to the provisions of Section&nbsp;8.2 of
the Base Indenture, no amendment, supplement or waiver shall, without the consent of each Holder
affected: (i)&nbsp;alter the provisions (including related definitions) set forth in Article&nbsp;11 hereof;
or (ii)&nbsp;release any Guarantor from any of its obligations under its Guarantee or the Indenture
otherwise than in accordance with the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;13.02<I>. Payments for Consents. </I>Neither the Issuer, Hovnanian nor any of its
Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent,
waive or agree to amend such term or provision within the time period set forth in the solicitation
documents relating to the consent, waiver or amendment.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 14<BR>
<FONT style="FONT-variant: SMALL-CAPS">Release Of Issuer</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;14.01<I>. Release of Issuer. </I>The Issuer may be released from its obligations under the
Indenture and the Notes in accordance with the provisions of Article&nbsp;Fifteen of the Base Indenture.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ARTICLE 15<BR>
<FONT style="FONT-variant: SMALL-CAPS">Miscellaneous</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.01<I>. GOVERNING LAW. </I>THIS SUPPLEMENTAL INDENTURE, THE NOTES AND EACH GUARANTEE, AND
ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE, THE
NOTES AND EACH GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.02<I>. No Adverse Interpretation of Other Agreements. </I>This Supplemental Indenture
may not be used to interpret another indenture or loan or debt agreement of Hovnanian, the Issuer
or any subsidiary of Hovnanian. Any such indenture or loan or debt agreement may not be used to
interpret this Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.03<I>. Successors and Assigns. </I>All covenants and agreements of the Issuer and the
Guarantors in this Supplemental Indenture and the Notes shall bind their respective successors and
assigns and inure to the benefit of their respective successors and assigns. All agreements of the
Trustee in this Supplemental Indenture shall bind its successors and assigns and inure to the
benefit of their respective successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.04<I>. Counterparts. </I>The parties may sign any number of counterparts of this
Supplemental Indenture. Each signed counterpart shall be an original, but all of them together
represent the same agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.05<I>. Severability. </I>To the extent permitted by applicable law, in case any one or
more of the provisions contained in this Supplemental Indenture or in the Notes or the Guarantees
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this
Supplemental Indenture or of the Notes or the Guarantees.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->50<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.06. <I>Effect of Headings. </I>The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.07. <I>Conflict of Any Provision of Indenture with TIA. </I>If and to the extent that
any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision
included in this Supplemental Indenture or in the Indenture which is required to be included herein
by any of Sections&nbsp;310 to 317 of the TIA, inclusive, or is deemed applicable to the Indenture by
virtue of the provisions of the TIA, such required provision shall control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;15.08. <I>Ratification of Indenture. </I>The Base Indenture, as supplemented by this
Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->51<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the date first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC., as <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Issuer<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC., as<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guarantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">On behalf of each entity named in Schedule&nbsp;1<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;hereto, as Guarantors<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY, as Trustee<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Joshua C. Jones
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Joshua C. Jones&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Financial Services Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->52<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>SCHEDULE 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Guarantors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">AUDDIE ENTERPRISES, L.L.C.<BR>
BUILDER SERVICES NJ, L.L.C.<BR>
BUILDER SERVICES NY, L.L.C.<BR>
BUILDER SERVICES PA, L.L.C.<BR>
DULLES COPPERMINE, L.L.C.<BR>
EASTERN NATIONAL TITLE AGENCY, LLC<BR>
EASTERN TITLE AGENCY, INC.<BR>
F&#038;W MECHANICAL SERVICES, L.L.C.<BR>
FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.<BR>
FOUNDERS TITLE AGENCY, INC.<BR>
GOVERNOR&#146;S ABSTRACT CO., INC.<BR>
HOMEBUYERS FINANCIAL SERVICES, L.L.C.<BR>
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.<BR>
HOVNANIAN ENTERPRISES, INC.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC<BR>
HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP, L.L.C.<BR>
K. HOV INTERNATIONAL, INC.<BR>
K. HOV IP, INC.<BR>
K. HOV IP, II, INC.<BR>
K. HOVNANIAN ACQUISITIONS, INC.<BR>
K. HOVNANIAN AT 4S, LLC<BR>
K. HOVNANIAN AT ACQUA VISTA, LLC<BR>
K. HOVNANIAN AT ALISO, LLC<BR>
K. HOVNANIAN AT ALLENTOWN, L.L.C.<BR>
K. HOVNANIAN AT ALMOND ESTATES, LLC<BR>
K. HOVNANIAN AT ANDALUSIA, LLC<BR>
K. HOVNANIAN AT ARBOR HEIGHTS, LLC<BR>
K. HOVNANIAN AT AVENUE ONE, L.L.C.<BR>
K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT I, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT II, L.L.C.<BR>
K. HOVNANIAN AT BELLA LAGO, LLC<BR>
K. HOVNANIAN AT BERKELEY, L.L.C.<BR>
K. HOVNANIAN AT BERNARDS V, L.L.C.<BR>
K. HOVNANIAN AT BLUE HERON PINES, L.L.C.<BR>
K. HOVNANIAN AT BRANCHBURG, L.L.C.<BR>
K. HOVNANIAN AT BRIDGEPORT, INC.<BR>
K. HOVNANIAN AT BRIDGEWATER I, L.L.C.<BR>
K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.<BR>
K. HOVNANIAN AT CALABRIA, INC.<BR>
K. HOVNANIAN AT CAMDEN I, L.L.C.<BR>
K. HOVNANIAN AT CAMERON CHASE, INC.<BR>
K. HOVNANIAN AT CAMP HILL, L.L.C.<BR>
K. HOVNANIAN AT CAPISTRANO, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT CARLSBAD, LLC<BR>
K. HOVNANIAN AT CARMEL DEL MAR, INC.<BR>
K. HOVNANIAN AT CARMEL VILLAGE, LLC<BR>
K. HOVNANIAN AT CASTILE, INC.<BR>
K. HOVNANIAN AT CEDAR GROVE III, L.L.C.<BR>
K. HOVNANIAN AT CEDAR GROVE V, L.L.C.<BR>
K. HOVNANIAN AT CHAPARRAL, INC.<BR>
K. HOVNANIAN AT CHARTER WAY, LLC<BR>
K. HOVNANIAN AT CHESTER I, L.L.C.<BR>
K. HOVNANIAN AT CHESTERFIELD, L.L.C.<BR>
K. HOVNANIAN AT CIELO, L.L.C.<BR>
K. HOVNANIAN AT CLIFTON, L.L.C.<BR>
K. HOVNANIAN AT COASTLINE, L.L.C.<BR>
K. HOVNANIAN AT CORTEZ HILL, LLC<BR>
K. HOVNANIAN AT CRANBURY, L.L.C.<BR>
K. HOVNANIAN AT CRESTLINE, INC.<BR>
K. HOVNANIAN AT CURRIES WOODS, L.L.C.<BR>
K. HOVNANIAN AT DENVILLE, L.L.C.<BR>
K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT DOMINGUEZ HILLS, INC.<BR>
K. HOVNANIAN AT DOVER, L.L.C.<BR>
K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.<BR>
K. HOVNANIAN AT EASTLAKE, LLC<BR>
K. HOVNANIAN AT EDGEWATER II, L.L.C.<BR>
K. HOVNANIAN AT EDGEWATER, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH, L.L.C.<BR>
K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT ENCINITAS RANCH, LLC<BR>
K. HOVNANIAN AT EVERGREEN, L.L.C.<BR>
K. HOVNANIAN AT EWING, L.L.C.<BR>
K. HOVNANIAN AT FAIR OAKS, L.L.C.<BR>
K. HOVNANIAN AT FIDDYMENT RANCH, LLC<BR>
K. HOVNANIAN AT FIFTH AVENUE, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE I, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE II, L.L.C.<BR>
K. HOVNANIAN AT FOREST MEADOWS, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN II, L.L.C.<BR>
K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT FRESNO, LLC<BR>
K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.<BR>
K. HOVNANIAN AT GILROY, LLC<BR>
K. HOVNANIAN AT GREAT NOTCH, L.L.C.<BR>
K. HOVNANIAN AT GRIDLEY, LLC<BR>
K. HOVNANIAN AT GUTTENBERG, L.L.C.<BR>
K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG, L.L.C.<BR>
K. HOVNANIAN AT HAWTHORNE, L.L.C.<BR>
K. HOVNANIAN AT HAZLET, L.L.C.<BR>
K. HOVNANIAN AT HERSHEY&#146;S MILL, INC.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.<BR>
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.<BR>
K. HOVNANIAN AT HILLTOP, L.L.C.<BR>
K. HOVNANIAN AT HUDSON POINTE, L.L.C.<BR>
K. HOVNANIAN AT JACKSON I, L.L.C.<BR>
K. HOVNANIAN AT JACKSON, L.L.C.<BR>
K. HOVNANIAN AT JAEGER RANCH, LLC<BR>
K. HOVNANIAN AT JERSEY CITY IV, L.L.C.<BR>
K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT KEYPORT, L.L.C.<BR>
K. HOVNANIAN AT KING FARM, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA GREENS, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA, LLC<BR>
K. HOVNANIAN AT LA HABRA KNOLLS, LLC<BR>
K. HOVNANIAN AT LA LAGUNA, L.L.C.<BR>
K. HOVNANIAN AT LA PAZ, LLC<BR>
K. HOVNANIAN AT LA TERRAZA, INC.<BR>
K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.<BR>
K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC<BR>
K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.<BR>
K. HOVNANIAN AT LANDMARK, LLC<BR>
K. HOVNANIAN AT LARKSPUR, LLC<BR>
K. HOVNANIAN AT LAWRENCE V, L.L.C.<BR>
K. HOVNANIAN AT LEE SQUARE, L.L.C.<BR>
K. HOVNANIAN AT LINWOOD, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.<BR>
K. HOVNANIAN AT LIVE OAK II, LLC<BR>
K. HOVNANIAN AT LONG BRANCH I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND III, L.L.C.<BR>
K. HOVNANIAN AT MACUNGIE, L.L.C.<BR>
K. HOVNANIAN AT MAHWAH VI, INC.<BR>
K. HOVNANIAN AT MALAN PARK, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN III, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD I, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD II, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD III, L.L.C.<BR>
K. HOVNANIAN AT MANTECA, LLC<BR>
K. HOVNANIAN AT MAPLE AVENUE, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VI, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VII, L.L.C.<BR>
K. HOVNANIAN AT MATSU, L.L.C.<BR>
K. HOVNANIAN AT MELANIE MEADOWS, LLC<BR>
K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT MENIFEE, LLC<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MIDDLETOWN II, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE I, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE II, L.L.C.<BR>
K. HOVNANIAN AT MONROE II, INC.<BR>
K. HOVNANIAN AT MONROE IV, L.L.C.<BR>
K. HOVNANIAN AT MONROE NJ, L.L.C.<BR>
K. HOVNANIAN AT MONTVALE, LLC<BR>
K. HOVNANIAN AT MONTVALE II, L.L.C.<BR>
K. HOVNANIAN AT MOSAIC, LLC<BR>
K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MUIRFIELD, LLC<BR>
K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT NEW WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT NORTH BERGEN. L.L.C.<BR>
K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL, L.L.C.<BR>
K. HOVNANIAN AT NORTH HALEDON, L.L.C.<BR>
K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.<BR>
K. HOVNANIAN AT NORTHAMPTON, L.L.C.<BR>
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.<BR>
K. HOVNANIAN AT NORTHFIELD, L.L.C.<BR>
K. HOVNANIAN AT NORTHLAKE, INC.<BR>
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.<BR>
K. HOVNANIAN AT OCEAN WALK, INC.<BR>
K. HOVNANIAN AT OCEANPORT, L.L.C.<BR>
K. HOVNANIAN AT OLD BRIDGE, L.L.C.<BR>
K. HOVNANIAN AT OLDE ORCHARD, LLC<BR>
K. HOVNANIAN AT PACIFIC BLUFFS, LLC<BR>
K. HOVNANIAN AT PARAMUS, L.L.C.<BR>
K. HOVNANIAN AT PARK LANE, LLC<BR>
K. HOVNANIAN AT PARKSIDE, LLC<BR>
K. HOVNANIAN AT PARSIPPANY, L.L.C.<BR>
K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.<BR>
K. HOVNANIAN AT PERKIOMEN II, INC.<BR>
K. HOVNANIAN AT PHILADELPHIA II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA III, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA D&#146;ORO, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA SERENA, L.L.C.<BR>
K. HOVNANIAN AT PITTSGROVE, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.<BR>
K. HOVNANIAN AT POSITANO, LLC<BR>
K. HOVNANIAN AT PRADO, L.L.C.<BR>
K. HOVNANIAN AT RANCHO 79, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.<BR>
K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC<BR>
K. HOVNANIAN AT RANDOLPH I, L.L.C.<BR>
K. HOVNANIAN AT RAPHO, L.L.C.<BR>
K. HOVNANIAN AT READINGTON II, L.L.C.<BR>
K. HOVNANIAN AT RED BANK, L.L.C.<BR>
K. HOVNANIAN AT RIDGEMONT, L.L.C.<BR>
K. HOVNANIAN AT RIDGESTONE, L.L.C.<BR>
K. HOVNANIAN AT RIVERBEND, LLC<BR>
K. HOVNANIAN AT RIVERCREST, LLC<BR>
K. HOVNANIAN AT RODERUCK, L.L.C.<BR>
K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.<BR>
K. HOVNANIAN AT ROWLAND HEIGHTS, LLC<BR>
K. HOVNANIAN AT SAGE, L.L.C.<BR>
K. HOVNANIAN AT SAN SEVAINE, INC.<BR>
K. HOVNANIAN AT SANTA FE SPRINGS, LLC<BR>
K. HOVNANIAN AT SANTA NELLA, LLC<BR>
K. HOVNANIAN AT SARATOGA, INC.<BR>
K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.<BR>
K. HOVNANIAN AT SAWMILL, INC.<BR>
K. HOVNANIAN AT SAYREVILLE, L.L.C.<BR>
K. HOVNANIAN AT SHELDON GROVE, LLC<BR>
K. HOVNANIAN AT SHREWSBURY, LLC<BR>
K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.<BR>
K. HOVNANIAN AT SIERRA ESTATES, LLC<BR>
K. HOVNANIAN AT SILVER SPRING, L.L.C.<BR>
K. HOVNANIAN AT SKYE ISLE, LLC<BR>
K. HOVNANIAN AT SMITHVILLE III, L.L.C.<BR>
K. HOVNANIAN AT SMITHVILLE, INC<BR>
K. HOVNANIAN AT SOMERS POINT, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.<BR>
K. HOVNANIAN AT SPARTA, L.L.C.<BR>
K. HOVNANIAN AT SPRINGCO, L.L.C.<BR>
K. HOVNANIAN AT STANTON, LLC<BR>
K. HOVNANIAN AT STATION SQUARE, L.L.C.<BR>
K. HOVNANIAN AT STONE CANYON, INC.<BR>
K. HOVNANIAN AT SUNRIDGE PARK, LLC<BR>
K. HOVNANIAN AT SUNSETS, LLC<BR>
K. HOVNANIAN AT SYCAMORE, INC.<BR>
K. HOVNANIAN AT TEANECK, L.L.C.<BR>
K. HOVNANIAN AT THE CLIFFS, LLC<BR>
K. HOVNANIAN AT THE CROSBY, LLC<BR>
K. HOVNANIAN AT THE GABLES, LLC<BR>
K. HOVNANIAN AT THE MONARCH, L.L.C.<BR>
K. HOVNANIAN AT THE PRESERVE, LLC<BR>
K. HOVNANIAN AT THOMPSON RANCH, LLC<BR>
K. HOVNANIAN AT THORNBURY, INC.<BR>
K. HOVNANIAN AT TRAIL RIDGE, LLC<BR>
K. HOVNANIAN AT TRENTON, L.L.C.<BR>
K. HOVNANIAN AT TROVATA, INC.<BR>
K. HOVNANIAN AT UNION TOWNSHIP I, INC.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT UPPER MAKEFIELD I, INC.<BR>
K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.<BR>
K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.<BR>
K. HOVNANIAN AT VAIL RANCH, INC.<BR>
K. HOVNANIAN AT VALLE DEL SOL, LLC<BR>
K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT VICTORVILLE, L.L.C.<BR>
K. HOVNANIAN AT VINELAND, L.L.C.<BR>
K. HOVNANIAN AT VISTA DEL SOL, L.L.C.<BR>
K. HOVNANIAN AT WANAQUE, L.L.C.<BR>
K. HOVNANIAN AT WARMINSTER, LLC<BR>
K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT WASHINGTON, L.L.C.<BR>
K. HOVNANIAN AT WATERSTONE, LLC<BR>
K. HOVNANIAN AT WAYNE IX, L.L.C.<BR>
K. HOVNANIAN AT WAYNE, VIII, L.L.C.<BR>
K. HOVNANIAN AT WEST BRADFORD, L.L.C.<BR>
K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WEST WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT WESTSHORE, LLC<BR>
K. HOVNANIAN AT WHEELER RANCH, LLC<BR>
K. HOVNANIAN AT WILDROSE, INC.<BR>
K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.<BR>
K. HOVNANIAN AT WILLOW BROOK, L.L.C.<BR>
K. HOVNANIAN AT WINCHESTER, LLC<BR>
K. HOVNANIAN AT WOODCREEK WEST, LLC<BR>
K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WOOLWICH I, L.L.C.<BR>
K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.<BR>
K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CLASSICS CIP, L.L.C.<BR>
K. HOVNANIAN CLASSICS, L.L.C.<BR>
K. HOVNANIAN COMMUNITIES, INC.<BR>
K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.<BR>
K. HOVNANIAN COMPANIES NORTHEAST, INC.<BR>
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF MARYLAND, INC.<BR>
K. HOVNANIAN COMPANIES OF NEW YORK, INC.<BR>
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF VIRGINIA, INC.<BR>
K. HOVNANIAN COMPANIES, LLC<BR>
K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CONSTRUCTION II, INC<BR>
K. HOVNANIAN CONSTRUCTION III, INC<BR>
K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.<BR>
K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.<BR>
K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF D.C., INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.<BR>
K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN FIRST HOMES, L.L.C.<BR>
K. HOVNANIAN FLORIDA REALTY, L.L.C.<BR>
K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC<BR>
K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC<BR>
K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC<BR>
K. HOVNANIAN GREAT WESTERN HOMES, LLC<BR>
K. HOVNANIAN HOLDINGS NJ, L.L.C.<BR>
K. HOVNANIAN HOMES &#151; DFW, L.L.C.<BR>
K. HOVNANIAN HOMES AT CAMERON STATION, LLC<BR>
K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.<BR>
K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.<BR>
K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.<BR>
K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.<BR>
K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.<BR>
K. HOVNANIAN HOMES AT PRIMERA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RUSSETT, L.L.C.<BR>
K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC<BR>
K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN HOMES OF D.C., L.L.C.<BR>
K. HOVNANIAN HOMES OF DELAWARE, L.L.C.<BR>
K. HOVNANIAN HOMES OF GEORGIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF HOUSTON, L.L.C.<BR>
K. HOVNANIAN HOMES OF INDIANA, L.L.C.<BR>
K. HOVNANIAN HOMES OF MARYLAND, L.L.C.<BR>
K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.<BR>
K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC<BR>
K. HOVNANIAN HOMES OF VIRGINIA, INC.<BR>
K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC<BR>
K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-7<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTHEAST SERVICES, L.L.C.<BR>
K. HOVNANIAN OF HOUSTON II, L.L.C.<BR>
K. HOVNANIAN OHIO REALTY, L.L.C.<BR>
K. HOVNANIAN OSTER HOMES, L.L.C.<BR>
K. HOVNANIAN PA REAL ESTATE, INC.<BR>
K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.<BR>
K. HOVNANIAN PROPERTIES OF RED BANK, INC.<BR>
K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.<BR>
K. HOVNANIAN STANDING ENTITY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT FLORIDA, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT ILLINOIS, L.L.C.<BR>
K. HOVNANIAN T&#038;C INVESTMENT, L.L.C.<BR>
K. HOVNANIAN T&#038;C MANAGEMENT CO., L.L.C.<BR>
K. HOVNANIAN TIMBRES AT ELM CREEK, LLC<BR>
K. HOVNANIAN VENTURE I, L.L.C.<BR>
K. HOVNANIAN WINDWARD HOMES, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAILEY&#146;S GLENN, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAKERSFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BEAUMONT, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HEMET, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HUNTFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT LOS BANOS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT MORENO VALLEY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT PALM SPRINGS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RENAISSANCE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK II, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT VINT HILL, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS, LLC<BR>
K. HOVNANIAN&#146;S PARKSIDE AT TOWNGATE, L.L.C.<BR>
K. HOVNANIAN&#146;S PRIVATE HOME PORTFOLIO, L.L.C.<BR>
KHIP, L.L.C.<BR>
LANDARAMA, INC.<BR>
M&#038;M AT CHESTERFIELD, LLC<BR>
M&#038;M AT CRESCENT COURT, L.L.C.<BR>
M&#038;M AT WEST ORANGE, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">M&#038;M AT WHEATENA URBAN RENEWAL, L.L.C.<BR>
MATZEL &#038; MUMFORD AT EGG HARBOR, L.L.C.<BR>
MATZEL &#038; MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.<BR>
MCNJ, INC.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF KENTUCKY, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF MICHIGAN, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES, L.L.C.<BR>
MMIP, L.L.C.<BR>
NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.<BR>
NEW LAND TITLE AGENCY, L.L.C.<BR>
PADDOCKS, L.L.C.<BR>
PARK TITLE COMPANY, LLC<BR>
PINE AYR, LLC<BR>
REAL PROPERTY HOLDING &#151; PRINCE GEORGE&#146;S COUNTY, MD, LLC<BR>
RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.<BR>
RIDGEMORE UTILITY, L.L.C.<BR>
SEABROOK ACCUMULATION CORPORATION<BR>
STONEBROOK HOMES, INC.<BR>
TERRAPIN REALTY, L.L.C.<BR>
THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.<BR>
THE MATZEL &#038; MUMFORD ORGANIZATION, INC<BR>
THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC<BR>
THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.<BR>
WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.<BR>
WASHINGTON HOMES, INC.<BR>
WESTMINSTER HOMES OF ALABAMA, L.L.C.<BR>
WESTMINSTER HOMES OF MISSISSIPPI, LLC<BR>
WESTMINSTER HOMES OF TENNESSEE, INC.<BR>
WESTMINSTER HOMES, INC.<BR>
WH LAND I, INC.<BR>
WH PROPERTIES, INC.<BR>
WH/PR LAND COMPANY, L.L.C.<BR>
WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF FACE OF NOTE&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR
DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED
FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (THE &#147;<B>DEPOSITARY</B>&#148;) TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE &#038; CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &#038; CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE &#038; CO., HAS AN INTEREST HEREIN.&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP> &nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Note.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt">K. HOVNANIAN ENTERPRISES, INC.<BR>
12.072% SENIOR SUBORDINATED AMORTIZING NOTES DUE 2014
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CUSIP No. 442488201</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ISIN No.: US4424882011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%"></TD>
    <TD width="3%"></TD>
    <TD width="48%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">No. &#95;&#95;&#95;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#091;Initial&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP> Number of Notes: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K.&nbsp;HOVNANIAN ENTERPRISES, INC., a California corporation (the &#147;<B>Issuer</B>&#148;, which term includes
any successor under the Indenture hereinafter referred to), for value received, hereby promises to
pay to &#091;CEDE &#038; CO., as nominee of The Depository Trust Company&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
&#091;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">**</SUP>, or registered assigns (the &#147;<B>Holder</B>&#148;), the initial principal amount of
$4.526049 for each of the number of Notes set forth above&#091;, which number of Notes may from time to
time be reduced or increased as set forth in Schedule&nbsp;A hereto, as appropriate, in accordance with
the terms of the Indenture, but which number of Notes, taken together with the number of all other
outstanding Notes, shall not exceed 3,000,000 Notes at any time (as increased by a number of Notes
equal to the number of any additional Units purchased by the Underwriters pursuant to the exercise
of their option to purchase additional Units as set forth in the Underwriting
Agreement)&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>, in equal quarterly installments (except for the first such payment) (each
such payment, an &#147;<B>Installment Payment</B>,&#148; constituting a payment of interest at the rate per year of
12.072% and a partial repayment of principal) payable on each February&nbsp;15, May&nbsp;15, August&nbsp;15 and
November&nbsp;15 commencing on May&nbsp;15, 2011 (each such date, an &#147;<B>Installment Payment Date</B>&#148; and the
period from, and including, February&nbsp;9, 2011 to, but excluding, the first Installment Payment Date
and each subsequent full quarterly period from, and including, an Installment Payment Date to, but
excluding, the immediately succeeding Installment Payment Date, an &#147;<B>Installment Payment Period</B>&#148;),
all as set forth on the reverse hereof, with the final Installment Payment due and payable on
February&nbsp;15, 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Installment Payment on any Installment Payment Date shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If an Installment Payment for any period shorter
than a full Installment Payment Period, such Installment Payment shall be computed on the basis of
the actual number of days elapsed per 30-day month. In the event that any Installment Payment Date
is not a Business Day, then payment of the Installment Payment on such date will be made on the
next succeeding day that is a Business Day, and without any interest or other payment in respect of
any such delay. However, if such Business Day is in the next succeeding calendar year, then such
installment payment shall be made on the immediately preceding Business Day, in each case
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">with the same force and effect as if made on the date when such Installment Payment was originally due.
Installment Payments shall be paid to the Person in
whose name the Note is registered, with limited exceptions, at the close of business on the
Business Day immediately preceding the related Installment Payment Date (each, a &#147;<B>Regular Record
Date</B>&#148;). If the Notes do not remain in book-entry only form, the Issuer shall have the right to
select Regular Record Dates, noticed in writing in advance, to the Trustee and Holders, which will
be more than 14&nbsp;days but less than 60&nbsp;days prior to the relevant Installment Payment Date.
Installment Payments shall be payable at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York or in Delaware; <I>provided</I>, <I>however</I>, that
payment of Installment Payments may be made at the option of the Issuer by check mailed to the
registered Holder at such address as shall appear in the Security Register or by wire transfer to
an account appropriately designated by the Holder entitled to payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or
be valid or obligatory for any purpose until the Certificate of Authentication shall have been
manually signed by or on behalf of the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which will for all purposes have the same effect as if set forth at this place.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;SIGNATURES ON THE FOLLOWING PAGE&#093;
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">* </SUP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> Include only if a Global Note.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">** </SUP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> Include only if not a Global Note.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<BR>Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">CERTIFICATE OF AUTHENTICATION<BR>
<BR>
Wilmington Trust Company, as Trustee, certifies that this is one of the
Securities of the series designated herein referred to in the within mentioned
Indenture.<BR>
<BR>
Dated:<BR>
<BR>
WILMINGTON TRUST COMPANY, as <br>Trustee<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Authorized Signatory&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REVERSE OF NOTE&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">12.072% Senior Subordinated Amortizing Notes due 2014
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is one of a duly authorized series of Securities of the Note Issuer designated as
its 12.072% Senior Subordinated Amortizing Notes due 2014 (herein sometimes referred to as the
&#147;<B>Notes</B>&#148;), issued under the Senior Subordinated Indenture, dated as of February&nbsp;9, 2011, among the
Issuer, Hovnanian Enterprises, Inc. (&#147;<B>Hovnanian</B>&#148;) and Wilmington Trust Company, as trustee (the
&#147;<B>Trustee</B>,&#148; which term includes any successor trustee under the Indenture) (including any provisions
of the TIA that are deemed incorporated therein) (the &#147;<B>Base Indenture</B>&#148;), as supplemented by the
First Supplemental Indenture, dated as of February&nbsp;9, 2011 (the &#147;<B>First Supplemental Indenture</B>&#148;),
among the Issuer, Hovnanian, the other Guarantors from time to time party thereto, and the Trustee
(the Base Indenture and, as supplemented by the First Supplemental Indenture, the &#147;<B>Indenture</B>&#148;), to
which Indenture reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders. The terms
of other series of Securities issued under the Indenture may vary with respect to interest rates,
issue dates, maturity, redemption, repayment, currency of payment and otherwise as provided in the
Indenture. The Indenture further provides that securities of a single series may be issued at
various times, with different maturity dates and may bear interest at different rates. This series
of Securities is limited in initial aggregate principal amount as specified in the First
Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each installment shall constitute a payment of interest (at a rate of 12.072% per annum) and a
partial repayment of principal on the Note, allocated as set forth in the schedule below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Installment Payment Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Interest</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.337631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.145703</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.326719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.126406</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.336579</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.116546</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.346737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.106388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.357201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.095924</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.367982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.085143</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.379087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.074038</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.390528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.062597</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">May&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.402314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.050811</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Installment Payment Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amount of Interest</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">August&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.414456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.038669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November&nbsp;15, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.426965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.026160</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">February&nbsp;15, 2014</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.439850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.013275</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes shall not be subject to redemption at the option of the Issuer. However, a Holder
shall have the right to require the Issuer to repurchase some or all of its Notes for cash at the
Repurchase Price per Note and on the Repurchase Date, upon the occurrence of certain events and
subject to the conditions set forth in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is not entitled to the benefit of any sinking fund. The Indenture contains
provisions for defeasance and covenant defeasance at any time of the indebtedness on this Note upon
compliance by the Issuer with certain conditions set forth therein, which provisions apply to this
Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default with respect to the Notes shall occur and be continuing, then (unless
no declaration of acceleration or notice is required for such Event of Default) either the Trustee
or the Holders of not less than 25% in principal amount of the Notes then outstanding may declare
the aggregate principal amount of the Notes, and all interest accrued thereon, to be due and
payable immediately, in the manner, subject to the conditions and with the effect provided in the
Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture permits, with certain exceptions as therein provided, the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in principal amount of the
Securities at the time outstanding, to execute supplemental indentures for certain purposes as
described therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No provision of this Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay Installment Payments on this Note at the time,
place and rate, and in the coin or currency, herein and in the Indenture prescribed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are guaranteed, on a senior subordinated basis, by the Guarantors as set forth in
the Indenture and the Guarantee endorsed hereon.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are originally being issued as part of the 7.25% Tangible Equity Units (the &#147;<B>Units</B>&#148;)
issued by Hovnanian and the Issuer pursuant to that certain Purchase Contract Agreement, dated as
of February&nbsp;9, 2011, between Hovnanian, the Issuer and Wilmington Trust Company, as Purchase
Contract Agent, as Trustee and as attorney-in-fact for the holders of Purchase Contracts from time
to time (the &#147;<B>Purchase Contract Agreement</B>&#148;). Holders of the Units have the right to separate such
Units into their constituent parts, consisting of Separate Purchase
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Contracts (as defined in the
Purchase Contract Agreement) and Separate Notes, during the times, and under the circumstances,
described in the Purchase Contract Agreement. Following separation of any Unit into its constituent
Separate Note and Separate Purchase Contract, the Separate Notes are transferable
independently from the Separate Purchase Contracts. In addition, Separate Notes can be
recombined with Separate Purchase Contracts to recreate Units, as provided for in the Purchase
Contract Agreement. Reference is hereby made to the Purchase Contract Agreement for a more complete
description of the terms thereof applicable to the Units and Notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note shall be registered on the Security register of the Issuer, upon due
presentation of this Note for registration of transfer at the office or agency of the Issuer in the
Borough of Manhattan, The City of New York or in Delaware, duly endorsed by, or accompanied by a
written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon
the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Note or Notes in authorized denominations and for a like aggregate
principal amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are initially issued in registered, global form without coupons in denominations
initially equal to $4.526049 and integral multiples in excess thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer or Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer of this
Note. No service charge shall be made for any such transfer or for any exchange of this Note as
contemplated by the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered upon the Security register for the Notes as the
absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving payment of or on
account of the principal of and, subject to the provisions of the Indenture, interest, if any, on
this Note and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This Note and the Indenture, and any claim, controversy or dispute arising under or related to
the Indenture or this Note, shall for all purposes be governed by, and construed in accordance
with, the laws of the State of New York.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms used but not defined in this Note shall have the meanings ascribed to such
terms in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No recourse shall be had for the payment of any Installment Payment on this Note, or for any
claim based hereon, or upon any obligation, covenant or agreement of the Issuer in the Indenture,
against any incorporator, stockholder, officer or director, past, present or future of the Issuer
or of any predecessor or
 successor, either directly or through the Issuer or of any successor, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment of penalty or
otherwise; and all such personal liability is expressly released and waived as a condition of, and
as part of the consideration for, the issuance of this Note.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer and each Holder agrees, for United States federal income tax purposes, to treat the
Notes as indebtedness of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Note is a component of a Unit, it shall be subject to the Section&nbsp;382 Ownership
Blocker (as defined in the Purchase Contract Agreement), and any purported violation of the Section
382 Ownership Blocker shall be subject to the consequences provided in the Indenture and the
Purchase Contract Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Note and the provisions of
the Indenture, the Indenture shall prevail.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FORM OF NOTATION ON NOTE RELATING TO GUARANTEE&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">GUARANTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned (the &#147;<B>Guarantors</B>&#148;) hereby unconditionally guarantee, jointly and severally, to
each Holder and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Issuer thereunder or under the
Notes, that (i)&nbsp;the due and punctual payment of the principal of, interest on the Notes (including,
without limitation, Installment Payments and the Repurchase Price of any Notes payable pursuant to
Article&nbsp;11 of the First Supplemental Indenture, if applicable), and all other amounts owing with
respect to the Notes, whether on the Maturity Date, on any Repurchase Date or on any Installment
Payment Date, by acceleration or otherwise, if lawful, and all other obligations of the Issuer to
the Holders or the Trustee thereunder or under the Notes shall be promptly paid in full when due or
performed in accordance with the terms of the Indenture and the Notes, including all amounts
payable to the Trustee, and (ii)&nbsp;in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same shall be promptly paid in full when due or to be
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise (each such guarantee, a &#147;<B>Guarantee</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Guarantors under this Guarantee are subordinated to all Senior
Indebtedness of a Guarantor, as set forth in Article&nbsp;7 of the First Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No past, present or future stockholder, officer, director, employee or incorporator, as such,
of any of the Guarantors shall have any liability under the Guarantee by reason of such Person&#146;s
status as stockholder, officer, director, employee or incorporator. Each Holder of a Note by
accepting a Note waives and releases all such liability. This waiver and release are part of the
consideration for the issuance of the Guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Holder of a Note by accepting a Note agrees that any Guarantor named below shall have no
further liability with respect to its Guarantee if such Guarantor otherwise ceases to be liable in
respect of its Guarantee in accordance with the terms of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication on the Notes upon which the Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any inconsistency between the provisions of this Guarantee and the provisions
of the Indenture, the Indenture shall prevail.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Guarantors have caused this instrument to be executed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">AUDDIE ENTERPRISES, L.L.C.<BR>
BUILDER SERVICES NJ, L.L.C.<BR>
BUILDER SERVICES NY, L.L.C.<BR>
BUILDER SERVICES PA, L.L.C.<BR>
DULLES COPPERMINE, L.L.C.<BR>
EASTERN NATIONAL TITLE AGENCY, LLC<BR>
EASTERN TITLE AGENCY, INC.<BR>
F&#038;W MECHANICAL SERVICES, L.L.C.<BR>
FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.<BR>
FOUNDERS TITLE AGENCY, INC.<BR>
GOVERNOR&#146;S ABSTRACT CO., INC.<BR>
HOMEBUYERS FINANCIAL SERVICES, L.L.C.<BR>
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.<BR>
HOVNANIAN ENTERPRISES, INC.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC<BR>
HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP, L.L.C.<BR>
K. HOV INTERNATIONAL, INC.<BR>
K. HOV IP, INC.<BR>
K. HOV IP, II, INC.<BR>
K. HOVNANIAN ACQUISITIONS, INC.<BR>
K. HOVNANIAN AT 4S, LLC<BR>
K. HOVNANIAN AT ACQUA VISTA, LLC<BR>
K. HOVNANIAN AT ALISO, LLC<BR>
K. HOVNANIAN AT ALLENTOWN, L.L.C.<BR>
K. HOVNANIAN AT ALMOND ESTATES, LLC<BR>
K. HOVNANIAN AT ANDALUSIA, LLC<BR>
K. HOVNANIAN AT ARBOR HEIGHTS, LLC<BR>
K. HOVNANIAN AT AVENUE ONE, L.L.C.<BR>
K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT I, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT II, L.L.C.<BR>
K. HOVNANIAN AT BELLA LAGO, LLC<BR>
K. HOVNANIAN AT BERKELEY, L.L.C.<BR>
K. HOVNANIAN AT BERNARDS V, L.L.C.<BR>
K. HOVNANIAN AT BLUE HERON PINES, L.L.C.<BR>
K. HOVNANIAN AT BRANCHBURG, L.L.C.<BR>
K. HOVNANIAN AT BRIDGEPORT, INC.<BR>
K. HOVNANIAN AT BRIDGEWATER I, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.<BR>
K. HOVNANIAN AT CALABRIA, INC.<BR>
K. HOVNANIAN AT CAMDEN I, L.L.C.<BR>
K. HOVNANIAN AT CAMERON CHASE, INC.<BR>
K. HOVNANIAN AT CAMP HILL, L.L.C.<BR>
K. HOVNANIAN AT CAPISTRANO, L.L.C.<BR>
K. HOVNANIAN AT CARLSBAD, LLC<BR>
K. HOVNANIAN AT CARMEL DEL MAR, INC.<BR>
K. HOVNANIAN AT CARMEL VILLAGE, LLC<BR>
K. HOVNANIAN AT CASTILE, INC.<BR>
K. HOVNANIAN AT CEDAR GROVE III, L.L.C.<BR>
K. HOVNANIAN AT CEDAR GROVE V, L.L.C.<BR>
K. HOVNANIAN AT CHAPARRAL, INC.<BR>
K. HOVNANIAN AT CHARTER WAY, LLC<BR>
K. HOVNANIAN AT CHESTER I, L.L.C.<BR>
K. HOVNANIAN AT CHESTERFIELD, L.L.C.<BR>
K. HOVNANIAN AT CIELO, L.L.C.<BR>
K. HOVNANIAN AT CLIFTON, L.L.C.<BR>
K. HOVNANIAN AT COASTLINE, L.L.C.<BR>
K. HOVNANIAN AT CORTEZ HILL, LLC<BR>
K. HOVNANIAN AT CRANBURY, L.L.C.<BR>
K. HOVNANIAN AT CRESTLINE, INC.<BR>
K. HOVNANIAN AT CURRIES WOODS, L.L.C.<BR>
K. HOVNANIAN AT DENVILLE, L.L.C.<BR>
K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT DOMINGUEZ HILLS, INC.<BR>
K. HOVNANIAN AT DOVER, L.L.C.<BR>
K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.<BR>
K. HOVNANIAN AT EASTLAKE, LLC<BR>
K. HOVNANIAN AT EDGEWATER II, L.L.C.<BR>
K. HOVNANIAN AT EDGEWATER, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH, L.L.C.<BR>
K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT ENCINITAS RANCH, LLC<BR>
K. HOVNANIAN AT EVERGREEN, L.L.C.<BR>
K. HOVNANIAN AT EWING, L.L.C.<BR>
K. HOVNANIAN AT FAIR OAKS, L.L.C.<BR>
K. HOVNANIAN AT FIDDYMENT RANCH, LLC<BR>
K. HOVNANIAN AT FIFTH AVENUE, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE I, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE II, L.L.C.<BR>
K. HOVNANIAN AT FOREST MEADOWS, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN II, L.L.C.<BR>
K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT FRESNO, LLC<BR>
K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.<BR>
K. HOVNANIAN AT GILROY, LLC<BR>
K. HOVNANIAN AT GREAT NOTCH, L.L.C.<BR>
K. HOVNANIAN AT GRIDLEY, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT GUTTENBERG, L.L.C.<BR>
K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG, L.L.C.<BR>
K. HOVNANIAN AT HAWTHORNE, L.L.C.<BR>
K. HOVNANIAN AT HAZLET, L.L.C.<BR>
K. HOVNANIAN AT HERSHEY&#146;S MILL, INC.<BR>
K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.<BR>
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.<BR>
K. HOVNANIAN AT HILLTOP, L.L.C.<BR>
K. HOVNANIAN AT HUDSON POINTE, L.L.C.<BR>
K. HOVNANIAN AT JACKSON I, L.L.C.<BR>
K. HOVNANIAN AT JACKSON, L.L.C.<BR>
K. HOVNANIAN AT JAEGER RANCH, LLC<BR>
K. HOVNANIAN AT JERSEY CITY IV, L.L.C.<BR>
K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT KEYPORT, L.L.C.<BR>
K. HOVNANIAN AT KING FARM, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA GREENS, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA, LLC<BR>
K. HOVNANIAN AT LA HABRA KNOLLS, LLC<BR>
K. HOVNANIAN AT LA LAGUNA, L.L.C.<BR>
K. HOVNANIAN AT LA PAZ, LLC<BR>
K. HOVNANIAN AT LA TERRAZA, INC.<BR>
K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.<BR>
K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC<BR>
K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.<BR>
K. HOVNANIAN AT LANDMARK, LLC<BR>
K. HOVNANIAN AT LARKSPUR, LLC<BR>
K. HOVNANIAN AT LAWRENCE V, L.L.C.<BR>
K. HOVNANIAN AT LEE SQUARE, L.L.C.<BR>
K. HOVNANIAN AT LINWOOD, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.<BR>
K. HOVNANIAN AT LIVE OAK II, LLC<BR>
K. HOVNANIAN AT LONG BRANCH I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND III, L.L.C.<BR>
K. HOVNANIAN AT MACUNGIE, L.L.C.<BR>
K. HOVNANIAN AT MAHWAH VI, INC.<BR>
K. HOVNANIAN AT MALAN PARK, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN III, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD I, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD II, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD III, L.L.C.<BR>
K. HOVNANIAN AT MANTECA, LLC<BR>
K. HOVNANIAN AT MAPLE AVENUE, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-3<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VI, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VII, L.L.C.<BR>
K. HOVNANIAN AT MATSU, L.L.C.<BR>
K. HOVNANIAN AT MELANIE MEADOWS, LLC<BR>
K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MENIFEE, LLC<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MIDDLETOWN II, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE I, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE II, L.L.C.<BR>
K. HOVNANIAN AT MONROE II, INC.<BR>
K. HOVNANIAN AT MONROE IV, L.L.C.<BR>
K. HOVNANIAN AT MONROE NJ, L.L.C.<BR>
K. HOVNANIAN AT MONTVALE, LLC<BR>
K. HOVNANIAN AT MONTVALE II, L.L.C.<BR>
K. HOVNANIAN AT MOSAIC, LLC<BR>
K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MUIRFIELD, LLC<BR>
K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT NEW WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT NORTH BERGEN. L.L.C.<BR>
K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL, L.L.C.<BR>
K. HOVNANIAN AT NORTH HALEDON, L.L.C.<BR>
K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.<BR>
K. HOVNANIAN AT NORTHAMPTON, L.L.C.<BR>
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.<BR>
K. HOVNANIAN AT NORTHFIELD, L.L.C.<BR>
K. HOVNANIAN AT NORTHLAKE, INC.<BR>
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.<BR>
K. HOVNANIAN AT OCEAN WALK, INC.<BR>
K. HOVNANIAN AT OCEANPORT, L.L.C.<BR>
K. HOVNANIAN AT OLD BRIDGE, L.L.C.<BR>
K. HOVNANIAN AT OLDE ORCHARD, LLC<BR>
K. HOVNANIAN AT PACIFIC BLUFFS, LLC<BR>
K. HOVNANIAN AT PARAMUS, L.L.C.<BR>
K. HOVNANIAN AT PARK LANE, LLC<BR>
K. HOVNANIAN AT PARKSIDE, LLC<BR>
K. HOVNANIAN AT PARSIPPANY, L.L.C.<BR>
K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.<BR>
K. HOVNANIAN AT PERKIOMEN II, INC.<BR>
K. HOVNANIAN AT PHILADELPHIA II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA III, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA D&#146;ORO, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA SERENA, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-4<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT PITTSGROVE, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.<BR>
K. HOVNANIAN AT POSITANO, LLC<BR>
K. HOVNANIAN AT PRADO, L.L.C.<BR>
K. HOVNANIAN AT RANCHO 79, LLC<BR>
K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.<BR>
K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC<BR>
K. HOVNANIAN AT RANDOLPH I, L.L.C.<BR>
K. HOVNANIAN AT RAPHO, L.L.C.<BR>
K. HOVNANIAN AT READINGTON II, L.L.C.<BR>
K. HOVNANIAN AT RED BANK, L.L.C.<BR>
K. HOVNANIAN AT RIDGEMONT, L.L.C.<BR>
K. HOVNANIAN AT RIDGESTONE, L.L.C.<BR>
K. HOVNANIAN AT RIVERBEND, LLC<BR>
K. HOVNANIAN AT RIVERCREST, LLC<BR>
K. HOVNANIAN AT RODERUCK, L.L.C.<BR>
K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.<BR>
K. HOVNANIAN AT ROWLAND HEIGHTS, LLC<BR>
K. HOVNANIAN AT SAGE, L.L.C.<BR>
K. HOVNANIAN AT SAN SEVAINE, INC.<BR>
K. HOVNANIAN AT SANTA FE SPRINGS, LLC<BR>
K. HOVNANIAN AT SANTA NELLA, LLC<BR>
K. HOVNANIAN AT SARATOGA, INC.<BR>
K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.<BR>
K. HOVNANIAN AT SAWMILL, INC.<BR>
K. HOVNANIAN AT SAYREVILLE, L.L.C.<BR>
K. HOVNANIAN AT SHELDON GROVE, LLC<BR>
K. HOVNANIAN AT SHREWSBURY, LLC<BR>
K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.<BR>
K. HOVNANIAN AT SIERRA ESTATES, LLC<BR>
K. HOVNANIAN AT SILVER SPRING, L.L.C.<BR>
K. HOVNANIAN AT SKYE ISLE, LLC<BR>
K. HOVNANIAN AT SMITHVILLE III, L.L.C.<BR>
K. HOVNANIAN AT SMITHVILLE, INC<BR>
K. HOVNANIAN AT SOMERS POINT, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.<BR>
K. HOVNANIAN AT SPARTA, L.L.C.<BR>
K. HOVNANIAN AT SPRINGCO, L.L.C.<BR>
K. HOVNANIAN AT STANTON, LLC<BR>
K. HOVNANIAN AT STATION SQUARE, L.L.C.<BR>
K. HOVNANIAN AT STONE CANYON, INC.<BR>
K. HOVNANIAN AT SUNRIDGE PARK, LLC<BR>
K. HOVNANIAN AT SUNSETS, LLC<BR>
K. HOVNANIAN AT SYCAMORE, INC.<BR>
K. HOVNANIAN AT TEANECK, L.L.C.<BR>
K. HOVNANIAN AT THE CLIFFS, LLC<BR>
K. HOVNANIAN AT THE CROSBY, LLC<BR>
K. HOVNANIAN AT THE GABLES, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT THE MONARCH, L.L.C.<BR>
K. HOVNANIAN AT THE PRESERVE, LLC<BR>
K. HOVNANIAN AT THOMPSON RANCH, LLC<BR>
K. HOVNANIAN AT THORNBURY, INC.<BR>
K. HOVNANIAN AT TRAIL RIDGE, LLC<BR>
K. HOVNANIAN AT TRENTON, L.L.C.<BR>
K. HOVNANIAN AT TROVATA, INC.<BR>
K. HOVNANIAN AT UNION TOWNSHIP I, INC.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.<BR>
K. HOVNANIAN AT UPPER MAKEFIELD I, INC.<BR>
K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.<BR>
K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.<BR>
K. HOVNANIAN AT VAIL RANCH, INC.<BR>
K. HOVNANIAN AT VALLE DEL SOL, LLC<BR>
K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT VICTORVILLE, L.L.C.<BR>
K. HOVNANIAN AT VINELAND, L.L.C.<BR>
K. HOVNANIAN AT VISTA DEL SOL, L.L.C.<BR>
K. HOVNANIAN AT WANAQUE, L.L.C.<BR>
K. HOVNANIAN AT WARMINSTER, LLC<BR>
K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT WASHINGTON, L.L.C.<BR>
K. HOVNANIAN AT WATERSTONE, LLC<BR>
K. HOVNANIAN AT WAYNE IX, L.L.C.<BR>
K. HOVNANIAN AT WAYNE, VIII, L.L.C.<BR>
K. HOVNANIAN AT WEST BRADFORD, L.L.C.<BR>
K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WEST WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT WESTSHORE, LLC<BR>
K. HOVNANIAN AT WHEELER RANCH, LLC<BR>
K. HOVNANIAN AT WILDROSE, INC.<BR>
K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.<BR>
K. HOVNANIAN AT WILLOW BROOK, L.L.C.<BR>
K. HOVNANIAN AT WINCHESTER, LLC<BR>
K. HOVNANIAN AT WOODCREEK WEST, LLC<BR>
K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WOOLWICH I, L.L.C.<BR>
K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.<BR>
K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CLASSICS CIP, L.L.C.<BR>
K. HOVNANIAN CLASSICS, L.L.C.<BR>
K. HOVNANIAN COMMUNITIES, INC.<BR>
K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.<BR>
K. HOVNANIAN COMPANIES NORTHEAST, INC.<BR>
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF MARYLAND, INC.<BR>
K. HOVNANIAN COMPANIES OF NEW YORK, INC.<BR>
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF VIRGINIA, INC.<BR>
K. HOVNANIAN COMPANIES, LLC<BR>
K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN CONSTRUCTION II, INC<BR>
K. HOVNANIAN CONSTRUCTION III, INC<BR>
K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.<BR>
K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.<BR>
K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF D.C., INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.<BR>
K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN FIRST HOMES, L.L.C.<BR>
K. HOVNANIAN FLORIDA REALTY, L.L.C.<BR>
K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC<BR>
K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC<BR>
K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC<BR>
K. HOVNANIAN GREAT WESTERN HOMES, LLC<BR>
K. HOVNANIAN HOLDINGS NJ, L.L.C.<BR>
K. HOVNANIAN HOMES &#151; DFW, L.L.C.<BR>
K. HOVNANIAN HOMES AT CAMERON STATION, LLC<BR>
K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.<BR>
K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.<BR>
K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.<BR>
K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.<BR>
K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.<BR>
K. HOVNANIAN HOMES AT PRIMERA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RUSSETT, L.L.C.<BR>
K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC<BR>
K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN HOMES OF D.C., L.L.C.<BR>
K. HOVNANIAN HOMES OF DELAWARE, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN HOMES OF GEORGIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF HOUSTON, L.L.C.<BR>
K. HOVNANIAN HOMES OF INDIANA, L.L.C.<BR>
K. HOVNANIAN HOMES OF MARYLAND, L.L.C.<BR>
K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.<BR>
K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC<BR>
K. HOVNANIAN HOMES OF VIRGINIA, INC.<BR>
K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC<BR>
K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTHEAST SERVICES, L.L.C.<BR>
K. HOVNANIAN OF HOUSTON II, L.L.C.<BR>
K. HOVNANIAN OHIO REALTY, L.L.C.<BR>
K. HOVNANIAN OSTER HOMES, L.L.C.<BR>
K. HOVNANIAN PA REAL ESTATE, INC.<BR>
K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.<BR>
K. HOVNANIAN PROPERTIES OF RED BANK, INC.<BR>
K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.<BR>
K. HOVNANIAN STANDING ENTITY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT FLORIDA, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT ILLINOIS, L.L.C.<BR>
K. HOVNANIAN T&#038;C INVESTMENT, L.L.C.<BR>
K. HOVNANIAN T&#038;C MANAGEMENT CO., L.L.C.<BR>
K. HOVNANIAN TIMBRES AT ELM CREEK, LLC<BR>
K. HOVNANIAN VENTURE I, L.L.C.<BR>
K. HOVNANIAN WINDWARD HOMES, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAILEY&#146;S GLENN, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAKERSFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BEAUMONT, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HEMET, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HUNTFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT LOS BANOS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT MORENO VALLEY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT PALM SPRINGS, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN&#146;S FOUR SEASONS AT RENAISSANCE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK II, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT VINT HILL, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS, LLC<BR>
K. HOVNANIAN&#146;S PARKSIDE AT TOWNGATE, L.L.C.<BR>
K. HOVNANIAN&#146;S PRIVATE HOME PORTFOLIO, L.L.C.<BR>
KHIP, L.L.C.<BR>
LANDARAMA, INC.<BR>
M&#038;M AT CHESTERFIELD, LLC<BR>
M&#038;M AT CRESCENT COURT, L.L.C.<BR>
M&#038;M AT WEST ORANGE, L.L.C.<BR>
M&#038;M AT WHEATENA URBAN RENEWAL, L.L.C.<BR>
MATZEL &#038; MUMFORD AT EGG HARBOR, L.L.C.<BR>
MATZEL &#038; MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.<BR>
MCNJ, INC.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF KENTUCKY, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF MICHIGAN, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES, L.L.C.<BR>
MMIP, L.L.C.<BR>
NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.<BR>
NEW LAND TITLE AGENCY, L.L.C.<BR>
PADDOCKS, L.L.C.<BR>
PARK TITLE COMPANY, LLC<BR>
PINE AYR, LLC<BR>
REAL PROPERTY HOLDING &#151; PRINCE GEORGE&#146;S COUNTY, MD, LLC<BR>
RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.<BR>
RIDGEMORE UTILITY, L.L.C.<BR>
SEABROOK ACCUMULATION CORPORATION<BR>
STONEBROOK HOMES, INC.<BR>
TERRAPIN REALTY, L.L.C.<BR>
THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.<BR>
THE MATZEL &#038; MUMFORD ORGANIZATION, INC<BR>
THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC<BR>
THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.<BR>
WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.<BR>
WASHINGTON HOMES, INC.<BR>
WESTMINSTER HOMES OF ALABAMA, L.L.C.<BR>
WESTMINSTER HOMES OF MISSISSIPPI, LLC<BR>
WESTMINSTER HOMES OF TENNESSEE, INC.<BR>
WESTMINSTER HOMES, INC.<BR>
WH LAND I, INC.<BR>
WH PROPERTIES, INC.<BR>
WH/PR LAND COMPANY, L.L.C.<BR>
WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Executive Vice President and<br>Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ASSIGNMENT
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Insert assignee&#146;s social security or tax identification number)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Insert address and zip code of assignee)<BR>
and irrevocably appoints

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for
him or her.

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">                                              Signature:
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">                                              Signature Guarantee:
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(Sign exactly as your name appears on the other side of this Note)
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURE GUARANTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signatures must be guaranteed by an &#147;eligible guarantor institution&#148; meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (&#147;STAMP&#148;) or such other &#147;signature guarantee program&#148; as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">as Trustee&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Attest<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">FORM OF REPURCHASE NOTICE
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">TO: &nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>K. HOVNANIAN ENTERPRISES, INC.<br>
WILMINGTON TRUST COMPANY, as Trustee</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registered Holder hereby irrevocably acknowledges receipt of a notice from K.
Hovnanian Enterprises, Inc. (the &#147;<B>Issuer</B>&#148;) regarding the right of Holders to elect to require the
Issuer to repurchase the Notes and requests and instructs the Issuer to pay, for each Note
designated below, the Repurchase Price for such Notes (determined as set forth in the Indenture),
in accordance with the terms of the Indenture and the Notes, to the registered holder hereof.
Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the
Indenture. The Notes shall be repurchased by the Issuer as of the Repurchase Date pursuant to the
terms and conditions specified in the Indenture.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE: The above signature of the Holder hereof must correspond with the name as written upon
the face of the Notes in every particular without alteration or enlargement or any change whatever.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notes Certificate Number (if applicable): &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Number of Notes to be repurchased (if less than all, must be one Note or integral multiples in
excess thereof): &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Social Security or Other Taxpayer Identification Number: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->B-13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B><BR>
&#091;SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial number of Notes evidenced by this Global Note is &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;. The following increases
or decreases in this Global Note have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of decrease</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of increase</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>following such</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Signature of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>in number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>in number of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>decrease (or</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>authorized officer</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>evidenced hereby</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>increase)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>of Trustee</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Include only if a Global Note.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-14<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT B</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>SUPPLEMENTAL INDENTURE</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">dated as of &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, &#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">among
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The Other Guarantors Party Hereto
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">and
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">WILMINGTON TRUST COMPANY,<BR>
as Trustee
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV><BR>
12.072% Senior Subordinated Amortizing Notes due 2014
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-15<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#093; SUPPLEMENTAL INDENTURE (this &#147;&#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; <B>Supplemental Indenture</B>&#148;),
entered into as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, among K. Hovnanian Enterprises, Inc., a California
corporation (the &#147;<B>Issuer</B>&#148;), Hovnanian Enterprises, Inc. (&#147;<B>Hovnanian</B>&#148;), &#091;list each new guarantor and
its jurisdiction of incorporation&#093; (each an &#147;<B>Undersigned</B>&#148;) and Wilmington Trust Company, as trustee
(the &#147;<B>Trustee</B>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer, Hovnanian, the other Guarantors party thereto and the Trustee entered
into the Indenture dated as of February&nbsp;9, 2011 (as supplemented, the &#147;<B>Indenture</B>&#148;) as supplemented
by (i)&nbsp;the First Supplemental Indenture dated as of February&nbsp;9, 2011 (the &#147;<B>First Supplemental
Indenture</B>&#148;), relating to the Issuer&#146;s 12.072% Senior Subordinated Amortizing Notes due 2014 (the
&#147;<B>Notes</B>&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, as a condition to the purchase of the Notes by the Holders, Hovnanian agreed pursuant
to the Indenture to cause any newly acquired or created Subsidiaries guaranteeing Applicable Debt
(or any Subsidiaries that did not originally guarantee the Notes but subsequently guarantee
Applicable Debt) to provide Guarantees of the Notes, subject to certain limitations.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and
intending to be legally bound, the parties hereto hereby agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section</FONT> 1. Capitalized terms used herein and not otherwise defined herein are used
as defined in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section&nbsp;2</FONT>. Each Undersigned, by its execution of this &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#093;
Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms
of the Indenture applicable to Guarantors, including, but not limited to Article&nbsp;5 and Article&nbsp;7 of
the First Supplemental Indenture. Each Undersigned shall also execute a Guarantee Notation in
respect of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section </FONT>3. This &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture, and any claim,
controversy or dispute arising under or related to this &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental
Indenture, shall be governed by, and construed in accordance with, the laws of the State of New
York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section</FONT> 4. This &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture may be signed in various
counterparts which together will constitute one and the same instrument.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section </FONT>5. This &#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture is an amendment
supplemental to the Indenture, and the Indenture and this &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental
Indenture will henceforth be read together.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section </FONT>6. The recitals herein contained are made solely by the Issuer, Hovnanian
and the Guarantors and not by the Trustee, and the Trustee assumes no responsibility for the
validity or accuracy thereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-17<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this &#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#093; Supplemental
Indenture to be duly executed as of the date first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC.,<BR>
as Issuer<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC., as<br> Guarantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">On behalf of each entity named in<br> Schedule&nbsp;1 hereto, as Guarantors<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY,<BR>
as Trustee<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-18<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.29
<SEQUENCE>4
<FILENAME>y89643exv4w29.htm
<DESCRIPTION>EX-4.29
<TEXT>
<HTML>
<HEAD>
<TITLE>exv4w29</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;4.29</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>K. HOVNANIAN ENTERPRISES, INC.,<BR>
as Issuer</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>HOVNANIAN ENTERPRISES, INC.<BR>
and the other Guarantors party hereto,<BR>
as Guarantors</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>and</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>WILMINGTON TRUST COMPANY,</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>as Trustee</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">First Supplemental Indenture
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Dated as of February&nbsp;14, 2011
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">11&#8542;% Senior Notes due 2015
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 1</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Scope of Supplemental Indenture; General</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;1.01</B>. <I>Scope of Supplemental Indenture; General</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 2</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Certain Definitions</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;2.01</B>. <I>Certain Definitions</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;2.02</B><I>. Rules of Construction</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 3</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Covenants</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.01</B><I>. Existence</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.02</B><I>. Payment of Taxes and Other Claims</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.03</B><I>. Maintenance of Properties and Insurance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.04</B><I>. Repurchase of Notes Upon Change of Control</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.05</B><I>. Limitations on Indebtedness</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.06</B><I>. Limitations on Restricted Payments</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.07</B><I>. Limitations on Transactions with Affiliates</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.08</B><I>. Limitations on Dispositions of Assets</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.09</B><I>. Offer to Purchase</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.10</B><I>. Limitations on Liens</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.11</B><I>. Limitations on Restrictions Affecting Restricted Subsidiaries</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.12</B><I>. Limitations on Mergers, Consolidations and Sales of Assets</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.13</B><I>. Reports to Holders of Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.14</B><I>. Limitation of Applicability of Certain Covenants if Notes Rated Investment Grade</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;3.15</B><I>. Applicability of Covenants Contained in the Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 4</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Remedies</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;4.01</B><I>. Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;4.02</B><I>. Additional Provisions Related to Events of Default</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 5</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Guarantees; Release of Guarantor</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;5.01</B><I>. Unconditional Guarantees</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;5.02</B><I>. Release of a Guarantor</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;5.03</B>. <I>Guarantors as &#147;obligors&#148; for Provisions Included in the Indenture Pursuant to the Trust Indenture Act of 1939</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 6</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">The Trustee</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;6.01</B><I>. Compensation and Indemnification of Trustee and Its Prior Claim</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;6.02</B><I>. Appointment Of Trustee</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 7</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Defeasance</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;7.01</B><I>. Defeasance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;7.02</B>. <I>Additional Provisions to Survive Legal Defeasance and Discharge</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;7.03</B><I>. Additional Covenant Defeasance</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;7.04</B><I>. Section&nbsp;10.4</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;7.05</B><I>. Satisfaction and Discharge of the Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 8</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">The Notes</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;8.01</B><I>. Form of Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;8.02</B><I>. Depositary</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;8.03</B><I>. Certificated Notes</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;8.04</B>. <I>Offices for Notices and Payments, etc</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 9</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Redemption</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;9.01</B><I>. Optional Redemption</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;9.02</B><I>. Sinking Fund; Mandatory Redemption</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;9.03</B><I>. Redemption with Proceeds of Equity Offering</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;9.04. </B><I>Applicability of Sections of the Base Indenture</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 10</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Amendments, Supplements And Waivers</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;10.01</B><I>. Amendments, Supplements and Waivers</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->ii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><FONT style="FONT-variant: SMALL-CAPS">Page</FONT></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 11</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Release Of Issuer</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;11.01</B><I>. Release of Issuer</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><B>ARTICLE 12</B><BR></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="center"><FONT style="FONT-variant: SMALL-CAPS">Miscellaneous</FONT><BR></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.01</B><I>. GOVERNING LAW</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.02</B><I>. No Adverse Interpretation of Other Agreements</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.03</B><I>. Successors and Assigns</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.04</B><I>. Counterparts</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.05</B><I>. Severability</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.06</B>. <I>Effect of Headings</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Section&nbsp;12.07</B>. <I>Conflict of Any Provision of Indenture with Trust Indenture Act of 1939</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SCHEDULE:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Guarantors</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unrestricted Subsidiaries</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">EXHIBIT:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form of Note</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form of Notation on Note Relating to Guarantee</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form of Supplemental Indenture</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->iii<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST SUPPLEMENTAL INDENTURE dated as of February&nbsp;14, 2011 (&#147;<B>Supplemental Indenture</B>&#148;) by and
among K. HOVNANIAN ENTERPRISES, INC., a California corporation (the &#147;<B>Issuer</B>&#148;), HOVNANIAN
ENTERPRISES, INC., a Delaware Corporation (&#147;<B>Hovnanian</B>&#148;), each of the other Guarantors (as defined
herein) and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the &#147;<B>Trustee</B>&#148;),
supplementing the Indenture dated as of February&nbsp;14, 2011 by and among the Issuer, Hovnanian and
Wilmington Trust Company (the &#147;<B>Base Indenture</B>&#148; and as supplemented by this Supplemental Indenture,
the &#147;<B>Indenture</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of Notes (as defined herein):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Hovnanian and the Issuer have duly authorized the execution and delivery of the Base
Indenture to provide for the issuance from time to time of the Issuer&#146;s Securities to be issued in
one or more series as in the Indenture provided and the Guarantees thereof;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer and the Guarantors desire and have requested the Trustee to join them in
the execution and delivery of this Supplemental Indenture in order to establish and provide for the
issuance by the Issuer of a series of Securities designated as its 11&#8542;% Senior
Notes due 2015 (the &#147;<B>Notes</B>&#148;), substantially in the form attached hereto as Exhibit&nbsp;A and guaranteed
(the &#147;<B>Guarantees</B>&#148;) by Hovnanian and the Guarantors (as defined herein), on the terms set forth
herein;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer now wishes to issue Notes in an aggregate principal amount of
$155,000,000;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the conditions set forth in the Base Indenture for the execution and delivery of this
Supplemental Indenture have been complied with; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the
Issuer, the Guarantors and the Trustee, in accordance with its terms, and a valid amendment of, and
supplement to, the Base Indenture have been done;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of the premises and the purchase and acceptance of the Notes by the Holders
thereof, the Issuer and the Guarantors mutually covenant and agree with the Trustee, for the equal
and ratable benefit of the Holders of the Notes, that the Base Indenture is supplemented and
amended, to the extent expressed herein, as follows:
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 1</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Scope of Supplemental Indenture; General</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;1.01</B>. <I>Scope of Supplemental Indenture; General. </I>This Supplemental Indenture
supplements, and to the extent inconsistent therewith, replaces, the provisions of the Base
Indenture, to which provisions reference is hereby made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The changes, modifications and supplements to the Base Indenture effected by this Supplemental
Indenture shall be applicable only with respect to, and govern the terms of, the Notes (which shall
be initially in the aggregate principal amount of $155,000,000) and shall not apply to any other
Securities that have or may be issued under the Indenture unless a supplemental indenture with
respect to such other Securities specifically incorporates such changes, modifications and
supplements. Pursuant to this Supplemental Indenture, there is hereby created and designated a
series of Securities under the Indenture entitled &#147;11&#8542;% Senior Notes due 2015.&#148;
The Notes shall be in the form of Exhibit&nbsp;A hereto, the terms of which are incorporated herein by
reference. The Notes shall be guaranteed by the Guarantors as provided in such form and the
Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to Section&nbsp;3.05 hereof, the Issuer may issue additional notes subsequent to the Issue
Date (such notes, the &#147;<B>Additional Notes</B>&#148;) of the same series as the Notes. In the event that the
Issuer shall issue and the Trustee shall authenticate any Additional Notes issued under this
Supplemental Indenture subsequent to the Issue Date, the Issuer shall use its best efforts to
obtain the same &#147;CUSIP&#148; number for such Notes as is printed on the Notes outstanding at such time;
<I>provided, however</I>, that if any series of Notes issued under this Supplemental Indenture subsequent
to the Issue Date is determined to be a different class of security than the Notes outstanding at
such time for federal income tax purposes, the Issuer may obtain a &#147;CUSIP&#148; number for such Notes
that is different than the &#147;CUSIP&#148; number printed on the Notes then outstanding. Notwithstanding
the foregoing, all Notes issued under this Supplemental Indenture shall vote and consent together
on all matters as one class, including without limitation, waivers, amendments, redemption and
Offers to Purchase, and no Notes will have the right to vote or consent as a separate class from
other Notes on any matter.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 2</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Certain Definitions</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.01</B>. <I>Certain Definitions. </I>Section&nbsp;1.1 of the Base Indenture is hereby amended by
adding the following definitions in their proper alphabetical order which, in the event of a
conflict with the definition of terms in the Base
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indenture, shall govern. Capitalized terms used but not defined herein have the meanings
ascribed to such terms in the Base Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Acquired Indebtedness</B>&#148; means (a)&nbsp;with respect to any Person that becomes a Restricted
Subsidiary (or is merged into Hovnanian, the Issuer or any Restricted Subsidiary) after the Issue
Date, Indebtedness of such Person or any of its Subsidiaries existing at the time such Person
becomes a Restricted Subsidiary (or is merged into Hovnanian, the Issuer or any Restricted
Subsidiary) that was not incurred in connection with, or in contemplation of, such Person becoming
a Restricted Subsidiary (or being merged into Hovnanian, the Issuer or any Restricted Subsidiary)
and (b)&nbsp;with respect to Hovnanian, the Issuer or any Restricted Subsidiary, any Indebtedness
expressly assumed by Hovnanian, the Issuer or any Restricted Subsidiary in connection with the
acquisition of any assets from another Person (other than Hovnanian, the Issuer or any Restricted
Subsidiary), which Indebtedness was not incurred by such other Person in connection with or in
contemplation of such acquisition. Indebtedness incurred in connection with or in contemplation of
any transaction described in clause (a)&nbsp;or (b)&nbsp;of the preceding sentence shall be deemed to have
been incurred by Hovnanian or a Restricted Subsidiary, as the case may be, at the time such Person
becomes a Restricted Subsidiary (or is merged into Hovnanian, the Issuer or any Restricted
Subsidiary) in the case of clause (a)&nbsp;or at the time of the acquisition of such assets in the case
of clause (b), but shall not be deemed Acquired Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Additional Notes</B>&#148; has the meaning ascribed to it in Section&nbsp;1.01 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Affiliate</B>&#148; means, when used with reference to a specified Person, any Person directly or
indirectly controlling, or controlled by or under direct or indirect common control with the Person
specified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Affiliate Transaction</B>&#148; has the meaning ascribed to it in Section&nbsp;3.07(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Applicable Debt</B>&#148; means all Indebtedness of Hovnanian or any of its Restricted Subsidiaries
(a)&nbsp;under Credit Facilities or (b)&nbsp;that is publicly traded (including in the Rule&nbsp;144A market),
including, without limitation the Issuer&#146;s senior notes and senior subordinated notes outstanding
on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Asset Acquisition</B>&#148; means (a)&nbsp;an Investment by Hovnanian, the Issuer or any Restricted
Subsidiary in any other Person if, as a result of such Investment, such Person shall become a
Restricted Subsidiary or shall be consolidated or merged with or into Hovnanian, the Issuer or any
Restricted Subsidiary or (b)&nbsp;the acquisition by Hovnanian, the Issuer or any Restricted Subsidiary
of the assets of any Person, which constitute all or substantially all of the assets or of an
operating
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">unit or line of business of such Person or which is otherwise outside the ordinary course of
business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Asset Disposition</B>&#148; means any sale, transfer, conveyance, lease or other disposition
(including, without limitation, by way of merger, consolidation or sale and leaseback or sale of
shares of Capital Stock in any Subsidiary) (each, a &#147;<B>transaction</B>&#148;) by Hovnanian, the Issuer or any
Restricted Subsidiary to any Person of any Property having a Fair Market Value in any transaction
or series of related transactions of at least $5.0&nbsp;million. The term &#147;<B>Asset Disposition</B>&#148; shall not
include:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;a transaction between Hovnanian, the Issuer and any Restricted Subsidiary or a transaction
between Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;a transaction in the ordinary course of business, including, without limitation, sales
(directly or indirectly), dedications and other donations to governmental authorities, leases and
sales and leasebacks of (i)&nbsp;homes, improved land and unimproved land and (ii)&nbsp;real estate
(including related amenities and improvements),
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;a transaction involving the sale of Capital Stock of, or the disposition of assets in, an
Unrestricted Subsidiary,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;any exchange or swap of assets of Hovnanian, the Issuer or any Restricted Subsidiary for
assets (including Capital Stock of any Person that is or will be a Restricted Subsidiary following
receipt thereof) that (x)&nbsp;are to be used by Hovnanian, the Issuer or any Restricted Subsidiary in
the ordinary course of its Real Estate Business and (y)&nbsp;have a Fair Market Value not less than the
Fair Market Value of the assets exchanged or swapped,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;any sale, transfer, conveyance, lease or other disposition of assets and properties that
is governed by Section&nbsp;3.12 hereof,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;dispositions of mortgage loans and related assets and mortgage-backed securities in the
ordinary course of a mortgage lending business,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;the creation of a Permitted Lien and dispositions in connection with Permitted Liens, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;any Restricted Payment or Permitted Investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Attributable Debt</B>&#148; means, with respect to any Capitalized Lease Obligations, the capitalized
amount thereof determined in accordance with GAAP.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bankruptcy Law</B>&#148; means title 11 of the United States Code, as amended, or any similar federal
or state law for the relief of debtors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Capital Stock</B>&#148; means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of or in such Person&#146;s capital stock or
other equity interests, and options, rights or warrants to purchase such capital stock or other
equity interests, whether now outstanding or issued after the Issue Date, including, without
limitation, all Disqualified Stock and Preferred Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Capitalized Lease Obligations</B>&#148; of any Person means the obligations of such Person to pay rent
or other amounts under a lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of such obligations will be the capitalized amount thereof
determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Cash Equivalents</B>&#148; means
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;U.S. dollars;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;securities issued or directly and fully guaranteed or insured by the U.S. government or
any agency or instrumentality thereof having maturities of one year or less from the date of
acquisition;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;certificates of deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition, bankers&#146; acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any domestic commercial bank having capital and surplus
in excess of $500.0&nbsp;million;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b)&nbsp;and (c)&nbsp;above entered into with any financial institution
meeting the qualifications specified in clause (c)&nbsp;above;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;commercial paper rated P-1, A-1 or the equivalent thereof by Moody&#146;s or S&#038;P, respectively,
and in each case maturing within six months after the date of acquisition; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;investments in money market funds substantially all of the assets of which consist of
securities described in the foregoing clauses (a)&nbsp;through (e).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Certificated Note</B>&#148; means a Note registered in individual form without interest coupons.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Change of Control</B>&#148; means
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;any sale, lease or other transfer (in one transaction or a series of transactions) of all
or substantially all of the consolidated assets of Hovnanian and its Restricted Subsidiaries to any
Person (other than a Restricted Subsidiary); <I>provided, however</I>, that a transaction where the
holders of all classes of Common Equity of Hovnanian immediately prior to such transaction own,
directly or indirectly, more than 50% of all classes of Common Equity of such Person immediately
after such transaction shall not be a Change of Control;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;a &#147;<B>person</B>&#148; or &#147;<B>group</B>&#148; (within the meaning of Section 13(d) of the Exchange Act (other than
(x)&nbsp;Hovnanian or (y)&nbsp;the Permitted Hovnanian Holders)) becomes the &#147;<B>beneficial owner</B>&#148; (as defined
in Rule&nbsp;13d-3 under the Exchange Act) of Common Equity of Hovnanian representing more than 50% of
the voting power of the Common Equity of Hovnanian;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Continuing Directors cease to constitute at least a majority of the Board of Directors of
Hovnanian;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the stockholders of Hovnanian approve any plan or proposal for the liquidation or
dissolution of Hovnanian; <I>provided, however</I>, that a liquidation or dissolution of Hovnanian which
is part of a transaction that does not constitute a Change of Control under the proviso contained
in clause (a)&nbsp;above shall not constitute a Change of Control; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;a change of control shall occur as defined in the instrument governing any publicly traded
debt securities of Hovnanian or the Issuer which requires Hovnanian or the Issuer to repay or
repurchase such debt securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Common Equity</B>&#148; of any Person means Capital Stock of such Person that is generally entitled to
(a)&nbsp;vote in the election of directors of such Person or (b)&nbsp;if such Person is not a corporation,
vote or otherwise participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Concurrent Offerings</B>&#148; means (i)&nbsp;the issuance by Hovnanian of 13,512,500 shares of its Class&nbsp;A
Common Stock on February&nbsp;9, 2011 pursuant to a prospectus supplement dated February&nbsp;3, 2011 to a
prospectus dated January&nbsp;28, 2011 and (ii)&nbsp;the issuance by the Issuer and Hovnanian of 3,000,000
7.25% tangible equity units on February&nbsp;9, 2011 and 450,000 7.25% tangible equity units on February
14, 2011, in each case, pursuant to a prospectus supplement dated February&nbsp;3, 2011 to a prospectus
dated January&nbsp;28, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Consolidated Cash Flow Available for Fixed Charges</B>&#148; means, for any period, Consolidated Net
Income for such period plus (each to the extent deducted
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in calculating such Consolidated Net Income and determined in accordance with GAAP) the sum
for such period, without duplication, of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;income taxes,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Consolidated Interest Expense,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;depreciation and amortization expenses and other non-cash charges to earnings, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;interest and financing fees and expenses which were previously capitalized and which are
amortized to cost of sales, <I>minus</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">all other non-cash items (other than the receipt of notes receivable) increasing such Consolidated
Net Income.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Consolidated Fixed Charge Coverage Ratio</B>&#148; means, with respect to any determination date, the
ratio of (x)&nbsp;Consolidated Cash Flow Available for Fixed Charges for the prior four full fiscal
quarters (the &#147;<B>Four Quarter Period</B>&#148;) for which financial results have been reported immediately
preceding the determination date (the &#147;<B>Transaction Date</B>&#148;), to (y)&nbsp;the aggregate Consolidated
Interest Incurred for the Four Quarter Period. For purposes of this definition, &#147;<B>Consolidated Cash
Flow Available for Fixed Charges</B>&#148; and &#147;<B>Consolidated Interest Incurred</B>&#148; shall be calculated after
giving effect on a <I>pro forma </I>basis for the period of such calculation to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the incurrence or the repayment, repurchase, defeasance or other discharge or the
assumption by another Person that is not an Affiliate (collectively, &#147;<B>repayment</B>&#148;) of any
Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary (and the application of the
proceeds thereof) giving rise to the need to make such calculation, and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), at any time on or after the
first day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence
or repayment, as the case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period, except that Indebtedness under revolving credit facilities
shall be deemed to be the average daily balance of such Indebtedness during the Four Quarter Period
(as reduced on such <I>pro forma </I>basis by the application of any proceeds of the incurrence of
Indebtedness giving rise to the need to make such calculation);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any Asset Disposition or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of Hovnanian, the Issuer
or any Restricted Subsidiary (including any Person that becomes a Restricted Subsidiary as a result
of any such Asset Acquisition) incurring Acquired Indebtedness at any time on or after the first
day
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the Four Quarter Period and on or prior to the Transaction Date), as if such Asset
Disposition or Asset Acquisition (including the incurrence or repayment of any such Indebtedness)
and the inclusion, notwithstanding clause (b)&nbsp;of the definition of &#147;Consolidated Net Income,&#148; of
any Consolidated Cash Flow Available for Fixed Charges associated with such Asset Acquisition as if
it occurred on the first day of the Four Quarter Period; <I>provided, however</I>, that the Consolidated
Cash Flow Available for Fixed Charges associated with any Asset Acquisition shall not be included
to the extent the net income so associated would be excluded pursuant to the definition of
&#147;Consolidated Net Income,&#148; other than clause (b)&nbsp;thereof, as if it applied to the Person or assets
involved before they were acquired; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the Consolidated Cash Flow Available for Fixed Charges and the Consolidated Interest
Incurred attributable to discontinued operations, as determined in accordance with GAAP, shall be
excluded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, in calculating &#147;Consolidated Cash Flow Available for Fixed Charges&#148; for purposes
of determining the denominator (but not the numerator) of this &#147;Consolidated Fixed Charge Coverage
Ratio,&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;interest on Indebtedness in respect of which a <I>pro forma </I>calculation is required that is
determined on a fluctuating basis as of the Transaction Date (including Indebtedness actually
incurred on the Transaction Date) and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness
in effect on the Transaction Date, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;notwithstanding clause (1)&nbsp;above, interest on such Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating to Interest
Protection Agreements, shall be deemed to accrue at the rate per annum resulting after giving
effect to the operation of such agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Consolidated Interest Expense</B>&#148; of Hovnanian for any period means the Interest Expense of
Hovnanian, the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Consolidated Interest Incurred</B>&#148; for any period means the Interest Incurred of Hovnanian, the
Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Consolidated Net Income</B>&#148; for any period means the aggregate net income (or loss) of Hovnanian
and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP;
<I>provided</I>, that there will be
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">excluded from such net income (loss) (to the extent otherwise included therein), without
duplication:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the net income (or loss) of (x)&nbsp;any Unrestricted Subsidiary (other than a Mortgage
Subsidiary) or (y)&nbsp;any Person (other than a Restricted Subsidiary or a Mortgage Subsidiary) in
which any Person other than Hovnanian, the Issuer or any Restricted Subsidiary has an ownership
interest, except, in each case, to the extent that any such income has actually been received by
Hovnanian, the Issuer or any Restricted Subsidiary in the form of cash dividends or similar cash
distributions during such period, which dividends or distributions are not in excess of
Hovnanian&#146;s, the Issuer&#146;s or such Restricted Subsidiary&#146;s (as applicable) <I>pro rata </I>share of such
Unrestricted Subsidiary&#146;s or such other Person&#146;s net income earned during such period,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;except to the extent includable in Consolidated Net Income pursuant to the foregoing
clause (a), the net income (or loss) of any Person that accrued prior to the date that (i)&nbsp;such
Person becomes a Restricted Subsidiary or is merged with or into or consolidated with Hovnanian,
the Issuer or any of its Restricted Subsidiaries (except, in the case of an Unrestricted Subsidiary
that is redesignated a Restricted Subsidiary during such period, to the extent of its retained
earnings from the beginning of such period to the date of such redesignation) or (ii)&nbsp;the assets of
such Person are acquired by Hovnanian or any Restricted Subsidiary,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the net income of any Restricted Subsidiary to the extent that (but only so long as) the
declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that
income is not permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted
Subsidiary during such period,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the gains or losses, together with any related provision for taxes, realized during such
period by Hovnanian, the Issuer or any Restricted Subsidiary resulting from (i)&nbsp;the acquisition of
securities, or extinguishment of Indebtedness, of Hovnanian or any Restricted Subsidiary or (ii)
any Asset Disposition by Hovnanian or any Restricted Subsidiary, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;any extraordinary gain or loss together with any related provision for taxes, realized by
Hovnanian, the Issuer or any Restricted Subsidiary;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided, further</I>, that for purposes of calculating Consolidated Net Income solely as it relates to
clause (iii)&nbsp;of Section&nbsp;3.06(a) hereof, clause (d)(ii) above shall not be applicable.
</DIV>





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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Continuing Director</B>&#148; means a director who either was a member of the Board of Directors of
Hovnanian on the Issue Date or who became a director of Hovnanian subsequent to such date and whose
election or nomination for election by Hovnanian&#146;s stockholders, was duly approved by a majority of
the Continuing Directors on the Board of Directors of Hovnanian at the time of such approval,
either by a specific vote or by approval of the proxy statement issued by Hovnanian on behalf of
the entire Board of Directors of Hovnanian in which such individual is named as nominee for
director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>control</B>&#148; when used with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms &#147;<B>controlling</B>&#148; and &#147;<B>controlled</B>&#148; have meanings
correlative to the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Credit Facilities</B>&#148; means, collectively, one or more credit facilities and lines of credit
among or between Hovnanian or one or more Restricted Subsidiaries and one or more lenders pursuant
to which Hovnanian or one or more Restricted Subsidiaries may incur indebtedness for working
capital and general corporate purposes (including acquisitions), as any such facility or line of
credit may be amended, restated, supplemented or otherwise modified from time to time, and includes
any agreement extending the maturity of, increasing the amount of, or restructuring, all or any
portion of the Indebtedness under such facility or line of credit or any successor facilities or
lines of credit and includes any facility or line of credit with one or more lenders refinancing or
replacing all or any portion of the Indebtedness under such facility or line of credit or any
successor facility or line of credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Currency Agreement</B>&#148; of any Person means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Custodian</B>&#148; means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Default</B>&#148; means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Designation Amount</B>&#148; has the meaning provided in the definition of Unrestricted Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Disqualified Stock</B>&#148; means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon the happening of
any event, (a)&nbsp;matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the holder thereof, in whole or in part, on or prior to the final maturity date of the
Notes or (b)&nbsp;is convertible into or exchangeable or exercisable for (whether at the option of the
issuer or the holder thereof) (i)&nbsp;debt securities or (ii)&nbsp;any Capital Stock referred to in (a)
above, in each case, at any time prior to the final maturity date of the Notes; <I>provided, however</I>,
that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof (or the holders of any security into or for which such Capital Stock is
convertible, exchangeable or exercisable) the right to require Hovnanian or the Issuer to
repurchase or redeem such Capital Stock upon the occurrence of a change in control or asset
disposition occurring prior to the final maturity date of the Notes shall not constitute
Disqualified Stock if the change in control or asset disposition provision applicable to such
Capital Stock are no more favorable to such holders than the provisions of Section&nbsp;3.04 and Section
3.08 hereof, as applicable, and such Capital Stock specifically provides that Hovnanian or the
Issuer, as applicable, will not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to Hovnanian&#146;s or the Issuer&#146;s, as applicable, repurchase of the Notes as are
required pursuant to Section&nbsp;3.04 or Section&nbsp;3.08 hereof, as applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>DTC</B>&#148; has the meaning ascribed to such term in Section&nbsp;8.02 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Equity Offering</B>&#148; means any public or private sale, after the Issue Date, of Qualified Stock
of Hovnanian, other than (a)&nbsp;an Excluded Contribution, (b)&nbsp;public offerings registered on Form S-4
or S-8 or any successor form thereto or (c)&nbsp;any issuance pursuant to employee benefit plans or
otherwise in compensation to officers, directors or employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Event of Default</B>&#148; means any event specified as such in Section&nbsp;4.01 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Excluded Contribution</B>&#148; means cash or Cash Equivalents received by Hovnanian as capital
contributions to its equity (other than through the issuance of Disqualified Stock) or from the
issuance or sale (other than to a Subsidiary) of Qualified Stock of Hovnanian, in each case, after
January&nbsp;31, 2008 (<I>provided </I>that the amount of Excluded Contributions under this Indenture shall be
reduced by the amount of any Restricted Payments (as defined under the Senior Secured Notes
Indenture) made with Excluded Contributions prior to the Issue Date pursuant to the Senior Secured
Notes Indenture) and to the extent designated as an Excluded Contribution pursuant to an Officer&#146;s
Certificate of Hovnanian; <I>provided </I>that any cash proceeds received in connection with the
Concurrent Offerings shall not constitute Excluded Contributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>expiration date</B>&#148; has the meaning ascribed to it in Section&nbsp;3.09(b) hereof.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Fair Market Value</B>&#148; means, with respect to any asset, the price (after taking into account any
liabilities relating to such assets) that would be negotiated in an arm&#146;s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction, as such price is determined in good faith by the Board of
Directors of Hovnanian or a duly authorized committee thereof, as evidenced by a resolution of such
Board or committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>GAAP</B>&#148; means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Note</B>&#148; has the meaning ascribed to such term in Section&nbsp;8.01 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Global Note Holder</B>&#148; has the meaning ascribed to such term in Section&nbsp;8.02 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>guarantee</B>&#148; means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person: (i)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii)&nbsp;entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof, in whole or in part; <I>provided </I>that the term &#147;guarantee&#148; does not
include endorsements for collection or deposit in the ordinary course of business. The term
&#147;guarantee&#148; used as a verb has a corresponding meaning.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Guarantors</B>&#148; means (i)&nbsp;initially, Hovnanian and each of the other Guarantors signatory hereto
as set forth on Schedule&nbsp;1 hereto, which includes each of Hovnanian&#146;s Restricted Subsidiaries in
existence on the Issue Date, other than the Issuer and K. Hovnanian Poland, sp.zo.o. and (ii)&nbsp;each
of Hovnanian&#146;s Subsidiaries that becomes a Guarantor of the Notes pursuant to the provisions of
this Indenture, and their successors, in each case until released from its respective Guarantee
pursuant to this Indenture.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Holder</B>&#148;, &#147;<B>Holders</B>&#148;, &#147;<B>Holder of Notes</B>&#148;, &#147;<B>Holders of Notes</B>&#148; and similar terms mean in the case
of a Note, the Person in whose name such Note is registered in the books of the Registrar for the
Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Hovnanian</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>incurrence</B>&#148; has the meaning ascribed to it in Section&nbsp;3.05(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Indebtedness</B>&#148; of any Person means, without duplication,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;any liability of such Person (i)&nbsp;for borrowed money or under any reimbursement obligation
relating to a letter of credit or other similar instruments (other than standby letters of credit
or similar instruments issued for the benefit of, or surety, performance, completion or payment
bonds, earnest money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business), (ii)&nbsp;evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the acquisition of any
businesses, properties or assets of any kind or with services incurred in connection with capital
expenditures (other than any obligation to pay a contingent purchase price which, as of the date of
incurrence thereof, is not required to be recorded as a liability in accordance with GAAP), or
(iii)&nbsp;in respect of Capitalized Lease Obligations (to the extent of the Attributable Debt in
respect thereof),
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any Indebtedness of others that such Person has guaranteed to the extent of the guarantee;
<I>provided, however</I>, that Indebtedness of Hovnanian and its Restricted Subsidiaries will not include
the obligations of Hovnanian or a Restricted Subsidiary under warehouse lines of credit of Mortgage
Subsidiaries to repurchase mortgages at prices no greater than 98% of the principal amount thereof,
and upon any such purchase the excess, if any, of the purchase price thereof over the Fair Market
Value of the mortgages acquired, will constitute Restricted Payments subject to Section&nbsp;3.06
hereof,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;to the extent not otherwise included, the obligations of such Person under Currency
Agreements or Interest Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such agreements, in accordance
with GAAP, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;all Indebtedness of others secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided</I>, that Indebtedness shall not include accounts payable, liabilities to trade creditors of
such Person or other accrued expenses arising in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be (i)&nbsp;the outstanding balance at such date of all
unconditional obligations as described
</DIV>




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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">above, net of any unamortized discount to be accounted for as Interest Expense, in accordance with
GAAP, (ii)&nbsp;the maximum liability of such Person for any contingent obligations under clause (a)
above at such date, net of an unamortized discount to be accounted for as Interest Expense in
accordance with GAAP, and (iii)&nbsp;in the case of clause (d)&nbsp;above, the lesser of (x)&nbsp;the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien
attaches and (y)&nbsp;the amount of the Indebtedness secured.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Indenture</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Expense</B>&#148; of any Person for any period means, without duplication, the aggregate
amount of (a)&nbsp;interest which, in conformity with GAAP, would be set opposite the caption &#147;interest
expense&#148; or any like caption on an income statement for such Person (including, without limitation,
imputed interest included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers&#146; acceptance financing, the net
costs (but reduced by net gains) associated with Currency Agreements and Interest Protection
Agreements, amortization of other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all other noncash interest
expense (other than interest and other charges amortized to cost of sales)), and (b)&nbsp;all interest
actually paid by Hovnanian or a Restricted Subsidiary under any guarantee of Indebtedness
(including, without limitation, a guarantee of principal, interest or any combination thereof) of
any Person other than Hovnanian, the Issuer or any Restricted Subsidiary during such period;
<I>provided</I>, that Interest Expense shall exclude any expense associated with the complete write-off of
financing fees and expenses in connection with the repayment of any Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Incurred</B>&#148; of any Person for any period means, without duplication, the aggregate
amount of (a)&nbsp;Interest Expense and (b)&nbsp;all capitalized interest and amortized debt issuance costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Protection Agreement</B>&#148; of any Person means any interest rate swap agreement, interest
rate collar agreement, option or futures contract or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries against fluctuations in interest rates
with respect to Indebtedness permitted to be incurred under the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Investment Grade</B>&#148; means, with respect to a debt rating of the Notes, a rating of Baa3 or
higher by Moody&#146;s together with a rating of BBB- or higher by S&#038;P or, in the event S&#038;P or Moody&#146;s
or both shall cease rating the Notes (for reasons outside the control of Hovnanian or the Issuer)
and Hovnanian shall select any other Rating Agency, the equivalent of such ratings by such other
Rating Agency.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Investments</B>&#148; of any Person means (a)&nbsp;all investments by such Person in any other Person in
the form of loans, advances or capital contributions, (b)&nbsp;all guarantees of Indebtedness or other
obligations of any other Person by such Person, (c)&nbsp;all purchases (or other acquisitions for
consideration) by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (d)&nbsp;all other items that would be classified as investments in any other Person
(including, without limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issue Date</B>&#148; means February&nbsp;14, 2011.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Issuer</B>&#148; has the meaning ascribed to it in the preamble hereof and shall also refer to any
successor obligor to such Issuer&#146;s obligations under the Indenture and the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Lien</B>&#148; means, with respect to any Property, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such Property. For purposes of this definition, a
Person shall be deemed to own, subject to a Lien, any Property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such Property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Make-Whole Amount</B>&#148; means, in connection with any optional redemption of any Note pursuant to
Section&nbsp;9.01 hereof, the excess, if any, of: (a)&nbsp;the aggregate present value as of the date of such
redemption of each dollar of principal being redeemed and the amount of interest (exclusive of
interest accrued to the redemption date) that would have been payable in respect of such dollar if
such prepayment had not been made, determined by discounting, on a semiannual basis, such principal
and interest at the Treasury Rate (determined on the business day preceding the date of such
redemption) plus 0.50%, from the respective dates on which such principal and interest would have
been payable if such payment had not been made; over (b)&nbsp;the principal amount of the Note being
redeemed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Marketable Securities</B>&#148; means (a)&nbsp;equity securities that are listed on the New York Stock
Exchange, the NYSE Amex or The Nasdaq Stock Market and (b)&nbsp;debt securities that are rated by a
nationally recognized rating agency, listed on the New York Stock Exchange or the NYSE Amex or
covered by at least two reputable market makers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Moody&#146;s</B>&#148; means Moody&#146;s Investors Service, Inc. or any successor to its debt rating business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Mortgage Subsidiary</B>&#148; means any Subsidiary of Hovnanian substantially all of whose operations
consist of the mortgage lending business.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Net Cash Proceeds</B>&#148; means with respect to an Asset Disposition, payments received in cash
(including any such payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise (including any cash received upon sale or disposition of such
note or receivable), but only as and when received), excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the
Property disposed of in such Asset Disposition or received in any other non-cash form unless and
until such non-cash consideration is converted into cash therefrom, in each case, net of all legal,
title and recording tax expenses, commissions and other fees and expenses incurred, and all
federal, state and local taxes required to be accrued as a liability under GAAP as a consequence of
such Asset Disposition, and in each case net of a reasonable reserve for the after-tax cost of any
indemnification or other payments (fixed and contingent) attributable to the seller&#146;s indemnities
or other obligations to the purchaser undertaken by Hovnanian, the Issuer or any of its Restricted
Subsidiaries in connection with such Asset Disposition, and net of all payments made on any
Indebtedness which is secured by or relates to such Property, in accordance with the terms of any
Lien or agreement upon or with respect to such Property or which such Indebtedness must by its
terms or by applicable law be repaid out of the proceeds from such Asset Disposition, and net of
all contractually required distributions and payments made to minority interest holders in
Restricted Subsidiaries or joint ventures as a result of such Asset Disposition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Non-Recourse Indebtedness</B>&#148; with respect to any Person means Indebtedness of such Person for
which (a)&nbsp;the sole legal recourse for collection of principal and interest on such Indebtedness is
against the specific property identified in the instruments evidencing or securing such
Indebtedness and such property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90&nbsp;days after the acquisition of such property and (b)&nbsp;no other
assets of such Person may be realized upon in collection of principal or interest on such
Indebtedness. Indebtedness which is otherwise Non-Recourse Indebtedness will not lose its character
as Non-Recourse Indebtedness because there is recourse to the borrower, any guarantor or any other
Person for (i)&nbsp;environmental warranties and indemnities, or (ii)&nbsp;indemnities for and liabilities
arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, insurance
and condemnation proceeds and other sums actually received by the borrower from secured assets to
be paid to the lender, waste and mechanics&#146; liens.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Notes</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Obligations</B>&#148; means with respect to any Indebtedness, all obligations (whether in existence on
the Issue Date or arising afterwards, absolute or
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">contingent, direct or indirect) for or in respect of principal (when due, upon acceleration,
upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase,
or otherwise), premium, interest, penalties, fees, indemnification, reimbursement and other amounts
payable and liabilities with respect to such Indebtedness, including all interest accrued or
accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or
proceeding at the contract rate (including, without limitation, any contract rate applicable upon
default) specified in the relevant documentation, whether or not the claim for such interest is
allowed as a claim in such case or proceeding.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>offer</B>&#148; has the meaning ascribed to it in Section&nbsp;3.09(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Offer to Purchase</B>&#148; has the meaning ascribed to it in Section&nbsp;3.09(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Paying Agent</B>&#148; refers to a Person engaged to perform the obligations of the Trustee in respect
of payments made or funds held hereunder in respect of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Permitted Hovnanian Holders</B>&#148; means, collectively, Ara K. Hovnanian, the members of his
immediate family and the members of the immediate family of the late Kevork S. Hovnanian, the
respective estates, spouses, heirs, ancestors, lineal descendants, legatees and legal
representatives of any of the foregoing and the trustee of any <I>bona fide </I>trust of which one or more
of the foregoing are the sole beneficiaries or the grantors thereof, or any entity of which any of
the foregoing, individually or collectively, beneficially own more than 50% of the Common Equity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Permitted Indebtedness</B>&#148; means
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Indebtedness under Credit Facilities incurred after the Issue Date in an aggregate amount
incurred under this clause (a)&nbsp;that, together with the principal amount then outstanding of Senior
Secured Notes (and any Refinancing Indebtedness in respect thereof), does not exceed $785.0&nbsp;million
principal amount outstanding at any one time;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Indebtedness under the Notes, other than Additional Notes;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Indebtedness outstanding on the Issue Date, including the Senior Secured Notes, but
excluding Indebtedness constituting Permitted Indebtedness pursuant to clauses (d), (e), (f), (h)
or (j)&nbsp;below, which shall instead be incurred under such clauses;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Indebtedness in respect of obligations of Hovnanian and its Subsidiaries to the trustees
under indentures for debt securities;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;intercompany debt obligations of (i)&nbsp;Hovnanian to the Issuer, (ii)&nbsp;the Issuer to
Hovnanian, (iii)&nbsp;Hovnanian or the Issuer to any Restricted Subsidiary and (iv)&nbsp;any Restricted
Subsidiary to Hovnanian or the Issuer or any other Restricted Subsidiary; <I>provided, however</I>, that
any Indebtedness of any Restricted Subsidiary or the Issuer or Hovnanian owed to any Restricted
Subsidiary or the Issuer that ceases to be a Restricted Subsidiary shall be deemed to be incurred
and shall be treated as an incurrence for purposes of Section&nbsp;3.05(a) hereof at the time the
Restricted Subsidiary in question ceases to be a Restricted Subsidiary;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Indebtedness of Hovnanian or the Issuer or any Restricted Subsidiary under any Currency
Agreements or Interest Protection Agreements in a notional amount no greater than the payments due
(at the time the related Currency Agreement or Interest Protection Agreement is entered into) with
respect to the Indebtedness or currency being hedged;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Purchase Money Indebtedness and Capitalized Lease Obligations in an aggregate principal
amount outstanding at any one time not to exceed $25.0&nbsp;million;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;obligations for, pledge of assets in respect of, and guaranties of, bond financings of
political subdivisions or enterprises thereof in the ordinary course of business;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Indebtedness secured only by office buildings owned or occupied by Hovnanian or any
Restricted Subsidiary, which Indebtedness does not exceed $10.0&nbsp;million aggregate principal amount
outstanding at any one time;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;Indebtedness under warehouse lines of credit, repurchase agreements and Indebtedness
secured by mortgage loans and related assets of mortgage lending Subsidiaries in the ordinary
course of a mortgage lending business; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;Indebtedness of Hovnanian or any Restricted Subsidiary which, together with all other
Indebtedness under this clause (k), does not exceed $50.0&nbsp;million aggregate principal amount
outstanding at any one time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Permitted Investment</B>&#148; means
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Cash Equivalents;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any Investment in Hovnanian, the Issuer or any Restricted Subsidiary or any Person that
becomes a Restricted Subsidiary as a result of such Investment or that is consolidated or merged
with or into, or transfers all or
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">substantially all of the assets of it or an operating unit or
line of business to, Hovnanian or a Restricted Subsidiary;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;any receivables, loans or other consideration taken by Hovnanian, the Issuer or any
Restricted Subsidiary in connection with any asset sale otherwise permitted by the Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Investments received in connection with any bankruptcy or reorganization proceeding, or as
a result of foreclosure, perfection or enforcement of any Lien or any judgment or settlement of any
Person in exchange for or satisfaction of Indebtedness or other obligations or other property
received from such Person, or for other liabilities or obligations of such Person created, in
accordance with the terms of the Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Investments in Currency Agreements or Interest Protection Agreements described in the
definition of &#147;Permitted Indebtedness&#148;;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;any loan or advance to an executive officer, director or employee of Hovnanian or any
Restricted Subsidiary made in the ordinary course of business or in accordance with past practice;
<I>provided, however</I>, that any such loan or advance exceeding $1.0&nbsp;million shall have been approved by
the Board of Directors of Hovnanian or a committee thereof consisting of disinterested members;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Investments in interests in issuances of collateralized mortgage obligations, mortgages,
mortgage loan servicing, or other mortgage related assets;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;obligations of Hovnanian or a Restricted Subsidiary under warehouse lines of credit of
Mortgage Subsidiaries to repurchase mortgages; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Investments in an aggregate amount outstanding not to exceed $10.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Permitted Liens</B>&#148; means
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Liens for taxes, assessments or governmental or quasi-government charges or claims that
(i)&nbsp;are not yet delinquent, (ii)&nbsp;are being contested in good faith by appropriate proceedings and
as to which appropriate reserves have been established or other provisions have been made in
accordance with GAAP, if required, or (iii)&nbsp;encumber solely property abandoned or in the process of
being abandoned,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;statutory Liens of landlords and carriers&#146;, warehousemen&#146;s, mechanics&#146;, suppliers&#146;,
materialmen&#146;s, repairmen&#146;s or other Liens imposed by law and arising in the ordinary course of
business and with respect to amounts that, to
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the extent applicable, either (i)&nbsp;are not yet
delinquent or (ii)&nbsp;are being contested in good faith by appropriate proceedings and as to which
appropriate reserves have
been established or other provisions have been made in accordance with GAAP, if required,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Liens (other than any Lien imposed by the Employer Retirement Income Security Act of 1974,
as amended) incurred or deposits made in the ordinary course of business in connection with
workers&#146; compensation, unemployment insurance and other types of social security,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Liens incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, development obligations, progress payments,
government contacts, utility services, developer&#146;s or other obligations to make on-site or off-site
improvements and other obligations of like nature (exclusive of obligations for the payment of
borrowed money but including the items referred to in the parenthetical in clause (a)(i) of the
definition of &#147;Indebtedness&#148;), in each case incurred in the ordinary course of business of
Hovnanian, the Issuer and the Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;attachment or judgment Liens not giving rise to a Default or an Event of Default,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;easements, dedications, assessment district or similar Liens in connection with municipal
or special district financing, rights-of-way, restrictions, reservations and other similar charges,
burdens, and other similar charges or encumbrances not materially interfering with the ordinary
course of business of Hovnanian, the Issuer and the Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;zoning restrictions, licenses, restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair the use of such real property in
the ordinary course of business of Hovnanian, the Issuer and the Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Liens securing Indebtedness incurred pursuant to clause (i)&nbsp;or (j)&nbsp;of the definition of
Permitted Indebtedness,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Liens securing (1)&nbsp;Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary
permitted to be incurred under this Indenture and Obligations in respect thereof; <I>provided</I>, that
the aggregate principal amount of Indebtedness of Hovnanian, the Issuer and the Restricted
Subsidiaries secured by Liens incurred pursuant to this clause (i), together with (x)&nbsp;the aggregate
principal amount of the Senior Secured Notes outstanding at such time and (y)&nbsp;the aggregate
principal amount of any Refinancing Indebtedness in respect of the Senior Secured Notes that is
secured by any assets of Hovnanian, the Issuer or
</DIV>


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</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">any Restricted Subsidiary, shall not exceed
$810.0&nbsp;million and (2)&nbsp;Refinancing Indebtedness in respect of Indebtedness referred to in clause
(1),
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;Liens securing Non-Recourse Indebtedness of Hovnanian, the Issuer or any Restricted
Subsidiary; <I>provided</I>, that such Liens apply only to the property financed out of the net proceeds
of such Non-Recourse Indebtedness within 90&nbsp;days after the incurrence of such Non-Recourse
Indebtedness,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;Liens securing Purchase Money Indebtedness; <I>provided</I>, that such Liens apply only to the
property acquired, constructed or improved with the proceeds of such Purchase Money Indebtedness
within 90&nbsp;days after the incurrence of such Purchase Money Indebtedness,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;Liens on property or assets of Hovnanian, the Issuer or any Restricted Subsidiary securing
Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary owing to Hovnanian, the Issuer
or one or more Restricted Subsidiaries (other than K. Hovnanian Poland, sp.z.o.o.),
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;leases or subleases granted to others not materially interfering with the ordinary course
of business of Hovnanian and the Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;purchase money security interests (including, without limitation, Capitalized Lease
Obligations); <I>provided</I>, that such Liens apply only to the Property acquired and the related
Indebtedness is incurred within 90&nbsp;days after the acquisition of such Property,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;any right of first refusal, right of first offer, option, contract or other agreement to
sell an asset; <I>provided </I>that such sale is not otherwise prohibited under the Indenture,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;any right of a lender or lenders to which Hovnanian, the Issuer or a Restricted Subsidiary
may be indebted to offset against, or appropriate and apply to the payment of such, Indebtedness
any and all balances, credits, deposits, accounts or money of Hovnanian, the Issuer or a Restricted
Subsidiary with or held by such lender or lenders or its Affiliates,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;any pledge or deposit of cash or property in conjunction with obtaining surety,
performance, completion or payment bonds and letters of credit or other similar instruments or
providing earnest money obligations, escrows or similar purpose undertakings or indemnifications in
the ordinary course of business of Hovnanian, the Issuer and the Restricted Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;Liens for homeowner and property owner association developments and assessments,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;Liens securing Refinancing Indebtedness; <I>provided</I>, that such Liens extend only to the
assets securing the Indebtedness being refinanced; <I>provided </I>further that no Liens may be incurred
under this clause (s)&nbsp;in respect of
Refinancing Indebtedness incurred to refinance Indebtedness that is secured by Liens incurred
under clause (i)&nbsp;above,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;Liens incurred in the ordinary course of business as security for the obligations of
Hovnanian, the Issuer and the Restricted Subsidiaries with respect to indemnification in respect of
title insurance providers,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;Liens on property of a Person existing at the time such Person is merged with or into or
consolidated with Hovnanian or any Subsidiary of Hovnanian or becomes a Subsidiary of Hovnanian;
<I>provided</I>, that such Liens were in existence prior to the contemplation of such merger or
consolidation or acquisition and do not extend to any assets other than those of the Person merged
into or consolidated with Hovnanian or the Subsidiary or acquired by Hovnanian or its Subsidiaries,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;Liens on property existing at the time of acquisition thereof by Hovnanian or any
Subsidiary of Hovnanian, <I>provided</I>, that such Liens were in existence prior to the contemplation of
such acquisition,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;Liens existing on the Issue Date (including Liens securing the Senior Secured Notes) and
any extensions, renewals or replacements thereof, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;Liens on specific items of inventory or other goods and proceeds of any Person securing
such Person&#146;s obligations in respect of bankers&#146; acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such inventory or other goods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Person</B>&#148; means any individual, corporation, partnership, limited liability company, joint
venture, incorporated or unincorporated association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Preferred Stock</B>&#148; of any Person means all Capital Stock of such Person which has a preference
in liquidation or with respect to the payment of dividends.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Property</B>&#148; of any Person means all types of real, personal, tangible, intangible or mixed
property owned by such Person, whether or not included in the most recent consolidated balance
sheet of such Person and its Subsidiaries under GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>purchase amount</B>&#148; has the meaning ascribed to it in Section&nbsp;3.09(b) hereof.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>purchase date</B>&#148; has the meaning ascribed to it in Section&nbsp;3.09(b) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Purchase Money Indebtedness</B>&#148; means Indebtedness of Hovnanian, the Issuer or any Restricted
Subsidiary incurred for the purpose of financing all or any part of the purchase price, or the cost
of construction or improvement, of any property to be used in the ordinary course of business by
Hovnanian, the Issuer and the Restricted Subsidiaries; <I>provided, however</I>, that (a)&nbsp;the aggregate
principal amount of such Indebtedness shall not exceed such purchase price or cost and (b)&nbsp;such
Indebtedness shall be incurred no later than 90&nbsp;days after the acquisition of such property or
completion of such construction or improvement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Qualified Stock</B>&#148; means Capital Stock of Hovnanian other than Disqualified Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Rating Agency</B>&#148; means a statistical rating agency or agencies, as the case may be, nationally
recognized in the United States and selected by Hovnanian (as certified by a resolution of the
Board of Directors of Hovnanian) which shall be substituted for S&#038;P or Moody&#146;s, or both, as the
case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Real Estate Business</B>&#148; means homebuilding, housing construction, real estate development or
construction and the sale of homes and related real estate activities, including the provision of
mortgage financing or title insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Refinancing Indebtedness</B>&#148; means Indebtedness (to the extent not Permitted Indebtedness) that
refunds, refinances or extends any Indebtedness of Hovnanian, the Issuer or any Restricted
Subsidiary (to the extent not Permitted Indebtedness described under clauses (a)&nbsp;and (d)&nbsp;through
(k)&nbsp;of the definition thereof) outstanding on the Issue Date or other Indebtedness (to the extent
not Permitted Indebtedness) permitted to be incurred by Hovnanian, the Issuer or any Restricted
Subsidiary pursuant to the terms of the Indenture after the Issue Date, but only to the extent
that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Refinancing Indebtedness is subordinated, if at all, to the Notes or the Guarantees,
as the case may be, to the same extent as the Indebtedness being refunded, refinanced or extended,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Refinancing Indebtedness is scheduled to mature either (i)&nbsp;no earlier than the
Indebtedness being refunded, refinanced or extended or (ii)&nbsp;after the maturity date of the Notes,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or
prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to
Maturity of the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">portion of the Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the Notes, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;such Refinancing Indebtedness is in an aggregate principal amount that is equal to or less
than the aggregate principal amount then outstanding under the Indebtedness being refunded,
refinanced or extended (plus (i)&nbsp;fees and expenses and (ii)&nbsp;accrued interest and the amount of any
premiums (including tender premiums), in each case incurred in connection with the refinancing
thereof);
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided</I>, that for purposes of determining the principal amount outstanding under clause (a)&nbsp;of
&#147;Permitted Indebtedness&#148; and clause (i)&nbsp;of &#147;Permitted Liens&#148;, the principal amount of any
Refinancing Indebtedness referred to in such clauses shall be calculated excluding any principal
amount that was incurred in respect of amounts set forth in the parenthetical in clause (d)&nbsp;above
and such principal amount shall nonetheless be permitted under such clauses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Registrar</B>&#148; means a Person engaged to maintain the security register for the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Repurchase Date</B>&#148; has the meaning ascribed to it in Section&nbsp;3.04(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Restricted Investment</B>&#148; means any Investment other than a Permitted Investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Restricted Payment</B>&#148; means any of the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the declaration or payment of any dividend or any other distribution on Capital Stock of
Hovnanian, the Issuer or any Restricted Subsidiary or any payment made to the direct or indirect
holders (in their capacities as such) of Capital Stock of Hovnanian, the Issuer or any Restricted
Subsidiary (other than (i)&nbsp;dividends or distributions payable solely in Qualified Stock and (ii)&nbsp;in
the case of the Issuer or Restricted Subsidiaries, dividends or distributions payable to Hovnanian,
the Issuer or a Restricted Subsidiary);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the purchase, redemption or other acquisition or retirement for value of any Capital Stock
of Hovnanian, the Issuer or any Restricted Subsidiary (other than a payment made to Hovnanian, the
Issuer or any Restricted Subsidiary); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;any Investment (other than any Permitted Investment), including any Investment in an
Unrestricted Subsidiary (including by the designation of a Subsidiary of Hovnanian as an
Unrestricted Subsidiary) and any amounts paid in accordance with clause (b)&nbsp;of the definition of
Indebtedness.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Restricted Subsidiary</B>&#148; means any Subsidiary of Hovnanian which is not an Unrestricted
Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>S&#038;P</B>&#148; means Standard &#038; Poor&#146;s Ratings Services, a division of The McGraw Hill Companies, Inc.,
a New York corporation, or any successor to its debt rating business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Senior Secured Notes</B>&#148; means the Issuer&#146;s 10
<SUP style="FONT-size: 85%; vertical-align: text-top">5</SUP>/<SUB style="FONT-size: 85%; vertical-align: text-bottom">8</SUB>% Senior Secured Notes due 2016 issued on October&nbsp;20,
2009 (and any exchange notes issued in exchange therefor in compliance with the registration rights
agreement dated October&nbsp;20, 2009 among the Issuer, Hovnanian, the other guarantors party thereto
and the initial purchasers named therein, and guarantees of such exchange notes).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Senior Secured Notes Indenture</B>&#148; means the Indenture dated as of October&nbsp;20, 2009, among the
Issuer, the Company, the other guarantors named therein and Wilmington Trust Company, as Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Significant Subsidiary</B>&#148; means any Subsidiary of Hovnanian which would constitute a
&#147;<B>significant subsidiary</B>&#148; as defined in Rule&nbsp;1-02(w)(1) or (2)&nbsp;of Regulation&nbsp;S-X under the
Securities Act and the Exchange Act as in effect on the Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Subordinated Indebtedness</B>&#148; means Indebtedness subordinated in right of payment to the Notes
pursuant to a written agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Subsidiary</B>&#148; of any Person means any corporation or other entity of which a majority of the
Capital Stock having ordinary voting power to elect a majority of the Board of Directors or other
persons performing similar functions is at the time directly or indirectly owned or controlled by
such Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Successor</B>&#148; has the meaning ascribed to it in Section&nbsp;3.12(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Supplemental Indenture</B>&#148; has the meaning ascribed to it in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Suspended Covenants</B>&#148; has the meaning ascribed to such term in Section&nbsp;3.14 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Treasury Rate</B>&#148; means, in connection with the calculation of any Make-Whole Amount with
respect to any Note, the yield to maturity at the time of computation of United States Treasury
securities with a constant maturity, as compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (519)&nbsp;that has become publicly available at least two business
days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data), equal to the then remaining
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">maturity of the Note
being prepaid. If no maturity exactly corresponds to such maturity, yields for the published
maturities occurring prior to and after such maturity most closely corresponding to such maturity
shall be calculated pursuant
to the immediately preceding sentence and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Trustee</B>&#148; means the party named in the preamble hereof until such time, if any, as a successor
replaces such party in accordance with the applicable provisions of the Indenture and thereafter
means the successor serving as Trustee under the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Unrestricted Subsidiary</B>&#148; means any Subsidiary of Hovnanian so designated by a resolution
adopted by the Board of Directors of Hovnanian or a duly authorized committee thereof as provided
below; <I>provided </I>that (a)&nbsp;the holders of Indebtedness thereof do not have direct or indirect
recourse against Hovnanian, the Issuer or any Restricted Subsidiary, and neither Hovnanian, the
Issuer nor any Restricted Subsidiary otherwise has liability for, any payment obligations in
respect of such Indebtedness (including any undertaking, agreement or instrument evidencing such
Indebtedness), except, in each case, to the extent that the amount thereof constitutes a Restricted
Payment permitted by the Indenture, in the case of Non-Recourse Indebtedness, to the extent such
recourse or liability is for the matters discussed in the last sentence of the definition of
&#147;Non-Recourse Indebtedness,&#148; or to the extent such Indebtedness is a guarantee by such Subsidiary
of Indebtedness of Hovnanian, the Issuer or a Restricted Subsidiary and (b)&nbsp;no holder of any
Indebtedness of such Subsidiary shall have a right to declare a default on such Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated maturity as a result of
a default on any Indebtedness of Hovnanian, the Issuer or any Restricted Subsidiary. As of the
Issue Date, the Unrestricted Subsidiaries will be the Subsidiaries of Hovnanian named in Schedule&nbsp;2
hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing, the Board of Directors of Hovnanian or a duly authorized committee
thereof may designate any Subsidiary in addition to those named above to be an Unrestricted
Subsidiary; <I>provided, however</I>, that (a)&nbsp;the net amount (the &#147;<B>Designation Amount</B>&#148;) then outstanding
of all previous Investments by Hovnanian and the Restricted Subsidiaries in such Subsidiary will be
deemed to be a Restricted Payment at the time of such designation and will reduce the amount
available for Restricted Payments under Section&nbsp;3.06 hereof to the extent provided therein, (b)
Hovnanian must be permitted under Section&nbsp;3.06 hereof to make the Restricted Payment deemed to have
been made pursuant to clause (a), and (c)&nbsp;after giving effect to such designation, no Default or
Event of Default shall have occurred or be continuing. In accordance with the foregoing, and not in
limitation thereof, Investments made by any Person in any Subsidiary
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of such Person prior to such
Person&#146;s merger with Hovnanian or any Restricted Subsidiary (but not in contemplation or
anticipation of such merger) shall not be
counted as an Investment by Hovnanian or such Restricted Subsidiary if such Subsidiary of such
Person is designated as an Unrestricted Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Hovnanian or a duly authorized committee thereof may also
redesignate an Unrestricted Subsidiary to be a Restricted Subsidiary; <I>provided, however</I>, that (a)
the Indebtedness of such Unrestricted Subsidiary as of the date of such redesignation could then be
incurred under Section&nbsp;3.05 hereof and (b)&nbsp;immediately after giving effect to such redesignation
and the incurrence of any such additional Indebtedness, Hovnanian and the Restricted Subsidiaries
could incur $1.00 of additional Indebtedness under Section&nbsp;3.05(a) hereof. Any such designation or
redesignation by the Board of Directors of Hovnanian or a committee thereof will be evidenced to
the Trustee by the filing with the Trustee of a certified copy of the resolution of the Board of
Directors of Hovnanian or a committee thereof giving effect to such designation or redesignation
and an Officers&#146; Certificate certifying that such designation or redesignation complied with the
foregoing conditions and setting forth the underlying calculations of such Officers&#146; Certificate.
The designation of any Person as an Unrestricted Subsidiary shall be deemed to include a
designation of all Subsidiaries of such Person as Unrestricted Subsidiaries; <I>provided, however</I>,
that the ownership of the general partnership interest (or a similar member&#146;s interest in a limited
liability company) by an Unrestricted Subsidiary shall not cause a Subsidiary of Hovnanian of which
more than 95% of the equity interest is held by Hovnanian or one or more Restricted Subsidiaries to
be deemed an Unrestricted Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Weighted Average Life to Maturity</B>&#148; means, when applied to any Indebtedness or portion thereof
at any date, the number of years obtained by dividing (a)&nbsp;the sum of the products obtained by
multiplying (i)&nbsp;the amount of each then remaining installment, sinking fund, serial maturity or
other required payment of principal, including, without limitation, payment at final maturity, in
respect thereof, by (ii)&nbsp;the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment by (b)&nbsp;the sum of all such payments
described in clause (a)(i) above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;2.02</B><I>. Rules of Construction. </I>Unless the context otherwise requires or except as
otherwise expressly provided,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&#147;herein,&#148; &#147;hereof&#148; and other words of similar import refer to this Indenture as a whole
and not to any particular Section, Article other subdivision;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;all references to Sections or Articles or Exhibits refer to Sections or Articles or
Exhibits of or to this Indenture unless otherwise indicated;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;references to agreements or instruments, or to statutes or regulations, are to such
agreements or instruments, or statutes or regulations, as amended from time to time (or to
successor statutes and regulations); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;in the event that a transaction meets the criteria of more than one category of permitted
transactions or listed exceptions, the Issuer may classify such transaction as it, in its sole
discretion, determines.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 3</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Covenants</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.01</B><I>. Existence. </I>Hovnanian and the Issuer will each do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and the existence of
each of the Restricted Subsidiaries in accordance with their respective organizational documents,
and the material rights, licenses and franchises of Hovnanian, the Issuer and each Restricted
Subsidiary, <I>provided </I>that Hovnanian and the Issuer are not required to preserve any such right,
license or franchise, or the existence of any Restricted Subsidiary, if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of Hovnanian and its
Restricted Subsidiaries taken as a whole; and <I>provided further </I>that this Section does not prohibit
any transaction otherwise permitted by Sections&nbsp;3.08 and 3.12 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.02</B><I>. Payment of Taxes and Other Claims. </I>Hovnanian will pay or discharge, and cause
each of its Subsidiaries to pay or discharge before the same become delinquent (a)&nbsp;all material
taxes, assessments and governmental charges levied or imposed upon Hovnanian or any Subsidiary or
its income or profits or property, and (b)&nbsp;all material lawful claims for labor, materials and
supplies that, if unpaid, might by law become a Lien upon the property of Hovnanian or any
Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability or
validity of which is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.03</B><I>. Maintenance of Properties and Insurance. </I>Hovnanian will cause all properties
used or useful in the conduct of its business or the business of any of its Restricted Subsidiaries
to be maintained and kept in good condition, repair and working order as in the judgment of
Hovnanian may be necessary so that the business of Hovnanian and its Restricted Subsidiaries may be
properly and advantageously conducted at all times; <I>provided </I>that nothing in this Section
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3.03
shall prevent Hovnanian or any Restricted Subsidiary from discontinuing the use, operation or
maintenance of any of such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of Hovnanian,
desirable in the conduct of the business of Hovnanian and its Restricted Subsidiaries taken as
a whole.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.04</B><I>. Repurchase of Notes Upon Change of Control.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In the event that there shall occur a Change of Control, each Holder of Notes shall have
the right, at such Holder&#146;s option, to require the Issuer to purchase all or any part of such
Holder&#146;s Notes on a date (the &#147;<B>Repurchase Date</B>&#148;) that is no later than 90&nbsp;days after notice of the
Change of Control, at 101% of the principal amount thereof plus accrued and unpaid interest, if
any, to the Repurchase Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;On or before the thirtieth day after any Change of Control, the Issuer is obligated to
mail or cause to be mailed, to all Holders of record of Notes and to the Trustee, a notice
regarding the Change of Control and the repurchase right. The notice shall state the Repurchase
Date, the date by which the repurchase right must be exercised, the price for the Notes and the
procedure which the Holder must follow to exercise such right. Substantially simultaneously with
mailing of the notice, the Issuer shall cause a copy of such notice to be published in a newspaper
of general circulation in the Borough of Manhattan, The City of New York. To exercise such right,
the Holder of such Note must deliver, at least ten days prior to the Repurchase Date, written
notice to the Issuer (or an agent designated by the Issuer for such purpose) of the Holder&#146;s
exercise of such right, together with the Note with respect to which the right is being exercised,
duly endorsed for transfer; <I>provided, however</I>, that if mandated by applicable law, a Holder may be
permitted to deliver such written notice nearer to the Repurchase Date than may be specified by the
Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Issuer will comply with applicable law, including Section 14(e) of the Exchange Act
and Rule&nbsp;14e-1 thereunder, if applicable, if the Issuer is required to give a notice of a right of
repurchase as a result of a Change of Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.05</B><I>. Limitations on Indebtedness.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Hovnanian and the Issuer will not, and will not cause or permit any Restricted Subsidiary,
directly or indirectly, to create, incur, assume, become liable for or guarantee the payment of
(collectively, an &#147;<B>incurrence</B>&#148;) any Indebtedness (including Acquired Indebtedness) unless, after
giving effect thereto and the application of the proceeds therefrom, the Consolidated Fixed Charge
Coverage Ratio on the date thereof would be at least 2.0 to 1.0.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Notwithstanding the foregoing, the provisions of the Indenture will not prevent the
incurrence of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Permitted Indebtedness,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Refinancing Indebtedness,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Non-Recourse Indebtedness,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any Guarantee of Indebtedness represented by the Notes,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any guarantee of Indebtedness incurred under Credit Facilities in compliance with
the Indenture, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any guarantee by the Issuer, Hovnanian or any Guarantor of Indebtedness that is
permitted to be incurred in compliance with the Indenture; <I>provided </I>that in the event such
Indebtedness that is being guaranteed is subordinated to the Notes or a Guarantee, as the
case may be, then the related guarantee shall be subordinated in right of payment to the
Notes or such Guarantee, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;For purposes of determining compliance with this covenant, in the event that an item of
Indebtedness may be incurred through the first paragraph of this covenant or by meeting the
criteria of one or more of the types of Indebtedness described in the second paragraph of this
covenant (or the definitions of the terms used therein), Hovnanian, in its sole discretion,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) may classify such item of Indebtedness under and comply with either of such
paragraphs (or any of such definitions), as applicable,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) may classify and divide such item of Indebtedness into more than one of such
paragraphs (or definitions), as applicable, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) may elect to comply with such paragraphs (or definitions), as applicable, in
any order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Hovnanian and the Issuer will not, and will not cause or permit any Guarantor to, directly
or indirectly, in any event incur any Indebtedness that purports to be by its terms (or by the
terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of
Hovnanian or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly subordinated to the
Notes or the Guarantee of such Guarantor, as the case may be, to the same extent and in the same
manner as such Indebtedness is subordinated to such other Indebtedness of Hovnanian or such
Guarantor, as the case may be.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.06</B><I>. Limitations on Restricted Payments.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Hovnanian and the Issuer will not, and will not cause or permit any Restricted Subsidiary
to, directly or indirectly, make any Restricted Payment unless:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) no Default or Event of Default shall have occurred and be continuing at the time
of or immediately after giving effect to such Restricted Payment;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) immediately after giving effect to such Restricted Payment, Hovnanian could
incur at least $1.00 of Indebtedness pursuant to Section&nbsp;3.05(a) hereof; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) immediately after giving effect to such Restricted Payment, the aggregate
amount of all Restricted Payments (including the Fair Market Value of any non-cash
Restricted Payment) declared or made on or after the Issue Date does not exceed the sum
of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) 50% of the Consolidated Net Income of Hovnanian on a cumulative basis
during the period (taken as one accounting period) from and including February
1, 2011 and ending on the last day of Hovnanian&#146;s fiscal quarter immediately
preceding the date of such Restricted Payment (or in the event such Consolidated
Net Income shall be a deficit, minus 100% of such deficit), <I>plus</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) 100% of the aggregate net cash proceeds of, and the Fair Market Value
of Property received by, Hovnanian from (1)&nbsp;any capital contribution to
Hovnanian after the Issue Date or any issue or sale after the Issue Date of
Qualified Stock (other than (a)&nbsp;to any Subsidiary of Hovnanian, (b)&nbsp;any Excluded
Contribution and (c)&nbsp;from the Concurrent Offerings) and (2)&nbsp;the issue or sale
after the Issue Date of any Indebtedness or other securities of Hovnanian
convertible into or exercisable for Qualified Stock of Hovnanian that have been
so converted or exercised, as the case may be, <I>plus</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment (or if the Investment was made prior to the
Issue Date, that would have constituted a Restricted Payment if made after the
Issue Date, if such disposition or repayment results in cash received by
Hovnanian, the Issuer or any Restricted Subsidiary), an amount (to the extent
not included in the calculation of Consolidated Net Income
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">referred to in (A)) equal to the lesser of (x)&nbsp;the return of capital with
respect to such Investment (including by dividend, distribution or sale of
Capital Stock) and (y)&nbsp;the amount of such Investment that was treated (or would
have been treated when made) as a Restricted Payment, in either case, less the
cost of the disposition or repayment of such Investment (to the extent not
included in the calculation of Consolidated Net Income referred to in (A)), <I>plus</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) with respect to any Unrestricted Subsidiary that is redesignated as a
Restricted Subsidiary after the Issue Date, in accordance with the definition of
Unrestricted Subsidiary (so long as the designation of such Subsidiary as an
Unrestricted Subsidiary was treated as a Restricted Payment made after the Issue
Date, and only to the extent not included in the calculation of Consolidated Net
Income referred to in (A)), an amount equal to the lesser of (x)&nbsp;the
proportionate interest of Hovnanian or a Restricted Subsidiary in an amount
equal to the excess of (I)&nbsp;the total assets of such Subsidiary, valued on an
aggregate basis at the lesser of book value and Fair Market Value thereof, over
(II)&nbsp;the total liabilities of such Subsidiary, determined in accordance with
GAAP, and (y)&nbsp;the Designation Amount at the time of such Subsidiary&#146;s
designation as an Unrestricted Subsidiary, <I>plus</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) $10.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Clauses (ii)&nbsp;and (iii)&nbsp;of paragraph (a)&nbsp;of this Section&nbsp;3.06 will not prohibit:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the payment of any dividend within 60&nbsp;days of its declaration if such dividend
could have been made on the date of its declaration without violation of the provisions of
the Indenture;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the purchase, redemption or other acquisition, cancellation or retirement for
value of any shares of Capital Stock of Hovnanian in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a Subsidiary of Hovnanian or
constituting an Excluded Contribution) of, shares of Qualified Stock;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the making of Restricted Investments in joint ventures in an aggregate amount
made under this clause (iii)&nbsp;not to exceed Excluded Contributions (after giving effect to
all subsequent reductions in the amount of any Restricted Investment in a joint venture
made pursuant to this clause (iii)&nbsp;as a result of the repayment or disposition thereof for
cash,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">not to exceed the amount of such Restricted Investment previously made pursuant to
this clause (iii));
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the payment of dividends on Preferred Stock and Disqualified Stock up to an
aggregate amount of $10.0&nbsp;million in any fiscal year; <I>provided </I>that immediately after
giving effect to any declaration of such dividend, Hovnanian could incur at least $1.00 of
Indebtedness pursuant to Section&nbsp;3.05(a) hereof; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the purchase, redemption or other acquisition, cancellation or retirement for
value of Capital Stock, or options, warrants, equity appreciation rights or other rights
to purchase or acquire Capital Stock, of Hovnanian or any Subsidiary held by officers or
employees or former officers or employees of Hovnanian or any Subsidiary (or their estates
or beneficiaries under their estates) not to exceed $10.0&nbsp;million in the aggregate since
the Issue Date;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided, however</I>, that each Restricted Payment described in clauses (i)&nbsp;and (ii)&nbsp;of this paragraph
(b)&nbsp;shall be taken into account for purposes of computing the aggregate amount of all Restricted
Payments pursuant to clause (iii)&nbsp;of paragraph (a)&nbsp;of this Section&nbsp;3.06.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;For purposes of determining the aggregate and permitted amounts of Restricted Payments
made, the amount of any guarantee of any Investment in any Person that was initially treated as a
Restricted Payment and which was subsequently terminated or expired, net of any amounts paid by
Hovnanian or any Restricted Subsidiary in respect of such guarantee, shall be deducted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In determining the &#147;Fair Market Value of Property&#148; for purposes of clause (iii)&nbsp;of
paragraph (a)&nbsp;of this Section&nbsp;3.06 Property other than cash, Cash Equivalents and Marketable
Securities shall be deemed to be equal in value to the &#147;equity value&#148; of the Capital Stock or other
securities issued in exchange therefor. The equity value of such Capital Stock or other securities
shall be equal to (i)&nbsp;the number of shares of Common Equity issued in the transaction (or issuable
upon conversion or exercise of the Capital Stock or other securities issued in the transaction)
multiplied by the closing sale price of the Common Equity on its principal market on the date of
the transaction (less, in the case of Capital Stock or other securities which require the payment
of consideration at the time of conversion or exercise, the aggregate consideration payable
thereupon) or (ii)&nbsp;if the Common Equity is not then traded on the New York Stock Exchange, NYSE
Amex or The Nasdaq Stock Market, or if the Capital Stock or other securities issued in the
transaction do not consist of Common Equity (or Capital Stock or other securities convertible into
or exercisable for Common Equity), the value (if more than $10.0&nbsp;million) of such Capital Stock or
other securities as determined
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by a nationally recognized investment banking firm retained by the Board of Directors of
Hovnanian.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.07</B><I>. Limitations on Transactions with Affiliates.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Hovnanian and the Issuer will not, and will not cause or permit any Restricted Subsidiary
to, make any loan, advance, guarantee or capital contribution to, or for the benefit of, or sell,
lease, transfer or otherwise dispose of any property or assets to or for the benefit of, or
purchase or lease any property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, any Affiliate of Hovnanian or any Affiliate of any of
Hovnanian&#146;s Subsidiaries or any holder of 10% or more of the Common Equity of Hovnanian (including
any Affiliates of such holders), in a single transaction or series of related transactions (each,
an &#147;<B>Affiliate Transaction</B>&#148;), except for any Affiliate Transaction the terms of which are at least
as favorable as the terms which could be obtained by Hovnanian, the Issuer or such Restricted
Subsidiary, as the case may be, in a comparable transaction made on an arm&#146;s length basis with
Persons who are not such a holder, an Affiliate of such a holder or an Affiliate of Hovnanian or
any of Hovnanian&#146;s Subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In addition, Hovnanian and the Issuer will not, and will not cause or permit any
Restricted Subsidiary to, enter into an Affiliate Transaction unless:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) with respect to any such Affiliate Transaction involving or having a value of
more than $1.0&nbsp;million, Hovnanian shall have (x)&nbsp;obtained the approval of a majority of
the Board of Directors of Hovnanian and (y)&nbsp;either obtained the approval of a majority of
Hovnanian&#146;s disinterested directors or obtained an opinion of a qualified independent
financial advisor to the effect that such Affiliate Transaction is fair to Hovnanian, the
Issuer or such Restricted Subsidiary, as the case may be, from a financial point of view,
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) with respect to any such Affiliate Transaction involving or having a value of
more than $10.0&nbsp;million, Hovnanian shall have (x)&nbsp;obtained the approval of a majority of
the Board of Directors of Hovnanian and (y)&nbsp;delivered to the Trustee an opinion of a
qualified independent financial advisor to the effect that such Affiliate Transaction is
fair to Hovnanian, the Issuer or such Restricted Subsidiary, as the case may be, from a
financial point of view.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Notwithstanding the foregoing, an Affiliate Transaction will not include:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any contract, agreement or understanding with, or for the benefit of, or plan for
the benefit of, employees of Hovnanian or its
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Subsidiaries generally (in their capacities as such) that has been approved by the
Board of Directors of Hovnanian,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Capital Stock issuances to directors, officers and employees of Hovnanian or its
Subsidiaries pursuant to plans approved by the stockholders of Hovnanian,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any Restricted Payment otherwise permitted under Section&nbsp;3.06 hereof or any
Permitted Investment (other than a Permitted Investment referred to in clause (b)&nbsp;of the
definition thereof, except as permitted by clause (iv)&nbsp;below),
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any transaction between or among Hovnanian and one or more Restricted
Subsidiaries or between or among Restricted Subsidiaries (<I>provided, however</I>, no such
transaction shall involve any other Affiliate of Hovnanian (other than an Unrestricted
Subsidiary to the extent the applicable amount constitutes a Restricted Payment permitted
by the Indenture)),
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any transaction between one or more Restricted Subsidiaries and one or more
Unrestricted Subsidiaries where all of the payments to, or other benefits conferred upon,
such Unrestricted Subsidiaries are substantially contemporaneously dividended, or
otherwise distributed or transferred without charge, to Hovnanian or a Restricted
Subsidiary,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) issuances, sales or other transfers or dispositions of mortgages and
collateralized mortgage obligations in the ordinary course of business between Restricted
Subsidiaries and Unrestricted Subsidiaries of Hovnanian, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the payment of reasonable and customary fees to, and indemnity provided on
behalf of, officers, directors, employees or consultants of Hovnanian, the Issuer or any
Restricted Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.08</B><I>. Limitations on Dispositions of Assets. </I>(a)&nbsp;Hovnanian and the Issuer will not,
and will not cause or permit any Restricted Subsidiary to, make any Asset Disposition unless: (x)
Hovnanian (or such Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Disposition at least equal to the Fair Market Value thereof, and (y)&nbsp;not less than 70%
of the consideration received by Hovnanian (or such Restricted Subsidiary, as the case may be) is
in the form of cash, Cash Equivalents and Marketable Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The amount of (i)&nbsp;any Indebtedness (other than Subordinated Indebtedness) of Hovnanian or
any Restricted Subsidiary that is actually assumed
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by the transferee in such Asset Disposition and (ii)&nbsp;the fair market value (as determined in
good faith by the Board of Directors of Hovnanian) of any property or assets (including Capital
Stock of any Person that will be a Restricted Subsidiary following receipt thereof) received that
are used or useful in a Real Estate Business, shall be deemed to be consideration required by
clause (y)&nbsp;above for purposes of determining the percentage of such consideration received by
Hovnanian or the Restricted Subsidiaries.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Net Cash Proceeds of an Asset Disposition shall, within one year, at Hovnanian&#146;s
election, (1)&nbsp;be used by Hovnanian or a Restricted Subsidiary to (A)&nbsp;invest in assets (including
Capital Stock of any Person that is or will be a Restricted Subsidiary following investment
therein) used or useful in the business of the construction and sale of homes conducted by
Hovnanian and the Restricted Subsidiaries or (B)&nbsp;permanently prepay or repay secured Indebtedness
of Hovnanian or any Guarantor (and, if the Indebtedness is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto) or (2)&nbsp;to the extent not so used, be
applied to make an Offer to Purchase Notes and, if Hovnanian or a Restricted Subsidiary elects or
is required to do so, to repay, purchase or redeem any other unsubordinated Indebtedness (on a <I>pro
rata </I>basis if the amount available for such repayment, purchase or redemption is less than the
aggregate amount of (i)&nbsp;the principal amount of the Notes tendered in such Offer to Purchase and
(ii)&nbsp;the lesser of the principal amount, or accreted value, of such other unsubordinated
Indebtedness tendered or to be repaid, repurchased or redeemed, plus, in each case, accrued
interest to the date of repayment, purchase or redemption) at 100% of the principal amount or
accreted value thereof, as the case may be, plus accrued and unpaid interest, if any, to the date
of repurchase, repayment or redemption. Pending any such application under this paragraph, Net
Cash Proceeds may be used to temporarily reduce Indebtedness or otherwise be invested in any manner
not prohibited by the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Notwithstanding the foregoing, (A)&nbsp;Hovnanian will not be required to apply such Net Cash
Proceeds in accordance with clause (2)&nbsp;of paragraph (c)&nbsp;of this Section&nbsp;3.08 except to the extent
that such Net Cash Proceeds, together with the aggregate Net Cash Proceeds of prior Asset
Dispositions (other than those so used) which have not been applied in accordance with this
provision and as to which no prior prepayments or repayments shall have been made and no Offer to
Purchase shall have been made, exceed $25.0&nbsp;million and (B)&nbsp;in connection with an Asset
Disposition, Hovnanian and the Restricted Subsidiaries will not be required to comply with the
requirements of clause (y)&nbsp;of paragraph (a)&nbsp;of this Section&nbsp;3.08 to the extent that the non-cash
consideration received in connection with such Asset Disposition, together with the sum of all
non-cash consideration received in connection with all prior Asset Dispositions that has not yet
been converted into cash, Cash Equivalents or Marketable Securities, does not exceed $25.0&nbsp;million;
<I>provided, however</I>, that when any non-cash consideration is
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">converted into cash, Cash Equivalents or Marketable Securities, such cash shall constitute Net
Cash Proceeds and be subject to paragraph (c)&nbsp;of this Section&nbsp;3.08.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.09</B><I>. Offer to Purchase. </I>(a)&nbsp;An &#147;<B>Offer to Purchase</B>&#148; means an offer by the Issuer to
purchase Notes as required by the Indenture. An Offer to Purchase must be made by written offer
(the &#147;<B>offer</B>&#148;) sent to the Holders. The Issuer will notify the Trustee at least 15&nbsp;days (or such
shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its
obligation to make an Offer to Purchase, and the offer will be sent by the Issuer or, at the
Issuer&#146;s request, by the Trustee in the name and at the expense of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The offer must include or state the following as to the terms of the Offer to Purchase:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the provision of the Indenture pursuant to which the Offer to Purchase is being
made;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the aggregate principal amount of the outstanding Notes offered to be purchased
by the Issuer pursuant to the Offer to Purchase (including, if less than 100%, the manner
by which such amount has been determined pursuant to the Indenture) (the &#147;<B>purchase
amount</B>&#148;);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the purchase price, including the portion thereof representing accrued
interest;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) an expiration date (the &#147;<B>expiration date</B>&#148;) not less than 30&nbsp;days or more than 60
days after the date of the offer, and a settlement date for purchase (the &#147;<B>purchase date</B>&#148;)
not more than five Business Days after the expiration date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) information concerning the business of Hovnanian and its Subsidiaries which the
Issuer in good faith believes will enable the Holders to make an informed decision with
respect to the Offer to Purchase, at a minimum to include or incorporate by reference:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the most recent annual and quarterly financial statements and
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148; for Hovnanian,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a description of material developments in Hovnanian&#146;s business
subsequent to the date of the latest of the financial statements (including a
description of the events requiring the Issuer to make the Offer to Purchase),
and
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) if applicable, appropriate <I>pro forma </I>financial information concerning
the Offer to Purchase and the events requiring the Issuer to make the Offer to
Purchase;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a Holder may tender all or any portion of its Notes, subject to the requirement
that any portion of a Note tendered must be in denominations of $2,000 principal amount
and any multiple of $1,000 in excess of thereof;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the place or places where Notes are to be surrendered for tender pursuant to
the Offer to Purchase;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) each Holder electing to tender a Note pursuant to the offer will be required
to surrender such Note at the place or places specified in the offer prior to the close of
business on the expiration date (such Note being, if the Issuer or the Trustee so
requires, duly endorsed or accompanied by a duly executed written instrument of transfer);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) interest on any Note not tendered, or tendered but not purchased by the Issuer
pursuant to the Offer to Purchase, will continue to accrue;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) on the purchase date the purchase price will become due and payable on each Note
accepted for purchase, and interest on Notes purchased will cease to accrue on and after
the purchase date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Holders are entitled to withdraw Notes tendered by giving notice, which must be
received by the Issuer or the Trustee not later than the close of business on the
expiration date, setting forth the name of the Holder, the principal amount of the
tendered Notes, the certificate number of the tendered Notes and a statement that the
Holder is withdrawing all or a portion of the tender;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) (A)&nbsp;if Notes in an aggregate principal amount less than or equal to the
purchase amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the
Issuer will purchase all such Notes, and (B)&nbsp;if the Offer to Purchase is for less than all
of the outstanding Notes and Notes in an aggregate principal amount in excess of the
purchase amount are tendered and not withdrawn pursuant to the offer, the Issuer will
purchase Notes having an aggregate principal amount equal to the purchase amount on a <I>pro
rata </I>basis, with adjustments so that only Notes in denominations of $2,000 principal
amount and any multiples of $1,000 in excess thereof will be purchased;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) if any Note is purchased in part, new Notes equal in principal amount to the
unpurchased portion of the Note will be issued; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) if any Note contains a CUSIP or ISIN number, no representation is being made as
to the correctness of the CUSIP or ISIN number either as printed on the Notes or as
contained in the offer and that the Holder should rely only on the other identification
numbers printed on the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Prior to the purchase date, the Issuer will accept tendered Notes for purchase as required
by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an
Officers&#146; Certificate specifying which Notes have been accepted for purchase. On the purchase
date, the purchase price will become due and payable on each Note accepted for purchase, and
interest on Notes purchased will cease to accrue on and after the purchase date. The Trustee will
promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes equal
in principal amount to any unpurchased portion of any Notes accepted for purchase in part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Issuer will comply with Rule&nbsp;14e-1 under the Exchange Act and all other applicable
laws in making any Offer to Purchase, and the above procedures will be deemed modified as necessary
to permit such compliance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.10</B><I>. Limitations on Liens. </I>Hovnanian and the Issuer will not, and will not cause or
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens securing
any obligation or liability, other than Permitted Liens, on any of its Property, or on any shares
of Capital Stock or Indebtedness of any Restricted Subsidiary, unless contemporaneously therewith
or prior thereto all payments due under the Indenture and the Notes are secured on an equal and
ratable basis with the obligation or liability so secured until such time as such obligation or
liability is no longer secured by a Lien.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.11</B><I>. Limitations on Restrictions Affecting Restricted Subsidiaries. </I>Hovnanian and
the Issuer will not, and will not cause or permit any Restricted Subsidiary to, create, assume or
otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction
(other than encumbrances or restrictions imposed by law or by judicial or regulatory action or by
provisions of agreements that restrict the assignability thereof) on the ability of any Restricted
Subsidiary to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;pay dividends or make any other distributions on its Capital Stock or any other interest
or participation in, or measured by, its profits, owned by Hovnanian or any other Restricted
Subsidiary, or pay interest on or principal of any Indebtedness owed to Hovnanian or any other
Restricted Subsidiary,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;make loans or advances to Hovnanian or any other Restricted Subsidiary, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;transfer any of its property or assets to Hovnanian or any other Restricted Subsidiary,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;except for:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) encumbrances or restrictions existing under or by reason of applicable law,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) contractual encumbrances or restrictions in effect at or entered into on the
Issue Date and any amendments, modifications, restatements, renewals, supplements,
refundings, replacements or refinancings thereof, <I>provided </I>that such amendments,
modifications, restatements, renewals, supplements, refundings, replacements or
refinancings are no more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such contractual encumbrances or
restrictions, as in effect at or entered into on the Issue Date,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any restrictions or encumbrances arising under Acquired Indebtedness; <I>provided</I>,
that such encumbrance or restriction applies only to either the assets that were subject
to the restriction or encumbrance at the time of the acquisition or the obligor on such
Indebtedness and its Subsidiaries prior to such acquisition,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any restrictions or encumbrances arising in connection with Refinancing
Indebtedness; <I>provided, however</I>, that any restrictions and encumbrances of the type
described in this clause (iv)&nbsp;that arise under such Refinancing Indebtedness shall not be
materially more restrictive or apply to additional assets than those under the agreement
creating or evidencing the Indebtedness being refunded, refinanced, replaced or extended,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any Permitted Lien, or any other agreement restricting the sale or other
disposition of property, securing Indebtedness permitted by the Indenture if such
Permitted Lien or agreement does not expressly restrict the ability of a Subsidiary of
Hovnanian to pay dividends or make or repay loans or advances prior to default thereunder,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) reasonable and customary borrowing base covenants set forth in agreements
evidencing Indebtedness otherwise permitted by the Indenture,
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;customary non-assignment provisions in leases, licenses, encumbrances,
contracts or similar assets entered into or acquired in the ordinary course of business,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or
disposition,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) encumbrances or restrictions existing under or by reason of the Indenture, the
Notes or the Guarantees,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) purchase money obligations that impose restrictions on the property so acquired
of the nature described in clause (c)&nbsp;of this Section&nbsp;3.11,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Liens permitted under the Indenture securing Indebtedness that limit the right
of the debtor to dispose of the assets subject to such Lien,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements, assets sale agreements, stock sale agreements and
other similar agreements,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) customary provisions of any franchise, distribution or similar agreements,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) restrictions on cash or other deposits or net worth imposed by contracts
entered into in the ordinary course of business, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) any encumbrance or restrictions of the type referred to in clauses (a), (b)&nbsp;or
(c)&nbsp;of this Section&nbsp;3.11 imposed by any amendments, modifications, restatements, renewals,
supplements, refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i)&nbsp;through (xiv)&nbsp;of this Section&nbsp;3.11, <I>provided</I>, that
such amendments, modifications, restatements, renewals, supplements, refundings,
replacements or refinancings are, in the good faith judgment of Hovnanian&#146;s Board of
Directors, no more restrictive with respect to such dividend and other payment
restrictions than those contained in the dividend or other payment restrictions prior to
such amendment, modification, restatement, renewal, supplement, refunding, replacement or
refinancing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.12</B><I>. Limitations on Mergers, Consolidations and Sales of Assets. </I>This Section&nbsp;3.12
shall replace the provisions contained in Sections&nbsp;9.1 and 9.2 of
</DIV>


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</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Base Indenture in their entirety and the references to (i)&nbsp;Article&nbsp;Nine in Section&nbsp;9.3 of
the Base Indenture shall refer to this Section&nbsp;3.12 and (ii)&nbsp;Sections&nbsp;9.1 or 9.2 elsewhere in the
Base Indenture shall refer to this Section&nbsp;3.12.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither the Issuer nor any Guarantor will consolidate or merge with or into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets (including, without
limitation, by way of liquidation or dissolution), or assign any of its obligations under the
Notes, the Guarantees or the Indenture (as an entirety or substantially as an entirety in one
transaction or in a series of related transactions), to any Person (in each case other than in a
transaction in which Hovnanian, the Issuer or a Restricted Subsidiary is the survivor of a
consolidation or merger, or the transferee in a sale, lease, conveyance or other disposition)
unless:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Person formed by or surviving such consolidation or merger (if other than Hovnanian,
the Issuer or the Guarantor, as the case may be), or to which such sale, lease, conveyance or other
disposition or assignment will be made (collectively, the &#147;<B>Successor</B>&#148;), is a corporation or other
legal entity organized and existing under the laws of the United States or any state thereof or the
District of Columbia, and the Successor assumes by supplemental indenture in a form reasonably
satisfactory to the Trustee all of the obligations of Hovnanian, the Issuer or the Guarantor, as
the case may be, under the Notes or a Guarantee, as the case may be, and the Indenture,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;immediately after giving effect to such transaction, no Default or Event of Default has
occurred and is continuing, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;immediately after giving effect to such transaction, Hovnanian (or its Successor) could
incur at least $1.00 of Indebtedness pursuant to Section&nbsp;3.05(a) hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing provisions shall not apply to: (i)&nbsp;a transaction involving the sale or
disposition of Capital Stock of a Guarantor, or the consolidation or merger of a Guarantor, or the
sale, lease, conveyance or other disposition of all or substantially all of the assets of a
Guarantor, that in any such case results in such Guarantor being released from its Guarantee
pursuant to Section&nbsp;5.02 hereof, or (ii)&nbsp;a transaction the purpose of which is to change the state
of incorporation of Hovnanian, the Issuer or any Guarantor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.13</B><I>. Reports to Holders of Notes. </I>(a)&nbsp;This Section&nbsp;3.13(a) shall replace the
provisions contained in Section&nbsp;4.3(a) of the Base Indenture in its entirety and the references to
Section&nbsp;4.3(a) in Article&nbsp;Four or elsewhere in the Base Indenture shall refer to this Section
3.13(a).
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hovnanian shall file with the Commission the annual reports and the information, documents and
other reports required to be filed pursuant to Section&nbsp;13 or 15(d) of the Exchange Act. Hovnanian
shall file with the Trustee and mail to each Holder of record of Notes such reports, information
and documents within 15&nbsp;days after it files them with the Commission. In the event that Hovnanian
is no longer subject to these periodic reporting requirements of the Exchange Act, it will
nonetheless continue to file reports with the Commission and the Trustee and mail such reports to
each Holder of Notes as if it were subject to such reporting requirements. Regardless of whether
Hovnanian is required to furnish such reports to its stockholders pursuant to the Exchange Act,
Hovnanian will cause its consolidated financial statements and a &#147;Management&#146;s Discussion and
Analysis of Results of Operations and Financial Condition&#148; written report, similar to those that
would have been required to appear in annual or quarterly reports, to be delivered to Holders of
Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The posting of the reports, information and documents referred to in Section&nbsp;3.13(a) on
Hovnanian&#146;s website or one maintained on its behalf for such purpose shall be deemed to satisfy
Hovnanian&#146;s delivery obligations to the Trustee and the Holders. In addition, availability of the
foregoing materials on the Commission&#146;s EDGAR service shall be deemed to satisfy Hovnanian&#146;s
delivery obligations to the Trustee and the Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The following shall be added at the end of the first sentence of Section&nbsp;4.3(d) of the
Base Indenture: &#147;and include in such Officers&#146; Certificate if any officer of Hovnanian is aware of
any Default or Event of Default, a statement specifying such Default or Event of Default and what
action Hovnanian is taking or proposes to take with respect thereto&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.14</B><I>. Limitation of Applicability of Certain Covenants if Notes Rated Investment
Grade.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Issuer, Hovnanian and its Restricted Subsidiaries&#146; obligations to comply with the
provisions of the Indenture under this Article&nbsp;3 (except for Sections&nbsp;3.01, 3.02, 3.03, 3.04, 3.10,
3.12 (other than clause (c)&nbsp;of the first paragraph thereof), 3.13 and 3.15 hereof) will be
suspended (such suspended covenants, the &#147;<B>Suspended Covenants</B>&#148;) and cease to have any further
effect from and after the first date when the Notes issued under the Indenture are rated Investment
Grade (the &#147;<B>Suspension Date</B>&#148;); <I>provided </I>that if the Notes subsequently cease to be rated Investment
Grade, then, from and after the time the Notes cease to be rated Investment Grade, the Issuer&#146;s,
Hovnanian&#146;s and its Restricted Subsidiaries&#146; obligation to comply with the Suspended Covenants
shall be reinstated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;With respect to Restricted Payments made after any such reinstatement of the obligations
to comply with the Suspended Covenants, the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">amount of Restricted Payments made after the Issue Date will be calculated as though Section
3.06 of this Supplemental Indenture had been in effect during the entire period after such date.
Accordingly, Restricted Payments made after the Suspension Date will reduce the amount available to
be made as Restricted Payments under Section&nbsp;3.06(a) of this Supplemental Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Notwithstanding clauses (a)&nbsp;and (b)&nbsp;above, in the event of any such reinstatement of the
obligation to comply with the Suspended Covenants, no action taken or omitted to be taken by the
Issuer, Hovnanian or any of its Subsidiaries prior to such reinstatement, or action taken by the
Issuer, Hovnanian or any of its Subsidiaries at any time pursuant to a contractual obligation
arising prior to such reinstatement (not entered into in contemplation of such reinstatement),
shall give rise to a Default or Event of Default under the Indenture upon reinstatement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Issuer shall promptly notify the Trustee of any suspension or reinstatement of the
Suspended Covenants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;3.15</B><I>. Applicability of Covenants Contained in the Base Indenture. </I>Each of the
agreements and covenants of the Issuer and/or Hovnanian, as applicable, contained in Article&nbsp;Three
of the Base Indenture shall apply to the Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 4</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Remedies</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.01</B><I>. Events of Default. </I>(a) &#147;<B>Event of Default</B>&#148; means any one or more of the
following events and this Section&nbsp;4.01(a) (i)&nbsp;through (ix)&nbsp;replaces Section&nbsp;5.1 (a)&nbsp;through (h)&nbsp;of
the Base Indenture in its entirety:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the failure by Hovnanian, the Issuer and the Guarantors to pay interest on any
Note when the same becomes due and payable and the continuance of any such failure for a
period of 30&nbsp;days;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the failure by Hovnanian, the Issuer and the Guarantors to pay the principal or
premium of any Note when the same becomes due and payable at maturity, upon acceleration
or otherwise;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the failure by Hovnanian, the Issuer or any Restricted Subsidiary to comply
with any of its agreements or covenants in, or provisions of, the Notes, the Guarantees or
the Indenture and such failure continues for the period and after the notice specified
below (except in the case of a default under Sections&nbsp;3.04 and 3.12 hereof, which will
constitute Events of Default with notice but without passage of time);
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the acceleration of any Indebtedness (other than Non-Recourse Indebtedness) of
Hovnanian, the Issuer or any Restricted Subsidiary that has an outstanding principal
amount of $10.0&nbsp;million or more, individually or in the aggregate, and such acceleration
does not cease to exist, or such Indebtedness is not satisfied, in either case within 30
days after such acceleration;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the failure by Hovnanian, the Issuer or any Restricted Subsidiary to make any
principal or interest payment in an amount of $10.0&nbsp;million or more, individually or in
the aggregate, in respect of Indebtedness (other than Non-Recourse Indebtedness) of
Hovnanian or any Restricted Subsidiary within 30&nbsp;days of such principal or interest
becoming due and payable (after giving effect to any applicable grace period set forth in
the documents governing such Indebtedness);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) a final judgment or judgments that exceed $10.0&nbsp;million or more, individually or
in the aggregate, for the payment of money having been entered by a court or courts of
competent jurisdiction against Hovnanian, the Issuer or any of its Restricted Subsidiaries
and such judgment or judgments is not satisfied, stayed, annulled or rescinded within 60
days of being entered;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Hovnanian, the Issuer or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) commences a voluntary case,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) consents to the entry of an order for relief against it in an
involuntary case,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) makes a general assignment for the benefit of its creditors;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) is for relief against Hovnanian, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an involuntary case,
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) appoints a Custodian of Hovnanian, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary or a Custodian for all or
substantially all of the property of Hovnanian or any Restricted Subsidiary that
is a Significant Subsidiary, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) orders the liquidation of Hovnanian, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">and the order or decree remains unstayed and in effect for 60&nbsp;days; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) any Guarantee of a Guarantor which is a Significant Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such Guarantee and the
Indenture) or is declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Guarantee (other than by reason of release of a
Guarantor from its Guarantee in accordance with the terms of the Indenture and the
Guarantee).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Default as described in subclause (iii)&nbsp;above will not be deemed an Event of Default until
the Trustee notifies Hovnanian, or the Holders of at least 25&nbsp;percent in principal amount of the
then outstanding Notes notify Hovnanian and the Trustee, of the Default and (except in the case of
a default with respect to Sections&nbsp;3.04 and 3.12 hereof) Hovnanian does not cure the Default within
60&nbsp;days after receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a &#147;Notice of Default.&#148; If such a Default is cured within such
time period, it ceases.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The first sentence of the second paragraph in Section&nbsp;5.1 of the Base Indenture is
replaced, with respect to the Notes, in its entirety with the following and the third paragraph in
Section&nbsp;5.1 of the Base Indenture is deleted in its entirety:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default (other than an Event of Default with respect to Hovnanian or
the Issuer resulting from subclauses (vii)&nbsp;or (viii)&nbsp;of Section&nbsp;4.01(a)), shall have
occurred and be continuing under the Indenture, the Trustee by notice to Hovnanian, or the
Holders of at least 25&nbsp;percent in principal amount of the Notes then outstanding by notice
to Hovnanian and the Trustee, may declare all Notes to be due and payable immediately.
Upon such declaration of acceleration, the amounts due and payable on the Notes will be
due and payable immediately. If an Event of Default with respect to Hovnanian or the
Issuer specified in subclauses (vii)&nbsp;or (viii)&nbsp;of Section&nbsp;4.01(a) occurs, such an amount
will <I>ipso facto </I>become and be immediately due and payable without any declaration, notice
or other act on the part of the Trustee and Hovnanian or any Holder.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;4.02</B><I>. Additional Provisions Related to Events of Default. </I>The provisions of Sections
5.1 (except as specified above), 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 of the Base Indenture
shall apply to the Notes; <I>provided </I>that (x)&nbsp;the reference in the last paragraph of Section&nbsp;5.1 of
the Base Indenture shall be to clauses (i)&nbsp;and (ii)&nbsp;of Section&nbsp;4.01(a) hereof, (y)&nbsp;the first clause
of the parenthetical contained in Section&nbsp;5.8 of the Base Indenture shall be replaced with the
following: &#147;(the term &#147;defaults&#148; for the purposes of this Section&nbsp;5.8 being hereby defined to be
any Event of Default as defined in this Supplemental Indenture, not including periods of grace, if
any, provided for therein&#148; and (z)&nbsp;all references contained in Section&nbsp;5.8 of the Base Indenture to
clause (d)&nbsp;shall be replaced with the following: &#147;clause (iii)&nbsp;of Section&nbsp;4.01(a)&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Hovnanian is required to deliver to the Trustee prompt written notice of the
occurrence of any Default or Event of Default.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 5</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Guarantees; Release of Guarantor</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;5.01</B><I>. Unconditional Guarantees. </I>(a)&nbsp;Hovnanian and each of the other Guarantors
hereby (and will so long, in the case of a Restricted Subsidiary, as it remains a Restricted
Subsidiary) Guarantee the Notes in accordance with the provisions of Article&nbsp;Thirteen of the Base
Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Each Guarantor, by execution hereof, agrees to be bound by the Base Indenture, as
supplemented by this Supplemental Indenture, with respect to the Notes as if such Guarantor was a
party to both the Base Indenture and this Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Each existing Restricted Subsidiary (other than the Issuer (for so long as it remains the
Issuer) and K. Hovnanian Poland, sp.z.o.o.) will be a Guarantor. Hovnanian is permitted to cause
any Unrestricted Subsidiary to be a Guarantor. If the Issuer, Hovnanian or any of its Restricted
Subsidiaries acquires or creates a Restricted Subsidiary after the Issue Date, the new Restricted
Subsidiary shall (subject to Section&nbsp;5.02(b) hereof) provide a Guarantee Notation, substantially in
the form of Exhibit&nbsp;B hereto and shall also execute a supplemental indenture in the form of Exhibit
C hereto, and deliver an Opinion of Counsel to the Trustee in accordance with Section&nbsp;8.4 of the
Base Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;5.02</B><I>. Release of a Guarantor. </I>(a)&nbsp;If all or substantially all of the assets of any
Guarantor other than Hovnanian or all of the Capital Stock of any Guarantor other than Hovnanian is
sold (including by consolidation, merger, issuance or otherwise) or disposed of (including by
liquidation, dissolution or otherwise) by Hovnanian or any of its Subsidiaries, or, unless
Hovnanian elects
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">otherwise, if any Guarantor other than Hovnanian is designated an Unrestricted Subsidiary in
accordance with the terms of the Indenture, then such Guarantor (in the event of a sale or other
disposition of all of the Capital Stock of such Guarantor or a designation as an Unrestricted
Subsidiary) or the Person acquiring such assets (in the event of a sale or other disposition of all
or substantially all of the assets of such Guarantor) shall be deemed automatically and
unconditionally released and discharged from any of its obligations under the Indenture without any
further action on the part of the Trustee or any Holder of the Notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Upon the release of the guarantee by a Guarantor (including, for the avoidance of doubt,
the Issuer after it ceases to be the Issuer pursuant to Article&nbsp;Fourteen of the Base Indenture)
other than Hovnanian under all then outstanding Applicable Debt, at any time after the suspension
of the Suspended Covenants pursuant to Section&nbsp;3.14 hereof, (i)&nbsp;the Guarantee of such Guarantor
under the Indenture will be released and discharged in respect of the Notes at such time; <I>provided</I>
that the foregoing shall not apply to any release of any Guarantor done in contemplation of, or in
connection with, any cessation of the Notes being rated Investment Grade, and (ii)&nbsp;no Restricted
Subsidiary thereafter acquired or created will be required to be a Guarantor in respect of the
Notes. In the event that (i)&nbsp;any such released Guarantor thereafter guarantees any Applicable Debt
(or if any released guarantee under any Applicable Debt is reinstated or renewed) then any such
released Guarantor will Guarantee the Notes on the terms and conditions set forth in the Indenture
or (ii)&nbsp;the Suspended Covenants cease to be suspended pursuant to Section&nbsp;3.14 hereof then all
Restricted Subsidiaries of Hovnanian then existing (other than the Restricted Subsidiaries named in
Section&nbsp;5.01(c) hereof) will Guarantee the Notes on the terms and conditions set forth in the
Indenture. For purposes of this clause (b), Applicable Debt secured by a Lien on such Restricted
Subsidiary&#146;s Property or issued by such Restricted Subsidiary shall be deemed guaranteed by such
Restricted Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;An Unrestricted Subsidiary that is a Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under its Guarantee upon notice from
Hovnanian to the Trustee to such effect, without any further action required on the part of the
Trustee or any Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;5.03</B>. <I>Guarantors as &#147;obligors&#148; for Provisions Included in the Indenture Pursuant to
the Trust Indenture Act of 1939. </I>Each provision included in the Indenture which is required to be
included by any of Sections&nbsp;310 to 317 of the Trust Indenture Act of 1939, inclusive, or is deemed
applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, and
which applies to an &#147;obligor,&#148; as that term is defined under the Trust Indenture Act of 1939, shall
apply to each of the Guarantors.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 6</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">The Trustee</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.01</B><I>. Compensation and Indemnification of Trustee and Its Prior Claim. </I>Solely with
respect to the Notes to which this Supplemental Indenture relates, Section&nbsp;6.6 of the Base
Indenture is amended by replacing each occurrence of the word &#147;Issuer&#148; in such Section&nbsp;6.6 with the
word &#147;Hovnanian.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;6.02</B><I>. Appointment Of Trustee. </I>The Issuer hereby appoints Wilmington Trust Company as
Trustee for the Notes, and Wilmington Trust Company accepts such appointment, subject to the terms
and conditions of this Indenture.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 7</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Defeasance</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.01</B><I>. Defeasance. </I>Except as stated below, the provisions of Article&nbsp;Ten of the Base
Indenture shall apply to the Notes in their entirety; <I>provided</I>, that the &#147;obligations&#148; referred to
in each of Section&nbsp;10.2 and Section&nbsp;10.3 of the Base Indenture will also apply to the &#147;obligations&#148;
of Hovnanian and the Guarantors with respect to their Guarantees in the case of Section&nbsp;10.2 of the
Base Indenture and with respect to the covenants and events of default specified herein in the case
of Section&nbsp;10.3 of the Base Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.02</B>. <I>Additional Provisions to Survive Legal Defeasance and Discharge. </I>Section&nbsp;10.2
of the Base Indenture is hereby amended to (x)&nbsp;delete the &#147;and&#148; following clause (c)&nbsp;and before
clause (d)&nbsp;of such section and to replace it with &#147;;&#148; and (y)&nbsp;add the following clauses (e)&nbsp;and (f)
to the end of such section, &#147;(e) the rights of registration of transfer and exchange of the Notes;
and (f)&nbsp;the rights of Holders of Notes that are beneficiaries with respect to property so deposited
with the Trustee payable to all or any of them&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.03</B><I>. Additional Covenant Defeasance. </I>In addition to the &#147;obligations&#148; referred to
in Section&nbsp;10.3 of the Base Indenture, &#147;Covenant Defeasance&#148;, as defined in such Section, will also
apply to the release of obligations of the Issuer, Hovnanian and the Guarantors set forth in
Section&nbsp;3.04 through 3.11 hereof, inclusive, clause (c)&nbsp;of Section&nbsp;3.12 hereof, Section&nbsp;3.13
hereof, Section&nbsp;5.01 hereof and each Guarantor&#146;s obligations under its Guarantee Notation and
clauses (iii) (with respect to the covenants so defeased), (iv), (v), (vi), (vii) (with respect to
Significant Subsidiaries), (viii) (with respect to Significant Subsidiaries) and (ix)&nbsp;of Section
4.01(a) hereof will no longer constitute Events of Default or Defaults.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.04</B><I>. Section&nbsp;10.4. </I>Section&nbsp;10.4(b) of the Base Indenture is hereby amended by
replacing the words &#147;the date of this Indenture&#148; with &#147;February&nbsp;14, 2011&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;7.05</B><I>. Satisfaction and Discharge of the Indenture. </I>Section&nbsp;10.9 of the Base
Indenture is hereby amended by replacing the word &#147;Event of Default&#148; in clause (a)(iii) thereof
with the word &#147;Default.&#148;
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 8</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">The Notes</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.01</B><I>. Form of Notes. </I>The Notes will be issued as Global Securities in the form of
Exhibit&nbsp;A hereto (the &#147;<B>Global Note</B>&#148;). The terms of such Notes are herein incorporated by reference
and are part of this Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.02</B><I>. Depositary. </I>The Depositary for the Global Note will initially be The
Depositary Trust Company (&#147;<B>DTC</B>&#148;) and the Global Note will be deposited on or about the Issue Date
with, or on behalf of, DTC and registered in the name of Cede &#038; Co., as nominee of DTC (such
nominee being referred to herein as the &#147;<B>Global Note Holder</B>&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.03</B><I>. Certificated Notes. </I>In addition to the provisions set forth in Section&nbsp;2.8 of
the Base Indenture, any Person having a beneficial interest in the Global Note may, upon request to
the Trustee, exchange such beneficial interest for Notes in the form of Certificated Notes. Upon
any such issuance, the Trustee is required to register such Certificated Notes in the name of, and
cause the same to be delivered to, such Person or Persons (or the nominee of any thereof).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;8.04</B>. <I>Offices for Notices and Payments, etc</I>. The Issuer initially designates the
Corporate Trust Office of the Trustee as the office or agency where the Notes may be presented for
payment, registration of transfer and for exchange as provided for in this Indenture, and as the
office or agency where notices and demands to or upon the Issuer and Hovnanian in respect of the
Notes or of this Indenture may be served. The Issuer hereby appoints the Trustee as Registrar and
Paying Agent and as the agent upon whom notices and demands may be served with respect to the
Notes.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 9</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Redemption</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.01</B><I>. Optional Redemption. </I>The Notes will be redeemable, in whole, at any time, or
in part, from time to time, at the option of the Issuer upon not less than 30 nor more than 60
days&#146; notice at a redemption price equal to the sum of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;100% of the principal amount thereof, plus accrued and unpaid interest thereon to the
redemption date, if any; <I>plus</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Make-Whole Amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall have no responsibility in connection with the calculation of such redemption
price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.02</B><I>. Sinking Fund; Mandatory Redemption. </I>There is no sinking fund for, or mandatory
redemption of, the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.03</B><I>. Redemption with Proceeds of Equity Offering</I>. At any time and from time to time
prior to April&nbsp;15, 2014, the Issuer may redeem Notes with the net cash proceeds received by the
Issuer from any Equity Offering of Hovnanian at a redemption price equal to 111.875% of the
principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal
amount for all such redemptions not to exceed 35% of the original aggregate principal amount of the
Notes (including Additional Notes) <I>provided </I>that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;in each case the redemption takes place not later than 60&nbsp;days after the closing of the
related Equity Offering, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;not less than 65% of the original aggregate principal amount of the Notes (including
Additional Notes) remains outstanding immediately thereafter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;9.04. </B><I>Applicability of Sections of the Base Indenture. </I>The provisions of Sections
12.2, 12.3 and 12.4 of the Base Indenture in respect of the Notes shall apply to any optional
redemption of the Notes. Notwithstanding the foregoing, notices of any redemption may be given
prior to the completion thereof, and may, at the Issuer&#146;s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of a related Equity Offering.
Section&nbsp;12.5 of the Base Indenture shall not so apply.
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 10</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Amendments, Supplements And Waivers</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;10.01</B><I>. Amendments, Supplements and Waivers. </I>The Issuer, Hovnanian, the Guarantors
and the Trustee may amend, supplement or waive the Indenture, the Guarantees or the Notes as
provided in Article&nbsp;Eight of the Base Indenture; <I>provided</I>, that, in addition to the provisions
specified in Section&nbsp;8.1 of the Base Indenture, without the consent of, or notice to, any Holder,
Hovnanian, the Issuer, the Guarantors and the Trustee may amend or supplement the Indenture, the
Notes or the Guarantees to evidence the assumption by Hovnanian (or its successor entity) or a
successor entity of the Issuer of the obligations of the Issuer under the Indenture and the Notes;
<I>provided</I>, <I>further</I>, that, in addition to the provisions of Section&nbsp;8.2 of the Base Indenture, no
amendment, supplement or waiver shall, without the consent of each Holder affected: (i)&nbsp;alter the
provisions (including related definitions) set forth in Article&nbsp;9 hereof or Section&nbsp;3.04 or 3.08
hereof; (ii)&nbsp;release any Guarantor from any of its obligations under its Guarantee or the Indenture
otherwise than in accordance with the Indenture or (iii)&nbsp;waive a continuing Default or Event of
Default in the payment of principal of or interest on the Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 11</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Release Of Issuer</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;11.01</B><I>. Release of Issuer. </I>The Issuer may be released from its obligations under the
Indenture and the Notes in accordance with the provisions of Article&nbsp;Fourteen of the Base Indenture
and the following is added at the end of clause (3)&nbsp;of Article&nbsp;Fourteen thereof: &#147;until such time,
if any, as such Guarantee may be released pursuant to Section&nbsp;3.14 or Section&nbsp;5.02 hereof.&#148;
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE 12</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">Miscellaneous</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.01</B><I>. GOVERNING LAW. </I>THIS SUPPLEMENTAL INDENTURE, THE NOTES AND EACH GUARANTEE
SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.02</B><I>. No Adverse Interpretation of Other Agreements. </I>This Supplemental Indenture
may not be used to interpret another indenture (other than the Base Indenture) or loan or debt
agreement of Hovnanian, the Issuer or any
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">subsidiary of Hovnanian. Any such indenture (other than the Base Indenture) or loan or debt
agreement may not be used to interpret this Supplemental Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.03</B><I>. Successors and Assigns. </I>All covenants and agreements of the Issuer, Hovnanian
and the Guarantors in this Supplemental Indenture and the Notes shall bind their respective
successors and assigns and inure to the benefit of their respective successors and assigns. All
agreements of the Trustee in this Supplemental Indenture shall bind its successors and assigns and
inure to the benefit of their respective successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.04</B><I>. Counterparts. </I>The parties may sign any number of counterparts of this
Supplemental Indenture. Each signed counterpart shall be an original, but all of them together
represent the same agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.05</B><I>. Severability. </I>To the extent permitted by applicable law, in case any one or
more of the provisions contained in this Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Supplemental Indenture or of the
Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.06</B>. <I>Effect of Headings. </I>The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section&nbsp;12.07</B>. <I>Conflict of Any Provision of Indenture with Trust Indenture Act of 1939. </I>If
and to the extent that any provision of this Supplemental Indenture limits, qualifies or conflicts
with another provision included in this Supplemental Indenture or in the Base Indenture which is
required to be included herein by any of Sections&nbsp;310 to 317 of the Trust Indenture Act of 1939,
inclusive, or is deemed applicable to this Indenture by virtue of the provisions of the Trust
Indenture Act of 1939, such required provision shall control.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->53<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the date first above written.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">K. HOVNANIAN ENTERPRISES, INC., as <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Issuer<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left" nowrap>Executive Vice President and
<BR>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">HOVNANIAN ENTERPRISES, INC., as <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guarantor<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left" nowrap>Executive Vice President and<BR>

Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">On behalf of each entity named in Schedule&nbsp;1 <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;hereto, as Guarantors<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ J. Larry Sorsby
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">J. Larry Sorsby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left" nowrap>Executive Vice President and
<BR>
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">WILMINGTON TRUST COMPANY, as</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trustee</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Joshua C. Jones</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Joshua C. Jones</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Financial Services Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>SCHEDULE 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Guarantors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">AUDDIE ENTERPRISES, L.L.C.<BR>
BUILDER SERVICES NJ, L.L.C.<BR>
BUILDER SERVICES NY, L.L.C.<BR>
BUILDER SERVICES PA, L.L.C.<BR>
DULLES COPPERMINE, L.L.C.<BR>
EASTERN NATIONAL TITLE AGENCY, LLC<BR>
EASTERN TITLE AGENCY, INC.<BR>
F&#038;W MECHANICAL SERVICES, L.L.C.<BR>
FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.<BR>
FOUNDERS TITLE AGENCY, INC.<BR>
GOVERNOR&#146;S ABSTRACT CO., INC.<BR>
HOMEBUYERS FINANCIAL SERVICES, L.L.C.<BR>
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC<BR>
HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP, L.L.C.<BR>
K. HOV INTERNATIONAL, INC.<BR>
K. HOV IP, INC.<BR>
K. HOV IP, II, INC.<BR>
K. HOVNANIAN ACQUISITIONS, INC.<BR>
K. HOVNANIAN AT 4S, LLC<BR>
K. HOVNANIAN AT ACQUA VISTA, LLC<BR>
K. HOVNANIAN AT ALISO, LLC<BR>
K. HOVNANIAN AT ALLENTOWN, L.L.C.<BR>
K. HOVNANIAN AT ALMOND ESTATES, LLC<BR>
K. HOVNANIAN AT ANDALUSIA, LLC<BR>
K. HOVNANIAN AT ARBOR HEIGHTS, LLC<BR>
K. HOVNANIAN AT AVENUE ONE, L.L.C.<BR>
K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT I, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT II, L.L.C.<BR>
K. HOVNANIAN AT BELLA LAGO, LLC<BR>
K. HOVNANIAN AT BERKELEY, L.L.C.<BR>
K. HOVNANIAN AT BERNARDS V, L.L.C.<BR>
K. HOVNANIAN AT BLUE HERON PINES, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-1<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT BRANCHBURG, L.L.C.<BR>
K. HOVNANIAN AT BRIDGEPORT, INC.<BR>
K. HOVNANIAN AT BRIDGEWATER I, L.L.C.<BR>
K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.<BR>
K. HOVNANIAN AT CALABRIA, INC.<BR>
K. HOVNANIAN AT CAMDEN I, L.L.C.<BR>
K. HOVNANIAN AT CAMERON CHASE, INC.<BR>
K. HOVNANIAN AT CAMP HILL, L.L.C.<BR>
K. HOVNANIAN AT CAPISTRANO, L.L.C.<BR>
K. HOVNANIAN AT CARLSBAD, LLC<BR>
K. HOVNANIAN AT CARMEL DEL MAR, INC.<BR>
K. HOVNANIAN AT CARMEL VILLAGE, LLC<BR>
K. HOVNANIAN AT CASTILE, INC.<BR>
K. HOVNANIAN AT CEDAR GROVE III, L.L.C.<BR>
K. HOVNANIAN AT CEDAR GROVE V, L.L.C.<BR>
K. HOVNANIAN AT CHAPARRAL, INC.<BR>
K. HOVNANIAN AT CHARTER WAY, LLC<BR>
K. HOVNANIAN AT CHESTER I, L.L.C.<BR>
K. HOVNANIAN AT CHESTERFIELD, L.L.C.<BR>
K. HOVNANIAN AT CIELO, L.L.C.<BR>
K. HOVNANIAN AT CLIFTON, L.L.C.<BR>
K. HOVNANIAN AT COASTLINE, L.L.C.<BR>
K. HOVNANIAN AT CORTEZ HILL, LLC<BR>
K. HOVNANIAN AT CRANBURY, L.L.C.<BR>
K. HOVNANIAN AT CRESTLINE, INC.<BR>
K. HOVNANIAN AT CURRIES WOODS, L.L.C.<BR>
K. HOVNANIAN AT DENVILLE, L.L.C.<BR>
K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT DOMINGUEZ HILLS, INC.<BR>
K. HOVNANIAN AT DOVER, L.L.C.<BR>
K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.<BR>
K. HOVNANIAN AT EASTLAKE, LLC<BR>
K. HOVNANIAN AT EDGEWATER II, L.L.C.<BR>
K. HOVNANIAN AT EDGEWATER, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH, L.L.C.<BR>
K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT ENCINITAS RANCH, LLC<BR>
K. HOVNANIAN AT EVERGREEN, L.L.C.<BR>
K. HOVNANIAN AT EWING, L.L.C.<BR>
K. HOVNANIAN AT FAIR OAKS, L.L.C.<BR>
K. HOVNANIAN AT FIDDYMENT RANCH, LLC<BR>
K. HOVNANIAN AT FIFTH AVENUE, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT FLORENCE I, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE II, L.L.C.<BR>
K. HOVNANIAN AT FOREST MEADOWS, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN II, L.L.C.<BR>
K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT FRESNO, LLC<BR>
K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.<BR>
K. HOVNANIAN AT GILROY, LLC<BR>
K. HOVNANIAN AT GREAT NOTCH, L.L.C.<BR>
K. HOVNANIAN AT GRIDLEY, LLC<BR>
K. HOVNANIAN AT GUTTENBERG, L.L.C.<BR>
K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG, L.L.C.<BR>
K. HOVNANIAN AT HAWTHORNE, L.L.C.<BR>
K. HOVNANIAN AT HAZLET, L.L.C.<BR>
K. HOVNANIAN AT HERSHEY&#146;S MILL, INC.<BR>
K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.<BR>
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.<BR>
K. HOVNANIAN AT HILLTOP, L.L.C.<BR>
K. HOVNANIAN AT HUDSON POINTE, L.L.C.<BR>
K. HOVNANIAN AT JACKSON I, L.L.C.<BR>
K. HOVNANIAN AT JACKSON, L.L.C.<BR>
K. HOVNANIAN AT JAEGER RANCH, LLC<BR>
K. HOVNANIAN AT JERSEY CITY IV, L.L.C.<BR>
K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT KEYPORT, L.L.C.<BR>
K. HOVNANIAN AT KING FARM, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA GREENS, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA, LLC<BR>
K. HOVNANIAN AT LA HABRA KNOLLS, LLC<BR>
K. HOVNANIAN AT LA LAGUNA, L.L.C.<BR>
K. HOVNANIAN AT LA PAZ, LLC<BR>
K. HOVNANIAN AT LA TERRAZA, INC.<BR>
K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.<BR>
K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC<BR>
K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.<BR>
K. HOVNANIAN AT LANDMARK, LLC<BR>
K. HOVNANIAN AT LARKSPUR, LLC<BR>
K. HOVNANIAN AT LAWRENCE V, L.L.C.<BR>
K. HOVNANIAN AT LEE SQUARE, L.L.C.<BR>
K. HOVNANIAN AT LINWOOD, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.<BR>
K. HOVNANIAN AT LIVE OAK II, LLC<BR>
K. HOVNANIAN AT LONG BRANCH I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND III, L.L.C.<BR>
K. HOVNANIAN AT MACUNGIE, L.L.C.<BR>
K. HOVNANIAN AT MAHWAH VI, INC.<BR>
K. HOVNANIAN AT MALAN PARK, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN III, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD I, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD II, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD III, L.L.C.<BR>
K. HOVNANIAN AT MANTECA, LLC<BR>
K. HOVNANIAN AT MAPLE AVENUE, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VI, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VII, L.L.C.<BR>
K. HOVNANIAN AT MATSU, L.L.C.<BR>
K. HOVNANIAN AT MELANIE MEADOWS, LLC<BR>
K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MENIFEE, LLC<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MIDDLETOWN II, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE I, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE II, L.L.C.<BR>
K. HOVNANIAN AT MONROE II, INC.<BR>
K. HOVNANIAN AT MONROE IV, L.L.C.<BR>
K. HOVNANIAN AT MONROE NJ, L.L.C.<BR>
K. HOVNANIAN AT MONTVALE, LLC<BR>
K. HOVNANIAN AT MONTVALE II, L.L.C.<BR>
K. HOVNANIAN AT MOSAIC, LLC<BR>
K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MUIRFIELD, LLC<BR>
K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT NEW WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT NORTH BERGEN. L.L.C.<BR>
K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL, L.L.C.<BR>
K. HOVNANIAN AT NORTH HALEDON, L.L.C.<BR>
K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.<BR>
K. HOVNANIAN AT NORTHAMPTON, L.L.C.<BR>
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.<BR>
K. HOVNANIAN AT NORTHFIELD, L.L.C.<BR>
K. HOVNANIAN AT NORTHLAKE, INC.<BR>
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.<BR>
K. HOVNANIAN AT OCEAN WALK, INC.<BR>
K. HOVNANIAN AT OCEANPORT, L.L.C.<BR>
K. HOVNANIAN AT OLD BRIDGE, L.L.C.<BR>
K. HOVNANIAN AT OLDE ORCHARD, LLC<BR>
K. HOVNANIAN AT PACIFIC BLUFFS, LLC<BR>
K. HOVNANIAN AT PARAMUS, L.L.C.<BR>
K. HOVNANIAN AT PARK LANE, LLC<BR>
K. HOVNANIAN AT PARKSIDE, LLC<BR>
K. HOVNANIAN AT PARSIPPANY, L.L.C.<BR>
K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.<BR>
K. HOVNANIAN AT PERKIOMEN II, INC.<BR>
K. HOVNANIAN AT PHILADELPHIA II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA III, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA D&#146;ORO, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA SERENA, L.L.C.<BR>
K. HOVNANIAN AT PITTSGROVE, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.<BR>
K. HOVNANIAN AT POSITANO, LLC<BR>
K. HOVNANIAN AT PRADO, L.L.C.<BR>
K. HOVNANIAN AT RANCHO 79, LLC<BR>
K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.<BR>
K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC<BR>
K. HOVNANIAN AT RANDOLPH I, L.L.C.<BR>
K. HOVNANIAN AT RAPHO, L.L.C.<BR>
K. HOVNANIAN AT READINGTON II, L.L.C.<BR>
K. HOVNANIAN AT RED BANK, L.L.C.<BR>
K. HOVNANIAN AT RIDGEMONT, L.L.C.<BR>
K. HOVNANIAN AT RIDGESTONE, L.L.C.<BR>
K. HOVNANIAN AT RIVERBEND, LLC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT RIVERCREST, LLC<BR>
K. HOVNANIAN AT RODERUCK, L.L.C.<BR>
K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.<BR>
K. HOVNANIAN AT ROWLAND HEIGHTS, LLC<BR>
K. HOVNANIAN AT SAGE, L.L.C.<BR>
K. HOVNANIAN AT SAN SEVAINE, INC.<BR>
K. HOVNANIAN AT SANTA FE SPRINGS, LLC<BR>
K. HOVNANIAN AT SANTA NELLA, LLC<BR>
K. HOVNANIAN AT SARATOGA, INC.<BR>
K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.<BR>
K. HOVNANIAN AT SAWMILL, INC.<BR>
K. HOVNANIAN AT SAYREVILLE, L.L.C.<BR>
K. HOVNANIAN AT SHELDON GROVE, LLC<BR>
K. HOVNANIAN AT SHREWSBURY, LLC<BR>
K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.<BR>
K. HOVNANIAN AT SIERRA ESTATES, LLC<BR>
K. HOVNANIAN AT SILVER SPRING, L.L.C.<BR>
K. HOVNANIAN AT SKYE ISLE, LLC<BR>
K. HOVNANIAN AT SMITHVILLE III, L.L.C.<BR>
K. HOVNANIAN AT SMITHVILLE, INC<BR>
K. HOVNANIAN AT SOMERS POINT, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.<BR>
K. HOVNANIAN AT SPARTA, L.L.C.<BR>
K. HOVNANIAN AT SPRINGCO, L.L.C.<BR>
K. HOVNANIAN AT STANTON, LLC<BR>
K. HOVNANIAN AT STATION SQUARE, L.L.C.<BR>
K. HOVNANIAN AT STONE CANYON, INC.<BR>
K. HOVNANIAN AT SUNRIDGE PARK, LLC<BR>
K. HOVNANIAN AT SUNSETS, LLC<BR>
K. HOVNANIAN AT SYCAMORE, INC.<BR>
K. HOVNANIAN AT TEANECK, L.L.C.<BR>
K. HOVNANIAN AT THE CLIFFS, LLC<BR>
K. HOVNANIAN AT THE CROSBY, LLC<BR>
K. HOVNANIAN AT THE GABLES, LLC<BR>
K. HOVNANIAN AT THE MONARCH, L.L.C.<BR>
K. HOVNANIAN AT THE PRESERVE, LLC<BR>
K. HOVNANIAN AT THOMPSON RANCH, LLC<BR>
K. HOVNANIAN AT THORNBURY, INC.<BR>
K. HOVNANIAN AT TRAIL RIDGE, LLC<BR>
K. HOVNANIAN AT TRENTON, L.L.C.<BR>
K. HOVNANIAN AT TROVATA, INC.<BR>
K. HOVNANIAN AT UNION TOWNSHIP I, INC.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT UPPER MAKEFIELD I, INC.<BR>
K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.<BR>
K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.<BR>
K. HOVNANIAN AT VAIL RANCH, INC.<BR>
K. HOVNANIAN AT VALLE DEL SOL, LLC<BR>
K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT VICTORVILLE, L.L.C.<BR>
K. HOVNANIAN AT VINELAND, L.L.C.<BR>
K. HOVNANIAN AT VISTA DEL SOL, L.L.C.<BR>
K. HOVNANIAN AT WANAQUE, L.L.C.<BR>
K. HOVNANIAN AT WARMINSTER, LLC<BR>
K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT WASHINGTON, L.L.C.<BR>
K. HOVNANIAN AT WATERSTONE, LLC<BR>
K. HOVNANIAN AT WAYNE IX, L.L.C.<BR>
K. HOVNANIAN AT WAYNE, VIII, L.L.C.<BR>
K. HOVNANIAN AT WEST BRADFORD, L.L.C.<BR>
K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WEST WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT WESTSHORE, LLC<BR>
K. HOVNANIAN AT WHEELER RANCH, LLC<BR>
K. HOVNANIAN AT WILDROSE, INC.<BR>
K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.<BR>
K. HOVNANIAN AT WILLOW BROOK, L.L.C.<BR>
K. HOVNANIAN AT WINCHESTER, LLC<BR>
K. HOVNANIAN AT WOODCREEK WEST, LLC<BR>
K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WOOLWICH I, L.L.C.<BR>
K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.<BR>
K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CLASSICS CIP, L.L.C.<BR>
K. HOVNANIAN CLASSICS, L.L.C.<BR>
K. HOVNANIAN COMMUNITIES, INC.<BR>
K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.<BR>
K. HOVNANIAN COMPANIES NORTHEAST, INC.<BR>
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF MARYLAND, INC.<BR>
K. HOVNANIAN COMPANIES OF NEW YORK, INC.<BR>
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF VIRGINIA, INC.<BR>
K. HOVNANIAN COMPANIES, LLC<BR>
K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CONSTRUCTION II, INC<BR>
K. HOVNANIAN CONSTRUCTION III, INC

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.<BR>
K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.<BR>
K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF D.C., INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.<BR>
K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN FIRST HOMES, L.L.C.<BR>
K. HOVNANIAN FLORIDA REALTY, L.L.C.<BR>
K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC<BR>
K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC<BR>
K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC<BR>
K. HOVNANIAN GREAT WESTERN HOMES, LLC<BR>
K. HOVNANIAN HOLDINGS NJ, L.L.C.<BR>
K. HOVNANIAN HOMES &#151; DFW, L.L.C.<BR>
K. HOVNANIAN HOMES AT CAMERON STATION, LLC<BR>
K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.<BR>
K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.<BR>
K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.<BR>
K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.<BR>
K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.<BR>
K. HOVNANIAN HOMES AT PRIMERA, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RUSSETT, L.L.C.<BR>
K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC<BR>
K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN HOMES OF D.C., L.L.C.<BR>
K. HOVNANIAN HOMES OF DELAWARE, L.L.C.<BR>
K. HOVNANIAN HOMES OF GEORGIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF HOUSTON, L.L.C.<BR>
K. HOVNANIAN HOMES OF INDIANA, L.L.C.<BR>
K. HOVNANIAN HOMES OF MARYLAND, L.L.C.<BR>
K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.<BR>
K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC<BR>
K. HOVNANIAN HOMES OF VIRGINIA, INC.<BR>
K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC<BR>
K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTHEAST SERVICES, L.L.C.<BR>
K. HOVNANIAN OF HOUSTON II, L.L.C.<BR>
K. HOVNANIAN OHIO REALTY, L.L.C.<BR>
K. HOVNANIAN OSTER HOMES, L.L.C.<BR>
K. HOVNANIAN PA REAL ESTATE, INC.<BR>
K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.<BR>
K. HOVNANIAN PROPERTIES OF RED BANK, INC.<BR>
K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.<BR>
K. HOVNANIAN STANDING ENTITY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT FLORIDA, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT ILLINOIS, L.L.C.<BR>
K. HOVNANIAN T&#038;C INVESTMENT, L.L.C.<BR>
K. HOVNANIAN T&#038;C MANAGEMENT CO., L.L.C.<BR>
K. HOVNANIAN TIMBRES AT ELM CREEK, LLC<BR>
K. HOVNANIAN VENTURE I, L.L.C.<BR>
K. HOVNANIAN WINDWARD HOMES, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN&#146;S FOUR SEASONS AT BAILEY&#146;S GLENN, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAKERSFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BEAUMONT, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HEMET, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HUNTFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT LOS BANOS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT MORENO VALLEY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT PALM SPRINGS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RENAISSANCE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK II, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT VINT HILL, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS, LLC<BR>
K. HOVNANIAN&#146;S PARKSIDE AT TOWNGATE, L.L.C.<BR>
K. HOVNANIAN&#146;S PRIVATE HOME PORTFOLIO, L.L.C.<BR>
KHIP, L.L.C.<BR>
LANDARAMA, INC.<BR>
M&#038;M AT CHESTERFIELD, LLC<BR>
M&#038;M AT CRESCENT COURT, L.L.C.<BR>
M&#038;M AT WEST ORANGE, L.L.C.<BR>
M&#038;M AT WHEATENA URBAN RENEWAL, L.L.C.<BR>
MATZEL &#038; MUMFORD AT EGG HARBOR, L.L.C.<BR>
MATZEL &#038; MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.<BR>
MCNJ, INC.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF KENTUCKY, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF MICHIGAN, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES, L.L.C.<BR>
MMIP, L.L.C.<BR>
NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">NEW LAND TITLE AGENCY, L.L.C.<BR>
PADDOCKS, L.L.C.<BR>
PARK TITLE COMPANY, LLC<BR>
PINE AYR, LLC<BR>
REAL PROPERTY HOLDING &#151; PRINCE GEORGE&#146;S COUNTY, MD, LLC<BR>
RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.<BR>
RIDGEMORE UTILITY, L.L.C.<BR>
SEABROOK ACCUMULATION CORPORATION<BR>
STONEBROOK HOMES, INC.<BR>
TERRAPIN REALTY, L.L.C.<BR>
THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.<BR>
THE MATZEL &#038; MUMFORD ORGANIZATION, INC<BR>
THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC<BR>
THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.<BR>
WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.<BR>
WASHINGTON HOMES, INC.<BR>
WESTMINSTER HOMES OF ALABAMA, L.L.C.<BR>
WESTMINSTER HOMES OF MISSISSIPPI, LLC<BR>
WESTMINSTER HOMES OF TENNESSEE, INC.<BR>
WESTMINSTER HOMES, INC.<BR>
WH LAND I, INC.<BR>
WH PROPERTIES, INC.<BR>
WH/PR LAND COMPANY, L.L.C.<BR>
WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 1-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>SCHEDULE 2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Unrestricted Subsidiaries</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">12TH* STREET RESIDENTIAL, LTD.<BR>
77 HUDSON STREET JOINT DEVELOPMENT, L.L.C.<BR>
AG/HOV DELRAY HOLDINGS, L.L.C.<BR>
AG/HOV DELRAY, L.L.C.<BR>
BRIGHTBEACH DEVELOPMENT, LTD.<BR>
BRIGHTCHASE, LTD.<BR>
BRIGHTON HOMES AT WALDEN, LTD.<BR>
COBBLESTONE SQUARE DEVELOPMENT, L.L.C.<BR>
FIRST MORTGAGE LENDERS OF FLORIDA, L.L.C.<BR>
GTIS-HOV FESTIVAL LAKES LLC<BR>
GTIS-HOV HOLDINGS LLC<BR>
GTIS-HOV POSITANO LLC<BR>
GTIS-HOV RANCHO 79 LLC<BR>
HERITAGE PINES, L.L.C.<BR>
HEXTER-FAIR LAND TITLE COMPANY I, INC.<BR>
HOVSITE CATALINA LLC<BR>
HOVSITE CHURCHILL CLUB LLC<BR>
HOVSITE CIDER GROVE LLC<BR>
HOVSITE FIRENZE LLC<BR>
HOVSITE FLORIDA HOLDINGS LLC<BR>
HOVSITE GREENWOOD MANOR LLC<BR>
HOVSITE HOLDINGS LLC<BR>
HOVSITE HUNT CLUB LLC<BR>
HOVSITE ILLINOIS HOLDINGS LLC<BR>
HOVSITE IRISH PRAIRIE LLC<BR>
HOVSITE LIBERTY LAKES LLC<BR>
HOVSITE MONTEVERDE 1 &#038; 2 LLC<BR>
HOVSITE MONTEVERDE 3 &#038; 4 LLC<BR>
HOVSITE PROVIDENCE LLC<BR>
HOVSITE SOUTHAMPTON LLC<BR>
HOVWEST LAND ACQUISITION, LLC<BR>
K. HOVNANIAN 77 HUDSON STREET INVESTMENTS, L.L.C.<BR>
K. HOVNANIAN AMERICAN MORTGAGE, L.L.C.<BR>
K. HOVNANIAN AT 77 HUDSON STREET URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT COBBLESTONE SQUARE CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN AT DELRAY BEACH, L.L.C.<BR>
K. HOVNANIAN AT EAGLE&#146;S POINT, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA I, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL II, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 2-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL III, L.L.C.<BR>
K. HOVNANIAN AT TRENTON II, L.L.C.<BR>
K. HOVNANIAN AT TRENTON URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN GT INVESTMENT, L.L.C.<BR>
K. HOVNANIAN HOVWEST HOLDINGS, L.L.C.<BR>
K. HOVNANIAN INVESTMENTS, L.L.C.<BR>
K. HOVNANIAN JV HOLDINGS, L.L.C.<BR>
K. HOVNANIAN JV SERVICES COMPANY, L.L.C.<BR>
K. HOVNANIAN MANALAPAN INVESTMENT, L.L.C.<BR>
K. HOVNANIAN MINNESOTA HOLDINGS, LLC<BR>
K. HOVNANIAN NASSAU GROVE HOLDINGS, L.L.C.<BR>
LAUREL HIGHLANDS, LLC<BR>
M&#038;M AT MONROE WOODS, L.L.C.<BR>
MILLENNIUM TITLE AGENCY, LTD.<BR>
MM-BEACHFRONT NORTH I, L.L.C.<BR>
MM-BEACHFRONT NORTH II, L.L.C.<BR>
MSHOV HOLDING COMPANY, L.L.C.<BR>
NASSAU GROVE ENTERPRISES, L.L.C.<BR>
NORTH MANATEE, L.L.C.<BR>
OLD CITY DELAWARE, L.L.C.<BR>
OLD CITY DEVELOPMENT, INC.<BR>
OLD CITY JOINT DEVELOPMENT, L.L.C.<BR>
PI INVESTMENTS I, L.L.C.<BR>
PRESTON GRANDE HOMES, INC.<BR>
PRESTON PARKER, L. P.<BR>
RR HOUSTON DEVELOPERS, LLC<BR>
RR HOUSTON DEVELOPMENT, L.P.<BR>
RR HOUSTON INVESTMENT, L.P.<BR>
RR HOUSTON INVESTORS, LLC<BR>
TOWN HOMES AT MONTGOMERY, L.L.C.<BR>
WHI-REPUBLIC, LLC<BR>
WINDWARD HOME MORTGAGE, L.L.C.<BR>
WOODMORE RESIDENTIAL, L.L.C.<BR>
WTC VENTURES, L.L.C.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Schedule 2-2<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;A</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
&#147;<B>DEPOSITARY</B>&#148;), TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE &#038; CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &#038; CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &#038; CO.,
HAS AN INTEREST HEREIN.&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">1</SUP>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (&#147;OID&#148;) FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. UPON REQUEST, THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO A HOLDER OF THIS NOTE
INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE DATE AND THE YIELD TO MATURITY
OF THIS NOTE. HOLDERS SHOULD CONTACT THE CORPORATE CONTROLLER AT 110 WEST FRONT STREET, P.O. BOX
500, RED BANK, NEW JERSEY 07701.
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD><B><I>This should be included only if the Note is
issued in global form.</I></B></TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;FACE OF NOTE&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">REGISTERED &#151; No. <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CUSIP No.: 442488 BK7</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; &#091;, or such other
amount as is provided in the
schedule of increases or
decreases in the global note
attached hereto&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">2</SUP></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">11&#8542;% Senior Notes due 2015
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. Hovnanian Enterprises, Inc., a California corporation (the &#147;<B>Issuer</B>&#148;, which term includes any
successor under the Indenture hereinafter referred to), for value received hereby promises to pay
to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, or registered assigns, the principal sum of
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; Dollars ($&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;) &#091;or such other amount as is provided in the schedule of
increases or decreases in the global note attached hereto&#093;<SUP style="FONT-size: 85%; vertical-align: text-top">2</SUP> on October&nbsp;15, 2015.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest Rate: 11&#8542;% per annum.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest Payment Dates: April&nbsp;15 and October&nbsp;15, commencing April&nbsp;15, 2011
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest Record Dates: April 1 and October 1
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Reference is hereby made to the further provisions of this Note set forth on the reverse hereof,
which will for all purposes have the same effect as if set forth at this place.
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="FONT-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>For Global Notes.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->A-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized officer.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">K. HOVNANIAN ENTERPRISES, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Form of&#093; Trustee&#146;s Certificate of Authentication
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is one of the Securities of the series designated herein referred to in the within
mentioned Indenture.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">WILMINGTON TRUST COMPANY, as <br>
Trustee</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Authorized Signatory</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REVERSE SIDE OF NOTE&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">11&#8542;% Senior Notes due 2015
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms used herein are used as defined in the Indenture referred to below unless
otherwise indicated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Principal and Interest</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K.&nbsp;HOVNANIAN ENTERPRISES, INC. (the &#147;<B>Issuer</B>&#148;, which term includes any successor under the
Indenture hereinafter referred to), a California corporation, promises to pay interest on the
principal amount of this Note at the rate per annum shown above. The Issuer will pay interest
semiannually on April&nbsp;15 and October&nbsp;15 of each year, commencing April&nbsp;15, 2011, until the
principal is paid or made available for payment. Interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided for or, if no interest has been paid,
from February&nbsp;14, 2011, <I>provided </I>that, if there is no existing default in the payment of interest,
and if this Note is authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such succeeding interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer promises to pay the principal of this Note on October&nbsp;15, 2015.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Method of Payment</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer will pay interest on the Notes (except defaulted interest, if any, which will be
paid on such special payment date to Holders of record on such special record date as may be fixed
by the Issuer) to the persons who are registered Holders of Notes at the close of business on the
April 1 and October 1 immediately preceding the interest payment date. Holders must surrender Notes
to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in
money of the United States that at the time of payment is legal tender for payment of public and
private debts. Payment of principal of, premium, if any, and interest on a Global Note registered
in the name of, or held by the Depositary or its nominee will be made in immediately available
funds to the Depositary or its nominee, as the case may be, as the registered Holder of such a
Global Note. If any of the Notes are no longer represented by a Global Note, payment of interest
on the definitive Notes may, at the Issuer&#146;s option, be made by check mailed directly to Holders at
their registered address.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Paying Agent and Registrar</U>.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initially, Wilmington Trust Company (the &#147;<B>Trustee</B>&#148;) will act as Paying Agent and Registrar.
The Issuer may change or appoint any Paying Agent, Registrar or co-Registrar without notice to any
Holder. The Issuer or any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Indenture</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer issued the Notes under an Indenture among the Issuer, Hovnanian, the Guarantors and
the Trustee, the terms of which have been established in the First Supplemental Indenture (the
&#147;<B>Supplemental Indenture</B>&#148;) dated as of February&nbsp;14, 2011, supplementing an Indenture dated February
14, 2011 (the &#147;<B>Base Indenture</B>&#148;, as supplemented by the Supplemental Indenture, the &#147;<B>Indenture</B>&#148;),
pursuant to Section&nbsp;2.3 of the Base Indenture. This Note is one of the Securities of the series
designated as the &#147;117/8% Senior Notes due 2015&#148; of the Issuer. The Issuer may
issue additional Notes of this series after this Note has been issued. This Note and any
additional notes of this series subsequently issued under the Indenture shall be treated as a
single series for all purposes under the Indenture and shall vote and consent together on all
matters as one class, including, without limitation, waivers, amendments, redemption and offers to
purchase. The terms of the Notes and the Guarantees include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(&#147;<B>TIA</B>&#148;), as in effect on the date of the Indenture. The Notes and the Guarantees are subject to
all such terms, and Holders are referred to the Indenture and the TIA for a statement of them. To
the extent permitted by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture will control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to: K. Hovnanian Enterprises, Inc., 110 West Front Street, Red
Bank, New Jersey 07701, Attention: Corporate Controller.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Optional Redemption; Redemption with Proceeds of Equity Offering</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes will be redeemable, in whole, at any time, or in part, from time to time, at the
option of the Issuer upon not less than 30 nor more than 60&nbsp;days&#146; notice at a redemption price
equal to the sum of:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;100% of the principal amount thereof, plus accrued and unpaid interest thereon to the
redemption date; <I>plus</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Make-Whole Amount.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall have no responsibility in connection with the calculation of such redemption
price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Make-Whole Amount</B>&#148; means, in connection with any optional redemption of any Note, the excess,
if any, of: (a)&nbsp;the aggregate present value as of the date of such redemption of each dollar of
principal being redeemed and the amount of interest (exclusive of interest accrued to the
redemption date) that would have been payable in respect of such dollar if such prepayment had not
been made, determined by discounting, on a semiannual basis, such principal and interest at the
Treasury Rate (determined on the business day preceding the date of such redemption) plus 0.5%,
from the respective dates on which such principal and interest would have been payable if such
payment had not been made; over (b)&nbsp;the principal amount of the Note being redeemed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Treasury Rate</B>&#148; means, in connection with the calculation of any Make-Whole Amount with
respect to any Note, the yield to maturity at the time of computation of United States Treasury
securities with a constant maturity, as compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (519)&nbsp;that has become publicly available at least two business
days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data), equal to the then remaining maturity of the Note
being prepaid. If no maturity exactly corresponds to such maturity, yields for the published
maturities occurring prior to and after such maturity most closely corresponding to such maturity
shall be calculated pursuant to the immediately preceding sentence and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any time and from time to time prior to April&nbsp;15, 2014, the Issuer may redeem Notes with
the net cash proceeds received by the Issuer from any Equity Offering of Hovnanian at a redemption
price equal to 111.875% of the principal amount plus accrued and unpaid interest to the redemption
date, in an aggregate principal amount for all such redemptions not to exceed 35% of the original
aggregate principal amount of the Notes (including Additional Notes) <I>provided </I>that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;in each case the redemption takes place not later than 60&nbsp;days after the closing of the
related Equity Offering, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;not less than 65% of the original aggregate principal amount of the Notes (including
Additional Notes) remains outstanding immediately thereafter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If less than all of the Notes are to be redeemed at any time, the Trustee, within 10 Business
Days after the Issuer gives written notice to the Trustee that such redemption is to occur, will
select Notes for redemption on a <I>pro rata </I>basis,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by lot or by such other method as the Trustee in its sole discretion shall deem appropriate
and fair.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes may be redeemed in part in denominations of $2,000 and multiples of $1,000 in excess
thereof. Notices of any redemption may be given prior to the completion thereof, and may, at the
Issuer&#146;s discretion, be subject to one or more conditions precedent, including, but not limited to,
completion of a related Equity Offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any Note is to be redeemed in part only, the notice of redemption that relates to that Note
shall state the portion of the principal amount thereof to be redeemed and shall state that on and
after the redemption date a new Note in principal amount equal to the unredeemed portion of the
original Note will be issued in the name of the Holder thereof upon surrender of the original Note.
Notes called for redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Repurchase Provisions</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Change of Control occurs, each Holder shall have the right, at such Holder&#146;s option, to
require the Issuer to purchase all or any part (equal to $2,000 principal amount or any multiple of
$1,000 in excess thereof of such Holder&#146;s Notes on a date that is no later than 90&nbsp;days after
notice of the Change of Control, at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest to the date of repurchase as provided in, and subject to the terms
of, the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Mandatory Redemption</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no sinking fund for, or mandatory redemption of, the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Denominations, Transfer, Exchange</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are in registered form only without coupons in denominations of $2,000 of principal
amount and integral multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. Pursuant to the Indenture, there are certain periods during
which the Registrar is not required to issue, register the transfer of, or exchange any Note or
certain portions of a Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Persons Deemed Owners</U>.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registered Holder of this Note shall be treated as the owner of it for all purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Discharge and Defeasance</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain conditions set forth in the Indenture, the Issuer, Hovnanian and the
Guarantors at any time may terminate some or all of their obligations under the Notes and the
Indenture if the Issuer deposits with the Trustee money and/or U.S. Government Obligations for the
payment of principal, premium, if any, and interest on the Notes to maturity or redemption, as the
case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Defaults and Remedies</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Notes may declare all the Notes to be due and payable immediately. If a
bankruptcy or insolvency default with respect to the Issuer or Hovnanian occurs and is continuing,
the Notes automatically become immediately due and payable. Holders may not enforce the Indenture
or the Notes except as provided in the Indenture. The Trustee may require an indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in
its exercise of remedies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Amendment, Supplement and Waiver</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to certain exceptions, the Indenture, the Notes or the Guarantees may be amended or
supplemented, or future compliance therewith or default may be waived, with the consent of the
Holders of a majority in principal amount of the outstanding Notes. Without notice to or the
consent of any Holder, the Issuer, Hovnanian, the Guarantors and the Trustee may amend or
supplement the Indenture, the Notes or the Guarantees to, among other things set forth in the
Indenture, cure any ambiguity, defect or inconsistency if such amendment or supplement does not
adversely affect the legal rights of the Holders in any material respect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<U>Trustee Dealings With Issuer</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its affiliates, with the same rights as if it were not
Trustee; <I>however</I>, if it acquires any conflicting interest (as defined in the TIA), it must
eliminate such conflict, apply to the Commission for permission to continue or resign.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<U>No Recourse Against Others</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An incorporator, and any past, present or future director, officer, partner, employee or
stockholder, as such, of the Issuer, Hovnanian or the Guarantors shall not have any liability for
any obligations of the Issuer, Hovnanian or the Guarantors under the Notes, the Indenture or the
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<U>Guarantees</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes will be entitled to the benefits of certain Guarantees made for the benefit of the
Holders. Reference is hereby made to the Indenture for a statement of the respective rights,
limitation of rights, duties and obligations thereunder of the Guarantors, the Trustee and the
Holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<U>Governing Law</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<U>CUSIP Numbers</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to a recommendation promulgated by the Committee on Uniform Note Identification
Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices as a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice and reliance may be
placed only on the other identification numbers placed thereon.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;<U>Authentication</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Note is not valid until the Trustee (or Authenticating Agent) manually signs the
certificate of authentication on the other side of this Note.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;<U>Abbreviations</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ASSIGNMENT FORM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you the Holder want to assign this Note, fill in the form below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I or we assign and transfer this Note to
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt">(Insert assignee&#146;s social security or tax ID number)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt">(Print or type assignee&#146;s name, address, and zip code)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and irrevocably appoint &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; agent to transfer this Note on the books of the
Issuer. The agent may substitute another to act for him.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Your signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">(Sign exactly as your name appears on the other side
of this Note)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Signature Guarantee:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>



<TD colspan="7" valign="top" align="left" style="border-top: 0px solid #000000"><DIV style="font-size: 1px; border-bottom: 1px solid #00000; width: 100%; FONT-SIZE: 1PX; margin-left: 11%">&nbsp;</div></TD>
</TR>

<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Signature must be guaranteed by participant in a
recognized Signature Guarantee Medallion Program (or
other signature guarantor program reasonably
acceptable to the Trustee)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">OPTION OF HOLDER TO ELECT PURCHASE
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you wish to have all of this Note purchased by the Issuer pursuant to Section&nbsp;3.04 or 3.08
of the First Supplemental Indenture, check the box: <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you wish to have a portion of this Note purchased by the Issuer pursuant to Section&nbsp;3.04 or
3.08 of the First Supplemental Indenture, state the amount (in original principal amount) below:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">$&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->

<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>


<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Your signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">(Sign exactly as your name appears on the other side
of this Note)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Signature Guarantee:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>



<TD colspan="7" valign="top" align="left" style="border-top: 0px solid #000000"><DIV style="font-size: 1px; border-bottom: 1px solid #00000; width: 100%; FONT-SIZE: 1PX; margin-left: 11%">&nbsp;</div></TD>
</TR>

<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Signature must be guaranteed by participant in a
recognized Signature Guarantee Medallion Program (or
other signature guarantor program reasonably
acceptable to the Trustee)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE OF INCREASES OR DECREASES<BR>
IN THE GLOBAL NOTE*</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The following increases or decreases in this Global Note have been made:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Signature of</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">decrease in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">increase in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">of this Global</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">authorized</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Amount</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Note following</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">signatory of</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Date of Increase or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">of this Global</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">of this Global</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">such decrease (or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Trustee or</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Decrease</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Note</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Note</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">increase)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Custodian</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><B><I>*</I></B></TD>
    <TD>&nbsp;</TD>
    <TD><B><I>This should be included only if the Note is issued in global form.</I></B></TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;B</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Form of Notation on Note Relating to Guarantee&#093;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">GUARANTEE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned (the &#147;Guarantors&#148;, which term includes any successor persons under the
Indenture (the &#147;Indenture&#148;) referred to in the Note upon which this notation is endorsed) (the
&#147;Endorsed Note&#148;), has unconditionally guaranteed, jointly and severally (i)&nbsp;the due and punctual
payment of the principal of, premium, if any, and interest on the Endorsed Note and all other Notes
of the same series as the Endorsed Note (the &#147;Guaranteed Notes&#148;), whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the overdue principal of,
premium, if any, and interest, if any, on the Guaranteed Notes, to the extent lawful, and the due
and punctual performance of all other obligations of the Issuer to the Holders of Guaranteed Notes
or the Trustee all in accordance with the terms set forth in Article&nbsp;Thirteen of the Indenture and
(ii)&nbsp;in case of any extension of time of payment or renewal of any Guaranteed Notes or any of such
other obligations, that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto
in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Guarantors to the Holders of Guaranteed Notes and to the Trustee
pursuant to the Guarantee evidenced hereby and the Indenture are expressly set forth in Article&nbsp;13
of the Indenture and reference is hereby made to such Indenture for the terms of this Guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No stockholder, officer, director, employee, partner or incorporator, as such, past, present
or future, of the Guarantors shall have any personal liability under the Guarantee evidenced hereby
by reason of such person&#146;s status as such stockholder, officer, director, employee, partner or
incorporator. Each Holder of a Guaranteed Note by accepting a Guaranteed Note waives and releases
all such liability. This waiver and release are part of the consideration for the issuance of this
Guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Holder of a Guaranteed Note by accepting a Guaranteed Note agrees that any Guarantor
named below shall have no further liability with respect to its Guarantee if such Guarantor
otherwise ceases to be liable in respect of its Guarantee in accordance with the terms of the
Indenture.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Guarantee evidenced hereby shall not be valid or obligatory for any purpose until the
certificate of authentication of the Guaranteed Notes shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Guarantee shall be governed by, and constructed in accordance with, the laws of the State of
New York.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">HOVNANIAN ENTERPRISES, INC.<BR>
AUDDIE ENTERPRISES, L.L.C.<BR>
BUILDER SERVICES NJ, L.L.C.<BR>
BUILDER SERVICES NY, L.L.C.<BR>
BUILDER SERVICES PA, L.L.C.<BR>
DULLES COPPERMINE, L.L.C.<BR>
EASTERN NATIONAL TITLE AGENCY, LLC<BR>
EASTERN TITLE AGENCY, INC.<BR>
F&#038;W MECHANICAL SERVICES, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FOUNDERS TITLE AGENCY OF MARYLAND, L.L.C.<BR>
FOUNDERS TITLE AGENCY, INC.<BR>
GOVERNOR&#146;S ABSTRACT CO., INC.<BR>
HOMEBUYERS FINANCIAL SERVICES, L.L.C.<BR>
HOVNANIAN DEVELOPMENTS OF FLORIDA, INC.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF CALIFORNIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF FLORIDA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF GEORGIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF MARYLAND, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NEW JERSEY, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF NORTH CAROLINA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP OF TEXAS LLC<BR>
HOVNANIAN LAND INVESTMENT GROUP OF VIRGINIA, L.L.C.<BR>
HOVNANIAN LAND INVESTMENT GROUP, L.L.C.<BR>
K. HOV INTERNATIONAL, INC.<BR>
K. HOV IP, INC.<BR>
K. HOV IP, II, INC.<BR>
K. HOVNANIAN ACQUISITIONS, INC.<BR>
K. HOVNANIAN AT 4S, LLC<BR>
K. HOVNANIAN AT ACQUA VISTA, LLC<BR>
K. HOVNANIAN AT ALISO, LLC<BR>
K. HOVNANIAN AT ALLENTOWN, L.L.C.<BR>
K. HOVNANIAN AT ALMOND ESTATES, LLC<BR>
K. HOVNANIAN AT ANDALUSIA, LLC<BR>
K. HOVNANIAN AT ARBOR HEIGHTS, LLC<BR>
K. HOVNANIAN AT AVENUE ONE, L.L.C.<BR>
K. HOVNANIAN AT BAKERSFIELD 463, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT I, L.L.C.<BR>
K. HOVNANIAN AT BARNEGAT II, L.L.C.<BR>
K. HOVNANIAN AT BELLA LAGO, LLC<BR>
K. HOVNANIAN AT BERKELEY, L.L.C.<BR>
K. HOVNANIAN AT BERNARDS V, L.L.C.<BR>
K. HOVNANIAN AT BLUE HERON PINES, L.L.C.<BR>
K. HOVNANIAN AT BRANCHBURG, L.L.C.<BR>
K. HOVNANIAN AT BRIDGEPORT, INC.<BR>
K. HOVNANIAN AT BRIDGEWATER I, L.L.C.<BR>
K. HOVNANIAN AT BROAD AND WALNUT, L.L.C.<BR>
K. HOVNANIAN AT CALABRIA, INC.<BR>
K. HOVNANIAN AT CAMDEN I, L.L.C.<BR>
K. HOVNANIAN AT CAMERON CHASE, INC.<BR>
K. HOVNANIAN AT CAMP HILL, L.L.C.<BR>
K. HOVNANIAN AT CAPISTRANO, L.L.C.<BR>
K. HOVNANIAN AT CARLSBAD, LLC<BR>
K. HOVNANIAN AT CARMEL DEL MAR, INC.<BR>
K. HOVNANIAN AT CARMEL VILLAGE, LLC<BR>
K. HOVNANIAN AT CASTILE, INC.<BR>
K. HOVNANIAN AT CEDAR GROVE III, L.L.C.<BR>
K. HOVNANIAN AT CEDAR GROVE V, L.L.C.<BR>
K. HOVNANIAN AT CHAPARRAL, INC.<BR>
K. HOVNANIAN AT CHARTER WAY, LLC<BR>
K. HOVNANIAN AT CHESTER I, L.L.C.<BR>
K. HOVNANIAN AT CHESTERFIELD, L.L.C.<BR>
K. HOVNANIAN AT CIELO, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT CLIFTON, L.L.C.<BR>
K. HOVNANIAN AT COASTLINE, L.L.C.<BR>
K. HOVNANIAN AT CORTEZ HILL, LLC<BR>
K. HOVNANIAN AT CRANBURY, L.L.C.<BR>
K. HOVNANIAN AT CRESTLINE, INC.<BR>
K. HOVNANIAN AT CURRIES WOODS, L.L.C.<BR>
K. HOVNANIAN AT DENVILLE, L.L.C.<BR>
K. HOVNANIAN AT DEPTFORD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT DOMINGUEZ HILLS, INC.<BR>
K. HOVNANIAN AT DOVER, L.L.C.<BR>
K. HOVNANIAN AT EAST BRANDYWINE, L.L.C.<BR>
K. HOVNANIAN AT EASTLAKE, LLC<BR>
K. HOVNANIAN AT EDGEWATER II, L.L.C.<BR>
K. HOVNANIAN AT EDGEWATER, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT EGG HARBOR TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH II, L.L.C.<BR>
K. HOVNANIAN AT EL DORADO RANCH, L.L.C.<BR>
K. HOVNANIAN AT ELK TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT ENCINITAS RANCH, LLC<BR>
K. HOVNANIAN AT EVERGREEN, L.L.C.<BR>
K. HOVNANIAN AT EWING, L.L.C.<BR>
K. HOVNANIAN AT FAIR OAKS, L.L.C.<BR>
K. HOVNANIAN AT FIDDYMENT RANCH, LLC<BR>
K. HOVNANIAN AT FIFTH AVENUE, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE I, L.L.C.<BR>
K. HOVNANIAN AT FLORENCE II, L.L.C.<BR>
K. HOVNANIAN AT FOREST MEADOWS, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN, L.L.C.<BR>
K. HOVNANIAN AT FRANKLIN II, L.L.C.<BR>
K. HOVNANIAN AT FREEHOLD TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT FRESNO, LLC<BR>
K. HOVNANIAN AT GASLAMP SQUARE, L.L.C.<BR>
K. HOVNANIAN AT GILROY, LLC<BR>
K. HOVNANIAN AT GREAT NOTCH, L.L.C.<BR>
K. HOVNANIAN AT GRIDLEY, LLC<BR>
K. HOVNANIAN AT GUTTENBERG, L.L.C.<BR>
K. HOVNANIAN AT HACKETTSTOWN II, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT HAMBURG, L.L.C.<BR>
K. HOVNANIAN AT HAWTHORNE, L.L.C.<BR>
K. HOVNANIAN AT HAZLET, L.L.C.<BR>
K. HOVNANIAN AT HERSHEY&#146;S MILL, INC.<BR>
K. HOVNANIAN AT HIGHLAND SHORES, L.L.C.<BR>
K. HOVNANIAN AT HIGHLAND VINEYARDS, INC.<BR>
K. HOVNANIAN AT HILLTOP, L.L.C.<BR>
K. HOVNANIAN AT HUDSON POINTE, L.L.C.<BR>
K. HOVNANIAN AT JACKSON I, L.L.C.<BR>
K. HOVNANIAN AT JACKSON, L.L.C.<BR>
K. HOVNANIAN AT JAEGER RANCH, LLC<BR>
K. HOVNANIAN AT JERSEY CITY IV, L.L.C.<BR>
K. HOVNANIAN AT JERSEY CITY V URBAN RENEWAL COMPANY, L.L.C.<BR>
K. HOVNANIAN AT KEYPORT, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT KING FARM, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA GREENS, L.L.C.<BR>
K. HOVNANIAN AT LA COSTA, LLC<BR>
K. HOVNANIAN AT LA HABRA KNOLLS, LLC<BR>
K. HOVNANIAN AT LA LAGUNA, L.L.C.<BR>
K. HOVNANIAN AT LA PAZ, LLC<BR>
K. HOVNANIAN AT LA TERRAZA, INC.<BR>
K. HOVNANIAN AT LAFAYETTE ESTATES, L.L.C.<BR>
K. HOVNANIAN AT LAKE RANCHO VIEJO, LLC<BR>
K. HOVNANIAN AT LAKE TERRAPIN, L.L.C.<BR>
K. HOVNANIAN AT LANDMARK, LLC<BR>
K. HOVNANIAN AT LARKSPUR, LLC<BR>
K. HOVNANIAN AT LAWRENCE V, L.L.C.<BR>
K. HOVNANIAN AT LEE SQUARE, L.L.C.<BR>
K. HOVNANIAN AT LINWOOD, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR CONTRACTORS, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR III, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LITTLE EGG HARBOR, L.L.C.<BR>
K. HOVNANIAN AT LIVE OAK II, LLC<BR>
K. HOVNANIAN AT LONG BRANCH I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MACUNGIE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MAKEFIELD TOWNSHIP I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND I, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND II, L.L.C.<BR>
K. HOVNANIAN AT LOWER MORELAND III, L.L.C.<BR>
K. HOVNANIAN AT MACUNGIE, L.L.C.<BR>
K. HOVNANIAN AT MAHWAH VI, INC.<BR>
K. HOVNANIAN AT MALAN PARK, L.L.C.<BR>
K. HOVNANIAN AT MANALAPAN III, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD I, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD II, L.L.C.<BR>
K. HOVNANIAN AT MANSFIELD III, L.L.C.<BR>
K. HOVNANIAN AT MANTECA, LLC<BR>
K. HOVNANIAN AT MAPLE AVENUE, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP IX, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP V, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO TOWNSHIP VIII, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VI, L.L.C.<BR>
K. HOVNANIAN AT MARLBORO VII, L.L.C.<BR>
K. HOVNANIAN AT MATSU, L.L.C.<BR>
K. HOVNANIAN AT MELANIE MEADOWS, LLC<BR>
K. HOVNANIAN AT MENDHAM TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MENIFEE, LLC<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT MIDDLE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MIDDLETOWN II, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE I, L.L.C.<BR>
K. HOVNANIAN AT MILLVILLE II, L.L.C.<BR>
K. HOVNANIAN AT MONROE II, INC.<BR>
K. HOVNANIAN AT MONROE IV, L.L.C.<BR>
K. HOVNANIAN AT MONROE NJ, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT MONTVALE, LLC<BR>
K. HOVNANIAN AT MONTVALE II, L.L.C.<BR>
K. HOVNANIAN AT MOSAIC, LLC<BR>
K. HOVNANIAN AT MT. OLIVE TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT MUIRFIELD, LLC<BR>
K. HOVNANIAN AT NEW BRUNSWICK URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT NEW WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT NORTH BERGEN. L.L.C.<BR>
K. HOVNANIAN AT NORTH BRUNSWICK VI, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL II, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL III, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL IV, L.L.C.<BR>
K. HOVNANIAN AT NORTH CALDWELL, L.L.C.<BR>
K. HOVNANIAN AT NORTH HALEDON, L.L.C.<BR>
K. HOVNANIAN AT NORTH WILDWOOD, L.L.C.<BR>
K. HOVNANIAN AT NORTHAMPTON, L.L.C.<BR>
K. HOVNANIAN AT NORTHERN WESTCHESTER, INC.<BR>
K. HOVNANIAN AT NORTHFIELD, L.L.C.<BR>
K. HOVNANIAN AT NORTHLAKE, INC.<BR>
K. HOVNANIAN AT OCEAN TOWNSHIP, INC.<BR>
K. HOVNANIAN AT OCEAN WALK, INC.<BR>
K. HOVNANIAN AT OCEANPORT, L.L.C.<BR>
K. HOVNANIAN AT OLD BRIDGE, L.L.C.<BR>
K. HOVNANIAN AT OLDE ORCHARD, LLC<BR>
K. HOVNANIAN AT PACIFIC BLUFFS, LLC<BR>
K. HOVNANIAN AT PARAMUS, L.L.C.<BR>
K. HOVNANIAN AT PARK LANE, LLC<BR>
K. HOVNANIAN AT PARKSIDE, LLC<BR>
K. HOVNANIAN AT PARSIPPANY, L.L.C.<BR>
K. HOVNANIAN AT PARSIPPANY-TROY HILLS, L.L.C.<BR>
K. HOVNANIAN AT PERKIOMEN II, INC.<BR>
K. HOVNANIAN AT PHILADELPHIA II, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA III, L.L.C.<BR>
K. HOVNANIAN AT PHILADELPHIA IV, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA D&#146;ORO, L.L.C.<BR>
K. HOVNANIAN AT PIAZZA SERENA, L.L.C.<BR>
K. HOVNANIAN AT PITTSGROVE, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL IV, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL V, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VI, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VII, L.L.C.<BR>
K. HOVNANIAN AT PORT IMPERIAL URBAN RENEWAL VIII, L.L.C.<BR>
K. HOVNANIAN AT POSITANO, LLC<BR>
K. HOVNANIAN AT PRADO, L.L.C.<BR>
K. HOVNANIAN AT RANCHO 79, LLC<BR>
K. HOVNANIAN AT RANCHO CRISTIANITOS, INC.<BR>
K. HOVNANIAN AT RANCHO SANTA MARGARITA, LLC<BR>
K. HOVNANIAN AT RANDOLPH I, L.L.C.<BR>
K. HOVNANIAN AT RAPHO, L.L.C.<BR>
K. HOVNANIAN AT READINGTON II, L.L.C.<BR>
K. HOVNANIAN AT RED BANK, L.L.C.<BR>
K. HOVNANIAN AT RIDGEMONT, L.L.C.<BR>
K. HOVNANIAN AT RIDGESTONE, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT RIVERBEND, LLC<BR>
K. HOVNANIAN AT RIVERCREST, LLC<BR>
K. HOVNANIAN AT RODERUCK, L.L.C.<BR>
K. HOVNANIAN AT ROSEMARY LANTANA, L.L.C.<BR>
K. HOVNANIAN AT ROWLAND HEIGHTS, LLC<BR>
K. HOVNANIAN AT SAGE, L.L.C.<BR>
K. HOVNANIAN AT SAN SEVAINE, INC.<BR>
K. HOVNANIAN AT SANTA FE SPRINGS, LLC<BR>
K. HOVNANIAN AT SANTA NELLA, LLC<BR>
K. HOVNANIAN AT SARATOGA, INC.<BR>
K. HOVNANIAN AT SAVANNAH LAKE, L.L.C.<BR>
K. HOVNANIAN AT SAWMILL, INC.<BR>
K. HOVNANIAN AT SAYREVILLE, L.L.C.<BR>
K. HOVNANIAN AT SHELDON GROVE, LLC<BR>
K. HOVNANIAN AT SHREWSBURY, LLC<BR>
K. HOVNANIAN AT SCOTCH PLAINS, L.L.C.<BR>
K. HOVNANIAN AT SIERRA ESTATES, LLC<BR>
K. HOVNANIAN AT SILVER SPRING, L.L.C.<BR>
K. HOVNANIAN AT SKYE ISLE, LLC<BR>
K. HOVNANIAN AT SMITHVILLE III, L.L.C.<BR>
K. HOVNANIAN AT SMITHVILLE, INC<BR>
K. HOVNANIAN AT SOMERS POINT, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK, L.L.C.<BR>
K. HOVNANIAN AT SOUTH BRUNSWICK II, L.L.C.<BR>
K. HOVNANIAN AT SPARTA, L.L.C.<BR>
K. HOVNANIAN AT SPRINGCO, L.L.C.<BR>
K. HOVNANIAN AT STANTON, LLC<BR>
K. HOVNANIAN AT STATION SQUARE, L.L.C.<BR>
K. HOVNANIAN AT STONE CANYON, INC.<BR>
K. HOVNANIAN AT SUNRIDGE PARK, LLC<BR>
K. HOVNANIAN AT SUNSETS, LLC<BR>
K. HOVNANIAN AT SYCAMORE, INC.<BR>
K. HOVNANIAN AT TEANECK, L.L.C.<BR>
K. HOVNANIAN AT THE CLIFFS, LLC<BR>
K. HOVNANIAN AT THE CROSBY, LLC<BR>
K. HOVNANIAN AT THE GABLES, LLC<BR>
K. HOVNANIAN AT THE MONARCH, L.L.C.<BR>
K. HOVNANIAN AT THE PRESERVE, LLC<BR>
K. HOVNANIAN AT THOMPSON RANCH, LLC<BR>
K. HOVNANIAN AT THORNBURY, INC.<BR>
K. HOVNANIAN AT TRAIL RIDGE, LLC<BR>
K. HOVNANIAN AT TRENTON, L.L.C.<BR>
K. HOVNANIAN AT TROVATA, INC.<BR>
K. HOVNANIAN AT UNION TOWNSHIP I, INC.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP II, L.L.C.<BR>
K. HOVNANIAN AT UPPER FREEHOLD TOWNSHIP III, L.L.C.<BR>
K. HOVNANIAN AT UPPER MAKEFIELD I, INC.<BR>
K. HOVNANIAN AT UPPER UWCHLAN II, L.L.C.<BR>
K. HOVNANIAN AT UPPER UWCHLAN, L.L.C.<BR>
K. HOVNANIAN AT VAIL RANCH, INC.<BR>
K. HOVNANIAN AT VALLE DEL SOL, LLC<BR>
K. HOVNANIAN AT VERONA URBAN RENEWAL, L.L.C.<BR>
K. HOVNANIAN AT VICTORVILLE, L.L.C.

</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN AT VINELAND, L.L.C.<BR>
K. HOVNANIAN AT VISTA DEL SOL, L.L.C.<BR>
K. HOVNANIAN AT WANAQUE, L.L.C.<BR>
K. HOVNANIAN AT WARMINSTER, LLC<BR>
K. HOVNANIAN AT WARREN TOWNSHIP, L.L.C.<BR>
K. HOVNANIAN AT WASHINGTON, L.L.C.<BR>
K. HOVNANIAN AT WATERSTONE, LLC<BR>
K. HOVNANIAN AT WAYNE IX, L.L.C.<BR>
K. HOVNANIAN AT WAYNE, VIII, L.L.C.<BR>
K. HOVNANIAN AT WEST BRADFORD, L.L.C.<BR>
K. HOVNANIAN AT WEST VIEW ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WEST WINDSOR, L.L.C.<BR>
K. HOVNANIAN AT WESTSHORE, LLC<BR>
K. HOVNANIAN AT WHEELER RANCH, LLC<BR>
K. HOVNANIAN AT WILDROSE, INC.<BR>
K. HOVNANIAN AT WILDWOOD BAYSIDE, L.L.C.<BR>
K. HOVNANIAN AT WILLOW BROOK, L.L.C.<BR>
K. HOVNANIAN AT WINCHESTER, LLC<BR>
K. HOVNANIAN AT WOODCREEK WEST, LLC<BR>
K. HOVNANIAN AT WOODHILL ESTATES, L.L.C.<BR>
K. HOVNANIAN AT WOOLWICH I, L.L.C.<BR>
K. HOVNANIAN CAMBRIDGE HOMES, L.L.C.<BR>
K. HOVNANIAN CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CLASSICS CIP, L.L.C.<BR>
K. HOVNANIAN CLASSICS, L.L.C.<BR>
K. HOVNANIAN COMMUNITIES, INC.<BR>
K. HOVNANIAN COMPANIES METRO D.C. NORTH, L.L.C.<BR>
K. HOVNANIAN COMPANIES NORTHEAST, INC.<BR>
K. HOVNANIAN COMPANIES OF CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF MARYLAND, INC.<BR>
K. HOVNANIAN COMPANIES OF NEW YORK, INC.<BR>
K. HOVNANIAN COMPANIES OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN COMPANIES OF SOUTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN COMPANIES OF VIRGINIA, INC.<BR>
K. HOVNANIAN COMPANIES, LLC<BR>
K. HOVNANIAN CONNECTICUT ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN CONSTRUCTION II, INC<BR>
K. HOVNANIAN CONSTRUCTION III, INC<BR>
K. HOVNANIAN CONSTRUCTION MANAGEMENT, INC.<BR>
K. HOVNANIAN CRAFTBUILT HOMES OF SOUTH CAROLINA, L.L.C.<BR>
K. HOVNANIAN DELAWARE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN DEVELOPMENTS OF ARIZONA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CALIFORNIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF CONNECTICUT, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF D.C., INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF DELAWARE, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF GEORGIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF ILLINOIS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF INDIANA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF KENTUCKY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MARYLAND, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MICHIGAN, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF MINNESOTA, INC.

</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY II, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW JERSEY, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NEW YORK, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF OHIO, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF PENNSYLVANIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF SOUTH CAROLINA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF TEXAS, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF VIRGINIA, INC.<BR>
K. HOVNANIAN DEVELOPMENTS OF WEST VIRGINIA, INC.<BR>
K. HOVNANIAN EASTERN PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN FIRST HOMES, L.L.C.<BR>
K. HOVNANIAN FLORIDA REALTY, L.L.C.<BR>
K. HOVNANIAN FOUR SEASONS @ HISTORIC VIRGINIA, LLC<BR>
K. HOVNANIAN FOUR SEASONS AT GOLD HILL, LLC<BR>
K. HOVNANIAN GREAT WESTERN BUILDING COMPANY, LLC<BR>
K. HOVNANIAN GREAT WESTERN HOMES, LLC<BR>
K. HOVNANIAN HOLDINGS NJ, L.L.C.<BR>
K. HOVNANIAN HOMES &#151; DFW, L.L.C.<BR>
K. HOVNANIAN HOMES AT CAMERON STATION, LLC<BR>
K. HOVNANIAN HOMES AT CAMP SPRINGS, L.L.C.<BR>
K. HOVNANIAN HOMES AT FAIRWOOD, L.L.C.<BR>
K. HOVNANIAN HOMES AT FOREST RUN, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM PARK TOWNS, L.L.C.<BR>
K. HOVNANIAN HOMES AT GREENWAY FARM, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 1, L.L.C.<BR>
K. HOVNANIAN HOMES AT JONES STATION 2, L.L.C.<BR>
K. HOVNANIAN HOMES AT MAXWELL PLACE, L.L.C.<BR>
K. HOVNANIAN HOMES AT PAYNE STREET, L.L.C.<BR>
K. HOVNANIAN HOMES AT PRIMERA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RENAISSANCE PLAZA, L.L.C.<BR>
K. HOVNANIAN HOMES AT RUSSETT, L.L.C.<BR>
K. HOVNANIAN HOMES AT THE HIGHLANDS, LLC<BR>
K. HOVNANIAN HOMES NORTHERN CALIFORNIA, INC.<BR>
K. HOVNANIAN HOMES OF D.C., L.L.C.<BR>
K. HOVNANIAN HOMES OF DELAWARE, L.L.C.<BR>
K. HOVNANIAN HOMES OF GEORGIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF HOUSTON, L.L.C.<BR>
K. HOVNANIAN HOMES OF INDIANA, L.L.C.<BR>
K. HOVNANIAN HOMES OF MARYLAND, L.L.C.<BR>
K. HOVNANIAN HOMES OF MINNESOTA, L.L.C.<BR>
K. HOVNANIAN HOMES OF NORTH CAROLINA, INC.<BR>
K. HOVNANIAN HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN HOMES OF SOUTH CAROLINA, LLC<BR>
K. HOVNANIAN HOMES OF VIRGINIA, INC.<BR>
K. HOVNANIAN HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN LIBERTY ON BLUFF CREEK, LLC<BR>
K. HOVNANIAN NORTH CENTRAL ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN NORTHEAST SERVICES, L.L.C.<BR>
K. HOVNANIAN OF HOUSTON II, L.L.C.<BR>
K. HOVNANIAN OHIO REALTY, L.L.C.<BR>
K. HOVNANIAN OSTER HOMES, L.L.C.

</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. HOVNANIAN PA REAL ESTATE, INC.<BR>
K. HOVNANIAN PENNSYLVANIA ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC.<BR>
K. HOVNANIAN PROPERTIES OF RED BANK, INC.<BR>
K. HOVNANIAN SHORE ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTH JERSEY ACQUISITIONS, L.L.C.<BR>
K. HOVNANIAN SOUTHERN NEW JERSEY, L.L.C.<BR>
K. HOVNANIAN STANDING ENTITY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOLDINGS, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF KENTUCKY, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF MICHIGAN, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF PENNSYLVANIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES OF WEST VIRGINIA, L.L.C.<BR>
K. HOVNANIAN SUMMIT HOMES, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT FLORIDA, L.L.C.<BR>
K. HOVNANIAN T&#038;C HOMES AT ILLINOIS, L.L.C.<BR>
K. HOVNANIAN T&#038;C INVESTMENT, L.L.C.<BR>
K. HOVNANIAN T&#038;C MANAGEMENT CO., L.L.C.<BR>
K. HOVNANIAN TIMBRES AT ELM CREEK, LLC<BR>
K. HOVNANIAN VENTURE I, L.L.C.<BR>
K. HOVNANIAN WINDWARD HOMES, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ASHBURN VILLAGE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAILEY&#146;S GLENN, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BAKERSFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT BEAUMONT, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT CHARLOTTESVILLE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY CONDOMINIUM, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT DULLES DISCOVERY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HEMET, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT HUNTFIELD, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND CONDOMINIUMS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT KENT ISLAND, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT LOS BANOS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT MORENO VALLEY, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT NEW KENT VINEYARDS, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT PALM SPRINGS, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RENAISSANCE, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK II, LLC<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT RUSH CREEK, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT ST. MARGARETS LANDING, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS AT VINT HILL, L.L.C.<BR>
K. HOVNANIAN&#146;S FOUR SEASONS, LLC<BR>
K. HOVNANIAN&#146;S PARKSIDE AT TOWNGATE, L.L.C.<BR>
K. HOVNANIAN&#146;S PRIVATE HOME PORTFOLIO, L.L.C.<BR>
KHIP, L.L.C.<BR>
LANDARAMA, INC.<BR>
M&#038;M AT CHESTERFIELD, LLC<BR>
M&#038;M AT CRESCENT COURT, L.L.C.<BR>
M&#038;M AT WEST ORANGE, L.L.C.<BR>
M&#038;M AT WHEATENA URBAN RENEWAL, L.L.C.<BR>
MATZEL &#038; MUMFORD AT EGG HARBOR, L.L.C.<BR>
MATZEL &#038; MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, L.L.C.<BR>
MCNJ, INC.

</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF KENTUCKY, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF MICHIGAN, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF PENNSYLVANIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES OF WEST VIRGINIA, L.L.C.<BR>
MIDWEST BUILDING PRODUCTS &#038; CONTRACTOR SERVICES, L.L.C.<BR>
MMIP, L.L.C.<BR>
NATOMAS CENTRAL NEIGHBORHOOD HOUSING, L.L.C.<BR>
NEW LAND TITLE AGENCY, L.L.C.<BR>
PADDOCKS, L.L.C.<BR>
PARK TITLE COMPANY, LLC<BR>
PINE AYR, LLC<BR>
REAL PROPERTY HOLDING &#151; PRINCE GEORGE&#146;S COUNTY, MD, LLC<BR>
RIDGEMORE UTILITY ASSOCIATES OF PENNSYLVANIA, L.L.C.<BR>
RIDGEMORE UTILITY, L.L.C.<BR>
SEABROOK ACCUMULATION CORPORATION<BR>
STONEBROOK HOMES, INC.<BR>
TERRAPIN REALTY, L.L.C.<BR>
THE HIGHLANDS CONDOMINIUMS AT METROSQUARE, L.L.C.<BR>
THE MATZEL &#038; MUMFORD ORGANIZATION, INC<BR>
THE RESIDENCE AT DULLES PARKWAY CORPORATE CENTER, LLC<BR>
THE RESIDENCE AT GREENFIELD CROSSING, L.L.C.<BR>
WASHINGTON HOMES AT COLUMBIA TOWN CENTER, L.L.C.<BR>
WASHINGTON HOMES, INC.<BR>
WESTMINSTER HOMES OF ALABAMA, L.L.C.<BR>
WESTMINSTER HOMES OF MISSISSIPPI, LLC<BR>
WESTMINSTER HOMES OF TENNESSEE, INC.<BR>
WESTMINSTER HOMES, INC.<BR>
WH LAND I, INC.<BR>
WH PROPERTIES, INC.<BR>
WH/PR LAND COMPANY, L.L.C.<BR>
WOODLAND LAKE CONDOMINIUMS AT BOWIE NEW TOWN, L.L.C.

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>&#091;Signature page follows&#093;</I>
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top" style="border-bottom: 1px solid #000000">&nbsp;</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
</TR>
<TR valign="bottom">
    <TD valign="top">By:</TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:</DIV></TD>
<td>&nbsp;</td>
<td>&nbsp;</td>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>&#091;Signature Page to Guarantee&#093;</I>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT C</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUPPLEMENTAL INDENTURE</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">dated as of<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
<BR>
among
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">K. HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">HOVNANIAN ENTERPRISES, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The Other Guarantors Party Hereto
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">and
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">WILMINGTON TRUST COMPANY,<BR>
as Trustee
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">11&#8542;% Senior Notes due 2015
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->B-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; SUPPLEMENTAL INDENTURE (this &#147;&#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; <B>Supplemental Indenture</B>&#148;),
entered into as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , among K. Hovnanian Enterprises, Inc., a California
corporation (the &#147;<B>Issuer</B>&#148;), Hovnanian Enterprises, Inc. (&#147;<B>Hovnanian</B>&#148;), &#091;each of the guarantors
listed on Schedule&nbsp;I hereto&#093; (each an &#147;<B>Undersigned</B>&#148;) and Wilmington Trust Company, a Delaware
baking corporation, as trustee (the &#147;<B>Trustee</B>&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Issuer, Hovnanian, the other Guarantors party thereto and the Trustee entered
into the Indenture dated as of February&nbsp;14, 2011 (as supplemented, the &#147;<B>Indenture</B>&#148;) as supplemented
by a Supplemental Indenture thereto, dated as of February&nbsp;14, 2011 (the &#147;<B>First Supplemental
Indenture</B>&#148;), relating to the Issuer&#146;s 11&#8542;% Senior Notes due 2015 (the &#147;<B>Notes</B>&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, as a condition to the purchase of the Notes by the Holders, Hovnanian agreed pursuant
to the Indenture to cause any newly acquired or created Restricted Subsidiaries to provide
Guarantees of the Notes, subject to certain limitations.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and
intending to be legally bound, the parties hereto hereby agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section</FONT> 1. Capitalized terms used herein and not otherwise defined herein are used
as defined in the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section&nbsp;2</FONT>. Each Undersigned, by its execution of this &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093;
Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms
of the Indenture applicable to Guarantors, including, but not limited to Article&nbsp;Thirteen of the
Base Indenture and Article&nbsp;5 of the First Supplemental Indenture. Each Undersigned will also
execute a Guarantee Notation in respect of the Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section </FONT>3. This &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section</FONT> 4. This &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture may be signed in various
counterparts which together will constitute one and the same instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section </FONT>5. This &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture is an amendment
supplemental to the Indenture (as amended and supplemented to the date hereof), and the Indenture
and this &#091; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#093; Supplemental Indenture will henceforth be read together.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Section&nbsp;6</FONT>. The recitals herein contained are made solely by the Issuer, Hovnanian
and the undersigned and not by the Trustee, and the Trustee assumes no responsibility for the
validity or accuracy thereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this &#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#093; Supplemental
Indenture to be duly executed as of the date first above written.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">K. HOVNANIAN ENTERPRISES, INC.,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as Issuer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">HOVNANIAN ENTERPRISES, INC., as <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guarantor</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">On behalf of each entity named in<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Schedule&nbsp;1 hereto, as Guarantors</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="0%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">WILMINGTON TRUST COMPANY,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as Trustee<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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<DOCUMENT>
<TYPE>EX-5.3
<SEQUENCE>5
<FILENAME>y89643exv5w3.htm
<DESCRIPTION>EX-5.3
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Simpson Thacher &#038; Bartlett Letterhead&#093;
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt; margin-right: 20%">February&nbsp;14, 2011

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hovnanian Enterprises, Inc.<BR>
110 West Front Street<BR>
P.O. Box 500<BR>
Red Bank, New Jersey 07701

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. Hovnanian Enterprises, Inc.<BR>
110 West Front Street<BR>
P.O. Box 500<BR>
Red Bank, New Jersey 07701

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as counsel to Hovnanian Enterprises, Inc., a Delaware corporation (&#147;Hovnanian&#148;),
and to K. Hovnanian Enterprises, Inc., a California corporation and a wholly-owned subsidiary of
Hovnanian (&#147;K. Hovnanian&#148;), and to certain other subsidiaries of Hovnanian (the &#147;Subsidiary
Registrants&#148;) in connection with the Registration Statement on Form S-3 (File No.&nbsp;333-171349) (the
&#147;Registration Statement&#148;) filed by Hovnanian, K. Hovnanian and the Subsidiary Registrants with the
Securities and Exchange Commission (the &#147;Commission&#148;) under the Securities Act of 1933, as amended
(the &#147;Securities Act&#148;), and the issuance thereunder (i)&nbsp;by Hovnanian of 13,512,500 shares (the
&#147;Shares&#148;) of Class&nbsp;A Common Stock, par value $.01 per share (the &#147;Common Stock&#148;), including
1,762,500 Shares issued by Hovnanian pursuant to the over-allotment option granted to the
underwriters, pursuant to the Underwriting Agreement dated as of February&nbsp;3, 2011, among Hovnanian
and the underwriters named therein (the &#147;Common Stock Underwriting Agreement), (ii)&nbsp;by K. Hovnanian
of $155,000,000 aggregate principal amount of 11<SUP style="font-size: 85%; vertical-align: text-top">7</SUP>/<SUB style="font-size: 85%; vertical-align: text-bottom">8</SUB>% Senior Notes due 2015 (the &#147;Senior Notes&#148;),
unconditionally guaranteed (each a &#147;Senior Note Guarantee,&#148; and collectively, the &#147;Senior Note
Guarantees&#148;) on a senior basis by Hovnanian and the Subsidiary Registrants (together, in such
capacity, the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Senior Notes Guarantors&#148;), pursuant to the Underwriting Agreement dated February&nbsp;3, 2011,
among K. Hovnanian, the Senior Notes Guarantors and the underwriters named therein (the &#147;Senior
Notes Underwriting Agreement&#148;), and (iii)&nbsp;by Hovnanian and K. Hovnanian of 3,450,000 7.25% Tangible
Equity Units (the &#147;Units&#148;), including 450,000 Units issued by Hovnanian and K. Hovnanian pursuant
to the over-allotment option granted to the underwriters, pursuant to the Underwriting Agreement
dated as of February&nbsp;3, 2011, among K. Hovnanian, the Amortizing Notes Guarantors (as defined
below) and the underwriters named therein (the &#147;Units Underwriting Agreement&#148;). Each Unit initially
consists of (i)&nbsp;a prepaid stock purchase contract (each a &#147;Purchase Contract,&#148; and collectively,
the &#147;Purchase Contracts&#148;) issued by Hovnanian which shall be settled by Hovnanian against delivery
of a number shares of Common Stock to be determined pursuant to the Purchase Contract Agreement (as
defined below) and (ii)&nbsp;a senior subordinated amortizing note (each an &#147;Amortizing Note,&#148; and
collectively, the &#147;Amortizing Notes&#148;) issued by K. Hovnanian and unconditionally guaranteed (each
an &#147;Amortizing Note Guarantee,&#148; and collectively, the &#147;Amortizing Note Guarantees&#148;) on a senior
subordinated basis by Hovnanian and the Subsidiary Registrants (together, in such capacity, the
&#147;Amortizing Notes Guarantors&#148;), which has an initial principal amount of $4.526049 per Amortizing
Note, bears interest at a rate of 12.072% per annum and has a final installment payment date of
February&nbsp;15, 2014.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have examined the Registration Statement as it became effective under the Securities Act;
Hovnanian&#146;s and K. Hovnanian&#146;s prospectus dated January&nbsp;28, 2011 (the &#147;Base Prospectus&#148;), as
supplemented by the prospectus supplement relating to the offering of the Shares, dated February&nbsp;3,
2011 (together with the Base Prospectus, the &#147;Common Stock Prospectus&#148;), filed by Hovnanian
pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act;
Hovnanian&#146;s and K. Hovnanian&#146;s prospectus supplement
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">relating to the offering of the Senior Notes, dated February&nbsp;3, 2011 (together with the Base
Prospectus, the &#147;Senior Notes Prospectus&#148;), filed by Hovnanian and K. Hovnanian pursuant to Rule
424(b) of the rules and regulations of the Commission under the Securities Act; Hovnanian&#146;s and K.
Hovnanian&#146;s prospectus supplement relating to the offering of the Units, dated February&nbsp;3, 2011
(together with the Base Prospectus, the &#147;Units Prospectus&#148; and, together with the Common Stock
Prospectus and the Senior Notes Prospectus, the &#147;Prospectuses&#148;), filed by Hovnanian and K.
Hovnanian pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act; the Indenture dated as of February&nbsp;14, 2011 (the &#147;Senior Notes Base Indenture&#148;),
among K. Hovnanian, Hovnanian, as Guarantor, and Wilmington Trust Company, as trustee (the &#147;Senior
Notes Trustee&#148;), as supplemented by the First Supplemental Indenture dated as of February&nbsp;14, 2011,
among K. Hovnanian, the Senior Notes Guarantors and the Senior Notes Trustee (the &#147;Senior Notes
Supplemental Indenture&#148; and, together with the Senior Notes Base Indenture, the &#147;Senior Notes
Indenture&#148;); a duplicate of the global note representing the Senior Notes; a duplicate of the
Senior Notes Guarantees annexed to the Senior Notes; the Purchase Contract Agreement, dated as of
February&nbsp;9, 2011 (the &#147;Purchase Contract Agreement&#148;), by and among Hovnanian, K. Hovnanian,
Wilmington Trust Company, as purchase contract agent (the &#147;Purchase Contract Agent&#148;), Wilmington
Trust Company, as Amortizing Notes Trustee (as defined below), and Wilmington Trust Company, as
attorney-in-fact for the holders of the Purchase Contracts from time to time; duplicates of the
global certificates representing the Units; duplicates of the registered certificates representing
the Purchase Contracts initially annexed to the Units; the Indenture, dated as of February&nbsp;9, 2011
(the &#147;Amortizing Notes Base Indenture&#148;), by and among K. Hovnanian, Hovnanian, as guarantor, and
Wilmington Trust Company, as trustee (the &#147;Amortizing Notes Trustee&#148;), as supplemented by the First
Supplemental Indenture, dated as of February&nbsp;9, 2011 (the
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Amortizing Notes Supplemental Indenture&#148; and, together with the Amortizing Notes Base
Indenture, the &#147;Amortizing Notes Indenture&#148;), by and among K. Hovnanian, the Amortizing Notes
Guarantors, and the Amortizing Notes Trustee; duplicates of the registered certificates
representing the Amortizing Notes and the Amortizing Notes Guarantees initially annexed thereto
annexed to the Units; a copy of a specimen certificate representing the Common Stock; the Common
Stock Underwriting Agreement; the Senior Notes Underwriting Agreement; and the Units Underwriting
Agreement. We also have examined the originals, or duplicates or certified or conformed copies, of
such corporate and other records, agreements, documents and other instruments and have made such
other investigations as we have deemed relevant and necessary in connection with the opinions
hereinafter set forth. As to questions of fact material to this opinion, we have relied upon
certificates or comparable documents or statements of public officials and of officers and
representatives of Hovnanian and K. Hovnanian.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In rendering the opinions set forth below, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us as duplicates or
certified or conformed copies and the authenticity of the originals of such latter documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the foregoing, and subject to the qualifications, assumptions and limitations
stated herein, we are of the opinion that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Shares issued and sold by Hovnanian pursuant to the Common Stock
Underwriting Agreement have been duly authorized by Hovnanian and are validly
issued, fully paid and nonassessable.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming the Senior Notes have been duly authorized, executed and
issued by K. Hovnanian and, assuming due authentication thereof by the Senior Notes
Trustee, the Senior Notes constitute valid and legally binding obligations of K.
Hovnanian enforceable against K. Hovnanian in accordance with their terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming the Senior Notes Guarantees have been duly authorized,
executed and issued by the Senior Notes Guarantors (other than Hovnanian), and
assuming due authentication of the Senior Notes by the Senior Notes Trustee, the
Senior Notes</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Guarantees constitute valid and legally binding obligations of the Senior Notes
Guarantors enforceable against the Senior Notes Guarantors in accordance with their
terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming that the Units have been duly authorized, executed and issued
by K. Hovnanian, and assuming further (a)&nbsp;the due authentication thereof by the
Purchase Contract Agent and the Amortizing Notes Trustee and (b)&nbsp;the due execution
of the Purchase Contract Agreement by the Purchase Contract Agent, the Amortizing
Notes Trustee and Wilmington Trust Company, as attorney-in-fact for the holders of
the Purchase Contracts from time to time, the Units constitute valid and legally
binding obligations of Hovnanian and K. Hovnanian, enforceable against Hovnanian
and K. Hovnanian in accordance with their terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming that the Amortizing Notes have been duly authorized, executed
and issued by K. Hovnanian, and assuming due authentication thereof by the
Amortizing Notes Trustee, the Amortizing Notes constitute valid and legally binding
obligations of K. Hovnanian enforceable against K. Hovnanian in accordance with
their terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming the Amortizing Notes Guarantees have been duly authorized,
executed and issued by the Amortizing Notes Guarantors (other than Hovnanian), and
assuming due authentication of the Amortizing Notes by the Amortizing Notes
Trustee, the Amortizing Notes Guarantees constitute valid and legally binding
obligations of the Amortizing Notes Guarantors enforceable against the Amortizing
Notes Guarantors in accordance with their terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assuming (a)&nbsp;the due authentication of the Purchase Contracts by the
Purchase Contract Agent and the due execution thereof by Wilmington Trust Company,
as attorney-in-fact for the holders of the Purchase Contracts from time to time,
and (b)&nbsp;the due execution of the Purchase Contract Agreement by the Purchase
Contract Agent, the Amortizing Notes Trustee and Wilmington Trust Company, as
attorney-in-fact for the holders of the Purchase Contracts from time to time, the
Purchase Contracts constitute valid and legally binding obligations of Hovnanian,
enforceable against Hovnanian in accordance with their terms and entitled to the
benefits of the Purchase Contract Agreement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our opinions set forth in paragraphs 2, 3, 4, 5, 6 and 7 above are subject to (i)&nbsp;the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors&#146; rights generally, (ii)&nbsp;general equitable principles (whether
considered in a proceeding in equity or at law) and (iii)&nbsp;an implied covenant of good faith and
fair dealing.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of our opinions set forth in paragraph 4 and 7 above, we assume that the increase
in the Settlement Rate (as defined in the Purchase Contract Agreement) upon the occurrence of a
Fundamental Change (as defined in the Purchase Contract Agreement) pursuant to the provisions of
the Purchase Contract Agreement and any related provisions of the Units or Purchase Contracts
represents reasonable compensation of the lost option value of the Units as a result of the
Fundamental Change.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not express any opinion herein concerning any law other than the law of the State of New
York, the federal Law of the United States and the Delaware General Corporation Law (including the
statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial
decisions interpreting the foregoing).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this opinion letter as Exhibit&nbsp;5.3 to the Current Report on
Form 8-K of Hovnanian filed with the Commission in connection with the offer and sale of the
Shares, the Senior Notes and the Units and to the use of our name under the caption &#147;Legal Matters&#148; in the Prospectuses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Very truly yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ Simpson Thacher &#038; Bartlett LLP

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">SIMPSON THACHER &#038; BARTLETT LLP

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>



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<DOCUMENT>
<TYPE>EX-5.4
<SEQUENCE>6
<FILENAME>y89643exv5w4.htm
<DESCRIPTION>EX-5.4
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w4</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5.4</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Hovnanian Enterprises, Inc. Letterhead&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">February&nbsp;14, 2011

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hovnanian Enterprises, Inc.<BR>
110 West Front Street<BR>
P.O. Box 500<BR>
Red Bank, New Jersey 07701

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">K. Hovnanian Enterprises, Inc.<BR>
110 West Front Street<BR>
P.O. Box 500<BR>
Red Bank, New Jersey 07701

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I am Senior Vice President and General Counsel of Hovnanian Enterprises, Inc., a Delaware
corporation (&#147;Hovnanian&#148;), and of K. Hovnanian Enterprises, Inc., a California corporation and a
wholly-owned subsidiary of Hovnanian (&#147;K. Hovnanian&#148;). Hovnanian, K. Hovnanian and certain other
subsidiaries of Hovnanian (the &#147;Subsidiary Registrants&#148;) have filed a Registration Statement on
Form S-3 (File No.&nbsp;333-171349) (the &#147;Registration Statement&#148;) with the Securities and Exchange
Commission (the &#147;Commission&#148;) under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;),
pursuant to which (i)&nbsp;Hovnanian has issued 13,512,500 shares (the &#147;Shares&#148;) of Class&nbsp;A Common
Stock, par value $.01 per share (the &#147;Common Stock&#148;), including 1,762,500 Shares issued by
Hovnanian pursuant to the over-allotment option granted to the underwriters, pursuant to the
Underwriting Agreement dated as of February&nbsp;3, 2011, among Hovnanian and the underwriters named
therein (the &#147;Common Stock Underwriting Agreement), (ii)&nbsp;K. Hovnanian has issued $155,000,000
aggregate principal amount of 11<SUP style="font-size: 85%; vertical-align: text-top">7</SUP>/<SUB style="font-size: 85%; vertical-align: text-bottom">8</SUB>% Senior Notes due 2015 (the &#147;Senior Notes&#148;), unconditionally
guaranteed (each a &#147;Senior Note Guarantee,&#148; and collectively, the &#147;Senior Note Guarantees&#148;) on a
senior basis by Hovnanian and the Subsidiary Registrants (together, in such capacity, the &#147;Senior
Notes Guarantors&#148;), pursuant to the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Underwriting Agreement dated February&nbsp;3, 2011, among K. Hovnanian, the Senior Notes Guarantors
and the underwriters named therein (the &#147;Senior Notes Underwriting Agreement&#148;), and (iii)&nbsp;Hovnanian
and K. Hovnanian have issued 3,450,000 7.25% Tangible Equity Units (the &#147;Units&#148;), including 450,000
Units issued by Hovnanian and K. Hovnanian pursuant to the over-allotment option granted to the
underwriters, pursuant to the Underwriting Agreement dated as of February&nbsp;3, 2011, among K.
Hovnanian, the Amortizing Notes Guarantors (as defined below) and the underwriters named therein
(the &#147;Units Underwriting Agreement&#148;). Each Unit initially consists of (i)&nbsp;a prepaid stock purchase
contract (each a &#147;Purchase Contract,&#148; and collectively, the &#147;Purchase Contracts&#148;) issued by
Hovnanian which shall be settled by Hovnanian against delivery of a number shares of Common Stock
to be determined pursuant to the Purchase Contract Agreement (as defined below) and (ii)&nbsp;a senior
subordinated amortizing note (each an &#147;Amortizing Note,&#148; and collectively, the &#147;Amortizing Notes&#148;)
issued by K. Hovnanian and unconditionally guaranteed (each an &#147;Amortizing Note Guarantee,&#148; and
collectively, the &#147;Amortizing Note Guarantees&#148;) on a senior subordinated basis by Hovnanian and the
Subsidiary Registrants (together, in such capacity, the &#147;Amortizing Notes Guarantors&#148;), which has
an initial principal amount of $4.526049 per Amortizing Note, bears interest at a rate of 12.072%
per annum and has a final installment payment date of February&nbsp;15, 2014.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have examined the Registration Statement as it became effective under the Securities Act;
Hovnanian&#146;s and K. Hovnanian&#146;s prospectus dated January&nbsp;28, 2011 (the &#147;Base Prospectus&#148;), as
supplemented by the prospectus supplement relating to the offering of the Shares, dated February&nbsp;3,
2011 (together with the Base Prospectus, the &#147;Common Stock Prospectus&#148;), filed by Hovnanian
pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act;
Hovnanian&#146;s and K. Hovnanian&#146;s prospectus supplement relating to the offering of the Senior Notes,
dated February&nbsp;3, 2011 (together with the Base
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Prospectus, the &#147;Senior Notes Prospectus&#148;), filed by Hovnanian and K. Hovnanian pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Securities Act; Hovnanian&#146;s
and K. Hovnanian&#146;s prospectus supplement relating to the offering of the Units, dated February&nbsp;3,
2011 (together with the Base Prospectus, the &#147;Units Prospectus&#148; and, together with the Common Stock
Prospectus and the Senior Notes Prospectus, the &#147;Prospectuses&#148;), filed by Hovnanian and K.
Hovnanian pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act; the Indenture dated as of February&nbsp;14, 2011 (the &#147;Senior Notes Base Indenture&#148;),
among K. Hovnanian, Hovnanian, as Guarantor, and Wilmington Trust Company, as trustee (the &#147;Senior
Notes Trustee&#148;), as supplemented by the First Supplemental Indenture dated as of February&nbsp;14, 2011,
among K. Hovnanian, the Senior Notes Guarantors and the Senior Notes Trustee (the &#147;Senior Notes
Supplemental Indenture&#148; and, together with the Senior Notes Base Indenture, the &#147;Senior Notes
Indenture&#148;); a duplicate of the global note representing the Senior Notes; a duplicate of the
Senior Notes Guarantees annexed to the Senior Notes; the Purchase Contract Agreement, dated as of
February&nbsp;9, 2011 (the &#147;Purchase Contract Agreement&#148;), by and among Hovnanian, K. Hovnanian,
Wilmington Trust Company, as purchase contract agent (the &#147;Purchase Contract Agent&#148;), Wilmington
Trust Company, as Amortizing Notes Trustee (as defined below), and Wilmington Trust Company, as
attorney-in-fact for the holders of the Purchase Contracts from time to time; duplicates of the
global certificates representing the Units; duplicates of the registered certificates representing
the Purchase Contracts initially annexed to the Units; the Indenture, dated as of February&nbsp;9, 2011
(the &#147;Amortizing Notes Base Indenture&#148;), by and among K. Hovnanian, Hovnanian, as guarantor, and
Wilmington Trust Company, as trustee (the &#147;Amortizing Notes Trustee&#148;), as supplemented by the First
Supplemental Indenture, dated as of February&nbsp;9, 2011 (the &#147;Amortizing Notes Supplemental Indenture&#148;
and, together with the Amortizing Notes Base
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indenture, the &#147;Amortizing Notes Indenture&#148;), by and among K. Hovnanian, the Amortizing Notes
Guarantors, and the Amortizing Notes Trustee; duplicates of the registered certificates
representing the Amortizing Notes and the Amortizing Notes Guarantees initially annexed thereto
annexed to the Units; a copy of a specimen certificate representing the Common Stock; the Common
Stock Underwriting Agreement; the Senior Notes Underwriting Agreement; and the Units Underwriting
Agreement. I also have examined the originals, or duplicates or certified or conformed copies, of
such corporate and other records, agreements, documents and other instruments and have made such
other investigations as I have deemed relevant and necessary in connection with the opinions
hereinafter set forth. As to questions of fact material to this opinion, I have relied upon
certificates or comparable documents or statements of public officials and of officers and
representatives of Hovnanian and K. Hovnanian.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In rendering the opinions set forth below, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents submitted to me as
originals, the conformity to original documents of all documents submitted to me as duplicates or
certified or conformed copies and the authenticity of the originals of such latter documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the foregoing, and subject to the qualifications, assumptions and limitations
stated herein, I am of the opinion that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Senior Notes have been duly authorized, executed and issued by K. Hovnanian.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Senior Notes Guarantees have been duly authorized, executed and issued by the Senior Notes Guarantors (other than Hovnanian).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Units have been duly authorized, executed and issued by K. Hovnanian.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Amortizing Notes have been duly authorized, executed and issued by K. Hovnanian.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Amortizing Notes Guarantees have been duly authorized, executed and issued by the Amortizing Notes Guarantors (other than Hovnanian).</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I am a member of the Bar of the State of New Jersey, and I do not express any opinion herein
concerning any law other than the law of the State of New Jersey and the State of California.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I hereby consent to the filing of this opinion letter as Exhibit&nbsp;5.4 to the Current Report on
Form 8-K of Hovnanian filed with the Commission in connection with the offer and sale of the
Shares, the Senior Notes and the Units and to the use of my name under the caption &#147;Legal Matters&#148; in the Prospectuses.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Peter S. Reinhart
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Peter S. Reinhart &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Senior Vice President and
General Counsel&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>




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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>7
<FILENAME>y89643exv99w1.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
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<TITLE>exv99w1</TITLE>
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.1</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Information Relating to Part II, Item&nbsp;14 &#151; Other Expenses of Issuance and Distribution</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expenses in connection with the issuance and distribution by (i)&nbsp;Hovnanian Enterprises,
Inc. (&#147;Hovnanian&#148;) of 13,512,500 shares (the &#147;Shares&#148;) of Class&nbsp;A Common Stock, par value $.01 per
share, including 1,762,500 Shares issued by Hovnanian pursuant to the over-allotment option granted
to the underwriters, (ii)&nbsp;K. Hovnanian Enterprises, Inc., a wholly-owned subsidiary of Hovnanian
(&#147;K. Hovnanian&#148;), of $155,000,000 aggregate principal amount
of 11<SUP style="font-size: 85%; vertical-align: text-top">7</sup>/<SUB style="font-size: 85%; vertical-align: text-bottom">8</sub>% Senior Notes due 2015 (the
&#147;Senior Notes&#148;), and (iii)&nbsp;Hovnanian and K. Hovnanian of 3,450,000 7.25% Tangible Equity Units (the
&#147;Units&#148;), including 450,000 Units issued by Hovnanian and K. Hovnanian pursuant to the
over-allotment option granted to the underwriters, in each case registered pursuant to Hovnanian&#146;s
and K. Hovnanian&#146;s Registration Statement on Form S-3 (File No.&nbsp;333-171349) initially filed on December&nbsp;22,
2010, other than underwriting discounts and commissions, are set forth in the following table. All
amounts are estimated except the Securities and Exchange Commission registration fee. All of such expenses are being borne by Hovnanian.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities and Exchange Commission Registration Fee(1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trustee&#146;s and Transfer Agent&#146;s Fees and Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,200,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounting fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Printing and duplicating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">167,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Miscellaneous expenses (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171,350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,820,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Registration fee payable in connection with the registration of an indeterminate amount of securities with an aggregate initial offering price not to
exceed $500,000,000 or the equivalent thereof in one or more foreign currencies pursuant to
the Registration Statement.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes, among other expenses, rating agency fees of $150,000 and listing fees of $20,000
payable in connection with the listing of the Units on the New York Stock Exchange.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>




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