<PAGE>
As filed with the Securities and Exchange Commission on December __, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
Hovnanian Enterprises, Inc. K. Hovnanian Enterprises, Inc
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its charter)
Delaware New Jersey
(State or other jurisdiction of incorporation)
22-1851059 22-2423583
(I.R.S. Employer Identification No.)
10 Highway 35 10 Highway 35
P.O. Box 500 P.O. Box 500
Red Bank, New Jersey 07701 Red Bank, New Jersey 07701
(732) 747-7800 (732) 747-7800
__________________
10 Highway 35
P.O. Box 500
Red Bank, New Jersey 07701
(732) 747-7800
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's principal executive offices)
SEE TABLE OF ADDITIONAL REGISTRANTS
__________________
J. Larry Sorsby
Hovnanian Enterprises, Inc.
10 Highway 35
P.O. Box 500
Red Bank, New Jersey 07701
(732) 747-7800
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
_______
Copies to:
Peter S. Reinhart, Esq. Vincent Pagano, Jr., Esq.
Hovnanian Enterprises, Inc. Simpson Thacher & Bartlett
10 Highway 35 425 Lexington avenue
P.O. Box 500 New York, New York 10017
Red Bank, New Jersey (212) 455-2000
(732) 747-7800
__________________
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
__________________
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
__________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Proposed Proposed
Title of Maximum Maximum Amount of
Securities to Amount to Offering Price Aggregate Registration Fee
be Registered be Registered Per Unit (1) Offering Price (1) (2)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10 1/2 % Senior Notes due 2007................ $150,000,000 100% $150,000,000 $ 37,500
------------------------------------------------------------------------------------------------------------------------
Guarantees of 10 1/2 % Senior Notes due 2007.. (3) (3) (3) None
========================================================================================================================
Total.................................. $150,000,000 100% $150,000,000 $ 37,500
========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457 of the Securities Act of 1933.
(2) The registration fee for the securities offered hereby has been calculated
under Rule 457(f)(2) of the Securities Act.
(3) No consideration will be received for the guarantees.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------ ---------------- --------------- ---------------------------------
<S> <C> <C> <C>
K. Hovnanian at Hopewell New Jersey 22-1732674 10 Highway 35, P.O. Box 500, Red
Ill, Inc. Bank, NJ 07701
(732) 747-7800
Recreational Development New Jersey 22-1757811 10 Highway 35, P.O. Box 500, Red
Corp., Inc. Bank, NJ 07701
(732) 747-7800
Pine Brook Company, Inc. New Jersey 22-1762833 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bedminster, New Jersey 22-1945452 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at The Bluff, New Jersey 22-1841019 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Atlantic New Jersey 22-1945458 10 Highway 35, P.O. Box 500, Red
City, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian Properties of New Jersey 22-1945461 10 Highway 35, P.O. Box 500, Red
Atlantic County, Inc. Bank, NJ 07701
(732) 747-7800
Montego Bay I Acquisition Florida 22-1945488 10 Highway 35, P.O. Box 500, Red
Corp., Inc. Bank, NJ 07701
(732) 747-7800
Pike Utilities, Inc. Florida 59-1321247 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
Arrow Properties, Inc. New Jersey 22-1945442 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Real Estate New Jersey 22-1945444 10 Highway 35, P.O. Box 500, Red
Investment, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian Texas, Inc. Texas 22-1945449 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
Landarama, Inc. New Jersey 22-1978612 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
Tropical Service Builders, Florida 59-1426699 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian Pennsylvania, Pennsylvania 22-1097670 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-2057909 10 Highway 35, P.O. Box 500, Red
North Brunswick V, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------ ---------------- --------------- ---------------------------------
<S> <C> <C> <C>
K. Hovnanian at Mahwah New Jersey 22-2246316 10 Highway 35, P.O. Box 500, Red
VIII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wall New Jersey 22-2262938 10 Highway 35, P.O. Box 500, Red
Township IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at New Jersey 22-2343552 10 Highway 35, P.O. Box 500, Red
Montville, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian of Palm Beach, Florida 59-1973196 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of Florida 22-2349530 10 Highway 35, P.O. Box 500, Red
Florida, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Freehold New Jersey 22-2348977 10 Highway 35, P.O. Box 500, Red
Township, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian Properties of Florida 22-2360970 10 Highway 35, P.O. Box 500, Red
Lake Worth, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of Pennsylvania 22-2390174 10 Highway 35, P.O. Box 500, Red
Pennsylvania, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-2380821 10 Highway 35, P.O. Box 500, Red
Hamilton, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Scotch New Jersey 22-2380821 10 Highway 35, P.O. Box 500, Red
Plains, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne IV, New Jersey 22-2406468 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian Developments of Florida 22-24166224 10 Highway 35, P.O. Box 500, Red
Florida, Inc. Bank, NJ 07701
(732) 747-7800
Montego Bay II Acquisition Florida 22-2416620 10 Highway 35, P.O. Box 500, Red
Corp., Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian of Palm Beach Florida 22-2525727 10 Highway 35, P.O. Box 500, Red
VII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wall New Jersey 22-2422378 10 Highway 35, P.O. Box 500, Red
Township II, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian of Palm Beach Florida 22-2428059 10 Highway 35, P.O. Box 500, Red
IX, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian at Tarpon Lakes Florida 22-2436504 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------ ---------------- --------------- ---------------------------------
<S> <C> <C> <C>
K. Hovnanian Companies New Jersey 22-2445216 10 Highway 35, P.O. Box 500, Red
Northeast, Inc. Bank, NJ 07701
(732) 747-7800
Kings Grant Evesham Corp. New Jersey 22-2445215 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Manalapan, New Jersey 22-2442998 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wall New Jersey 22-2442914 10 Highway 35, P.O. Box 500, Red
Township, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East New Jersey 22-2459186 10 Highway 35, P.O. Box 500, Red
Brunswick VII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies New Jersey 22-2459186 10 Highway 35, P.O. Box 500, Red
of Central Jersey, Inc. Bank, NJ 07701
(732) 747-7800
Hovnanian of Palm Beach XI, Florida 22-2457945 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South New Jersey 22-2458485 10 Highway 35, P.O. Box 500, Red
Brunswick II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lawrence New Jersey 22-2571403 10 Highway 35, P.O. Box 500, Red
Square, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Tarpon Florida 22-2510592 10 Highway 35, P.O. Box 500, Red
Lakes III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Horizon New Jersey 22-2500651 10 Highway 35, P.O. Box 500, Red
Heights, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Reservoir New Jersey 22-2510587 10 Highway 35, P.O. Box 500, Red
Ridge, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jersey City New Jersey 22-2562961 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Investment New Jersey 22-2541361 10 Highway 35, P.O. Box 500, Red
Properties of New Bank, NJ 07701
Jersey, Inc. (732) 747-7800
K. Hovnanian at Ft. Myers Florida 22-2652958 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Howell New Jersey 22-2562956 10 Highway 35, P.O. Box 500, Red
Township II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Klockner New Jersey 22-2572443 10 Highway 35, P.O. Box 500, Red
Farms, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
---------------------------- ---------------- -------------- --------------------------------
<S> <C> <C> <C>
K. Hovnanian at Jensen Beach, Florida 22-2572443 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Molly Pitcher Construction New Jersey 22-2577062 10 Highway 35, P.O. Box 500, Red
Co., Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah VII, New Jersey 22-2592139 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne III, Inc. New Jersey 22-2607669 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-2577062 10 Highway 35, P.O. Box 500, Red
East Brunswick II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Kings Grant I, New Jersey 22-2601064 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
The New Fortis Corporation North Carolina 56-1458833 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Clarkstown, New York 22-2618176 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of New New York 22-2618171 10 Highway 35, P.O. Box 500, Red
York, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of New York 22-2626492 10 Highway 35, P.O. Box 500, Red
New York, Inc. Bank, NJ 07701
(732) 747-7800
Dryer Associates, Inc. New Jersey 22-2626494 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Pasco I, Inc. Florida 22-2636392 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lakewood, Inc. New Jersey 22-2618178 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Martin Downs Florida 22-2593811 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Aviation, Inc. Delaware 22-2627859 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Investment New Jersey 22-2627866 10 Highway 35, P.O. Box 500, Red
Properties, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ft. Myers II, Florida 22-2636393 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
---------------------------- ---------------- -------------- --------------------------------
<S> <C> <C> <C>
K. Hovnanian at Bernards II, New Jersey 22-2643596 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South New Jersey 22-2652530 10 Highway 35, P.O. Box 500, Red
Brunswick III, Inc. Bank, NJ 07701
(732) 747-7800
Minerva Group, Inc. New Jersey 22-2652839 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of New Jersey 22-2664563 10 Highway 35, P.O. Box 500, Red
New Jersey, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bridgewater V, New Jersey 22-2713924 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at North New Jersey 22-2788417 10 Highway 35, P.O. Box 500, Red
Brunswick II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at New York 22-2717887 10 Highway 35, P.O. Box 500, Red
Washingtonville, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Peekskill, Inc. New York 22-2718071 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Newark I, Inc. New Jersey 22-2722766 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Carmel, Inc. New York 22-2749185 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East Windsor New Jersey 22-2741139 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
Parthenon Group, Inc. New Jersey 22-2748658 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Marlboro New Jersey 22-2748659 10 Highway 35, P.O. Box 500, Red
Township II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Somerset III, New Jersey 22-2748659 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
R.C.K. Community Management New York 22-2758195 10 Highway 35, P.O. Box 500, Red
Co., Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Montclair, NJ, New Jersey 22-2759221 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
---------------------------- ---------------- -------------- --------------------------------
<S> <C> <C> <C>
K. Hovnanian at East Brunswick New Jersey 22-2809056 10 Highway 35, P.O. Box 500, Red
VI, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hackettstown, New Jersey 22-2765936 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of North Carolina 22-2765939 10 Highway 35, P.O. Box 500, Red
North Carolina, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Montville II, New Jersey 22-2765937 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wall Township New Jersey 22-3434644 10 Highway 35, P.O. Box 500, Red
VII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bridgewater New Jersey 22-2765938 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Merrimack, Inc. New Hampshire 22-2821914 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bernards III, New Jersey 22-2774853 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Eastern National Title Florida 22-2774781 10 Highway 35, P.O. Box 500, Red
Insurance Agency, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne V, Inc. New Jersey 22-2790299 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Pasco II, Inc. Florida 22-2790300 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Delray Beach Florida 22-2837106 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Branchburg I, New Jersey 22-2790298 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Plainsboro II, New Jersey 22-2790297 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Northern New York 22-2814372 10 Highway 35, P.O. Box 500, Red
Westchester, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Marlboro New Jersey 22-2847875 10 Highway 35, P.O. Box 500, Red
Township, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at West Orange, New Jersey 22-2820279 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
--------------------------- ------------------------ ------------------ ----------------------------------
<S> <C> <C> <C>
Eastern Title Agency, Inc. New Jersey 22-2822803 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-2869319 10 Highway 35, P.O. Box 500, Red
Franklin, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah II, Inc. New Jersey 22-2859315 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
New England Community New Hampshire 22-2870386 10 Highway 35, P.O. Box 500, Red
Management Company, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Howell New Jersey 22-2859308 10 Highway 35, P.O. Box 500, Red
Township, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South New Jersey 22-2859309 10 Highway 35, P.O. Box 500, Red
Brunswick IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wall Township New Jersey 22-2859303 10 Highway 35, P.O. Box 500, Red
VI, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-2859305 10 Highway 35, P.O. Box 500, Red
Piscataway, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah V, Inc. New Jersey 22-28068663 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Merrimack II, New Hampshire 22-3003600 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Newark Urban New Jersey 22-2885748 10 Highway 35, P.O. Box 500, Red
Renewal Corporation I Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lawrence Florida 22-2870382 10 Highway 35, P.O. Box 500, Red
Grove, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Cedar Grove I, New Jersey 22-2892342 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Cedar Grove New Jersey 22-2892341 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at North New Jersey 22-2892493 10 Highway 35, P.O. Box 500, Red
Brunswick III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jersey City New Jersey 22-2935352 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Burlington, New Jersey 22-2949611 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
--------------------------- ------------------------- ------------------ ----------------------------------
<S> <C> <C> <C>
K. Hovnanian at South New Jersey 22-2937570 10 Highway 35, P.O. Box 500, Red
Brunswick V., Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Half Moon Bay, Florida 22-2915380 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jacksonville Florida 22-2914590 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Branchburg II, New Jersey 22-2926245 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Embassy Lakes, Florida 22-2920201 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at The Reserve at New Jersey 22-2934223 10 Highway 35, P.O. Box 500, Red
Medford, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Branchburg New Jersey 22-2961099 10 Highway 35, P.O. Box 500, Red
III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lower Saucon, Pennsylvania 22-2961090 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Jersey City Danforth CSO, Inc. New Jersey 22-2976939 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East Windsor New Jersey 22-2974415 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Marlboro New Jersey 22-3027961 10 Highway 35, P.O. Box 500, Red
Township III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Newark Urban New Jersey 22-3027956 10 Highway 35, P.O. Box 500, Red
Renewal Corp. III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Somerset VIII, New Jersey 22-2998840 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Readington, New Jersey 22-3002434 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hopewell I, New Jersey 22-3027962 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Newark Urban New Jersey 22-3027957 10 Highway 35, P.O. Box 500, Red
Renewal Corp. IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Newark Urban New Jersey 22-3027960 10 Highway 35, P.O. Box 500, Red
Renewal Corp. V, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
--------------------------- ------------------------- ------------------ ----------------------------------
<S> <C> <C> <C>
K. Hovnanian at Plainsboro New Jersey 22-3027955 10 Highway 35, P.O. Box 500, Red
III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah IV, Inc. New Jersey 22-3015286 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Pompano Beach, Florida 22-3011835 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jersey City New Jersey 22-3016528 10 Highway 35, P.O. Box 500, Red
III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-3017267 10 Highway 35, P.O. Box 500, Red
Newark Urban Renewal Bank, NJ 07701
Corporation, Inc. (732) 747-7800
K. Hovnanian at North New Jersey 22-3036037 10 Highway 35, P.O. Box 500, Red
Brunswick IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bridgewater New Jersey 22-4049666 10 Highway 35, P.O. Box 500, Red
IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South New Jersey 22-3039668 10 Highway 35, P.O. Box 500, Red
Brunswick, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Perkiomen I, Pennsylvania 22-3094743 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Valleybrook, New Jersey 22-3057022 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ocean New Jersey 22-3094742 10 Highway 35, P.O. Box 500, Red
Township, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Plainsboro I, New Jersey 22-30645323 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Real Estate of Florida 65-0215569 10 Highway 35, P.O. Box 500, Red
Florida, Inc. Bank, NJ 07701
(732) 747-7800
Western Financial Services, Florida 65-0224445 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne, Inc. New Jersey 22-3085521 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of Red New Jersey 22-3092532 10 Highway 35, P.O. Box 500, Red
Bank, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hanover, Inc. New Jersey 22-3133218 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
Exact Name Of Registrant State Or Other And Telephone Number
As Jurisdiction Of I.R.S. Employer Including Area Code, Of
Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- -------------------- ----------------------- -------------------------------------
<S> <C> <C> <C>
K. Hovnanian at Lake Florida 22-3133152 10 Highway 35, P.O. Box 500, Red
Charleston, Inc. Bank, NJ 07701
(732) 747-7800
New K. Hovnanian Developments Florida 58-2003324 10 Highway 35, P.O. Box 500, Red
of Florida, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of Virginia 22-3169584 10 Highway 35, P.O. Box 500, Red
Metro Washington, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Montgomery I, Pennsylvania 22-3165601 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
EXC, Inc. Delaware 22-3178077 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of Virginia 22-3188615 10 Highway 35, P.O. Box 500, Red
Metro Washington, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ashburn Virginia 22-3178078 10 Highway 35, P.O. Box 500, Red
Village, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Woodmont, Inc. Virginia 52-1785667 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Fairway Views, Florida 22-3188598 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Carolina Florida 22-3188607 10 Highway 35, P.O. Box 500, Red
Country Club I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Chapel Trail, Florida 22-3188602 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Treasure Coast, Florida 22-3188616 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Upper Merion, Pennsylvania 22-3188608 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah VI, Inc. New Jersey 22-3188612 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Medford I, Inc. New Jersey 22-3188613 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hov International, Inc. New Jersey 22-3188610 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Montclair, Inc. Virginia 22-3188614 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
Exact Name Of Registrant State Or Other And Telephone Number
As Jurisdiction Of I.R.S. Employer Including Area Code, Of
Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- -------------------- ----------------------- -------------------------------------
<S> <C> <C> <C>
K. Hovnanian at Bull Run, Inc. Virginia 22-3192910 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Sully Station, Virginia 22-3188746 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Spring Ridge, New Jersey 22-3192909 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Marine, Inc. New Jersey 22-3196910 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at River Oaks, Virginia 22-3199603 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Holly Crest, Virginia 22-3214275 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-3219172 10 Highway 35, P.O. Box 500, Red
Route 35, Inc. Bank, NJ 07701
(732) 747-7800
Stonebrook Homes, Inc. California 33-0553884 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Winston Florida 22-3219184 10 Highway 35, P.O. Box 500, Red
Trails, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lakes of Boca Florida 22-3230729 10 Highway 35, P.O. Box 500, Red
Raton, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lake Florida 22-3240225 10 Highway 35, P.O. Box 500, Red
Charleston II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lake Florida 22-3240226 10 Highway 35, P.O. Box 500, Red
Charleston III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bridgewater New Jersey 22-3243298 10 Highway 35, P.O. Box 500, Red
VI, Inc. Bank, NJ 07701
(732) 747-7800
KHIPE, Inc. New Jersey 22-3244134 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Fair Lakes, Virginia 22-3249049 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Carolina Florida 22-3247085 10 Highway 35, P.O. Box 500, Red
Country Club II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Valleybrook New Jersey 22-3252533 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
Exact Name Of Registrant State Or Other And Telephone Number
As Jurisdiction Of I.R.S. Employer Including Area Code, Of
Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- -------------------- ----------------------- -------------------------------------
<S> <C> <C> <C>
K. Hovnanian at Park Ridge, Virginia 22-3253530 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Belmont, Inc. Virginia 22-3253529 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Winston Trails Florida 22-3263586 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Fair Lakes Glen, Virginia 22-3261224 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Pembroke Florida 22-3273708 10 Highway 35, P.O. Box 500, Red
Shores, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Carolina Florida 22-3273706 10 Highway 35, P.O. Box 500, Red
Country Club III, Inc. Bank, NJ 07701
(732) 747-7800
Governor's Abstract Co., Inc. Pennsylvania 22-3278556 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Coconut Creek, Florida 22-3275859 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Polo Trace, Florida 22-3284165 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Founders Title Agency, Inc. Virginia 22-3293533 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bernards IV, New Jersey 22-3292171 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Perkiomen II, Pennsylvania 22-3301197 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne II, Inc. New Jersey 22-3301196 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Upper Pennsylvania 22-3302321 10 Highway 35, P.O. Box 500, Red
Makefield I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of California 22-3301757 10 Highway 35, P.O. Box 500, Red
California, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Terraza, Inc. California 22-3303807 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of California 22-3303806 10 Highway 35, P.O. Box 500, Red
California, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- --------------- ----------------------------------
<S> <C> <C> <C>
KHC Acquisition, Inc. California 22-3303802 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Stuart Road, Virginia 22-3312918 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Highland California 22-3309241 10 Highway 35, P.O. Box 500, Red
Vineyards, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ballantrae, Florida 22-3309139 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
Ballantrae Home Sales, Inc. Florida 22-3312524 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies at California 22-3312525 10 Highway 35, P.O. Box 500, Red
Wildrose, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Greenbrook, New Jersey 22-3415873 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hunter Virginia 22-3321100 10 Highway 35, P.O. Box 500, Red
Estates, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Carmel Del California 22-3320550 10 Highway 35, P.O. Box 500, Red
mar, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Vail Ranch, California 22-3320537 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Princeton, Inc. New Jersey 22-3322125 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Raritan I, Inc. New Jersey 22-3326386 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Calabria, Inc. California 22-3324654 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Seneca Maryland 22-3331047 10 Highway 35, P.O. Box 500, Red
Crossing, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of Maryland 22-3331050 10 Highway 35, P.O. Box 500, Red
Maryland, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of Maryland 22-3331045 10 Highway 35, P.O. Box 500, Red
Maryland, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Exeter Hills, Virginia 22-3331043 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- --------------- ----------------------------------
<S> <C> <C> <C>
K. Hovnanian Florida Region, Florida 22-3331674 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Southeast Florida 22-3331675 10 Highway 35, P.O. Box 500, Red
Florida, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Berlin, Inc. New Jersey 22-3330582 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East Brunswick New Jersey 22-3330584 10 Highway 35, P.O. Box 500, Red
VI, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bedminster II, New Hampshire 22-3331038 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Inverrary I, Florida 22-3332195 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mahwah IX, Inc. New Jersey 22-3337896 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Northlake, Inc. California 22-3336696 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hopewell IV, New Jersey 22-3345622 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Locust Grove New Jersey 22-3359254 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Castile, Inc. California 22-3356308 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Tierrasanta, California 22-3351875 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Preston, Inc. Maryland 22-3367625 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bernards III, New Jersey 22-3356307 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne VI, Inc. New Jersey 22-3367624 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-3360859 10 Highway 35, P.O. Box 500, Red
North Center Drive, Inc. Bank, NJ 07701
(732) 747-7800
Ballantrae Development Corp. Florida 22-3366681 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S. Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- --------------- ----------------------------------
<S> <C> <C> <C>
K. Hovnanian at La Trovata, California 22-3369099 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Rancho California 22-3369102 10 Highway 35, P.O. Box 500, Red
Cristianitos, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Tannery Hill, New Jersey 22-3396608 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Properties of New Jersey 22-3406661 10 Highway 35, P.O. Box 500, Red
N.B. Theatre, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Crystal New Jersey 22-3406656 10 Highway 35, P.O. Box 500, Red
Springs, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at The Cedars, New Jersey 22-3406664 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Construction New Jersey 22-3406668 10 Highway 35, P.O. Box 500, Red
Management, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Acquisitions, Inc. New Jersey 22-3406671 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Burlington II, New Jersey 22-3407458 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Burlington New Jersey 22-3412130 10 Highway 35, P.O. Box 500, Red
III, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ballantrae Florida 22-309425 10 Highway 35, P.O. Box 500, Red
Estates, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Smithville, New Jersey 22-3418731 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jefferson, Inc. New Jersey 22-3427233 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Upper Freehold New Jersey 22-3421542 10 Highway 35, P.O. Box 500, Red
Township I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hershey's Pennsylvania 22-3445102 10 Highway 35, P.O. Box 500, Red
Mill, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Dominion Virginia 22-3433318 10 Highway 35, P.O. Box 500, Red
Ridge, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Port Imperial New Jersey 22-3450185 10 Highway 35, P.O. Box 500, Red
North, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- ---------------- -----------------------------------
<S> <C> <C> <C>
K. Hovnanian at Union Township New Jersey 22-3464497 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East Brunswick New Jersey 22-2776654 10 Highway 35, P.O. Box 500, Red
VIII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Manalapan II, New Jersey 22-2765935 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hopewell V, New Jersey 22-3464499 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hopewell VI, New Jersey 22-3465709 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Cameron Chase, Virginia 22-3459993 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Thornbury, Inc. Pennsylvania 22-3462983 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne VII, Inc. New Jersey 22-3464498 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Scotch Plains II, New Jersey 22-3464496 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Marlboro New Jersey 22-3467252 10 Highway 35, P.O. Box 500, Red
Township IV, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Port Imperial New Jersey 22-3471929 10 Highway 35, P.O. Box 500, Red
Urban Renewal, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at East Whiteland Pennsylvania 22-3483220 10 Highway 35, P.O. Box 500, Red
I, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Stonegate, Inc. Virginia 22-3481223 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Crestline, Inc. California 22-3493450 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at San Sevaine, California 22-3493454 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Sycamore, Inc. California 22-3493456 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian Companies of California 22-3493449 10 Highway 35, P.O. Box 500, Red
Southern California, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- ---------------- -----------------------------------
<S> <C> <C> <C>
K. Hovnanian at Smithville II, New Jersey 22-2776387 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Stony Point, New York 22-2758195 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Stone Canyon, California 22-3512641 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Tuxedo, Inc. New York 22-3516266 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bridgeport, California 22-3547807 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Saratoga, Inc. California 22-3657806 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Chaparral, Inc. California 22-3565730 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ocean Walk, California 22-3565732 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lower Saugon Pennsylvania 22-3602924 10 Highway 35, P.O. Box 500, Red
II, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Stonegate, Inc. California 22-3582033 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Barrington, Virginia 22-3583846 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Hampton Oaks, Virginia 22-3583845 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at P.C. Homes, Virginia 22-3583847 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at P.C. Virginia 22-3583840 10 Highway 35, P.O. Box 500, Red
Properties, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Summerwood, Virginia 22-3583842 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at The Glen Virginia 22-3618411 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian's Four Seasons of Florida 22-3618584 10 Highway 35, P.O. Box 500, Red
the Palm Beaches, Inc. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------------ ---------------- ---------------- -----------------------------------
<S> <C> <C> <C>
K. Hovnanian at Wall Township New Jersey 22-3434643 10 Highway 35, P.O. Box 500, Red
VIII, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at North Jersey New Jersey 22-3556344 10 Highway 35, P.O. Box 500, Red
Acquisition, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Central New Jersey 22-3556343 10 Highway 35, P.O. Box 500, Red
Acquisition, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian Shore New Jersey 22-3556342 10 Highway 35, P.O. Box 500, Red
Acquisition, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian South Jersey New Jersey 22-3556341 10 Highway 35, P.O. Box 500, Red
Acquisition, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mansfield I, New Jersey 22-3556345 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mansfield II, New Jersey 22-3556346 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian North Central New Jersey 22-3554986 10 Highway 35, P.O. Box 500, Red
Acquisition, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wayne VIII, New Jersey 22-3618348 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Bernards V, New Jersey 22-3618587 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Wanaque, L.L.C New Jersey 22-3626037 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Chester I, New Jersey 22-3618347 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Winchester, California 52-2147836 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Middletown, New Jersey 22-3630452 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian's Four Seasons, California 52-2147837 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Menifee, L.L.C California 52-2147832 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at North Delaware 22-3627814 10 Highway 35, P.O. Box 500, Red
Brunswick VI, L.L.C Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- ------------------- ----------------- ---------------------------------
<S> <C> <C> <C>
K. Hovnanian at Carmel California 52-2147831 10 Highway 35, P.O. Box 500, Red
Village, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lawrence, New Jersey 22-3638073 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Blue Heron New Jersey 22-3630449 10 Highway 35, P.O. Box 500, Red
Pines, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jackson, New Jersey 22-3630450 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Roland California 22-2147833 10 Highway 35, P.O. Box 500, Red
Heights, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Berkeley, New Jersey 22-3644632 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at King Farm, Virginia 22-3647924 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South Bank, Virginia 22-3655682 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Prince Virginia 22-3647925 10 Highway 35, P.O. Box 500, Red
William, L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lake Terrapin, Virginia 22-3647920 10 Highway 35, P.O. Box 500, Red
L.L.C Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Clifton, L.L.C. New Jersey 22-3655976 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Upper Freehold New Jersey 22-3655975 10 Highway 35, P.O. Box 500, Red
Township II, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Jersey City New Jersey 22-3655974 10 Highway 35, P.O. Box 500, Red
IV, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Rancho Santa California 33-0890775 10 Highway 35, P.O. Box 500, Red
Margarita, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Lafayette New Jersey 22-3658926 10 Highway 35, P.O. Box 500, Red
Estates, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Arbor Heights, California 33-0890769 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at South Amboy, New Jersey 22-3663105 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- ------------------- ----------------- ---------------------------------
<S> <C> <C> <C>
K. Hovnanian at the Gables, California 33-0890769 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Linwood, New Jersey 22-3663731 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Riverbend, California 33-0890777 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Kincaid, Maryland 22-3664456 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Upper Freehold New Jersey 22-3666680 10 Highway 35, P.O. Box 500, Red
Township III, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Northfield, New Jersey 22-3665826 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Kent Island, Maryland 22-3668315 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
The Matzel & Mumford New Jersey 22-3670677 10 Highway 35, P.O. Box 500, Red
Organization, Inc. Bank, NJ 07701
(732) 747-7800
M & M Investments, LP New Jersey 22-3685183 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Ashburn Maryland 22-3681031 10 Highway 35, P.O. Box 500, Red
Village, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Co. Metro DC Maryland 22-3683159 10 Highway 35, P.O. Box 500, Red
North, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Mansfield New Jersey 22-3683839 10 Highway 35, P.O. Box 500, Red
Ill., L.L.C. Bank, NJ 07701
(732) 747-7800
Goodman Family of Builders, Texas 75-2653675 10 Highway 35, P.O. Box 500, Red
LP Bank, NJ 07701
(732) 747-7800
K. Hovnanian Developments of Texas 22-3685786 10 Highway 35, P.O. Box 500, Red
Texas, Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Brenbrooke, Virginia 22-3683842 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Spring Hill Maryland 22-3688868 10 Highway 35, P.O. Box 500, Red
Road, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at St. Margarets, Maryland 22-3688864 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Address Including Zip Code,
State Or Other And Telephone Number
Exact Name Of Registrant Jurisdiction Of I.R.S Employer Including Area Code, Of
As Specified In Its Incorporation Or Identification Registrant's Principal
Charter Organization Number Executive Offices
------------------------- ------------------- ----------------- ---------------------------------
<S> <C> <C> <C>
Matzel & Mumford of Delaware, Delaware 22-3686728 10 Highway 35, P.O. Box 500, Red
Inc. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Paramus, New Jersey 22-3687884 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Blooms Maryland 22-3688865 10 Highway 35, P.O. Box 500, Red
Crossing, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Encinitas California 33-0890770 10 Highway 35, P.O. Box 500, Red
Ranch, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Pacific Bluffs, California 33-0890774 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian Sunsets, L.L.C. California 33-0890768 10 Highway 35, P.O. Box 500, Red
Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Willow Brook, Maryland 22-3709105 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Park Lane, California 33-0896285 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian West Milford, New Jersey 22-3740951 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Washington, New Jersey 22-3743403 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Roderuck, Maryland 22-3756336 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at Columbia Town Maryland 22-3757772 10 Highway 35, P.O. Box 500, Red
Center, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian's Private Home New Jersey 22-3766856 10 Highway 35, P.O. Box 500, Red
Portfolio, L.L.C. Bank, NJ 07701
(732) 747-7800
K. Hovnanian at North Haledon, New Jersey Waiting 10 Highway 35, P.O. Box 500, Red
L.L.C. Bank, NJ 07701
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted. Neither the
Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated December __, 2000
PROSPECTUS
$150,000,000
K. Hovnanian Enterprises, Inc.
Offer to Exchange All Outstanding
10 1/2% Senior Notes Due 2007
for
10 1/2% Senior Notes Due 2007
Which Have Been Registered Under
The Securities Act Of 1933
The Exchange Offer Will Expire at 5:00 p.m., New York City Time,
on , 2001, Unless Extended.
__________________
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The Exchange Offer The Exchange Notes
. We will exchange all outstanding notes that are . The exchange notes are being offered in order to
validly tendered and not validly withdrawn for an satisfy certain of our obligations under the
equal principal amount of exchange notes that are registration rights agreement entered into in connection
freely tradeable. with the placement of the outstanding notes.
. You may withdraw tenders of outstanding notes at . The terms of the exchange notes to be issued in the
any time prior to the expiration date of the exchange exchange offer are substantially identical to the
offer. outstanding notes, except that the exchange notes will
be freely tradeable.
. The exchange offer expires at 5:00 p.m., New York
City time, on _________, 2001, unless extended. We Resales of Exchange Notes
do not currently intend to extend the expiration
date. . The exchange notes may be sold in the over-the-counter
market, in negotiated transactions or through a
combination of such methods. The exchange notes will be
. The exchange of outstanding notes for exchange eligible for trading in The Portal(SM) Market.
notes in the exchange offer will not be a taxable
event for U.S. federal income tax purposes.
. We will not receive any proceeds from the exchange
offer.
</TABLE>
You should consider carefully the risk factors beginning on page 8
of this prospectus before participating in the exchange offer.
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of exchange notes
received in exchange for outstanding notes where such outstanding notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities.
We have agreed that, for a period of one year after the consummation of the
exchange offer, we will make this prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal defense.
__________________
This Prospectus is dated , 2000.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Prospectus Summary................................ 1
K. Hovnanian...................................... 7
Use of Proceeds................................... 7
Recent Developments............................... 7
Ratio of Earnings to Fixed Charges................ 7
Risk Factors...................................... 8
Selected Historical Consolidated
Financial Information............................ 13
The Exchange Offer................................ 15
Description of Exchange Notes..................... 25
Material United States Federal Tax
Considerations................................... 61
Plan of Distribution.............................. 61
Forward-Looking Statements........................ 61
Legal Matters..................................... 62
Experts........................................... 62
Where You Can Find More Information............... 62
</TABLE>
__________________
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
any information that is different. This document may only be used where it is
legal to sell these securities. The information in this document may only be
accurate as of the date of this document.
__________________
<PAGE>
PROSPECTUS SUMMARY
This brief summary highlights selected information from the
prospectus. It may not contain all of the information that is important to you.
K. Hovnanian urges you to carefully read and review the entire prospectus and
the other documents to which it refers to fully understand the terms of the
exchange securities and the exchange offer. As used in this offering memorandum,
except as the context otherwise requires, references to "Hovnanian", "us", "we",
"our" or "Company" means Hovnanian Enterprises, Inc., a Delaware corporation,
together with its consolidated subsidiaries, including K. Hovnanian Enterprises,
Inc. (the "Issuer" or "K. Hovnanian"), a New Jersey corporation.
Summary of the Terms of the Exchange Offer
<TABLE>
<S> <C>
General............................................ On October 2, 2000, K. Hovnanian completed a private offering of
the outstanding notes, which consist of $150,000,000
aggregate principal amount of its 10 1/2% Senior Notes due
2007. In connection with the private offering, we entered
into a registration rights agreement in which we agreed,
among other things, to deliver this prospectus to you and to
complete an exchange offer for the outstanding notes.
The Exchange Offer................................. We are offering to exchange up to $150,000,000 aggregate
principal amount of our 10 1/2% Senior Notes due 2007 which
have been registered under the Securities Act for a like
aggregate principal amount of the outstanding notes.
Outstanding notes may be exchanged only in integral
multiples of $1,000.
The terms of the exchange notes are identical in all
material respects to the terms of the outstanding notes,
except that the registration rights and related liquidated
damages provisions, and the transfer restrictions,
applicable to the outstanding notes are not applicable to
the exchange notes.
Subject to the satisfaction or waiver of specified
conditions, we will exchange the applicable exchange notes
for all outstanding notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer. We
will cause the exchange to be effected promptly after the
expiration of the exchange offer.
Upon completion of the exchange offer, there may be no
market for the outstanding notes and you may have difficulty
selling them.
Resales............................................ Based on interpretations by the staff of the Securities and
Exchange Commission set forth in no-action letters issued to
third parties, we believe that exchange notes issued in the
exchange offer may be offered for resale, resold, or
otherwise transferred by you, without compliance with the
registration and prospectus delivery requirements of the
Securities Act, if:
(1) you acquire the exchange notes in the ordinary course
of your business;
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
(2) you are not engaging in and do not intend to engage in
a distribution of the exchange notes;
(3) do not have an arrangement or understanding with any
person to participate in a distribution of the exchange
notes; and
(4) you are not an affiliate of K. Hovnanian within the
meaning of Rule 405 under Securities Act.
If you are an affiliate of K. Hovnanian, or are engaging in
or intend to engage in, or have any arrangement or
understanding with any person to participate in, a
distribution of the exchange notes:
(1) you cannot rely on the applicable interpretations of
the staff of the SEC; and
(2) you must comply with the registration and prospectus
delivery requirements of the Securities Act in connection
with any resale transaction.
If you are a broker or dealer seeking to receive exchange
notes for your own account in exchange for outstanding notes
that you acquired as a result of market-making or other
trading activities, you must acknowledge that you will
deliver this prospectus in connection with any offer to
resell, resale, or other transfer of the exchange notes that
you receive in the exchange offer.
Any holder of outstanding notes who
. is an affiliate of K. Hovnanian
. does not acquire exchange notes in the ordinary course of
its business
. tenders in the exchange offer with the intention to
participate, or for the purpose of participating, in a
distribution of exchange notes
cannot rely on the position of the staff of the SEC enunciated in Morgan
Stanley & Co. Incorporated, Exxon Capital Holdings Corporation, as interpreted
in the SEC's letter to Shearman & Sterling dated July 2, 1993, or similar no-
action letters and, in the absence of an exemption therefrom, must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with the resale of the exchange notes.
Expiration Date.................................... The exchange offer will expire at 5:00 p.m., New York City
time, on , 2001 unless extended by us. We do not
currently intend to extend the expiration date.
Withdrawal......................................... You may withdraw the tender of your outstanding notes at any
time prior to the expiration of the exchange offer. We will
return to you any of your outstanding notes that are not
accepted for exchange for any reason, without expense to
you, promptly after the expiration or termination of the
exchange offer.
</TABLE>
2
<PAGE>
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<S> <C>
Interest on the Exchange
Securities and the Outstanding
Notes............................................ The exchange notes will bear interest at the applicable rate
per annum set forth on the cover page of this prospectus
from the most recent date to which interest has been paid on
the outstanding notes or, if no interest has been paid on
the outstanding notes, from . Such interest
will be payable semi-annually on each April 1 and October 1,
commencing April 1, 2001. No interest will be paid on
outstanding notes following their acceptance for exchange.
Conditions to the Exchange
Offer............................................ The exchange offer is subject to customary conditions, which
we may assert or waive. See "The Exchange Offer --
Conditions to the Exchange Offer."
Exchange Agent..................................... First Union National Bank is serving as exchange agent for
the exchange offer.
Procedures for Tendering
Outstanding Notes................................ If you wish to accept the exchange offer, you must complete,
sign and date the accompanying letter of transmittal, or a
facsimile of the letter of transmittal, according to the
instructions contained in this prospectus and the letter of
transmittal. You must also mail or otherwise deliver the
letter of transmittal, or a facsimile of the letter of
transmittal, together with the outstanding notes and any
other required documents, to the exchange agent at the
address set forth on the cover page of the letter of
transmittal. If you hold outstanding notes through The
Depository Trust Company and wish to participate in the
exchange offer, you must comply with the Automated Tender
Offer Program procedures of DTC, by which you will agree to
be bound by the letter of transmittal. By signing, or
agreeing to be bound by, the letter of transmittal, you will
represent to us that, among other things:
. any exchange notes that you receive will be acquired in the
ordinary course of your business
. you have no arrangement or understanding with any person or
entity to participate in a distribution of the exchange notes
. if you are a broker-dealer that will receive exchange notes
for your own account in exchange for outstanding securities
that were acquired as a result of market-making activities,
you will deliver a prospectus, as required by law, in
connection with any resale of such exchange notes
. you are not an "affiliate," as defined in Rule 405 of the
Securities Act, of K. Hovnanian or, if you are an affiliate,
you will comply with any applicable registration and
prospectus delivery requirements of the Securities Act
Special Procedures for Beneficial
Owners.......................................... If you are a beneficial owner of outstanding notes which are
registered in the name of a broker, dealer, commercial bank,
trust company or other nominee, and you wish to tender such
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outstanding notes in the exchange offer, you should contact
such registered holder promptly and instruct such registered
holder to tender on your behalf. If you wish to tender on
your own behalf, you must, prior to completing and executing
the letter of transmittal and delivering your outstanding
notes, either make appropriate arrangements to register
ownership of the outstanding notes in your name or obtain a
properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable
time and may not be able to be completed prior to the
expiration date.
Guaranteed Delivery Procedures..................... If you wish to tender your outstanding notes and your
outstanding notes are not immediately available or you
cannot deliver your outstanding notes, the letter of
transmittal or any other documents required by the letter of
transmittal or comply with the applicable procedures under
DTC's Automated Tender Offer Program prior to the expiration
date, you must tender your outstanding notes according to
the guaranteed delivery procedures set forth in this
prospectus under "The Exchange Offer--Guaranteed Delivery
Procedures."
Effect on Holders of Outstanding
Notes........................................... As a result of the making of, and upon acceptance for
exchange of all validly tendered outstanding notes pursuant
to the terms of the exchange offer, we will have fulfilled a
covenant contained in the registration rights agreement and,
accordingly, we will not be obligated to pay liquidated
damages as described in the registration rights agreement.
If you are a holder of outstanding notes and you do not
tender your outstanding notes in the exchange offer, you
will continue to hold such outstanding notes and you will be
entitled to all the rights and limitations applicable to the
outstanding notes in the indenture, except for any rights
under the registration rights agreement that by their terms
terminate upon the consummation of the exchange offer.
To the extent that outstanding notes are tendered and
accepted in the exchange offer, the trading market for
outstanding securities could be adversely affected.
Consequences of Failure to
Exchange....................................... All untendered outstanding notes will continue to be subject
to the restrictions on transfer provided for in the
outstanding notes and in the indenture. In general, the
outstanding notes may not be offered or sold, unless
registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. Other
than in connection with the exchange offer, we do not
currently anticipate that we will register the outstanding
notes under the Securities Act.
Use of Proceeds.................................... We will not receive any cash proceeds from the issuance of
exchange notes pursuant to the exchange offer.
Exchange Agent..................................... First Union National Bank is the exchange agent for the
exchange offer. The address and telephone number of the
exchange agent are set forth in the section captioned "The
Exchange Offer--Exchange Agent" of this prospectus.
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Summary of the Terms of the Exchange Notes
The terms of the exchange notes are identical in all material respects
to the terms of the outstanding notes, except that the registration rights and
related liquidated damages provisions, and the transfer restrictions, applicable
to the outstanding notes are not applicable to the exchange notes. The exchange
notes will evidence the same debt as the outstanding notes. The exchange notes
and the outstanding notes will be governed by the same indenture. Except where
the context requires otherwise, references in this prospectus to "notes" or
"securities" are references to both outstanding notes and exchange notes.
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Issuer............................................. K. Hovnanian Enterprises, Inc.
Securities Offered................................. We are offering $150.0 million aggregate principal amount of
10 1/2% Senior Notes due 2007.
Maturity Date...................................... October 1, 2007.
Interest Payment Dates............................. Every April 1 and October 1, beginning April 1, 2001.
Optional Redemption................................ We may redeem any or all of the notes at any time upon
payment of a "make-whole price." In addition, we may redeem
notes at any time prior to October 1, 2003 with the net cash
proceeds of one or more public equity offerings so long as
at least $97.5 million principal amount of notes remains
outstanding.
Change of Control.................................. Upon a change of control as described in the section
"Description of Exchange Notes," you will have the right to
require us to purchase some or all of your notes at 101% of
the principal amount, plus accrued and unpaid interest to
the date of purchase. We can give no assurance that, upon
such an event, we will have sufficient funds to purchase any
of your notes.
Guarantees......................................... The guarantors are Hovnanian Enterprises, Inc., the parent
corporation of the Issuer, and most of the parent's existing
and future restricted subsidiaries. If the Issuer cannot
make payments on the notes when they are due, the guarantors
must make them instead.
Ranking............................................ These notes are our general obligations and will not be
secured by any collateral. Your right to payment under
these notes will be:
. junior to the rights of our secured creditors to the extent
of their security in our assets;
. equal with the rights of creditors under our other
unsecured unsubordinated debt, including our revolving
credit agreement; and
. senior to the rights of creditors under debt expressly
subordinated to these notes.
The guarantee of each of the guarantors will also not be
secured by any collateral. Your right to payment under any
guarantee will be:
. junior to the rights of secured creditors to the extent of
their security in the guarantor's assets;
. equal with the rights of creditors under the guarantor's
other unsecured unsubordinated debt; and
. senior to the rights of creditors under the guarantor's
debt that is expressly subordinated to the guarantee.
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Certain Covenants.................................. The indenture governing the notes will, among other things,
restrict our ability and the ability of the guarantors to:
. borrow money;
. pay dividends on our common stock;
. repurchase our common stock;
. make investments in subsidiaries that are not restricted;
. sell certain assets;
. incur certain liens;
. merge with or into other companies; and
. enter into certain transactions with our affiliates.
For more details, see the section "Description of Notes"
under the heading "Certain Covenants."
Use of Proceeds.................................... K. Hovnanian will not receive any proceeds from the exchange
offer for a description of the use of proceeds of the
offering of outstanding securities, see "Use of Proceeds."
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K. HOVNANIAN
We design, construct and market high-quality, single-family detached homes
and attached condominium apartments and townhouses in planned residential
developments in the Northeast (primarily in New Jersey, southern New York state
and eastern Pennsylvania), Metro D.C. (northern Virginia and Maryland), Texas,
North Carolina, southern California and Poland. We market our homes to first-
time buyers, first- and second-time move-up buyers, luxury buyers, active adult
buyers and empty nesters. We offer a variety of homestyles at prices ranging in
the United States from $94,000 to $921,000 with an average sales price in fiscal
1999 of $241,000. We are currently offering homes for sale in 118 communities.
Since the incorporation of our predecessor company in 1959, we have delivered in
excess of 66,000 homes, including 4,230 homes in the twelve months ended July
31, 2000. In addition, we provide financial services (mortgage loans and title
insurance) to our homebuilding customers.
We have successfully strengthened our market positions through recent and
pending acquisitions, including our positions in the New Jersey market through
the acquisition of Matzel and Mumford, in the Dallas-Fort Worth market through
the acquisition of Goodman Family of Builders L.P. and in the North Carolina and
Metro D.C. markets through our pending merger with Washington Homes.
We employed approximately 1,500 full-time associates as of July 31, 2000.
Hovnanian was originally incorporated in New Jersey in 1967 as successor to a
business founded in 1959 by Kevork S. Hovnanian and became a Delaware
corporation in August 1983. K. Hovnanian was incorporated under the laws of the
State of New Jersey on November 1, 1982, as an indirect wholly-owned
consolidated subsidiary of Hovnanian. K. Hovnanian functions as a management
company for the operating subsidiaries of Hovnanian and borrows funds which it
lends to such subsidiaries. K. Hovnanian has essentially no independent
operations and generates no operating revenues. Both Hovnanian's executive
offices and K. Hovnanian's principal executive offices are located at 10 Highway
35, P.O. Box 500, Red Bank, New Jersey 07701, and their telephone number is
(732) 747-7800.
USE OF PROCEEDS
The exchange offer is intended to satisfy our obligations under the
registration rights agreement that we entered into in connection with the
private offering of the outstanding notes. We will not receive any cash proceeds
from the issuance of the exchange notes. In consideration for issuing the
exchange notes as contemplated in this prospectus, we will receive in exchange a
like principal amount of outstanding notes, the terms of which are identical in
all material respects to the exchange notes. The outstanding notes that are
surrendered in exchange for the exchange notes will be retired and canceled and
cannot be reissued. As a result, the issuance of the exchange notes will not
result in any increase or decrease in our capitalization.
We used the net proceeds from the private offering of the outstanding notes
to repay outstanding debt under our revolving credit agreement.
Our revolving credit agreement expires on July 31, 2003, and bears interest
at either the prime rate plus 0.25% or LIBOR plus 1.70% at our election.
RECENT DEVELOPMENTS
On August 28, 2000 Hovnanian and Washington Homes, Inc. entered into an
Agreement and Plan of Merger providing for the merger of Washington Homes, Inc.
into a wholly-owned subisidiary of Hovnanian. The Merger and related
transactions are expected to close in late January, 2001, following shareholder
approval. For more information on this transaction, see the information that
has been incorporated by reference herein from the Current Report on Form 8-K
filed on December 14, 2000 with the Securities and Exchange Commission.
RATIOS OF EARNINGS TO FIXED CHARGES
For purposes of computing the ratios of earnings to fixed charges, earnings
consist of earnings (loss) from continuing operations before income taxes,
minority interest, extraordinary items and cumulative effect of accounting
changes, plus fixed charges (interest charges and preferred share dividend
requirements of subsidiaries, adjusted to a pretax basis), less interest
capitalized, less preferred share dividend requirements of subsidiaries adjusted
to a pretax basis and less undistributed earnings of affiliates whose debt is
not guaranteed by the Hovnanian.
The following table sets forth the ratios of earnings to fixed charges for
Hovnanian for the periods indicated.
Nine months ended Years ended October 31,
July 31, 2000 1999 1998 1997
------------- ---- ---- ----
Ratio of earnings to fixed charges ....... 1.6 3.0 2.6 (a)
(a) Earnings for the year ended October 31, 1997 were insufficient to cover
fixed charges for such period by $9,197,000.
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RISK FACTORS
In addition to the other matters described in this prospectus, you should
carefully consider the following risk factors.
If you do not participate in the exchange offer, you will continue to be subject
to transfer restrictions.
If you do not exchange your outstanding notes in the exchange offer, you
will continue to be subject to restrictions on transfer of your outstanding
notes. We did not register the outstanding notes under the federal or any state
securities laws, and we do not intend to register them following the exchange
offer. As a result, the outstanding notes may only be transferred in limited
circumstances under the securities laws. In addition, to the extent outstanding
notes are tendered and accepted in the exchange offer, the trading market, if
any, for the outstanding notes would be adversely affected. As a result, after
the exchange offer, you may have difficulty selling your outstanding notes.
You must follow the exchange offer procedures carefully in order to receive the
exchange notes.
If you do not follow the procedures described herein, you will not receive
exchange notes. The exchange notes will be issued to you in exchange for your
outstanding notes only after timely receipt by the exchange agent of:
. your outstanding notes and either:
. a properly completed and executed letter of transmittal and all other
required documentation or
. a book-entry delivery by transmittal of an agent's message through DTC
If you want to tender your outstanding notes in exchange for exchange
notes, you should allow sufficient time to ensure timely delivery. No one is
under any duty to give you notification of defects or irregularities with
respect to tenders of outstanding notes for exchange. For additional
information, please refer to the sections captions "The Exchange Offer" and
"Plan of Distribution" in this prospectus.
Substantial Leverage--Our substantial debt could adversely affect our financial
health and prevent us from fulfilling our obligations under these notes.
We have a significant amount of debt. As of July 31, 2000, assuming we had
completed the offering and the Washington Homes merger on that date, our
consolidated debt would have been $510.0 million. This offering will not reduce
our debt. The amount of our debt could have important consequences to you. For
example, it could:
. limit our ability to obtain future financing for working capital,
capital expenditures, acquisitions, debt service requirements or other
requirements;
. require us to dedicate a substantial portion of our cash flow from
operations to the payment on our debt and reduce our ability to use
our cash flow for other purposes;
. limit our flexibility in planning for, or reacting to, changes in our
business;
. place us at a competitive disadvantage because we have more debt than
some of our competitors; and
. make us more vulnerable in the event of a downturn in our business or
in general economic conditions.
Our ability to meet our debt service and other obligations will depend upon
our future performance. We are engaged in businesses that are substantially
affected by changes in economic cycles. Our revenues and earnings vary with the
level of general economic activity in the markets we serve. Our businesses are
also affected by financial, political, business and other factors, many of which
are beyond our control. The factors that affect our ability to generate cash can
also affect our ability to raise additional funds for these purposes through the
sale of equity securities, the refinancing of debt, or the sale of assets.
Changes in prevailing interest rates may affect our
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ability to meet our debt service obligations, because borrowings under our
revolving credit facilities bear interest at floating rates.
Based on our current level of operations, we believe our cash flow from
operations, available cash and available borrowings under our revolving credit
facilities will be adequate to meet our future liquidity needs for the long
term. We can not assure you, however, that in the future our business will
generate sufficient cash flow from operations or that borrowings will be
available to us under our revolving credit facilities in an amount sufficient to
enable us to pay our indebtedness, including these notes, or to fund our other
liquidity needs. We may need to refinance all or a portion of our debt,
including these notes, on or before maturity. We can not assure you that we will
be able to refinance any of our debt, including our revolving credit facilities
and these notes, on commercially reasonable terms or at all.
The indentures governing these notes and our other outstanding debt and our
revolving credit facilities impose restrictions on our operations and
activities. The most significant restrictions relate to debt incurrence, sales
of assets and cash distributions by us and require us to comply with certain
financial covenants. If we fail to comply with any of these restrictions or
covenants, the trustees or the banks, as appropriate, could cause our debt to
become due and payable prior to maturity.
General Economic, Real Estate and Other Conditions--Future changes in business
conditions could adversely affect our business, including our ability to build
homes at prices our customers are willing or able to pay.
The homebuilding industry is cyclical and is significantly affected by
changes in general and local economic conditions, such as:
. employment levels;
. availability of financing for home buyers;
. interest rates;
. consumer confidence; and
. housing demand.
An oversupply of alternatives to new homes, such as rental properties and
used homes, could depress prices and reduce margins for the sale of new homes.
Weather conditions and natural disasters such as hurricanes, tornadoes,
earthquakes, floods and fires, can harm the homebuilding business.
Our success in developing, building and selling homes depends in part upon
the continued availability of suitable undeveloped land at acceptable prices.
The availability of undeveloped land for purchase at favorable prices depends on
a number of factors outside of our control, including the risk of competitive
over-bidding of land prices and restrictive governmental regulation. Should
suitable land opportunities become less available, our operating results could
be adversely affected.
Land inventory risk can be substantial for homebuilders. The market value
of undeveloped land, buildable lots and housing inventories can fluctuate
significantly as a result of changing economic and market conditions. In the
event of significant changes in economic or market conditions, we may have to
sell homes at a loss or hold land in inventory longer than planned. Inventory
carrying costs can be significant and can result in losses in a poorly
performing project or market.
In our business, we must continuously seek and make acquisitions of land
for expansion into new markets and for replacement and expansion of land
inventory within our current markets. Although we employ various measures
designed to manage inventory risks, we can give no assurance that such measures
will be successful.
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The homebuilding industry has from time to time experienced significant
difficulties, including:
. shortages of qualified trades people;
. reliance on local contractors, who may be inadequately capitalized;
. shortages of materials; and
. increases in the cost of certain materials (particularly increases in
the price of lumber, framing and cement, which are significant
components of home construction costs).
These difficulties could cause us to take longer and pay more costs to
build our homes. We may not be able to recapture increased costs by raising
prices in many cases because we fixed our prices up to twelve months in advance
of delivery by signing home sales contracts. In addition, some home buyers may
cancel or not honor their home sales contracts altogether.
We Depend on the Northeast Market.
We presently conduct, and will continue after the Washington Homes merger
to conduct, most of our business in the Northeast. Home prices in the Northeast,
including in some of the markets in which we operate, have declined from time to
time, particularly as a result of slow economic growth. We cannot be certain
that the current economic growth trend in the Northeast will continue. If home
prices decline in one or more of the markets in which we operate, our results of
operations may be adversely affected.
Interest Rates; Mortgage Financing--Future increases in interest rates could
prevent potential customers from buying our homes and adversely affect our
business.
Virtually all our customers finance their acquisitions through lenders
providing mortgage financing. Increases in interest rates or decreases in
availability of mortgage financing could depress the market for new homes
because of the increased monthly mortgage costs to potential home buyers. Even
if potential customers do not need financing, changes in interest rates and
mortgage availability could make it harder for them to sell their homes to
potential buyers who need financing. This could adversely affect our results of
operations.
In addition, we believe that the availability of FNMA, FHLMC, FHA and VA
mortgage financing is an important factor in marketing many of our homes. Any
limitations or restrictions on the availability of such financing could
adversely affect our sales.
Governmental Regulation and Environmental Matters--Governmental regulations
could increase the cost and availability of our development and homebuilding
projects and adversely affect our business.
We are subject to extensive and complex regulations that affect the
development and homebuilding process, including zoning, density and building
standards. These regulations often provide broad discretion to the administering
governmental authorities. This can delay or increase the cost of development or
homebuilding.
We also are subject to a variety of local, state, federal and foreign laws
and regulations concerning protection of health and the environment. The
particular environmental laws which apply to any given community vary greatly
according to the community site, the site's environmental conditions and the
present and former uses of the site. These environmental laws may result in
delays, may cause us to incur substantial compliance, remediation, and/or other
costs, and can prohibit or severely restrict development and homebuilding
activity in certain environmentally sensitive regions or areas.
Despite our past ability to obtain necessary permits and approvals for our
communities, it can be anticipated that increasingly stringent requirements will
be imposed on developers and homebuilders in the future. Although we cannot
predict the effect of these requirements, they could result in time-consuming
and expensive compliance programs and in substantial expenditures, which could
have a material adverse effect on our operations. In addition, the continued
effectiveness of permits already granted or approvals already obtained is
dependent upon many factors, some of which are beyond our control, such as
changes in policies, rules and regulations and their interpretation and
application.
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Competition--Homebuilding is very competitive, and competitive conditions could
adversely affect our results of operations.
The homebuilding industry is highly competitive and fragmented.
Homebuilders compete not only for home buyers, but also for desirable
properties, financing, raw materials and skilled labor. We compete with other
local, regional and national homebuilders, often within larger subdivisions
designed, planned and developed by such homebuilders. Some of our competitors
also have greater sales and financial resources. In addition, resales of homes
and the availability of rental housing provide additional competition.
The competitive conditions in the homebuilding industry could result in:
. difficulty in acquiring suitable land at acceptable prices;
. increased selling incentives;
. lower sales; or
. delays in construction.
Any of these problems could adversely affect results of operations.
Future Capital Requirements--Our future growth requires additional capital whose
availability is not assured.
Our operations require significant amounts of cash, and we will be required
to seek additional capital, whether from sales of equity or borrowing more
money, for the future growth and development of our business. We can give no
assurance as to the terms or availability of such additional capital. Moreover,
the indentures for our outstanding debt contain provisions that may restrict the
debt we may incur in the future. If we are not successful in obtaining
sufficient capital, it could reduce our sales and may adversely affect our
future growth and results of operations.
We may have difficulty consummating or integrating mergers and acquisitions,
including the Washington Homes merger, and certain consequences of those
acquisitions that we do complete could adversely affect our operating results.
Although we expect to close the Washington Homes merger by late January,
2001, the merger is subject to significant conditions, including shareholder and
regulatory approvals and the ability of either side to terminate the agreement
if our share price goes above or below specified thresholds. As a result, we
cannot be certain that it will be consummated. Although we have not recently
announced any acquisitions or mergers other than the Washington Homes merger, in
the future we may acquire other businesses. As a result of these acquisitions,
we may need to integrate product lines, dispersed operations and distinct
corporate cultures. These integration efforts may not succeed or may distract
our management from operating our existing business. We can give no assurance
that we will be able to realize the earnings enhancements that may be available.
Our failure to successfully manage future acquisitions could harm our operating
results.
Exercise of Change of Control Rights--We may not have the ability to raise funds
necessary to finance any change of control offer required by the indenture.
If a change of control occurs as described in the section "Description of
Exchange Notes" under the heading "Certain Covenants," we would be required to
offer to purchase your notes at 101% of their principal amount, together with
all accrued and unpaid interest, if any. If a purchase offer obligation arises
under the indenture governing your notes, a change of control will have also
occurred under one or more of the other indentures governing our debt. If a
purchase offer were required under the indentures for our debt, we can give no
assurance that we would have sufficient funds to pay the purchase price for all
debt that we are required to repurchase or repay. After giving effect to this
offering, we would not have sufficient funds available to purchase all of such
outstanding debt.
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Lack of Public Market for the Notes--We can not assure you that an active
trading market will develop for these notes.
These notes are a new issue of securities. There is no active public
trading market for these notes. We do not intend to apply for listing of these
notes on a security exchange. The liquidity of the trading market in the notes,
and the market prices quoted for the notes, may be adversely affected by changes
in the overall market for these types of securities and by changes in our
financial performance or prospects or in the prospects for companies in our
industry generally. As a consequence, we cannot assure you that an active
trading market will develop for your notes, that you will be able to sell your
notes, or that, even if you can sell your notes, that you will be able to sell
them at an acceptable price.
Fraudulent Conveyance Issues--Federal and state laws allow courts, under
specific circumstances, to void guarantees and to require you to return payments
received from guarantors.
Although you will be direct creditors of the guarantors by virtue of the
guarantees, existing or future creditors of any guarantor could avoid or
subordinate such guarantor's guarantee under the fraudulent conveyance laws if
they were successful in establishing that:
. such guarantee was incurred with fraudulent intent; or
. such guarantor did not receive fair consideration or reasonably
equivalent value for issuing its guarantee and
1) insolvent at the time of the guarantee;
2) rendered insolvent by reason of the guarantee;
3) engaged in a business or transaction for which its assets
constituted unreasonably small capital to carry on its business;
or
4) ended to incur, or believed that it would incur, debt beyond its
ability to pay such debt as it matured.
The measures of insolvency for purposes of determining whether a fraudulent
conveyance occurred would vary depending upon the laws of the relevant
jurisdiction and upon the valuation assumptions and methodology applied by the
court. Generally, however, a company would be considered insolvent for purposes
of the foregoing if:
. the sum of the company's debts, including contingent, unliquidated and
unmatured liabilities, is greater than all of such company's property
at a fair valuation, or
. if the present fair saleable value of the company's assets is less
than the amount that will be required to pay the probable liability on
its existing debts as they become absolute and matured.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following selected historical consolidated financial information for
the three years ended October 31, 1999 are derived from the audited consolidated
financial statements of Hovnanian Enterprises, Inc. The financial data for the
nine month periods ended July 31, 2000 and 1999 are derived from unaudited
financial statements. The unaudited financial statements include all
adjustments, consisting of normal recurring accruals, which Hovnanian
Enterprises, Inc. considers necessary for a fair presentation of the financial
position and the results of operations for these periods. Operating results for
the nine months ended July 31, 2000 are not necessarily indicative of the
results that may be expected for the entire year ending October 31, 2000. The
data should be read in conjunction with the consolidated financial statements,
related notes, and other financial information incorporated by reference herein.
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
July 31, October 31,
--------------------- --------------------------------
2000 1999 1999 1998 1997
-------- --------- -------- --------- --------
($ in thousands, except average selling prices)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Total revenues........................................... $784,019 $648,291 $948,287 $941,947 $784,136
======== ======== ======== ======== ========
Home and land sale revenues (1).......................... $766,321 $628,602 $920,630 $904,280 $754,662
Cost of sales............................................ 614,574 494,581 730,025 748,941 634,317
Inventory impairment loss (2)............................ 1,517 1,633 2,091 3,994 14,019
-------- -------- -------- -------- --------
Homebuilding gross margin................................ 150,230 132,388 188,514 151,345 106,326
Selling, general and administrative expense.............. 76,495 56,460 81,396 67,519 62,475
Corporate general and administrative expenses............ 24,361 20,869 28,652 21,048 15,088
Home and land sales interest expense..................... 24,256 21,237 29,175 32,151 30,467
(Loss) income from financial services.................... (1,140) 1,070 1,044 2,088 (45)
(Loss) income from investment properties................. -- -- (1,373) 4,406 (11,906)
Income (loss) from collateral mortgage financing......... 49 (19) 15 11 (24)
Other income (net of other operations)................... (1,541) 1,844 1,640 4,160 1,555
-------- -------- -------- -------- --------
Income (loss) before income taxes and extraordinary
loss.................................................... 22,486 36,717 50,617 41,292 (12,124)
State and federal income taxes........................... 7,485 14,659 19,674 15,141 (5,154)
-------- -------- -------- -------- --------
Income (loss) before extraordinary loss.................. 15,001 22,058 30,943 26,151 (6,970)
======== ======== ======== ======== ========
Extraordinary loss from extinguishment of debt net of
Taxes................................................... -- (868) (868) (748) --
Net income (loss)........................................ $ 15,001 $ 21,190 $ 30,075 $ 25,403 $ (6,970)
======== ======== ======== ======== ========
Selected Operating Data
New homes delivered:
Northeast Region........................................ 1,323 1,499 2,063 2,530 2,128
Metro D.C............................................... 185 127 198 152 70
Texas................................................... 668 -- 66 -- --
North Carolina.......................................... 465 508 756 687 695
California.............................................. 375 351 514 457 365
Florida................................................. 50 119 159 241 418
Other................................................... 11 11 12 71 41
-------- -------- -------- -------- --------
Total............................................... 3,077 2,615 3,768 4,138 3,717
======== ======== ======== ======== ========
Net sales contracts:
Northeast Region......................................... 1,506 1,379 1,885 2,375 2,438
Metro D.C................................................ 241 182 232 170 73
Texas.................................................... 693 -- 25 -- --
North Carolina........................................... 501 600 728 690 694
California............................................... 369 380 524 439 456
Florida.................................................. 69 112 123 164 351
Other.................................................... 47 6 18 39 61
-------- -------- -------- -------- --------
Total.................................................... 3,426 2,659 3,535 3,877 4,073
======== ======== ======== ======== ========
Backlog at period end:
Number of homes.......................................... 2,270 1,725 1,921 1,681 1,872
Dollar value using base prices........................... $584,008 $394,990 $460,660 $381,816 $374,314
Average selling price for delivered homes................ $248,026 $237,512 $241,123 $216,444 $196,881
Other Data
Gross margin percentage (3).............................. 19.8% 21.5% 20.9% 17.3% 15.6%
EBITDA (4)............................................... $ 55,502 $ 66,383 $ 91,277 $ 90,594 $ 59,713
Interest incurred (5).................................... $ 28,093 $ 17,705 $ 24,594 $ 28,947 $ 34,777
Ratio of EBITDA to interest incurred..................... 2.0x 3.7x 3.7x 3.1x 1.7x
Ratio of total debt to EBITDA(6)......................... N/A N/A 3.6x 2.5x 5.5x
Balance Sheet Data
Housing inventories....................................... $616,426 $527,230 $375,733 $410,393
Total assets.............................................. $841,518 $712,861 $589,102 $637,082
Total debt (6)............................................ $432,461 $330,194 $ 29,065 $328,696
Stockholders' equity...................................... $246,397 $236,426 $201,392 $178,762
</TABLE>
____________________
(1) Land sales for the periods presented were $3,144,000 for the nine months
ended July 31, 2000, $7,508,000 for the nine months ended July 31, 1999,
$12,017,000, $8,636,000 and $22,855,000 for the years ended October 31,
1999, 1998 and 1997, respectively.
13
<PAGE>
(2) In accordance with the provisions of Financial Accounting Standards No. 121
("FAS 121"), the Company records impairment losses on inventories related
to communities under development or inventories and long-lived assets held
for sale. Under FAS 121, communities under development are impaired if the
undiscounted cash flows estimated to be generated from sales is less than
the community's carrying amounts. Inventories and long-lived assets held
for sale are impaired if the carrying amount exceeds its fair value less
selling costs. Along with writeoffs of options not exercised (including
related approval engineering and capitalized interest costs), such
impairment losses for housing operations are reported as "Inventory
impairment loss."
(3) Before inventory impairment loss and land sales.
(4) EBITDA means earnings (loss) before (a) income taxes, (b) interest expense,
(c) amortization of capitalized interest, (d) depreciation and
amortization, (e) a nonrecurring noncash charge relating to real estate
inventory of $1,517,000 for the nine months ended July 31, 2000, $1,633,000
for the nine months ended July 31, 1999 and $2,091,000, $5,032,000 and
$28,465,000 for the years ended October 31, 1999, 1998 and 1997,
respectively, and (f) extraordinary loss from early extinguishment of debt.
EBITDA is a widely accepted financial indicator of a company's availability
to service debt. However, EBITDA should not be considered as an alternative
to operating income or to cash flows from operating activities (as
determined in accordance with generally accepted accounting principles) and
should not be construed as an indication of the Company's operating
performance or as a measure of liquidity. In addition, our method of
computation may not be comparable to other similarly titled measures of
other companies.
(5) Interest incurred consists of all cash interest and accrued interest costs,
whether expensed or capitalized, excluding interest under our mortgage
warehouse line and bonds collateralized by mortgages receivable.
(6) Total debt excludes debt under our mortgage warehouse line and bonds
collateralized by mortgages receivable.
14
<PAGE>
THE EXCHANGE OFFER
Introduction
K. Hovnanian hereby offers to exchange a like principal amount of exchange
notes for any or all outstanding notes in each case on the terms and subject to
the conditions set forth in this prospectus and accompanying letter of
transmittal. The offer described in the immediately preceding sentence is
referred to in this prospectus as the "exchange offer." Holders may tender some
or all of their outstanding notes pursuant to the exchange offer.
As of the date of this prospectus, $150,000,000 aggregate principal amount
of the outstanding notes. This prospectus, together with the letter of
transmittal, is first being sent to holders of outstanding notes on or about
, 2001.
Purpose and Effect of the Exchange Offer
We have entered into a registration rights agreement with the initial
purchasers of the outstanding notes in which we agreed, under certain
circumstances, to file a registration statement relating to an offer to exchange
the outstanding notes for exchange notes. We also agreed to use our best efforts
to cause such offer to be consummated on the earliest practicable date after the
exchange offer registration statement has become effective but in no event no
later than 30 days thereafter. The exchange notes will have terms substantially
identical to the outstanding notes except that the exchange notes will not
contain terms with respect to transfer restrictions, registration rights and
liquidated damages for failure to observe certain obligations in the
registration rights agreement. The outstanding notes were issued on October 2,
2000.
Under the circumstances set forth below, we will use our reasonable best
efforts to cause the SEC to declare effective a shelf registration statement
with respect to the resale of the outstanding notes and keep the statement
effective for up to two years after the effective date of the shelf registration
statement. These circumstances include:
. if applicable law does not permit the exchange offer after we have
sought a no-action letter or other favorable decision from the SEC and
we have taken all such other actions as may be requested by the SEC or
otherwise required in connection with such decision
. if any holder of the outstanding notes notifies us within 20 business
days following the consummation deadline of the exchange offer that
(i) such holder was prohibited by law or SEC policy from participating
in the exchange offer, (ii) such holder may not resell the exchange
notes acquired by it in the exchange offer to the public without
delivering a prospectus and this prospectus is not appropriate or
available for resale by that holder or (iii) such holder is a broker-
dealer and holds outstanding notes acquired directly from us or our
affiliates
If we fail to comply with certain obligations under the registration rights
agreement, we will be required to pay liquidated damages to holders of the
outstanding notes. Please read "Description of Exchange Notes--Registration
Rights; Liquidated Damages" for more details regarding the registration rights
agreement.
Each holder of outstanding notes that wishes to exchange such outstanding
notes for transferable exchange notes in the exchange offer will be required to
make the following written representations:
. such holder is not an affiliate of K. Hovnanian within the meaning of
Rule 405 of the Securities Act
. such holder is not engaged in, and does not intend to engage in, and
has no arrangement with any person to participate in the distribution
of the exchange notes
. such holder is acquiring the exchange notes in the ordinary course of
its business
15
<PAGE>
Each broker-dealer that receives exchange notes for its own account in
exchange for outstanding notes, where such outstanding notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such exchange notes. See "Plan of Distribution."
Resale of Exchange Notes
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, we believe that exchange notes issued
pursuant to the exchange offer may be offered for resale, resold, or otherwise
transferred by any exchange note holders without compliance with the
registration and prospectus delivery provisions of the Securities Act, if:
. such holder is not an affiliate of K. Hovnanian within the meaning of
Rule 405 under the Securities Act
. such holder is not engaged in, does not intend to engage in, and has
no arrangement or understanding with any person to participate in a
distribution of the exchange notes
. such holder is acquiring exchange notes in the ordinary course of its
business
Any holder who tenders in the exchange offer with the intention of
participating in any manner in a distribution of the exchange notes:
. cannot rely on the position of the Commission set forth in Morgan
Stanley and Co., Inc., Exxon Capital Holdings Corporation, as
interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, or similar no action letters
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale
transaction and that such secondary resale transaction must be covered
by an effective registration statement
This prospectus may be used for an offer to resell, resale or other
retransfer of exchange notes only as specifically set forth in this prospectus.
With regard to broker-dealers, only broker-dealers that acquired the outstanding
notes as a result of market-making activities or other trading activities may
participate in the exchange offer. Each broker-dealer that receives exchange
notes for its own account in exchange for outstanding notes, where such
outstanding notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of the exchange notes. Please
read "Plan of Distribution" for more details regarding the transfer of exchange
notes.
Terms of the Exchange Offer
On the terms and subject to the conditions set forth in this prospectus and
in the accompanying letter of transmittal, we will accept for exchange pursuant
to the exchange offer outstanding notes that are validly tendered and not
withdrawn prior to the expiration date. We will issue $1,000 principal amount of
exchange notes in exchange for each $1,000 principal amount of outstanding notes
surrendered under the exchange offer. Outstanding notes may only be tendered in
multiples of $1,000.
The form and terms of the exchange notes will be substantially identical to
the form and terms of the outstanding notes except the exchange notes will be
registered under the Securities Act, will not bear legends restricting their
transfer and will not provide for any liquidated damages upon our failure to
fulfill our obligations under the registration rights agreement to file, and
cause to be effective, a registration statement. The exchange notes will
evidence the same debt as the outstanding notes. The exchange notes will be
issued under and entitled to the benefits of the same indenture that authorized
the issuance of the outstanding notes. Consequently, both series will be treated
as a single class of debt securities under that indenture. For a description of
the indenture, see "Description of Exchange Notes."
16
<PAGE>
The exchange offer is not conditioned upon any minimum aggregate principal
amount of outstanding notes being tendered for exchange.
As of the date of this prospectus, $150 million aggregate principal amount
of the outstanding notes are outstanding. This prospectus and the letter of
transmittal are being sent to all registered holders of outstanding notes. There
will be no fixed record date for determining registered holders of outstanding
notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC.
Outstanding notes that are not tendered for exchange in the exchange offer will
remain outstanding and continue to accrue interest and will be entitled to the
rights and benefits such holders have under the indenture relating to the
outstanding notes and the registration rights agreement.
We will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance to
the exchange agent. The exchange agent will act as agent for the tendering
holders for the purposes of receiving the exchange notes from us and delivering
exchange notes to such holders. Subject to the terms of the registration rights
agreement, we expressly reserve the right to amend or terminate the exchange
offer, and not to accept the occurrence of any of the conditions specified below
under "--Conditions to the Exchange Offer."
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes. We will pay all charges and expenses, other than certain
applicable taxes described below in connection with the exchange offer. It is
important that you read "--Fees and Expenses" below for more details regarding
fees and expenses incurred in the exchange offer.
Expiration Date; Extensions, Amendments
As used in this prospectus, the term "expiration date" means 5:00 p.m. New
York City time, on , 2001. However, if we, in our sole discretion,
extend the period of time for which the exchange offer is open, the term
"expiration date" will mean the latest time and date to which we shall have
extended the expiration of the exchange offer.
In order to extend the period of time during which the exchange offer is
open, we will give oral or written notice of such extension to the exchange
agent. We will notify the registered holders of the outstanding notes no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date.
We reserve the right, in our sole discretion:
. to delay accepting for exchange any outstanding notes
. to extend the exchange offer or to terminate the exchange offer and to
refuse to accept outstanding notes not previously accepted if any of
the conditions set forth below under "--Conditions of the Exchange
Offer" have not been satisfied, by giving oral or written notice of
such delay, extension or termination to the exchange agent
. subject to the terms of the registration rights agreement, to amend
the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of the outstanding notes. If we amend the exchange offer in
a manner that we determine to constitute a material change, we will promptly
disclose such amendment in a manner reasonably calculated to inform the holders
of outstanding notes of such amendment.
17
<PAGE>
Conditions to the Exchange Offer
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or to issue exchange notes in exchange for, any outstanding
notes, and we may terminate or amend the exchange offer as provided in this
prospectus before accepting any outstanding notes for exchange if in our
reasonable judgment:
. the exchange notes to be received will not be tradeable by the holder,
without restriction under the Securities Act or the Exchange Act and
without material restrictions under the blue sky or securities laws of
substantially all of the states of the United States
. the exchange offer, or the making of any exchange by a holder of
outstanding notes, would violate applicable law or any applicable
interpretation of the staff of the SEC
. any action or proceeding has been instituted or threatened in any
court or by or before any governmental agency with respect to the
exchange offer that, in our judgment, would reasonably be expected to
impair our ability to proceed with the exchange offer
In addition, we will not be obligated to accept for exchange the
outstanding notes of any holder that has not made to us
. the representations described under "--Procedures for Tendering" and
"Plan of Distribution."
. such other representations as may be reasonably necessary under
applicable SEC rules, regulations, or interpretations to make
available to us an appropriate form for registration of the exchange
notes under the Securities Act
We expressly reserve the right at any time or at various times to extend
the period of time during which the exchange offer is open. Consequently, we may
delay acceptance of any outstanding notes by giving oral or written notice of
such extension to their holders. During any such extensions, all outstanding
notes previously tendered will remain subject to the exchange offer, and we may
accept them for exchange. We will return any outstanding notes that we do not
accept for exchange for any reason without expense to their tendering holder as
promptly as practicable after the expiration or termination of the exchange
offer.
We expressly reserve the right to amend or terminate the exchange offer,
and to reject for exchange any outstanding notes not previously accepted for
exchange, upon the occurrence of any of the conditions of the exchange offer
specified above. We will give oral or written notice of any extension,
amendment, non-acceptance or termination to the holders of the outstanding notes
as promptly as practicable. In the case of any extension, such notice will be
issued no later than 9:00 a.m. New York City time, on the business day after the
previously scheduled expiration date.
These conditions are for our sole benefit and we may assert them regardless
of the circumstances that may give rise to them or waive them in whole or in
part at any or at various times in our sole discretion. If we fail at any time
to exercise any of the foregoing rights, this failure will not constitute a
waiver of such right. Each such right will be deemed an ongoing right that we
may assert at any time or at various times.
In addition, we will not accept for exchange any outstanding notes
tendered, and will not issue exchange notes in exchange for any such outstanding
notes, if at such time any stop order will be threatened or in effect with
respect to the registration statement of which this prospectus constitutes a
part or the qualification of the indenture under the Trust Indenture Act of
1939.
Procedures for Tendering
Only a holder of outstanding notes may tender such outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must:
18
<PAGE>
. complete, sign and date the letter of transmittal, or a facsimile of
the letter of transmittal; have the signature on the letter of
transmittal guaranteed if the letter of transmittal so requires; and
mail or deliver such letter of transmittal or facsimile to the
exchange agent prior to the expiration date or
. comply with DTC's Automated Tender Offer Program procedures described
below
In addition, either:
. the exchange agent must receive outstanding notes along with the
letter of transmittal or
. the exchange agent must receive, prior to the expiration date, a
timely confirmation of book-entry transfer of such outstanding notes
into the exchange agent's account at DTC according to the procedure
for book-entry transfer described below or a properly transmitted
agent's message or
. the holder must comply with the guaranteed delivery procedures
described below
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at the
address set forth below under "--Exchange Agent" prior to the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date
will constitute an agreement between such holder and us in accordance with the
terms and subject to the conditions set forth in this prospectus and in the
letter of transmittal.
The method of delivery of outstanding notes, letters of transmittal, and
all other required documents is at your election and risk. Rather than mail
these items, we recommend that holders use an overnight or hand delivery
service. In all cases, you should allow sufficient time to assure timely
delivery to the exchange agent before the expiration date. You should not send
letters of transmittal or certificates representing outstanding notes to us.
Any beneficial owner of outstanding notes that are registered in the name
of a broker, dealer, commercial bank, trust company, or other nominee who wishes
to participate in the exchange offer should promptly contact the person through
which it beneficially owns such outstanding notes and instruct that person to
tender outstanding notes on behalf of such beneficial owner. If such beneficial
owner wishes to tender on its own behalf, it must, prior to completing and
executing the letter of transmittal and delivering its outstanding notes either:
. make appropriate arrangements to register ownership of the outstanding
notes in such owner's name or
. obtain a properly completed bond power from the registered holder of
outstanding notes
The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or another "eligible institution" within the meaning of Rule 17Ad-
15 under the Exchange Act unless the outstanding notes surrendered for exchange
are tendered:
. by a registered holder of the outstanding notes who has not completed
the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the letter of transmittal; or
. for the account of an eligible institution
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed on the outstanding notes, such
outstanding notes must be endorsed or accompanied by a properly completed
19
<PAGE>
bond power. The bond power must be signed by the registered holder as the
registered holder's name appears on the outstanding notes and an eligible
institution must guarantee the signature on the bond power.
If the letter of transmittal or any certificates representing outstanding
notes, or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations, or others acting in a
fiduciary or representative capacity, the persons should so indicate when
signing. Unless waived by us, they should also submit evidence satisfactory to
us of their authority to deliver the letter of transmittal.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's Automated Tender Offer
Program to tender. Participants in the program may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange, transmit their acceptance of the exchange electronically. They may do
so by causing DTC to transfer the outstanding notes to the exchange agent in
accordance with its procedures for transfer. DTC will then send an agent's
message to the exchange agent. The term "agent's message" means a message
transmitted by DTC, received by the exchange agent and forming part of the book-
entry confirmation, to the effect that:
. DTC has received an express acknowledgment from a participant in its
Automated Tender Offer Program that is tendering outstanding notes
that are the subject of the book-entry confirmation
. such participant has received and agrees to be bound by the terms of
the letter of transmittal (or in the case of an agent's message
relating to guaranteed delivery, that such participant has received
and agrees to be bound by the applicable notice of guaranteed
delivery)
. the agreement may be enforced against such participant
In all cases, we will issue exchange notes for outstanding notes that we
have accepted for exchange under the exchange offer only after the exchange
agent timely receives:
. outstanding notes or a timely book-entry confirmation of such
outstanding notes into the exchange agent's account at DTC
. a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
By tendering outstanding notes pursuant to the exchange offer, each holder
will represent to us that, among other things:
. the exchange notes acquired pursuant to the exchange offer are being
acquired in the ordinary course of business of the person receiving
the exchange notes (whether or not the person is the holder of the
outstanding notes);
. neither the holder nor any such other person is engaging in or intends
to engage in a distribution of the exchange notes;
. neither the holder nor any such other person has an arrangement or
understanding with any person to participate in a distribution of the
exchange notes;
. neither the holder nor any such other person is an affiliate of
Hovnanian, or if either is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities
Act.
In addition, each broker-dealer that is to receive exchange notes for its
own account in exchange for outstanding notes must represent that such
outstanding notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities and must acknowledge that it will
deliver a prospectus that meets the requirements of the Securities Act in
connection with any resale of the exchange notes. The letter of transmittal
20
<PAGE>
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. See "Plan of Distribution."
We will interpret the terms and conditions of the exchange offer, including
the letter of transmittal and the instructions to the letter of transmittal, and
will resolve all questions as to the validity, form, eligibility (including time
of receipt), and acceptance of outstanding notes tendered for exchange. Our
determinations in this regard will be final and binding on all parties. We
reserve the absolute right to reject any and all tenders of any particular
outstanding notes not properly tendered or to not accept any particular
outstanding notes if the acceptance might, in our or our counsel's judgment, be
unlawful. We also reserve the absolute right to waive any defects or
irregularities or conditions of the exchange offer as to any particular
outstanding notes either before or after the expiration date, including the
right to waive the ineligibility of any holder who seeks to tender outstanding
notes in the exchange offer.
Unless waived, any defects or irregularities in connection with tenders of
outstanding notes for exchange must be cured within such reasonable period of
time as we determine. Neither we, the exchange agent, nor any other person will
be under any duty to give notification of any defect or irregularity with
respect to any tender of outstanding notes for exchange, nor will any of them
incur any liability for any failure to give notification. Any outstanding notes
received by the exchange agent that are not properly tendered and as to which
the irregularities have not been cured or waived will be returned by the
exchange agent to the tendering holder, unless otherwise provided in the letter
of transmittal, promptly after the expiration date.
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect
to the outstanding notes at DTC, as book-entry transfer facility, for purposes
of the exchange offer promptly after the date of this prospectus. Any financial
institution that is a participant in DTC's system may make book-entry delivery
of outstanding notes by causing DTC to transfer the outstanding notes into the
exchange agent's account at DTC in accordance with DTC's procedures for
transfer. Holders of outstanding notes who are unable to deliver confirmation of
the book-entry tender of their outstanding notes into the exchange agent's
account at DTC or all other documents required by the letter of transmittal to
the exchange agent on or prior to the expiration date must tender their
outstanding notes according to the guaranteed delivery procedures below.
Guaranteed Delivery Procedures
Holders wishing to tender their outstanding notes but whose outstanding
notes are not immediately available or who cannot deliver their outstanding
notes, the letter of transmittal or any other required documents to the exchange
agent or comply with the applicable procedures under DTC's Automatic Tender
Offer Program prior to the expiration date may tender if:
. the tender is made through an eligible institution
. prior to the expiration date, the exchange agent receives from such
eligible institution either a properly completed and duly executed
notice of guaranteed delivery, letter of transmittal (by facsimile
transmission, mail, or hand delivery) or a properly transmitted
agent's message and notice of guaranteed delivery:
. setting forth the name and address of the holder, the
registered number(s) of such outstanding notes and the
principal amount of outstanding notes tendered
. stating that the tender is being made thereby
. guaranteeing that, within three New York Stock Exchange
trading days after the expiration date, the letter of
transmittal (or facsimile thereof) together with the
outstanding notes or a book-entry confirmation, and any
other documents required by the letter of transmittal, will
be deposited by the eligible institution with the exchange
agent
21
<PAGE>
. the exchange agent receives such properly completed and executed
letter of transmittal (or facsimile thereof), as well as all tendered
outstanding notes in proper form for transfer or a book-entry
confirmation, and all other documents required by the letter of
transmittal within three New York Stock Exchange trading days after
the expiration date.
Withdrawal Rights
Except as otherwise provided in this prospectus, holders of outstanding
notes may withdraw their tenders at any time prior to the expiration date.
For a withdrawal to be effective:
. the exchange agent must receive a written notice (which may be by
telegram, telex, facsimile or letter) of withdrawal at one of the
addresses set forth below under "Exchange Agent" or
. holders must comply with the appropriate procedures of DTC's Automated
Tender Offer Program system.
Any such notice of withdrawal must:
. specify the name of the person who tendered the outstanding notes to
be withdrawn
. identify the outstanding notes to be withdrawn (including the
principal amount of the outstanding notes)
. where certificates for outstanding notes have been transmitted,
specify the name in which such outstanding notes were registered, if
different from that of the withdrawing holder
If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates, the withdrawing holder must also submit:
. the serial numbers of the particular certificates to be withdrawn
. a signed notice of withdrawal with signatures guaranteed by an
eligible institution unless such holder is an eligible institution.
If outstanding notes have been tendered pursuant to the procedure for book-
entry transfer described above, any notice of withdrawal must specify the name
and number of the account at DTC to be credited with the withdrawn outstanding
securities and otherwise comply with the procedures of the facility. We will
determine all questions as to the validity, form, and eligibility, including
time of receipt, of notices of withdrawal and our determination will be final
and binding on all parties. Any outstanding notes so withdrawn will be deemed
not to have been validly tendered for exchange for purposes of the exchange
offer. Any outstanding notes that have been tendered for exchange but that are
not exchanged for any reason will be returned to their holder without cost to
the holder (or, in account at DTC according to the procedures described above,
such outstanding notes will be credited to an account maintained with DTC for
outstanding notes) as soon as practicable after withdrawal, rejection of tender
or termination of the exchange offer. Properly withdrawn outstanding notes may
be retendered by following the procedures described under "--Procedures for
Tendering" above at any time on or prior to the expiration date.
Exchange Agent
First Union National Bank has been appointed as the exchange agent for the
exchange offer. First Union also acts as trustee under the indenture. You should
direct all executed letters of transmittal and all questions and requests for
assistance, requests for additional copies of this prospectus or of the letter
of transmittal, and requests for notices of guaranteed delivery to the exchange
agent addressed as follows:
22
<PAGE>
Delivery to: First Union National Bank, Exchange Agent
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier Delivery: By Hand:
First Union National Bank First Union National Bank First Union National Bank
Attn: Marcia Rice Attn: Marcia Rice Attn: Marcia Rice
Corporate Trust Operations Reorg Corporate Trust Operations Reorg Corporate Trust Operations Reorg
1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd.
Charlotte NC 28288-1153 Charlotte NC 28288-1153 Charlotte NC 28288-1153
By Facsimile Transmissions:
(704) 590-7628
Facsimile Confirmation:
(704) 590-7413
For Information:
(704) 590-7413
</TABLE>
If you deliver the letter of transmittal to an address other than as set
forth above or transmit instructions via facsimile other that as set forth
above, such delivery or instructions will not be effective.
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we make additional solicitation by telegraph,
telephone or in person by our officers and regular employees and those of our
affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payment to broker-dealers or others for soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related,
reasonable out-of-pocket expenses.
We will pay the estimated cash expenses to be incurred in connection with
the exchange offer. The expenses are estimated in the aggregate to be
approximately $_____. They include:
. SEC registration fees
. fees and expenses of the exchange agent and trustee
. accounting and legal fees and printing costs
. related fees and expenses.
Accounting Treatment
We will record the exchange notes in our accounting records at the same
carrying value as the outstanding notes, which is the aggregate principal amount
as reflected in our accounting records on the date of exchange. Accordingly, we
will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will record the expenses of the exchange
offer as incurred.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. The tendering holder, however, will
be required to pay any transfer taxes (whether imposed on the registered holder
or any other person) if:
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. certificates representing outstanding notes for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of
outstanding notes tendered or
. tendered outstanding notes are registered in the name of any person
other than the person signing the letter of transmittal or
. a transfer tax is imposed for any reason other than the exchange of
outstanding notes under the exchange offer
If satisfactory evidence of payment of such taxes is not submitted with the
letter of transmittal, the amount of such transfer taxes will be billed to that
tendering holder.
Consequences of Failure to Exchange
Holders of outstanding notes who do not exchange their outstanding notes
for exchange notes under the exchange offer will remain subject to the
restrictions on transfer of such outstanding notes:
. as set forth in the legend printed on the notes as a consequence of
the issuance of the outstanding notes pursuant to the exemptions from,
or in transactions not subject to, the registration requirements of
the Securities Act and applicable state securities laws
. otherwise set forth in the offering circular distributed in connection
with the private offering of the outstanding notes
In general, you may not offer or sell the outstanding notes unless they are
registered under the Securities Act, or if the offer or sale is exempt from
registration under the Securities Act and applicable state securities laws.
Except as required by the registration rights agreement, we do not intend to
register resales of the outstanding notes under the Securities Act. Based on
interpretations of the SEC staff, exchange notes issued pursuant to the exchange
offer may be offered for resale, resold or otherwise transferred by their
holders (other than any such holder that is our "affiliate" within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that the
holders acquired the exchange notes in the ordinary course of the holders'
business and the holders have no arrangement or understanding with respect to
the distribution of the exchange notes to be acquired in the exchange offer. Any
holder who tenders in the exchange offer for the purpose of participating in a
distribution of the exchange notes:
. could not rely on the applicable interpretations of the SEC
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale
transaction
Other
Participating in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. We have no present plans to acquire any outstanding notes that are
not tendered in the exchange offer or to file a registration statement to permit
resales of any untendered outstanding notes.
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DESCRIPTION OF EXCHANGE NOTES
General
The form and terms of the exchange notes and the outstanding notes are
identical in all material respects except that the registration rights and
related liquidated damages provisions, and the transfer restrictions applicable
to the outstanding notes do not apply to the exchange notes. All references to
"Notes" in this section are references to both outstanding notes and exchange
notes, unless otherwise specified.
We issued the outstanding 10 1/2% Senior Notes due 2007 under an indenture,
dated as of October 2, 2000, among us, the Guarantors and First Union National
Bank, as trustee. The terms of the Notes include those stated in the indenture
and those made part of the indenture by reference to the Trust Indenture Act of
1939. The exchange notes will be issued under the same indenture.
This description of the exchange notes contains definitions of terms,
including those defined under the caption "Definitions of Certain Terms Used
in the Indenture". The following discussion includes a summary description of
certain material terms of the indenture, the registration rights agreement, and
the exchange notes. Because this is a summary, it does not include all of the
information that is included in the indenture, the registration rights
agreement, or the exchange notes.
You should read the indenture and the registration rights agreement
carefully and in their entirety because they, and not this description, define
your rights as holders of the notes. You may request copies of these documents
at our address set forth under "Where You Can Find More Information."
The outstanding notes and the exchange notes constitute a single series of
debt securities under the indenture. If the Exchange Offer is consummated,
holders of notes who do not exchange their notes in the Exchange Offer will
vote together with the holders of the registered notes for all relevant purposes
under the indenture. Accordingly, when determining whether the required holders
have given notice, consent or waiver or taken any other action permitted under
the indenture, any outstanding notes that remain outstanding after the Exchange
Offer will be aggregated with the registered notes. All references herein to
specified percentages in aggregate principal amount of notes outstanding shall
be deemed to mean, at any time after the Exchange Offer is consummated,
percentages in aggregate principal amount of notes and registered notes
outstanding.
The exchange notes will bear interest from the date the exchange notes are
first issued under the Indenture at the rate per annum shown on the cover page
of this offering memorandum, payable semi-annually on April 1 and October 1 of
each year, commencing April 1, 2001, to Holders of record at the close of
business on March 15 or September 15, as the case may be, immediately preceding
each such interest payment date. The exchange notes will mature on October 1,
2007, and will be issued in denominations of $1,000 and integral multiples
thereof.
The exchange notes are limited to an aggregate principal amount of $200.0
million. The exchange notes are guaranteed by the Company and each of the
Guarantors pursuant to the guarantees (the "Guarantees") described below.
The exchange notes are general unsecured obligations of the Issuer and rank
senior in right of payment to all our future Indebtedness of the Issuer that is,
by its terms, expressly subordinated in right of payment to the exchange notes
and pari passu in right of payment with all our existing and future unsecured
Indebtedness of the Issuer that is not so subordinated. The Guarantees are
general unsecured obligations of the Company and the Guarantors and will rank
senior in right of payment to all future Indebtedness of the Company and the
Guarantors that is, by its terms, expressly subordinated in right of payment to
the Guarantees and rank pari passu in right of payment with all existing and
future unsecured Indebtedness of the Company and the Guarantors that is not so
subordinated.
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Secured creditors of the Company, the Issuer and the other Guarantors have
a claim on the assets which secure the obligations of the Company and the
Guarantors to such creditors prior to claims of Holders of the exchange notes
against those assets. At July 31, 2000, as adjusted to give effect to the
transactions described under "Use of Proceeds" and the merger of Washington
Homes, the Company, the Issuer and the Guarantors would have had approximately
$510.0 million (including the Notes) of Indebtedness outstanding, of which $19.5
million would have been secured by assets of the Company and its Restricted
Subsidiaries and $100.0 million of which would have been subordinated to the
Notes. In addition, the Indebtedness under the revolving credit agreement is
secured by a pledge of the stock of KHL, Inc., a wholly owned subsidiary of the
Company, which is not a guarantor of the notes.
Redemption
The notes are subject to redemption upon not less than 30 nor more than 60
days' notice by mail, at any time, as a whole or in part, at the election of the
Issuer, at a price equal to the sum of (i) 100% of the principal amount thereof
plus accrued and unpaid interest and liquidated damages, if any, thereon to the
redemption date plus (ii) the Make-Whole Amount, if any.
The term "Make-Whole Amount" shall mean, in connection with any optional
redemption of any note, the excess, if any, of (i) 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 Reinvestment Rate (determined on the business day preceding
the date of such redemption) from the respective dates on which such principal
and interest would have been payable if such payment had not been made, over
(ii) the aggregate principal amount of the notes being redeemed.
The term "Reinvestment Rate" shall mean 0.50% (one-half of one percent)
plus the arithmetic mean of the yields under the respective headings "This Week"
and "Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the maturity of the principal being prepaid. If no maturity
exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment 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. For the purpose of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
The term "Statistical Release" shall mean the statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Federal Reserve System and which establishes yields on actively traded U.S.
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the indenture,
then such other reasonably comparable index which shall be designated by the
Issuer.
The Issuer may redeem notes, at any time prior to October 1, 2003, with the
net cash proceeds of one or more Public Equity Offerings by the Company, at a
redemption price equal to 110.5% of the principal amount of such notes, plus
accrued and unpaid interest and liquidated damages, if any, to the date of
redemption, provided, however, that after each such redemption not less than
$97.5 million principal amount of notes (excluding any notes held by the Company
or any of its Affiliates) remains outstanding. Notice of any such redemption
must be given within 60 days after the date of the closing of the relevant
Public Equity Offering.
Selection of the notes or portions thereof for redemption pursuant to the
foregoing shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of The Depository
Trust Company), unless such method is otherwise prohibited. Notice of
redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder whose notes are to be redeemed at the registered
address of such Holder. On and after the redemption date, interest ceases to
accrue on the notes or portions thereof called for redemption.
There is no sinking fund for the notes.
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The Guarantees
The Company and each of the Guarantors will (so long, in the case of a
Restricted Subsidiary, as it remains a Restricted Subsidiary) unconditionally
guarantee on a joint and several basis all of our obligations under the Notes,
including our obligations to pay principal, premium, if any, and interest with
respect to the notes. The Guarantees will be general unsecured obligations of
the Company and the Guarantors and will rank pari passu with all existing and
future unsecured Indebtedness of the Guarantors that is not, by its terms,
expressly subordinated in right of payment to the Guarantees. The obligations of
each Guarantor other than the Company are limited to the maximum amount which,
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 the Company that makes a payment
or distribution under a Guarantee shall be entitled to a contribution from each
other Guarantor in an amount pro rata, based on the net assets of each
Guarantor, determined in accordance with GAAP. Except as provided in "Certain
Covenants" below, the Company is not restricted from selling or otherwise
disposing of any of the Guarantors.
The Indenture requires that each existing and future Restricted Subsidiary
(other than KHL, Inc. and K. Hovnanian Poland, Inc.) be a Guarantor. The
Company is permitted to cause any Unrestricted Subsidiary to be a Guarantor.
The Indenture provides that if all or substantially all of the assets of
any Guarantor other than the Company or all of the Capital Stock of any
Guarantor other than the Company is sold (including by consolidation, merger,
issuance or otherwise) or disposed of (including by liquidation, dissolution or
otherwise) by the Company or any of its Subsidiaries, or, unless the Company
elects otherwise, if any Guarantor other than the Company 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.
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 the Company to the Trustee to such effect,
without any further action required on the part of the Trustee or any Holder.
A sale of assets or Capital Stock of a Guarantor may constitute an Asset
Disposition subject to the "Limitations on Dispositions of Assets" covenant.
Certain Covenants
The following is a summary of certain covenants that are contained in the
Indenture. Such covenants are applicable (unless waived or amended as permitted
by the Indenture) so long as any of the notes are outstanding or until the notes
are defeased pursuant to provisions described under "Defeasance of Indenture."
Repurchase of Notes upon Change of Control. In the event that there shall
occur a Change of Control, each Holder of notes shall have the right, at such
Holder's option, to require the Issuer to purchase all or any part of such
Holder's notes on a date (the "Repurchase Date") that is no later than 90 days
after notice of the Change of Control, at 101% of the principal amount thereof
plus accrued and unpaid interest and liquidated damages, if any, to the
Repurchase Date.
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 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
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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's exercise of such right, together with
the note with respect to which the right is being exercised, duly endorsed for
transfer; provided, however, 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.
The Issuer will comply with applicable law, including Section 14(e) of the
Securities Exchange Act of 1934 (the "Exchange Act") and Rule l4e-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.
With respect to any disposition of assets, the phrase "all or substantially
all" as used in the Indenture (including as set forth under "Limitations on
Mergers, Consolidations and Sales of Assets" below) varies according to the
facts and circumstances of the subject transaction, has no clearly established
meaning under New York law (which governs the indenture) and is subject to
judicial interpretation. Accordingly, in certain circumstances there may be a
degree of uncertainty in ascertaining whether a particular transaction would
involve a disposition of "all or substantially all" of the assets of the
Company, and therefore it may be unclear as to whether a Change of Control has
occurred and whether the Holders have the right to require the Issuer to
repurchase notes.
None of the provisions relating to a repurchase upon a Change of Control is
waivable by the Board of Directors of the Issuer or the Company. The Company
could, in the future, enter into certain transactions, including certain
recapitalizations of the Company, that would not result in a Change of Control,
but would increase the amount of Indebtedness outstanding at such time.
The Indenture will require the payment of money for notes or portions
thereof validly tendered to and accepted for payment by the Issuer pursuant to a
Change of Control offer. In the event that a Change of Control has occurred
under the indenture, a change of control will also have occurred under the
indenture governing the Issuer's 9 3/4% Subordinated Notes due 2005, 9 1/8%
Senior Notes due 2009 and under the revolving credit agreement. If a Change of
Control were to occur, there can be no assurance that the Issuer would have
sufficient funds to pay the purchase price for all notes and amounts due under
other Indebtedness that the Company may be required to repurchase or repay or
that the Company or the other Guarantors would be able to make such payments.
In the event that the Issuer were required to purchase outstanding notes
pursuant to a Change of Control offer, the Company expects that it would need to
seek third-party financing to the extent it does not have available funds to
enable the Issuer to meet its purchase obligations. However, there can be no
assurance that the Company would be able to obtain such financing.
Failure by the Issuer to purchase the notes when required upon a Change of
Control will result in an Event of Default with respect to the notes.
These provisions could have the effect of deterring hostile or friendly
acquisitions of the Company where the Person attempting the acquisition views
itself as unable to finance the purchase of the principal amount of Notes which
may be tendered to the Company upon the occurrence of a Change of Control.
Limitations on Indebtedness. The Indenture provides that the Company 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 "incurrence") 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.
Notwithstanding the foregoing, the provisions of the Indenture will not
prevent the incurrence of:
(1) Permitted Indebtedness,
(2) Refinancing Indebtedness,
(3) Non-Recourse Indebtedness,
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(4) any Guarantee of Indebtedness represented by the Notes, and
(5) any guarantee of Indebtedness incurred under Credit Facilities in
compliance with the Indenture.
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), the Company, in its sole discretion,
(1) may classify such item of Indebtedness under and comply with either
of such paragraphs (or any of such definitions), as applicable,
(2) may classify and divide such item of Indebtedness into more than one
of such paragraphs (or definitions), as applicable, and
(3) may elect to comply with such paragraphs (or definitions), as
applicable, in any order.
The Company 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 the Company 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 the Company or such Guarantor, as the
case may be.
Limitations on Restricted Payments. The Indenture provides that the
Company and the Issuer will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment unless:
(1) 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;
(2) immediately after giving effect to such Restricted Payment, the
Company could incur at least $1.00 of Indebtedness pursuant to the first
paragraph of the "Limitations on Indebtedness" covenant; and
(3) 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 after May 4, 1999 does not
exceed the sum of:
(a) 50% of the Consolidated Net Income of the Company on a
cumulative basis during the period (taken as one accounting
period) from and including February 1, 1999 and ending on
the last day of the Company'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), plus
(b) 100% of the aggregate net cash proceeds of and the Fair
Market Value of Property received by the Company from (1)
any capital contribution to the Company after February 1,
1999 or any issue or sale after February 1, 1999 of
Qualified Stock (other than to any Subsidiary of the
Company) and (2) the issue or sale after February 1, 1999 of
any Indebtedness or other securities of the Company
convertible into or exercisable for Qualified Stock of the
Company that have been so converted or exercised, as the
case may be, plus
(c) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after May
4, 1999, an amount (to the extent not included in the
calculation of Consolidated Net Income referred to in (a))
equal to the lesser of (x) the return of
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capital with respect to such Investment (including by
dividend, distribution or sale of Capital Stock) and (y) the
amount of such Investment that was treated 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)), plus
(d) with respect to any Unrestricted Subsidiary that is
redesignated as a Restricted Subsidiary after May 4, 1999,
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)
the proportionate interest of the Company or a Restricted
Subsidiary in an amount equal to the excess of (I) the total
assets of such Subsidiary, valued on an aggregate basis at
the lesser of book value and Fair Market Value thereof, over
(II) the total liabilities of such Subsidiary, determined in
accordance with GAAP, and (y) the Designation Amount at the
time of such Subsidiary's designation as an Unrestricted
Subsidiary, plus
(e) $17 million, minus
(f) the aggregate amount of all Restricted Payments (other than
Restricted Payments referred to in clause (C) of the
immediately succeeding paragraph) made after February 1,
1999 through May 4, 1999.
The foregoing clauses (2) and (3) will not prohibit:
(A) the payment of any dividend within 60 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;
(B) the repurchase, redemption or retirement of any shares of
Capital Stock of the Company in exchange for, or out of the
net proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of, other shares of
Qualified Stock; and
(C) 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 the Company or any
Subsidiary held by officers or employees or former officers
or employees of the Company or any Subsidiary (or their
estates or beneficiaries under their estates) not to exceed
$10 million in the aggregate since May 4, 1999;
provided, however that each Restricted Payment described in clauses (A) and
(B) of this sentence shall be taken into account for purposes of computing the
aggregate amount of all Restricted Payments pursuant to clause (3) of the
immediately preceding paragraph.
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 the Company or
any Restricted Subsidiary in respect of such guarantee, shall be deducted.
In determining the "Fair Market Value of Property" for purposes of clause
(3) of the first paragraph of this covenant, Property other than cash, Cash
Equivalents and Marketable Securities shall be deemed to be equal in value to
the "equity value" 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) 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
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(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) if the Common Equity is not then traded
on the New York Stock Exchange, American Stock Exchange or Nasdaq National
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 million) of
such Capital Stock or other securities as determined by a nationally recognized
investment banking firm retained by the Board of Directors of the Company.
Limitations on Transactions with Affiliates. The Indenture provides that
the Company 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 the Company or any Affiliate of
any of the Company's Subsidiaries or any holder of 10% or more of the Common
Equity of the Company (including any Affiliates of such holders), in a single
transaction or series of related transactions (each, an "Affiliate
Transaction"), except for any Affiliate Transaction the terms of which are at
least as favorable as the terms which could be obtained by the Company, the
Issuer or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with Persons who are not such a
holder, an Affiliate of such a holder or an Affiliate of the Company or any of
the Company's Subsidiaries.
In addition, the Company and the Issuer will not, and will not cause or
permit any Restricted Subsidiary to, enter into an Affiliate Transaction unless:
(1) with respect to any such Affiliate Transaction involving or having a
value of more than $1 million, the Company shall have (x) obtained the approval
of a majority of the Board of Directors of the Company and (y) either obtained
the approval of a majority of the Company's disinterested directors or obtained
an opinion of a qualified independent financial advisor to the effect that such
Affiliate Transaction is fair to the Company, the Issuer or such Restricted
Subsidiary, as the case may be, from a financial point of view, and
(2) with respect to any such Affiliate Transaction involving or having a
value of more than $10 million, the Company shall have (x) obtained the approval
of a majority of the Board of Directors of the Company and (y) delivered to the
Trustee an opinion of a qualified independent financial advisor to the effect
that such Affiliate Transaction is fair to the Company, the Issuer or such
Restricted Subsidiary, as the case may be, from a financial point of view.
The Indenture will also provide that notwithstanding the foregoing, an
Affiliate Transaction will not include:
(1) any contract, agreement or understanding with, or for the benefit of,
or plan for the benefit of, employees of the Company or its Subsidiaries
generally (in their capacities as such) that has been approved by the Board
of Directors of the Company,
(2) Capital Stock issuances to directors, officers and employees of the
Company or its Subsidiaries pursuant to plans approved by the stockholders of
the Company,
(3) any Restricted Payment otherwise permitted under the "Limitations on
Restricted Payments" covenant,
(4) any transaction between or among the Company and one or more
Restricted Subsidiaries or between or among Restricted Subsidiaries (provided,
however, no such transaction shall involve any other Affiliate of the Company
(other than an Unrestricted Subsidiary to the extent the applicable amount
constitutes a Restricted Payment permitted by the Indenture)),
(5) 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 the Company or a
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Restricted Subsidiary,
(6) 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 the Company, and
(7) the payment of reasonable and customary fees to, and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Company, the Issuer or any Restricted Subsidiary.
Limitations on Dispositions of Assets. The Indenture provides that the
Company and the Issuer will not, and will not cause or permit any Restricted
Subsidiary to, make any Asset Disposition unless:
(x) the Company (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) not less than 70% of the consideration received by the Company (or
such Restricted Subsidiary, as the case may be) is in the form of
cash, Cash Equivalents and Marketable Securities.
The amount of (i) any Indebtedness (other than any Indebtedness
subordinated to the notes) of the Company or any Restricted Subsidiary that is
actually assumed by the transferee in such Asset Disposition and (ii) the fair
market value (as determined in good faith by the Board of Directors of the
Company) of any property or assets received that are used or useful in a Real
Estate Business, shall be deemed to be consideration required by clause (y)
above for purposes of determining the percentage of such consideration received
by the Company or the Restricted Subsidiaries.
The Net Cash Proceeds of an Asset Disposition shall, within one year, at
the Company's election, (a) be used by the Company or a Restricted Subsidiary in
the business of the construction and sale of homes conducted by the Company and
the Restricted Subsidiaries or any other business of the Company or a Restricted
Subsidiary existing at the time of such Asset Disposition or (b) to the extent
not so used, be applied to make a Net Cash Proceeds offer for the notes and, if
the Company or a Restricted Subsidiary elects or is required to do so repay,
purchase or redeem any other unsubordinated Indebtedness (on a pro rata basis if
the amount available for such repayment, purchase or redemption is less than the
aggregate amount of (i) the principal amount of the Notes tendered in such Net
Cash Proceeds Offer and (ii) the lesser of the principal amount, or accreted
value, of such other unsubordinated Indebtedness, 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 and liquidated damages, if any, to the date of repurchase or
repayment.
Notwithstanding the foregoing, (A) the Company will not be required to
apply such Net Cash Proceeds to the repurchase of notes in accordance with
clause (b) of the preceding sentence 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 Net Cash Proceeds offer
shall have been made, exceed 5% of Consolidated Tangible Assets and (B) in
connection with an Asset Disposition, the Company and the Restricted
Subsidiaries will not be required to comply with the requirements of clause (y)
of the first sentence of the first paragraph of this covenant 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, does not
exceed 5% of Consolidated Tangible Assets; provided, however, that when any non-
cash consideration is converted into cash, such cash shall constitute Net Cash
Proceeds and be subject to the preceding sentence.
Limitations on Liens. The Indenture provides that the Company and the
Issuer will not, and will not cause or permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Liens, 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.
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Limitations on Restrictions Affecting Restricted Subsidiaries. The
Indenture provides that the Company 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:
(1) 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
the Company or any other Restricted Subsidiary, or pay interest on or principal
of any Indebtedness owed to the Company or any other Restricted Subsidiary,
(2) make loans or advances to the Company or any other Restricted
Subsidiary, or
(3) transfer any of its property or assets to the Company or any other
Restricted Subsidiary, except for
(a) encumbrances or restrictions existing under or by reason of
applicable law,
(b) contractual encumbrances or restrictions in effect on the
Issue Date and any amendments, modifications, restatements,
renewals, supplements, refundings, replacements or
refinancings thereof, provided 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 on
May 4, 1999,
(c) any restrictions or encumbrances arising under Acquired
Indebtedness; provided, 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,
(d) any restrictions or encumbrances arising in connection with
Refinancing Indebtedness; provided, however, that any
restrictions and encumbrances of the type described in this
clause (d) 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,
(e) 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 the Company to pay dividends or make or repay
loans or advances prior to default thereunder,
(f) reasonable and customary borrowing base covenants set forth
in agreements evidencing Indebtedness otherwise permitted by
the indenture,
(g) customary non-assignment provisions in leases, licenses,
encumbrances, contracts or similar assets entered into or
acquired in the ordinary course of business,
(h) 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,
(i) encumbrances or restrictions existing under or by reason of
the indenture or the notes,
(j) purchase money obligations that impose restrictions on the
property so acquired of the nature described in clause (3)
of the preceding paragraph,
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(k) Liens permitted under the indenture securing Indebtedness
that limit the right of the debtor to dispose of the assets
subject to such Lien,
(l) 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,
(m) customary provisions of any franchise, distribution or
similar agreements,
(n) restrictions on cash or other deposits or net worth imposed
by contracts entered into in the ordinary course of
business, and
(o) any encumbrance or restrictions of the type referred to in
clauses (1), (2) or (3) of the first paragraph of this
section imposed by any amendments, modifications,
restatements, renewals, supplements, refinancings,
replacements or refinancings of the contracts, instruments
or obligations referred to in clauses (a) through (n) of
this paragraph, provided that such amendments,
modifications, restatements, renewals, supplements,
refundings, replacements or refinancings are, in the good
faith judgment of the Company'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.
Limitations on Mergers, Consolidations and Sales of Assets. The indenture
provides that neither the Company nor 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 the Company, 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:
(1) the Person formed by or surviving such consolidation or merger (if
other than the Company, 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 "Successor"), 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 Company, the Issuer or the Guarantor, as the case
may be, under the notes or a Guarantee, as the case may be, and the
indenture,
(2) immediately after giving effect to such transaction, no Default or
Event of Default has occurred and is continuing,
(3) in the case of a transaction involving the Company, immediately after
giving effect to such transaction and the use of any net proceeds therefrom,
on a pro forma basis, the Consolidated Net Worth of the Company or the
Successor as the case may be, would be at least equal to the Consolidated Net
Worth of the Company immediately prior to such transaction (exclusive of any
adjustments to Consolidated Net Worth attributable to transaction costs) less
any amount treated as a Restricted Payment in connection with such
transaction in accordance with the Indenture, and
(4) immediately after giving effect to such transaction, the Company (or
its Successor) could incur at least $1.00 of Indebtedness pursuant to the
first paragraph of the "Limitation on Indebtedness" covenant.
The foregoing provisions shall not apply to:
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(a) 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 as provided under "The
Guarantees" above, or
(b) a transaction the purpose of which is to change the state of
incorporation of the Company, the Issuer or any Guarantor.
Reports to Holders of Notes. The Company shall file with the Commission
the annual reports and the information, documents and other reports required to
be filed pursuant to Section 13 or 15(d) of the Exchange Act. The Company shall
file with the Trustee and mail to each Holder of record of Notes such reports,
information and documents within 15 days after it files them with the
Commission. In the event that the Company is no longer subject to these
periodic 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 the Company is required to furnish such reports to its stockholders
pursuant to the Exchange Act, the Company will cause its consolidated financial
statements and a "Management's Discussion and Analysis of Results of Operations
and Financial Condition" written report, similar to those that would have been
required to appear in annual or quarterly reports, to be delivered to Holders of
notes.
Events of Default
The following are Events of Default under the Indenture:
(1) the failure by the Company, the Issuer and the Guarantors to pay
interest on, or liquidated damages with respect to, any Note when the same
becomes due and payable and the continuance of any such failure for a period of
30 days;
(2) the failure by the Company, 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;
(3) the failure by the Company, 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
covenants described under "Certain Covenants--Repurchase of Notes upon Change of
Control" and "Limitations on Mergers, Consolidations and Sales of Assets," which
will constitute Events of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company, the Issuer or any Restricted Subsidiary that has
an outstanding principal amount of $10 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;
(5) the failure by the Company, the Issuer or any Restricted Subsidiary to
make any principal or interest payment in an amount of $10 million or more,
individually or in the aggregate, in respect of Indebtedness (other than Non-
Recourse Indebtedness) of the Company or any Restricted Subsidiary within 30
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);
(6) a final judgment or judgments that exceed $10 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 Company, 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;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
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(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(a) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an
involuntary case,
(b) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a Custodian
for all or substantially all of the property of the Company
or any Restricted Subsidiary that is a Significant
Subsidiary, or
(c) orders the liquidation of the Company or any Restricted
Subsidiary that is a Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days, or
(9) 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).
A Default as described in subclause (3) above will not be deemed an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount of the then outstanding Notes notify the Company and
the Trustee, of the Default and (except in the case of a default with respect to
covenants described under "Certain Covenants--Repurchase of Notes upon Change of
Control" and "Limitations on Mergers, Consolidations and Sales of Assets") the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." If such a Default is cured within such
time period, it ceases.
If an Event of Default (other than an Event of Default with respect to the
Company resulting from subclauses (7) or (8) above), shall have occurred and be
continuing under the Indenture, the Trustee by notice to the Company, or the
Holders of at least 25 percent in principal amount of the notes then outstanding
by notice to the Company 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 the Company specified in subclauses (7) or (8) above
occurs, such an amount will ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Trustee and the
Company or any Holder.
The Holders of a majority in principal amount of the notes then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) on the notes under the indenture. Holders of a majority in
principal amount of the then outstanding notes may rescind an acceleration and
its consequence (except an acceleration due to nonpayment of principal or
interest on the notes) if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (other than the non-payment of
accelerated principal) have been cured or waived.
The Holders may not enforce the provisions of the indenture, the notes or
the Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the notes then
outstanding may direct the Trustee in its exercise of any trust or power,
provided, however, that such direction does
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not conflict with the terms of the indenture. The Trustee may withhold from the
Holders notice of any continuing Default or Event of Default (except any Default
or Event of Default in payment of principal or interest on the notes or that
resulted from the failure to comply with the covenant entitled "Repurchase of
Notes upon Change of Control") if the Trustee determines that withholding such
notice is in the Holders' interest.
The Company is required to deliver to the Trustee an annual statement
regarding compliance with the Indenture, and include in such statement, if any
officer of the Company is aware of any Default or Event of Default, a statement
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto. In addition, the Company is
required to deliver to the Trustee prompt written notice of the occurrence of
any Default or Event of Default.
Defeasance of Indenture
The indenture permits the Company, the Issuer and the Guarantors to
terminate all of their respective obligations under the indenture with respect
to the notes and the Guarantees, other than the obligation to pay interest on
and the principal of the notes and certain other obligations, at any time by
(1) depositing in trust with the Trustee, under an irrevocable trust
agreement, money or U.S. government obligations in an amount
sufficient to pay principal of and interest and liquidated damages, if
any, on the Notes to their maturity, and
(2) complying with certain other conditions, including delivery to the
Trustee of an opinion of counsel or a ruling received from the
Internal Revenue Service to the effect that Holders will not recognize
income, gain or loss for federal income tax purposes as a result of
the Company's exercise of such right and will be subject to federal
income tax on the same amount and in the same manner and at the same
times as would have been the case otherwise.
In addition, the indenture permits the Company, the Issuer and the
Guarantors to terminate all of their obligations under the indenture with
respect to the notes and the Guarantees (including the obligations to pay
interest on and the principal of the notes and certain other obligations), at
any time by
(1) depositing in trust with the Trustee, under an irrevocable trust
agreement, money or U.S. government obligations in an amount
sufficient to pay principal of and interest and liquidated damages, if
any, on the notes to their maturity, and
(2) complying with certain other conditions, including delivery to the
Trustee of an opinion of counsel or a ruling, received from the
Internal Revenue Service, to the effect that Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of the Company's exercise of such right and will be subject to
federal income tax on the same amount and in the same manner and at
the same times as would have been the case otherwise, which opinion of
counsel is based upon a change in the applicable federal tax law since
the date of the Indenture.
Transfer and Exchange
A Holder may transfer or exchange notes only in accordance with the
provisions of 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.
Amendment, Supplement and Waiver
Subject to certain exceptions, the indenture, the notes or the Guarantees
may be amended or supplemented with the consent (which may include consents
obtained in connection with a tender offer or exchange offer for notes) of the
Holders of at least a majority in principal amount of the notes then
outstanding, and any existing Default under, or compliance with any provision of
the Indenture may be waived (other than any continuing Default or Event of
Default in the payment of interest on or the principal of the notes) with the
consent (which may include
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consents obtained in connection with a tender offer or exchange offer for notes)
of the Holders of a majority in principal amount of the notes then outstanding.
Without the consent of any Holder, the Company, the Issuer, the Guarantors and
the Trustee may amend or supplement the indenture, the notes or the Guarantees
to cure any ambiguity, defect or inconsistency; to comply with the "Limitations
on Mergers, Consolidations and Sales of Assets" covenant set forth in the
indenture; to provide for uncertificated notes in addition to or in place of
certificated notes; to make any change that does not adversely affect the legal
rights of any Holder; to add a Guarantor; or to delete a Guarantor which, in
accordance with the terms of the indenture, ceases to be liable on its
Guarantee.
Without the consent of each Holder affected, the Company, the Issuer, the
Guarantors and the Trustee may not:
(1) reduce the amount of notes whose Holders must consent to an amendment,
supplement or waiver,
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any note,
(3) reduce the principal of or change the fixed maturity of any note or
alter the provisions (including related definitions) with respect to
redemptions described under "Optional Redemption" or with respect to
mandatory offers to repurchase Notes described under "Limitations on
Dispositions of Assets" or "Repurchase of Notes upon Change of
Control,"
(4) make any note payable in money other than that stated in the note,
(5) make any change in the "Waiver of Past Defaults and Compliance with
Indenture Provisions," "Rights of Holders to Receive Payment" or the
"With Consent of Holders" sections set forth in the Indenture,
(6) modify the ranking or priority of the notes or any Guarantee,
(7) release any Guarantor from any of its obligations under its Guarantee
or the indenture otherwise than in accordance with the indenture, or
(8) waive a continuing Default or Event of Default in the payment of
principal of or interest on the notes.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Indenture (and our obligation to obtain any
such consent otherwise required from such Holder) may be subject to the
requirement that such Holder shall have been the Holder of record of any Notes
with respect to which such consent is required or sought as of a date identified
by the Trustee in a notice furnished to Holders in accordance with the terms of
the indenture.
Concerning the Trustee
The indenture contains certain limitations on the rights of the Trustee, as
a creditor of the Company, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest (as defined in the Indenture),
it must eliminate such conflict or resign. The Trustee is also trustee with
respect to our 9 3/4% Subordinated Notes due 2005 and 9 1/8% Senior Notes due
2009.
Governing Law
The indenture, the notes and the Guarantees will be governed by the laws of
the State of New York without giving effect to principles of conflict of laws.
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Definitions of Certain Terms Used in the Indenture
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
terms used in the Indenture.
"Acquired Indebtedness" means (1) with respect to any Person that becomes a
Restricted Subsidiary (or is merged into the Company, 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 the Company, 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 the Company,
the Issuer or any Restricted Subsidiary) and (2) with respect to the Company,
the Issuer or any Restricted Subsidiary, any Indebtedness expressly assumed by
the Company, the Issuer or any Restricted Subsidiary in connection with the
acquisition of any assets from another Person (other than the Company, 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 (1) or (2) of the preceding sentence shall be deemed to have
been incurred by the Company or a Restricted Subsidiary, as the case may be, at
the time such Person becomes a Restricted Subsidiary (or is merged into the
Company, the Issuer or any Restricted Subsidiary) in the case of clause (1) or
at the time of the acquisition of such assets in the case of clause (2), but
shall not be deemed Acquired Indebtedness.
"Affiliate" means, when used with reference to a specified Person any
Person direct or indirectly controlling, or controlled by or under direct or
indirect common control with the Person specified.
"Asset Acquisition" means (1) an Investment by the Company, 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 the Company, the Issuer or any Restricted
Subsidiary or (2) the acquisition by the Company, 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 unit or line of business of such Person or
which is otherwise outside the ordinary course of business.
"Asset Disposition" 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 "transaction") by the Company, 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 million. The term "Asset Disposition"
shall not include:
(1) a transaction between the Company, the Issuer and any Restricted
Subsidiary or a transaction between Restricted Subsidiaries,
(2) 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 (A) homes, improved land and unimproved land and (B) real estate
(including related amenities and improvements),
(3) a transaction involving the sale of Capital Stock of, or the
disposition of assets in, an Unrestricted Subsidiary,
(4) any exchange or swap of assets of the Company, the Issuer or any
Restricted Subsidiary for assets that (x) are to be used by the
Company, the Issuer or any Restricted Subsidiary in the ordinary
course of its Real Estate Business and (y) have a Fair Market Value
not less than the Fair Market Value of the assets exchanged or
swapped,
(5) any sale, transfer, conveyance, lease or other disposition of assets
and properties that is governed by the provisions relating to
"Limitations on Mergers, Consolidation and Sales of Assets," or
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(6) dispositions of mortgage loans and related assets and mortgage-backed
securities in the ordinary course of a mortgage lending business.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Bankruptcy Law" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person'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.
"Capitalized Lease Obligations" 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.
"Cash Equivalents" means
(1) U.S. dollars;
(2) 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;
(3) certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition, bankers' 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
million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) entered into
with any financial institution meeting the qualifications specified in clause
(3) above;
(5) commercial paper rated P-1, A-1 or the equivalent thereof by Moody's
or S&P, respectively, and in each case maturing within six months after the date
of acquisition; and
(6) investments in money market funds substantially all of the assets of
which consist of securities described in the foregoing clauses (1) through (5).
"Change of Control" means
(1) any sale, lease or other transfer (in one transaction or a series of
transactions) of all or substantially all of the consolidated assets
of the Company and its Restricted Subsidiaries to any Person (other
than a Restricted Subsidiary); provided, however, that a transaction
where the holders of all classes of Common Equity of the Company
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;
(2) a "person" or "group" (within the meaning of Section 13(d) of the
Exchange Act (other than (x) the Company or (y) the Permitted
Hovnanian Holders) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of Common Equity of the Company
representing more than 50% of the voting power of the Common Equity of
the Company;
(3) Continuing Directors cease to constitute at least a majority of the
Board of Directors of the Company;
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(4) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; provided, however, that a
liquidation or dissolution of the Company which is part of a
transaction that does not constitute a Change of Control under the
proviso contained in clause (1) above shall not constitute a Change of
Control; or
(5) a change of control shall occur as defined in the instrument governing
any publicly traded debt securities of the Company or the Issuer which
requires the Company or the Issuer to repay or repurchase such debt
securities.
"Common Equity" of any Person means Capital Stock of such Person that is
generally entitled to (1) vote in the election of directors of such Person or
(2) 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.
"Consolidated Adjusted Tangible Assets" of the Company as of any date means
the Consolidated Tangible Assets of the Company, the Issuer and the Restricted
Subsidiaries at the end of the fiscal quarter immediately preceding the date
less any assets securing any Non-Recourse Indebtedness, as determined in
accordance with GAAP.
"Consolidated Cash Flow Available for Fixed Charges" means, for any period
Consolidated Net Income for such period plus (each to the extent deducted in
calculating such Consolidated Net Income and determined in accordance with GAAP)
the sum for such period, without duplication, of:
(1) income taxes,
(2) Consolidated Interest Expense,
(3) depreciation and amortization expenses and other non-cash charges to
earnings and
(4) interest and financing fees and expenses which were previously
capitalized and which are amortized to cost of sales, minus
all other non-cash items (other than the receipt of notes receivable)
increasing such Consolidated Net Income.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
determination date, the ratio of (x) Consolidated Cash Flow Available for Fixed
Charges for the prior four full fiscal quarters (the "Four Quarter Period") for
which financial results have been reported immediately preceding the
determination date (the "Transaction Date"), to (y) the aggregate Consolidated
Interest Incurred for the Four Quarter Period. For purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Interest
Incurred" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to
(1) the incurrence or the repayment, repurchase, defeasance or other
discharge or the assumption by another Person that is not an Affiliate
(collectively, "repayment") of any Indebtedness of the Company, 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 pro forma basis by the application of any proceeds of
the incurrence of Indebtedness giving rise to the need to make such
calculation);
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(2) 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 the Company, 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 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 (2) of the definition of "Consolidated Net Income," 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; provided, however, 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 "Consolidated Net Income,"
other than clause (2) thereof, as if it applied to the Person or
assets involved before they were acquired, and
(3) 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.
Furthermore, in calculating "Consolidated Cash Flow Available for Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio,"
(a) interest on Indebtedness in respect of which a pro forma
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
(b) notwithstanding clause (a) 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.
"Consolidated Interest Expense" of the Company for any period means the
Interest Expense of the Company, the Issuer and the Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Incurred" for any period means the Interest Incurred
of the Company, the Issuer and the Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" for any period means the aggregate net income (or
loss) of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided that there will be excluded
from such net income (loss) (to the extent otherwise included therein), without
duplication:
(1) the net income (or loss) of (x) any Unrestricted Subsidiary (other
than a Mortgage Subsidiary) or (y) any Person (other than a Restricted
Subsidiary or a Mortgage Subsidiary) in which any Person other than
the Company, 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 the Company, 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 the Company's, the Issuer's or such Restricted Subsidiary's (as
applicable) pro rata share of such Unrestricted Subsidiary's or such
other Person's net income earned during such period,
(2) except to the extent includable in Consolidated Net Income pursuant to
the foregoing clause (1), the net income (or loss) of any Person that
accrued prior to the date that (a) such Person becomes a Restricted
Subsidiary or is merged with or into or consolidated with the Company,
the Issuer or
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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 (b) the
assets of such Person are acquired by the Company or any Restricted
Subsidiary,
(3) 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,
(4) the gains or losses, together with any related provision for taxes,
realized during such period by the Company, the Issuer or any
Restricted Subsidiary resulting from (a) the acquisition of
securities, or extinguishment of Indebtedness, of the Company or any
Restricted Subsidiary or (b) any Asset Disposition by the Company or
any Restricted Subsidiary,
(5) any extraordinary gain or loss together with any related provision for
taxes, realized by the Company, the Issuer or any Restricted
Subsidiary, and
(6) any non-recurring expense recorded by the Company, the Issuer or any
Restricted Subsidiary in connection with a merger accounted for as a
"pooling-of-interests" transaction;
provided, further, that for purposes of calculating Consolidated Net Income
solely as it relates to clause (3) of the first paragraph of the "Limitations on
Restricted Payments" covenant, clause (4)(b) above shall not be applicable.
"Consolidated Net Worth" of any Person as of any date means the
stockholders' equity (including any Preferred Stock that is classified as equity
under GAAP, other than Disqualified Stock) of such Person and its Restricted
Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less any
amount attributable to Unrestricted Subsidiaries.
"Consolidated Tangible Assets" of the Company as of any date means the
total amount of assets of the Company, the Issuer and the Restricted
Subsidiaries (less applicable reserves) on a consolidated basis at the end of
the fiscal quarter immediately preceding such date, as determined in accordance
with GAAP, less (1) Intangible Assets and (2) appropriate adjustments on account
of minority interests of other Persons holding equity investments in Restricted
Subsidiaries.
"Continuing Director" means a director who either was a member of the Board
of Directors of the Company on the date of the Indenture or who became a
director of the Company subsequent to such date and whose election or nomination
for election by the Company's stockholders, was duly approved by a majority of
the Continuing Directors on the Board of Directors of the Company at the time of
such approval, either by a specific vote or by approval of the proxy statement
issued by the Company on behalf of the entire Board of Directors of the Company
in which such individual is named as nominee for director.
"control" 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 "controlling" and "controlled" have meanings correlative to the foregoing.
"Credit Facilities" means, collectively, each of the credit facilities and
lines of credit of the Company or one or more Restricted Subsidiaries in
existence on the Issue Date and one or more other facilities and lines of credit
among or between the Company or one or more Restricted Subsidiaries and one or
more lenders pursuant to which the Company 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.
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"Currency Agreement" 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.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, an Event of Default.
"Designation Amount" has the meaning provided in the definition of
Unrestricted Subsidiary.
"Disqualified Stock" 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, (1) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Notes or (2) is convertible into or exchangeable or
exercisable for (whether at the option of the issuer or the holder thereof) (a)
debt securities or (b) any Capital Stock referred to in (1) above, in each case,
at any time prior to the final maturity date of the Notes; provided, however,
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 the Company to repurchase or redeem such Capital Stock upon the
occurrence of a change in control occurring prior to the final maturity date of
the Notes shall not constitute Disqualified Stock if the change in control
provision applicable to such Capital Stock are no more favorable to such holders
than the provisions described under the caption "Certain Covenants--Repurchase
of Notes upon Change of Control" and such Capital Stock specifically provides
that the Company will not repurchase or redeem any such Capital Stock pursuant
to such provisions prior to the Company's repurchase of the Notes as are
required pursuant to the provisions described under the caption "Certain
Covenants--Repurchase of Notes upon Change of Control."
"Event of Default" has the meaning set forth in "Events of Default."
"Fair Market Value" 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'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 the Company or a duly authorized committee thereof, as evidenced by
a resolution of such Board or committee.
"GAAP" 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 May 4, 1999.
"Guarantee" means the guarantee of the Notes by the Company and each
Guarantor under the Indenture.
"Guarantors" means (i) initially, each of the Company's Subsidiaries,
except the Issuer, four subsidiaries formerly engaged in the issuance of
collateralized mortgage obligations, a mortgage lending subsidiary, a subsidiary
holding and licensing Hovnanian trade name and a subsidiary engaged in
homebuilding activities in Poland and (ii) each of the Company's Subsidiaries
which becomes a Guarantor of the Notes pursuant to the provisions of the
Indenture.
"Holder" means the Person in whose name a Note is registered in the books
of the Registrar for the Notes.
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"Indebtedness" of any Person means, without duplication,
(1) any liability of such Person (a) 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 instrument 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), (b) 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 (c) in respect of Capitalized Lease Obligations (to the extent of
the Attributable Debt in respect thereof),
(2) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee; provided however, that Indebtedness of the Company and
its Restricted Subsidiaries will not include the obligations of the Company 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 the "Limitations on Restricted Payments"
covenant,
(3) 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
(4) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
provided, 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 (a) 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, (b) the maximum liability of such Person for
any contingent obligations under clause (1) above at such date, net of an
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP, and (c) in the case of clause (4) above, the lesser of (x) 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) the amount of the Indebtedness secured.
"Intangible Assets" of the Company means all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, write-ups of assets over their prior carrying
value (other than write-ups which occurred prior to the Issue Date and other
than, in connection with the acquisition of an asset, the write-up of the value
of such asset (within one year of its acquisition) to its fair market value in
accordance with GAAP) and all other items which would be treated as intangible
on the consolidated balance sheet of the Company, the Issuer and the Restricted
Subsidiaries prepared in accordance with GAAP.
"Interest Expense" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" 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' 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
(ii) all interest actually paid by the Company 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 the
Company, the Issuer or any Restricted Subsidiary during such period; provided,
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.
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"Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of (1) Interest Expense and (2) all
capitalized interest and amortized debt issuance costs.
"Interest Protection Agreement" 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 Debt
permitted to be incurred under the Indenture.
"Investments" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) 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.
"Issue Date" means the date on which the Notes are originally issued under
the Indenture.
"Lien" 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.
"Marketable Securities" means (a) equity securities that are listed on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq National
Market and (b) debt securities that are rated by a nationally recognized rating
agency, listed on the New York Stock Exchange or the American Stock Exchange or
covered by at least two reputable market makers.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt rating business.
"Mortgage Subsidiary" means any Subsidiary of the Company substantially all
of whose operations consist of the mortgage lending business.
"Net Cash Proceeds" means with respect to an Asset Disposition, cash
payments received (including any cash 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's
indemnities or other obligations to the purchaser undertaken by the Company, 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 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.
"Non-Recourse Indebtedness" with respect to any Person means Indebtedness
of such Person for which (1) 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 days after the acquisition of such property and (2) 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
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(a) environmental warranties and indemnities, or (b) 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' liens.
"Notes" means the notes offered pursuant to this prospectus supplement.
"Permitted Hovnanian Holders" means, collectively, Kevork S. Hovnanian, Ara
K. Hovnanian, the members of their immediate families, the respective estates,
spouses, heirs, ancestors, lineal descendants, legatees and legal
representatives of any of the foregoing and the trustee of any bona fide 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.
"Permitted Indebtedness" means
(1) Indebtedness under Credit Facilities which does not exceed $250
million principal amount outstanding at any one time;
(2) Indebtedness in respect of obligations of the Company and its
Subsidiaries to the trustees under indentures for debt securities;
(3) intercompany debt obligations of (i) the Company to the Issuer, (ii)
the Issuer to the Company, (iii) the Company or the Issuer to any Restricted
Subsidiary and (iv) any Restricted Subsidiary to the Company or the Issuer or
any other Restricted Subsidiary; provided, however, that any Indebtedness of any
Restricted Subsidiary or the Issuer or the Company 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 the
first paragraph of the covenant described under "Limitations on Indebtedness" at
the time the Restricted Subsidiary in question ceases to be a Restricted
Subsidiary;
(4) Indebtedness of the Company 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;
(5) Purchase Money Indebtedness;
(6) Capitalized Lease Obligations;
(7) 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;
(8) Indebtedness secured only by office buildings owned or occupied by the
Company or any Restricted Subsidiary, which Indebtedness does not exceed $10
million aggregate principal amount outstanding at any one time;
(9) 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
(10) Indebtedness of the Company or any Restricted Subsidiary which,
together with all other Indebtedness under this clause (10), does not exceed $30
million aggregate principal amount outstanding at any one time.
"Permitted Investment" means
(1) Cash Equivalents;
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(2) any Investment in the Company, 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
substantially all of the assets of it or an operating unit or line of business
to, the Company or a Restricted Subsidiary;
(3) any receivables, loans or other consideration taken by the Company,
the Issuer or any Restricted Subsidiary in connection with any asset sale
otherwise permitted by the Indenture;
(4) 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;
(5) Investments in Currency Agreements or Interest Protection Agreements
described in the definition of Permitted Indebtedness;
(6) any loan or advance to an executive officer, director or employee of
the Company or any Restricted Subsidiary made in the ordinary course of business
or in accordance with past practice; provided, however, that any such loan or
advance exceeding $1 million shall have been approved by the Board of Directors
of the Company or a committee thereof consisting of disinterested members;
(7) Investments in joint ventures in a Real Estate Business with
unaffiliated third parties in an aggregate amount at any time outstanding not to
exceed 10% of Consolidated Tangible Assets at such time;
(8) Investments in interests in issuances of collateralized mortgage
obligations, mortgages, mortgage loan servicing, or other mortgage related
assets;
(9) obligations of the Company or a Restricted Subsidiary under warehouse
lines of credit of Mortgage Subsidiaries to repurchase mortgages; and
(10) Investments in an aggregate amount outstanding not to exceed $10
million.
"Permitted Liens" means
(1) Liens for taxes, assessments or governmental or quasi-government
charges or claims that (a) are not yet delinquent, (b) 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 (c) encumber solely property abandoned or in the process of being
abandoned,
(2) statutory Liens of landlords and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other Liens imposed by law
and arising in the ordinary course of business and with respect to amounts that,
to the extent applicable, either (a) are not yet delinquent or (b) 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,
(3) 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' compensation, unemployment
insurance and other types of social security,
(4) 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'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 (1)(a) of the definition of "Indebtedness"), in each case incurred in the
ordinary course of business of the Company, the Issuer and the Restricted
Subsidiaries,
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(5) attachment or judgment Liens not giving rise to a Default or an Event
of Default,
(6) 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 the Company, the Issuer and the Restricted Subsidiaries,
(7) 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 the
Company, the Issuer and the Restricted Subsidiaries,
(8) Liens securing Indebtedness incurred pursuant to clause (8) or (9) of
the definition of Permitted Indebtedness,
(9) Liens securing Indebtedness of the Company, the Issuer or any
Restricted Subsidiary permitted to be incurred under the Indenture; provided,
that the aggregate amount of all consolidated Indebtedness of the Company, the
Issuer and the Restricted Subsidiaries (including, with respect to Capitalized
Lease Obligations, the Attributable Debt in respect thereof) secured by Liens
(other than Non-Recourse Indebtedness and Indebtedness incurred pursuant to
clause (9) of the definition of Permitted Indebtedness) shall not exceed 40% of
Consolidated Adjusted Tangible Assets at any one time outstanding (after giving
effect to the incurrence of such Indebtedness and the use of the proceeds
thereof),
(10) Liens securing Non-Recourse Indebtedness of the Company, the Issuer or
any Restricted Subsidiary; provided, that such Liens apply only to the property
financed out of the net proceeds of such Non-Recourse Indebtedness within 90
days after the incurrence of such Non-Recourse Indebtedness,
(11) Liens securing Purchase Money Indebtedness; provided that such Liens
apply only to the property acquired, constructed or improved with the proceeds
of such Purchase Money Indebtedness within 90 days after the incurrence of such
Purchase Money Indebtedness,
(12) Liens on property or assets of the Company, the Issuer or any
Restricted Subsidiary securing Indebtedness of the Company, the Issuer or any
Restricted Subsidiary owing to the Company, the Issuer or one or more Restricted
Subsidiaries,
(13) leases or subleases granted to others not materially interfering with
the ordinary course of business of the Company and the Restricted Subsidiaries,
(14) purchase money security interests (including, without limitation,
Capitalized Lease Obligations); provided, that such Liens apply only to the
Property acquired and the related Indebtedness is incurred within 90 days after
the acquisition of such Property,
(15) any right of first refusal, right of first offer, option, contract or
other agreement to sell an asset; provided that such sale is not otherwise
prohibited under the Indenture,
(16) any right of a lender or lenders to which the Company, 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 the Company, the Issuer or a Restricted
Subsidiary with or held by such lender or lenders or its Affiliates,
(17) 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 the Company, the Issuer and the Restricted Subsidiaries,
(18) Liens for homeowner and property owner association developments and
assessments ,
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(19) Liens securing Refinancing Indebtedness; provided, that such Liens
extend only to the assets securing the Indebtedness being refinanced,
(20) Liens incurred in the ordinary course of business as security for the
obligations of the Company, the Issuer and the Restricted Subsidiaries with
respect to indemnification in respect of title insurance providers,
(21) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary of the
Company or becomes a Subsidiary of the Company; provided 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 the Company or the Subsidiary or acquired by
the Company or its Subsidiaries,
(22) Liens on property existing at the time of acquisition thereof by the
Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition,
(23) Liens existing on the Issue Date and any extensions, renewals or
replacements thereof, and
(24) Liens on specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods.
"Person" 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.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Property" 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.
"Public Equity Offering" means an underwritten public offering of Common
Equity of the Company pursuant to an effective registration statement filed
under the Securities Act (excluding registration statements filed on Form S-8 or
any successor form).
"Purchase Money Indebtedness" means Indebtedness of the Company, 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 the Company, the
Issuer and the Restricted Subsidiaries; provided, however, that (1) the
aggregate principal amount of such Indebtedness shall not exceed such purchase
price or cost and (2) such Indebtedness shall be incurred no later than 90 days
after the acquisition of such property or completion of such construction or
improvement.
"Qualified Stock" means Capital Stock of the Company other than
Disqualified Stock.
"Real Estate Business" means homebuilding, housing construction, real
estate development or construction and related real estate activities, including
the provision of mortgage financing or title insurance.
"Refinancing Indebtedness" means Indebtedness (to the extent not Permitted
Indebtedness) that refunds, refinances or extends any Indebtedness of the
Company, the Issuer or any Restricted Subsidiary (to the extent not Permitted
Indebtedness) outstanding on the Issue Date or other Indebtedness (to the extent
not Permitted Indebtedness) permitted to be incurred by the Company, the Issuer
or any Restricted Subsidiary pursuant to the terms of the Indenture, but only to
the extent that
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(1) 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,
(2) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Indebtedness being refunded, refinanced or extended
or (b) after the maturity date of the Notes,
(3) 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 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
(4) 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.
"Restricted Payment" means any of the following:
(1) the declaration or payment of any dividend or any other distribution
on Capital Stock of the Company, 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 the Company, the Issuer
or any Restricted Subsidiary (other than (a) dividends or
distributions payable solely in Qualified Stock and (b) in the case of
the Issuer or Restricted Subsidiaries, dividends or distributions
payable to the Company, the Issuer or a Restricted Subsidiary);
(2) the purchase, redemption or other acquisition or retirement for value
of any Capital Stock of the Company, the Issuer or any Restricted
Subsidiary (other than a payment made to the Company, the Issuer or
any Restricted Subsidiary); and
(3) any Investment (other than any Permitted Investment), including any
Investment in an Unrestricted Subsidiary (including by the designation
of a Subsidiary of the Company as an Unrestricted Subsidiary) and any
amounts paid in accordance with clause (2) of the definition of
Indebtedness.
"Restricted Subsidiary" means any Subsidiary of the Company which is not an
Unrestricted Subsidiary.
"S&P" means Standard and Poor's Ratings Group or any successor to its debt
rating business.
"Significant Subsidiary" means any Subsidiary of the Company which would
constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X
under the Securities Act and the Exchange Act as in effect on the Issue Date.
"Subsidiary" 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.
"Trustee" means the party named as such above until a successor replaces
such party in accordance with the applicable provisions of the Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary of the Company so designated
by a resolution adopted by the Board of Directors of the Company or a duly
authorized committee thereof as provided below; provided that (a) the holders of
Indebtedness thereof do not have direct or indirect recourse against the
Company, the Issuer or any Restricted Subsidiary, and neither the Company, 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
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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 "Non-Recourse Indebtedness," or to the extent such Indebtedness is
a guarantee by such Subsidiary of Indebtedness of the Company, the Issuer or a
Restricted Subsidiary and (b) 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 the Company, the Issuer or any
Restricted Subsidiary. The Unrestricted Subsidiaries will be the following: K.
Hovnanian Mortgage, Inc., Hovnanian Financial Services I, Inc., Hovnanian
Financial Services II, Inc., Hovnanian Financial Services III, Inc. and
Hovnanian Financial Services IV, Inc.
Subject to the foregoing, the Board of Directors of the Company or a duly
authorized committee thereof may designate any Subsidiary in addition to those
named above to be an Unrestricted Subsidiary; provided, however, that (1) the
net amount (the "Designation Amount") then outstanding of all previous
Investments by the Company 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 the "Limitations
on Restricted Payments" covenant set forth in the Indenture, to the extent
provided therein, (2) the Company must be permitted under the "Limitations on
Restricted Payments" covenant set forth in the Indenture to make the Restricted
Payment deemed to have been made pursuant to clause (1), and (3) 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 of such Person prior
to such Person's merger with the Company or any Restricted Subsidiary (but not
in contemplation or anticipation of such merger) shall not be counted as an
Investment by the Company or such Restricted Subsidiary if such Subsidiary of
such Person is designated as an Unrestricted Subsidiary.
The Board of Directors of the Company or a duly authorized committee
thereof may also redesignate an Unrestricted Subsidiary to be a Restricted
Subsidiary provided, however, that (1) the Indebtedness of such Unrestricted
Subsidiary as of the date of such redesignation could then be incurred under the
"Limitations on Indebtedness" covenant and (2) immediately after giving effect
to such redesignation and the incurrence of any such additional Indebtedness,
the Company and the Restricted Subsidiaries could incur $1.00 of additional
Indebtedness under the first paragraph of the "Limitations on Indebtedness"
covenant. Any such designation or redesignation by the Board of Directors of
the Company 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 the Company or a committee thereof giving effect to such
designation or redesignation and an Officers' Certificate certifying that such
designation or redesignation complied with the foregoing conditions and setting
forth the underlying calculations of such Officers' 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; provided, however, that the ownership of the general partnership
interest (or a similar member's interest in a limited liability company) by an
Unrestricted Subsidiary shall not cause a Subsidiary of the Company of which
more than 95% of the equity interest is held by the Company or one or more
Restricted Subsidiaries to be deemed an Unrestricted Subsidiary.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or portion thereof at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) 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 (b) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment by
(ii) the sum of all such payments described in clause (i)(a) above.
Concerning the Trustee
The indenture contains certain limitations on the rights of the trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate that conflict within 90 days, apply to the SEC for permission to
continue or resign.
The holders of a majority in principal amount of the outstanding notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the trustee, subject to certain
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exceptions. The indenture provides that in case an Event of Default shall occur
(which shall not be cured), the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of notes, unless that holder shall have offered to the trustee security
and indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture and
registration rights agreement without charge by writing to Hovnanian at 10
Highway 35, Red Bank, NJ 07701, Attention: Corporate Controller.
Book-Entry, Delivery and Form
We initially offered and sold the outstanding notes to QIBs in reliance on
Rule 144A ("Rule 144A Notes"). We also offered and sold in offshore
transactions in reliance on Regulation S ("Regulation S Notes").
Rule 144A Notes were initially represented by one or more notes in
registered, global form without interest coupons (collectively, the "Rule 144A
Global Notes"). The Rule 144A Global Notes were deposited upon issuance with
the trustee as custodian for The Depository Trust Company ("DTC"), in New York,
New York, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant as described below.
Regulation S Notes were initially were represented by one or more temporary
Global Notes in registered, global form without interest coupons (collectively,
the "Regulation S Temporary Global Notes"). The Regulation S Temporary Global
Notes are registered in the name of a nominee of DTC for credit to the
subscribers' respective accounts at Euroclear and Clearstream. Beneficial
interests in the Regulation S Temporary Global Notes may be held only through
Euroclear or Clearstream.
Within a reasonable time period after the expiration of the period of 40
days commencing on the day after the latest of the commencement of the private
offering and the original Issue Date (as defined) of the notes (such period
through and including such 40th day, the "Restricted Period"), the Regulation S
Temporary Global Notes will be exchanged for one or more permanent Global Notes
(collectively, the "Regulation S Permanent Global Notes" and, together with the
Regulation S Temporary Global Notes, the "Regulation S Global Notes" (the
Regulation S Global Notes and Rule 144A Global Notes, collectively being the
"Global Notes")) upon delivery to DTC of certification of compliance with the
transfer restrictions applicable to the notes and pursuant to Regulation S as
provided in the indenture. During the Restricted Period, beneficial interests
in the Regulation S Temporary Global Notes were held only through Euroclear or
Clearstream (as indirect participants in DTC), unless transferred to a person
that takes delivery in the form of an interest in the corresponding Rule 144A
Global Notes in accordance with the certification requirements described below.
See "--Book-Entry, Delivery and Form--Exchanges between Regulation S Notes and
Rule 144A Notes." Beneficial interests in the Rule 144A Global Notes may not be
exchanged for beneficial interests in the Regulation S Global Notes at any time
except in the limited circumstances described below. See "--Book-Entry,
Delivery and Form--Exchanges between Regulation S Notes and Rule 144A Notes."
Except as set forth below, the Global Notes may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for
notes in certificated form ("Certificated Notes") except in the limited
circumstances described below. See "--Book-Entry, Delivery and Form--Exchange
of Book-Entry Notes for Certificated Notes."
Rule 144A Notes (including beneficial interests in the Rule 144A Global
Notes) were subject to certain restrictions on transfer and will bear a
restrictive legend as described under "Notice to Investors." In addition,
transfer of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants
(including, if applicable, those of Euroclear and Clearstream), which may change
from time to time.
The notes may be presented for registration of transfer and exchange at the
offices of the Registrar.
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Depository Procedures
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of Participants. The Participants include securities brokers and
dealers (including the initial purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised us that pursuant to procedures established by it,
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the initial purchaser with portions of the
principal amount of Global Notes; and
(2) ownership of such interests in the Global Notes will be shown on, and
the transfer ownership thereof will be effected only through, records
maintained by DTC (with respect to Participants) or by Participants
and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Notes).
Investors in the Rule 144A Global Notes may hold interests therein directly
through DTC or indirectly through organizations such as Euroclear and
Clearstream. Investors in the Regulation S Global Notes must initially hold
their interests therein through Euroclear or Clearstream, if they are
Participants in such systems, or indirectly through organizations which are
Participants in such systems. After the expiration of the Restricted Period
(but not earlier), investors may also hold interests in the Regulation S Global
Notes through organizations other than Euroclear and Clearstream that are
Participants in the DTC system. Euroclear and Clearstream will hold interests
in the Regulation S Global Notes on behalf of their Participants through
customers' securities accounts in their respective names on the books of their
respective depositaries. The depositaries, in turn, will hold such interests in
the Regulation S Global Notes in customers' securities accounts in the
depositaries' names on the books of DTC. All interests in a Global Note,
including those held through Euroclear or Clearstream, may be subject to the
procedures and requirements of DTC. Those interests held by Euroclear or
Clearstream may also be subject to the procedures and requirements of such
system.
The laws of some states require that certain persons take physical delivery
in definitive form of securities they own. Consequently, the ability to
transfer beneficial interest in a Global Note to such persons may be limited to
that extent. Because DTC can act only on behalf of Participants, which in turn
act on behalf of Indirect Participants and certain banks, the ability of a
person having a beneficial interest in a Global Note to pledge such interest to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the notes, see "--Book-Entry, Delivery and Form--Exchange of
Book-Entry Notes for Certificated Notes" and "--Book-Entry, Delivery and Form--
Exchanges between Regulation S Notes and Rule 144A Notes."
Except as described below, owners of interests in the Global Notes will not
have notes registered in their names, will not receive physical delivery of
notes in certificated form and will not be considered the registered owners or
holders thereof under the indenture for any purpose.
Payments in respect of the principal and premium and liquidated damages, if
any, and interest on a Global Note registered in the name of DTC or its nominee
will be payable by the trustee to DTC or its nominee in its capacity as the
registered holder under the indenture. Under the terms of the indenture, we and
the trustee will treat the persons in whose names the notes, including the
Global Notes, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever.
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Consequently, none of us, the trustee nor any agent of the Company or the
trustee has or will have any responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of
beneficial ownership interests in the Global Notes, or for
maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the
beneficial ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any
of its Participants or Indirect Participants.
DTC has advised the Company that its current practice, upon receipt of any
payment in respect of securities such as the notes (including principal and
interest), is to credit the accounts of the relevant Participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security
such as the Global Notes as shown on the records of DTC. Payments by
Participants and the Indirect Participants to the beneficial owners of notes
will be governed by standing instructions and customary practices and will not
be the responsibility of DTC, the trustee or the Company. Neither the Company
nor the trustee will be liable for any delay by DTC or its Participants in
identifying the beneficial owners of the notes, and the Company and the trustee
may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee as the registered owner of the notes for all purposes.
Except for trades involving only Euroclear and Clearstream participants,
interests in the Global Notes will trade in DTC's Same-Day Funds Settlement
System and secondary market trading activity in such interests will therefore
settle in immediately available funds, subject in all cases to the rules and
procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
Participants in Euroclear and Clearstream will be effected in the ordinary way
in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
notes described herein, cross-market transfers between Participants in DTC, on
the one hand, and Euroclear or Clearstream Participants, on the other hand, will
be effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or Clearstream, as the case may be,
will, if the transaction meets its settlement requirements, deliver instructions
to its respective depositary to take action to effect final settlement on its
behalf by delivering or receiving interests in the relevant Global Note in DTC,
and making or receiving payment in accordance with normal procedures for same-
day fund settlement applicable to DTC. Euroclear Participants and Clearstream
Participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.
Because of time zone differences, the securities accounts of a Euroclear or
Clearstream Participant purchasing an interest in a Global Note from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream Participant, during the securities
settlement processing day (which must be a business day for Euroclear or
Clearstream) immediately following the settlement date of DTC. Cash received in
Euroclear or Clearstream as a result of sales of interests in a Global Note by
or through a Euroclear or Clearstream Participant to a Participant in DTC will
be received with value on the settlement date of DTC but will be available in
the relevant Euroclear or Clearstream cash account only as of the business day
for Euroclear or Clearstream following DTC's settlement date. DTC has advised
the Company that it will take any action permitted to be taken by a holder of
notes only at the direction of one or more Participants to whose account DTC
interests in the Global Notes are credited and only in respect of such portion
of the aggregate principal amount of the notes as to which such Participant or
Participants have given direction. However, if there is an Event of Default
under the notes, DTC reserves the right to exchange Global Notes for legended
notes in certificated form, and to distribute such notes to its Participants.
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The information in this section concerning DTC, Euroclear and Clearstream
and their book-entry systems has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Regulation S Global Notes
and in the Rule 144A Global Notes among Participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to continue to perform
such procedures, and such procedures may be discontinued at any time. None of
the Company, the initial purchaser or the trustee will have any responsibility
for the performance by DTC, Euroclear or Clearstream or their respective
Participants or indirect Participants of their respective obligations under the
rules and procedures governing their operations.
Exchange of Book-Entry Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
(1) DTC (a) notifies the Company that it is unwilling or unable to
continue as depositary for the Global Note and the Company thereupon
fails to appoint a successor depositary or (b) has ceased to be a
clearing agency registered under the Exchange Act;
(2) The Company, at its option, notifies the trustee in writing that it
elects to cause the issuance of the notes in certificated form; or
(3) there shall have occurred and be continuing to occur a Default or an
Event of Default with respect to the notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon request but only upon at least 20 days' prior written
notice given to the trustee by or on behalf of DTC in accordance with customary
procedures. In all cases, Certificated Notes delivered in exchange for any
Global Note or beneficial interest therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures) and will bear, in the
case of the Rule 144A Global Notes or the Regulation S Temporary Global Notes,
the restrictive legend referred to in "Notice to Investors" unless the Company
determines otherwise, in compliance with applicable law.
Exchanges between Regulation S Notes and Rule 144A Notes
Prior to the expiration of the Restricted Period, a beneficial interest in
the Regulation S Global Notes were to be transferred to a person who takes
delivery in the form of an interest in the corresponding Rule 144A Global Notes
only upon receipt by the trustee of a written certification from the transferor
to the effect that such transfer is being made
(1) to a person whom the transferor reasonably believes is a Qualified
Institutional Buyer in a transaction meeting the requirements of Rule
144A; or
(2) pursuant to another exemption from the registration requirements under
the Securities Act which is accompanied by an opinion of counsel
regarding availability of such exemption; and
(3) in accordance with all applicable securities laws of any state of the
United States or any other jurisdiction.
Beneficial interests in the Rule 144A Global Notes may be transferred to a
person who takes delivery in the form of an interest in the Regulation S Global
Notes, whether before or after the expiration of the Restricted Period, only if
the transferor first delivers to the trustee a written certificate to the effect
that such transfer is being made in accordance with Rule 903 or 904 of
Regulation S or Rule 144 (if available) and that, if such transfer occurs prior
to the expiration of the Restricted Period, the interest transferred will be
held immediately thereafter through Euroclear or Clearstream.
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Any beneficial interest in one of the Global Notes that is transferred to a
person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note, and accordingly, will thereafter be subject
to all transfer restrictions and other procedures applicable to beneficial
interests in such other Global Note for as long as it remains such an interest.
Transfers involving an exchange of a beneficial interest in the Regulation
S Global Notes for a beneficial interest in the Rule 144A Global Notes or vice
versa will be effected by DTC by means of an instruction originated by the
trustee through the DTC/Deposit Withdraw at Custodian system. Accordingly, in
connection with such transfer, appropriate adjustments will be made to reflect a
decrease in the principal amount of the Regulation S Global Notes and a
corresponding increase in the principal amount of the Rule 144A Global Notes or
vice versa, as applicable.
Payments; Certifications by Holders of the Regulation S Temporary Global Notes
A holder of a beneficial interest in the Regulation S Temporary Global
Notes must provide Euroclear or Clearstream, as the case may be, with a
certificate in the form required by the indenture certifying that the beneficial
owner of the interest in the Regulation S Temporary Global Notes is either not a
U.S. Person (as defined below) or has purchased such interest in a transaction
that is exempt from the registration requirements under the Securities Act (the
"Regulation S Certificate"), and Euroclear or Clearstream, as the case may be,
must provide to the trustee (or the Paying Agent if other than the trustee) a
certificate in the form required by the indenture, prior to any exchange of such
beneficial interest for a beneficial interest in the Regulation S Permanent
Global Notes.
"U.S. Person" means
(1) any individual resident in the United States;
(2) any partnership or corporation organized or incorporated under the
laws of the United States;
(3) any estate of which an executor or administrator is a U.S. Person
(other than an estate governed by foreign law and of which at least
one executor or administrator is a non-U.S. Person who has sole or
shared investment discretion with respect to its assets);
(4) any trust of which any trustee is a U.S. Person (other than a trust of
which at least one trustee is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S.
Person):
(5) any agency or branch of a foreign entity located in the United States;
(6) any non-discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. Person;
(7) any discretionary or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such an account
held for the benefit or account of a non-U.S. Person):
(8) any partnership or corporation organized or incorporated under the
laws of a foreign jurisdiction and formed by a U.S. Person principally
for the purpose of investing in securities not registered under the
Securities Act (unless it is organized or incorporated, and owned, by
accredited investors within the meaning of Rule 501(a) under the
Securities Act who are not natural persons, estates or trusts);
provided, however, that the term "U.S. Person" shall not include:
(a) a branch or agency of a U.S. Person that is located and
operating outside the United States for valid business
purposes as a locally regulated branch or agency engaged in
the banking or insurance business;
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(b) any employee benefit plan established and administered in
accordance with the law, customary practices and
documentation of a foreign country; and
(c) the international organizations set forth in Section
902(o)(7) of Regulation S under the Securities Act and any
other similar international organizations, and their
agencies, affiliates and pension plans.
Certificated Notes
Subject to certain conditions, 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). All such Certificated Notes issued in exchange for the Rule 144A
Global Note or the Regulation S Temporary Global Note would be subject to the
legend requirements described herein under "Notice to Investors." In addition,
if:
(1) We notify the trustee in writing that the Depositary is no longer
willing or able to act as a depositary and we are unable to locate a
qualified successor within 90 days; or
(2) We, at our option, notify the trustee in writing that we elect to
cause the issuance of notes in the form of Certificated Notes under
the indenture;
then, upon surrender by the Global Note holder of its Global Note, Certificated
Notes will be issued to each person that the Global Note holder and the
Depositary identify as being the beneficial owner of the related notes.
Neither we nor the trustee will be liable for any delay by the Global Note
holder or the Depositary in identifying the beneficial owners of notes and we
and the trustee may conclusively rely on, and will be protected in relying on,
instructions from the Global Note holder or the Depositary for all purposes.
Same Day Settlement And Payment
The indenture requires that payments in respect of the notes represented by
the Global Note (including principal, premium, if any, interest and liquidated
damages, if any) be made by wire transfer of immediately available next day
funds to the accounts specified by the Global Note holder. With respect to
Certificated Notes, we will make all payments of principal, premium, if any,
interest and liquidated damages, if any, by wire transfer of immediately
available funds to the accounts specified by the holders thereof or, if no such
account is specified, by mailing a check to each such holder's registered
address. We expect that secondary trading in the Certificated Notes will also
be settled in immediately available funds.
Registration Rights; Liquidated Damages
The Company, the Issuer, the Guarantors and the initial purchasers entered
into the registration rights agreement on October 2, 2000. Pursuant to the
registration rights agreement, the Company, the Issuer and the Guarantors agreed
to file with the SEC the Exchange Offer Registration Statement on the
appropriate form under the Securities Act with respect to the exchange notes.
Upon the effectiveness of the Exchange Offer Registration Statement, the Issuer
will offer to the holders of Transfer Restricted Securities pursuant to the
Exchange Offer who are able to make certain representations the opportunity to
exchange their Transfer Restricted Securities for New Notes. If:
(1) the Issuer is not required to file the Exchange Offer Registration
Statement or permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or SEC policy; or
(2) any holder of Transfer Restricted Securities notifies the Issuer in
writing prior to the 20th business day following consummation of the
exchange offer that:
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(a) based on an opinion of counsel, it is prohibited by law or
SEC policy from participating in the exchange offer; or
(b) it is a broker-dealer and owns notes acquired directly from
the Issuer,
the Company, the Issuer and the Guarantors will file with the SEC a Shelf
Registration Statement to cover resales of the notes by the holders thereof who
satisfy certain conditions relating to the provisions of information in
connection with the Shelf Registration Statement.
The Company, the Issuer and the Guarantors will use their reasonable best
efforts to cause the applicable registration statement to be declared effective
as promptly as possible by the SEC.
For purposes of the preceding, "Transfer Restricted Securities" means each:
(1) note, until the earliest to occur of:
(a) the date on which that note is exchanged in the Exchange
Offer for a New Note which is entitled to be resold to the
public by the holder thereof without complying with the
prospectus delivery requirements of the Securities Act;
(b) the date on which that note has been disposed of in
accordance with a Shelf Registration Statement (and
purchasers thereof have been issued New Notes); or
(c) the date on which that note is distributed to the public
pursuant to Rule 144 under the Securities Act; and
(2) New Note issued to a broker-dealer until the date on which that New
Note is disposed of by that broker-dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration
Statement (including the delivery of the prospectus contained
therein).
The registration rights agreement provides that:
(1) The Company, the Issuer and the Guarantors will file an Exchange Offer
Registration Statement with the SEC on or prior to 90 days after the
Closing Date;
(2) the Company, the Issuer and the Guarantors will use their reasonable
best efforts to have the Exchange Offer Registration Statement
declared effective by the SEC on or prior to 150 days after the
Closing Date;
(3) unless the Exchange Offer would not be permitted by applicable law or
SEC policy, the Company, the Issuer and the Guarantors will commence
the Exchange Offer, keep the Exchange Offer open for a period of not
less than 20 business days and use their reasonable best efforts to
issue, on or prior to 30 business days after the date on which the
Exchange Offer Registration Statement was declared effective by the
SEC, New Notes in exchange for all notes tendered prior thereto in the
Exchange Offer; and
(4) if obligated to file the Shelf Registration Statement, the Company,
the Issuer and the Guarantors will file the Shelf Registration
Statement with the SEC on or prior to 30 days after that filing
obligation arises and use their reasonable best efforts to cause the
Shelf Registration to be declared effective by the SEC on or prior to
90 days after that obligation arises.
The Company, the Issuer and the Guarantors will pay liquidated damages to
each holder of notes upon the occurrence of any of the following:
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(1) the Company, the Issuer and the Guarantors fail to file any of the
Registration Statements required by the registration rights agreement
on or before the date specified for that filing;
(2) any of such Registration Statements is not declared effective by the
SEC on or prior to the date specified for that effectiveness (the
"Effectiveness Target Date");
(3) the Issuer fails to consummate the Exchange Offer within 40 business
days of the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement; or
(4) the Shelf Registration Statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective
or usable in connection with resales of Transfer Restricted Securities
during the periods specified in the registration rights agreement
(each such event referred to in clauses (1) through (4) above a "Registration
Default").
Such liquidated damages shall be:
(1) with respect to the first 90-day period immediately following the
occurrence of the first Registration Default, an amount equal to $.05
per week per $1,000 principal amount of notes held by that holder; and
(2) an additional $.05 per week per $1,000 principal amount of notes with
respect to each subsequent 90- day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages
for all Registration Defaults of $.25 per week per $1,000 principal
amount of notes.
All accrued liquidated damages will be paid on each Damages Payment Date to
the Global Note holder by wire transfer of immediately available funds or by
federal funds check and to holders of Certificated Securities by wire transfer
to the accounts specified by them or by mailing checks to their registered
addresses if no such accounts have been specified. Following the cure of all
Registration Defaults, the accrual of liquidated damages will cease.
Holders of notes will be required to make certain representations to the
Company, the Issuer and the Guarantors (as described in the registration rights
agreement) in order to participate in the Exchange Offer and will be required to
deliver certain information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within the
time periods set forth in the registration rights agreement in order to have
their notes included in the Shelf Registration Statement and benefit from the
provisions regarding liquidated damages set forth above with respect to the
Shelf Registration Statement.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Exchange of Notes
The exchange of outstanding notes for exchange notes in the exchange offer
will not constitute a taxable event to holders for U.S. Federal Income Tax
purposes. Consequently, no gain or loss will be recognized by a holder upon
receipt of an exchange note, the holding period of the exchange note will
include the holding period of the outstanding note and the basis of the exchange
note will be the same as the basis of the outstanding note immediately before
the exchange.
In any event, persons considering the exchange of outstanding notes for
exchange notes should consult their own tax advisors concerning the United
States federal income tax consequences in light of their particular situations
as well as any consequences arising under the laws of any other taxing
jurisdiction.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such outstanding notes were acquired as a
result of market-making activities or other trading activities. We have agreed
that, for a period of one-year after the consummation date, we will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale.
We will not receive any proceeds from any sale of exchange notes by broker-
dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes, or through a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices, or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer or the purchasers of any such exchange notes. Any broker-
dealer that resells exchange notes that were received by it for its own account
pursuant to the exchange offer and any broker or dealer that participates in a
distribution of such exchange notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale or exchange
notes and any commission or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The letter of
transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is in an
"underwriter" within the meaning of the Securities Act.
We have agreed, for a period of one year after the consummation date to
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have also agreed to pay all expenses incident
to the exchange offer (including the expenses of one counsel for the initial
purchasers of the outstanding notes directly from us) and will indemnify the
holders of the notes (including any broker-dealers) against certain liabilities,
including liabilities under the statement of a material fact contained in the
registration statement or prospectus or (2) an omission or alleged omission to
state in the registration statement or the prospectus a material fact that is
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. This indemnification obligation does not
extend to statements or omissions in the registration statement or prospectus
made in reliance upon and in conformity with written information pertaining to
the holder that is furnished in writing to us by or on behalf of the holder.
FORWARD-LOOKING STATEMENTS
This offering memorandum includes "forward-looking statements" including,
in particular, the statements about our plans, strategies and prospects under
the headings "Prospectus Summary." Although we believe that our
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plans, intentions and expectations reflected in or suggested by such forward-
looking statements are reasonable, we can give no assurance that such plans,
intentions or expectations will be achieved. Important factors that could cause
actual results to differ materially from the forward-looking statements we make
in this offering memorandum, including under the heading "Risk Factors." All
forward-looking statements attributable to the Company or persons acting on our
behalf are expressly qualified in their entirety by the cautionary statements
and risk factors contained throughout this prospectus.
LEGAL MATTERS
Certain legal matters relating to the exchange notes offered hereby will be
passed upon for us by Simpson Thacher & Bartlett, New York, New York.
EXPERTS
The consolidated financial statements of Hovnanian Enterprises, Inc.
appearing in Hovnanian Enterprises, Inc.'s Annual Report (Form 10-K) for the
year ended October 31, 1999 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements incorporated in this prospectus by
reference from Washington Homes, Inc.'s Current Report on Form 8-K dated
September 20, 2000, for the year ended July 31, 2000 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, and file reports, proxy statements and other information with the
Commission. You may read and copy any reports, proxy statements and other
information at the Commission's public reference room at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional
offices located at 500 West Madison Street, 14th Floor, Chicago, Illinois 60661
and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material also can be obtained by mail from the Public Reference Section of the
Commission, at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at the prescribed rates. The Commission also maintains a website
that contains reports, proxy and information statements and other information.
The website address is: http://www.sec.gov. Hovnanian's Class A Common Stock
is listed on the American Stock Exchange, and reports, proxy statements and
other information also can be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006.
This prospectus is part of a registration statement filed with the SEC.
The SEC allows us to "incorporate by reference" selected documents we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information in the documents incorporated by
reference is considered to be part of this prospectus, and information in
documents that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below filed under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
Hovnanian has filed the following documents with the Commission and these
documents are incorporated herein by reference:
. Annual Report on Form 10-K for the fiscal year ended October 31, 1999,
Registration File No. 1-8551, and
. Quarterly Reports on Form 10-Q for the quarters ended January 31,
2000, April 30, 2000 and July 31, 2000, Registration File No. 1-8551
. Current Report on Form 8-K of Washington Homes, Inc. filed on
September 20, 2000.
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. Current Report on Form 8-K filed on December 14, 2000.
All documents filed by Hovnanian pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this prospectus and prior to
the termination of the offering made by this prospectus are to be incorporated
herein by reference. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
Hovnanian will provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the information
incorporated by reference in this prospectus, other than exhibits to such
information (unless such exhibits are specifically incorporated by reference
into the information that this prospectus incorporates). Requests for such
copies should be directed to Paul W. Buchanan, Senior Vice President--Corporate
Controller, Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500, Red Bank,
New Jersey 07701, (telephone: (732) 747-7800).
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Hovnanian is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware grants each corporation organized
thereunder the power to indemnify any person who is or was a director, officer,
employee or agent of another corporation or enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of being or having been in any such capacity, if he
acted in good faith in a manner reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 1029(b)(7) of the General Corporation Law of the State of Delaware
enables a corporation in its certificate of incorporation or an amendment
thereto validly approved by stockholders to limit or eliminate the personal
liability of the members of its board of directors for violations of the
directors' fiduciary duty of care.
Article EIGHTH of Hovnanian's Restated Certificate of Incorporation
contains the following provisions with respect to indemnification:
No director of the Company shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director; provided, however, that this Article shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. This Article shall
not eliminate or limit the liability of a director for any act or omission
occurring prior to the date on which this Article becomes effective. Any repeal
or modification of this Article Eighth shall not adversely affect any right or
protection of a director of the Company existing hereunder with respect to any
act or omission occurring prior to the time of such repeal or modification.
Hovnanian maintains a liability insurance policy providing coverage for
its directors and officers in an amount up to an aggregate limit of $10,000,000
for any single occurrence.
K. Hovnanian is a New Jersey corporation. Subsection 2 of Title 14A,
Section 3-5 of the New Jersey Statutes grants any corporation organized for any
purpose under any general or special law of New Jersey the power to indemnify a
corporate agent against his expenses and liabilities in connection with any
proceeding involving the corporate agent by reason of his being or having been
such a corporate agent, other than a proceeding by or in the right of the
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24
corporation, if (a) such corporate agent acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation; and (b) with respect to any criminal proceeding, such corporate
agent had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent does not by itself create a
presumption that the corporate agent did not meet such applicable standards of
conduct. Section 3 of Title 14A, Section 3-5 of the New Jersey Statutes grants
any corporation organized under any general or special law of New Jersey the
power to indemnify a director, officer, employee or agent of a corporation
against his expenses in connection with any proceeding by or in the right of the
corporation, which involves him by reason of his having been a corporate agent,
if he acted in good faith and in a manner he reasonably believed be in or not
opposed to the best interests of the corporation. However, no indemnification
shall be provided in respect of any claim, issue or matter in which the
corporate agent shall is adjudged to be liable to the corporation, unless and
only to the extent that the Superior Court or the court in which the proceeding
was brought determines, upon application, that despite the adjudication of
liability, but in view of all circumstances of the case, the corporate agent is
fairly and reasonably entitled to indemnity for expenses deemed proper by the
Superior Court or such other court. Corporations organized for any purpose under
any general or special law of New Jersey shall indemnify a corporate agent
against expenses to the extent that such corporate agent has been successful on
the merits or otherwise in any proceeding referred to in subsections 2 and 3 of
Title 14A, Section 3-5.
Subsection 4 provides that any indemnification under these subsections,
unless ordered by a court under subsection 3, may be made by the corporation
only as authorized in a specific case upon a determination that indemnification
is proper in the circumstances because the corporate agent met the applicable
standard of (a) good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and (b) with respect to any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Subsection 5 provides that unless provided for in the certificate of
incorporation or bylaws, such determination shall be made (a) by the board of
directors or a committee thereof, acting by a majority vote of a quorum
consisting of directors who were not parties to or otherwise involved in the
proceeding; or (b) if such quorum is not obtainable, or even if obtainable and
such quorum directs, by written opinion of independent legal counsel designated
by the board of directors; or (c) by the shareholders if the certificate of
incorporation or bylaws or a resolution of the board of directors or of the
shareholders so directs. Subsection 7 provides that if a corporation on
application by a corporate agent fails or refuses to provide indemnification as
required or permitted by this section, a corporate agent may apply to a court
for an award of indemnification by the corporation. This section does not
exclude any other rights to which a corporate agent may be entitled under a
certificate of incorporation, bylaw, agreement, vote of shareholders, or
otherwise; provided that no indemnification is made if a final adjudication
adverse to the corporate agent establishes that his acts or omissions (a) were
in breach of his duty of loyalty to the corporation or its shareholders, as
defined under New Jersey law, (b) were not in good faith or involved a knowing
violation of law or (c) resulted in receipt by the corporate agent of an
improper personal benefit.
Except as required by subsection 4, no indemnification shall be made or
expenses advanced by a corporation or shall be ordered by a court if such action
would be inconsistent with a provision of the certificate of incorporation, a
bylaw, a resolution of the board of directors or of the shareholders, an
agreement or other proper corporate action in effect at the time of the
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25
accrual of the alleged cause of action asserted in the proceeding, which
prohibits, limits or otherwise conditions the exercise of indemnification powers
by the corporation or the rights to which a corporate agent may be entitled.
Neither K. Hovnanian's Certificate of Incorporation nor its bylaws
contain any provisions relating to indemnity.
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Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
1.1 Purchase Agreement, dated September 27, 2000 among K. Hovnanian
Enterprises, Inc., Hovnanian Enterprises, Inc. and certain of its
Subsidiaries and Donaldson, Lufkin and Jenrette Securities Corporation,
Salomon Smith Barney, Inc. and PNC Capital Markets, Inc.
4.1 Indenture, dated as of October 2, 2000 among K. Hovnanian Enterprises,
Inc., the Guarantors party named therein, and First Union National Bank
as trustee.
4.2 Registration Rights Agreement, dated as of October 2, 2000 among K.
Hovnanian Enterprises, Inc., Hovnanian Enterprises, Inc. and certain of
its Subsidiaries and Donaldson, Lufkin and Jenrette Securities
Corporation, Salomon Smith Barney, Inc. and PNC Capital Markets, Inc.
5.1 Opinion of Simpson Thacher & Bartlett *
12.1 Statement re: Computation of Ratios of Earnings to Fixed Charges*
21.1 Subsidiaries of the Registrant
23.1 Consent of Simpson Thacher & Bartlett (contained in 5.1)*
23.2 Consent of Ernst & Young LLP
23.3 Consent of Deloitte & Touche LLP
24.1 Powers of Attorney
25.1 Statement of eligibility and qualification under the Trust Indenture
Act of 1939
99.1 Form of Letter of Transmittal
99.2 Form of Letter to Securities Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.3 Form of Letter to Clients
99.4 Form of Notice of Guaranteed Delivery
* To be filed.
Item 22. Undertakings
The undersigned registrant hereby undertakes:
1. To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of
this form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through
the date of responding to the request.
2. To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration
statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore
unenforceable.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Hovnanian Enterprises, Inc. certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Red Bank, State of New Jersey, on
December 27, 2000.
HOVNANIAN ENTERPRISES, INC.
By: /s/ J. Larry Sorsby
--------------------------
J. Larry Sorsby
Executive Vice President
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints J. Larry Sorsby and each of them, the true and lawful attorneys-in-fact
and agents of the undersigned, with full power of substitution and
resubstitution, for and in the name, place and stead of undersigned, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, including any filings pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, and hereby grants to such attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and anything necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute, or substitutes, may lawfully do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian
---------------------------- Chairman of the Board December 27, 2000
Kevork S. Hovnanian
------------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian
----------------------------- Chief Executive Officer, President and December 27, 2000
Ara K. Hovnanian Director
------------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan
----------------------------- Senior Vice President - Corporate December 27, 2000
Paul W. Buchanan Controller and Director
------------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart
----------------------------- Senior Vice President, General December 27, 2000
Peter S. Reinhart Counsel/Secretary and Director
------------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby
----------------------------- Executive Vice President, Chief December 27, 2000
J. Larry Sorsby Financial Officer and Director
------------------------------------------------------------------------------------------------------------------------
_____________________________ Director December __, 2000
Arthur M. Greenbaum
------------------------------------------------------------------------------------------------------------------------
_____________________________ Director December __, 2000
Desmond P. McDonald
------------------------------------------------------------------------------------------------------------------------
_____________________________ Director December __, 2000
Stephen D. Weinroth
------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian Chairman of the Board December 27, 2000
----------------------------------
Kevork S. Hovnanian
-------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian Chief Executive Officer, December 27, 2000
---------------------------------- President and Director
Ara K. Hovnanian
-------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan Senior Vice President - December 27, 2000
---------------------------------- Corporate Controller and Director
Paul W. Buchanan
-------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart Senior Vice President, General December 27, 2000
---------------------------------- Counsel/Secretary and Director
Peter S. Reinhart
-------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby Executive Vice President, Chief December 27, 2000
---------------------------------- Financial Officer and Director
J. Larry Sorsby
-------------------------------------------------------------------------------------------------------------------
Director December __, 2000
__________________________________
Arthur M. Greenbaum
-------------------------------------------------------------------------------------------------------------------
Director December __, 2000
__________________________________
Desmond P. McDonald
-------------------------------------------------------------------------------------------------------------------
Director December __, 2000
__________________________________
Stephen D. Weinroth
-------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
K. Hovnanian Enterprises, Inc. certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-4 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Red Bank, State of New
Jersey, December 27, 2000.
K. HOVNANIAN ENTERPRISES, INC.
By: /s/ J. Larry Sorsby
----------------------------
J. Larry Sorsby
Executive Vice President
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints J. Larry Sorsby and each of them, the true and lawful attorneys-in-fact
and agents of the undersigned, with full power of substitution and
resubstitution, for and in the name, place and stead of undersigned, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, including any filings pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, and hereby grants to such attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and anything necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute, or substitutes, may lawfully do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian
--------------------------- Chairman of the Board December 27, 2000
Kevork S. Hovnanian
------------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian
--------------------------- Chief Executive Officer, President and December 27, 2000
Ara K. Hovnanian Director
------------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan
--------------------------- Senior Vice President - Corporate December 27, 2000
Paul W. Buchanan Controller and Director
------------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart
--------------------------- Senior Vice President, General December 27, 2000
Peter S. Reinhart Counsel/Secretary and Director
------------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby
--------------------------- Executive Vice President, Chief December 27, 2000
J. Larry Sorsby Financial Officer and Director
------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian Chairman of the Board December 27, 2000
-------------------------------
Kevork S. Hovnanian
-------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian Chief Executive Officer, December 27, 2000
-------------------------------
Ara K. Hovnanian President and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan Senior Vice President - Corporate December 27, 2000
-------------------------------
Paul W. Buchanan Controller and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart Senior Vice President, General December 27, 2000
-------------------------------
Peter S. Reinhart Counsel/Secretary and Director
-------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby Executive Vice President, Chief December 27, 2000
-------------------------------
J. Larry Sorsby Financial Officer and Director
-------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of the Registrants, as listed on the attached Schedule of Subsidiary
Registrants has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Red Bank,
State of New Jersey, on December 27, 2000.
Registrants (as listed on the attached Schedule of
Subsidiary Registrants)
By: /s/ J. Larry Sorsby
------------------------------------------
J. Larry Sorsby
Executive Vice President
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints J. Larry Sorsby and each of them, the true and lawful attorneys-in-fact
and agents of the undersigned, with full power of substitution and
resubstitution, for and in the name, place and stead of undersigned, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, including any filings pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, and hereby grants to such attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and anything necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute, or substitutes, may lawfully do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian Chairman of the Board December 27, 2000
---------------------------
Kevork S. Hovnanian
-------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian Chief Executive Officer, December 27, 2000
---------------------------
Ara K. Hovnanian President and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan Senior Vice President - Corporate December 27, 2000
---------------------------
Paul W. Buchanan Controller and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart Senior Vice President, General December 27, 2000
---------------------------
Peter S. Reinhart Counsel/Secretary and Director
-------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby Executive Vice President, Chief December 27, 2000
---------------------------
J. Larry Sorsby Financial Officer and Director
-------------------------------------------------------------------------------------------------------------------
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Signature Title Date
--------- ----- ----
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Kevork S. Hovnanian Chairman of the Board December 27, 2000
---------------------------
Kevork S. Hovnanian
-------------------------------------------------------------------------------------------------------------------
/s/ Ara K. Hovnanian Chief Executive Officer, December 27, 2000
---------------------------
Ara K. Hovnanian President and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Paul W. Buchanan Senior Vice President - Corporate December 27, 2000
---------------------------
Paul W. Buchanan Controller and Director
-------------------------------------------------------------------------------------------------------------------
/s/ Peter S. Reinhart Senior Vice President, General December 27, 2000
---------------------------
Peter S. Reinhart Counsel/Secretary and Director
-------------------------------------------------------------------------------------------------------------------
/s/ J. Larry Sorsby Executive Vice President, Chief December 27, 2000
---------------------------
J. Larry Sorsby Financial Officer and Director
-------------------------------------------------------------------------------------------------------------------
</TABLE>
