<Page>
EXHIBIT 99.1
K. HOVNANIAN ENTERPRISES, INC.
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ITS
8.000% SENIOR NOTES DUE 2012
AND
8.875% SENIOR SUBORDINATED NOTES DUE 2012
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, FOR ANY AND ALL OF ITS
OUTSTANDING 8.000% SENIOR NOTES DUE 2012
AND
OUTSTANDING 8.875% SENIOR SUBORDINATED NOTES DUE 2012
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 2002 UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
THE EXPIRATION DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank)
<Table>
By Overnight Mail or Courier: By Hand: By Mail:
Wachovia Bank, N.A. Wachovia Bank, N.A. Wachovia Bank, N.A.
Attn: Marsha Rice Attn: Marsha Rice Attn: Marsha Rice
Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations
Reorg. Reorg. Reorg.
1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd.
Charlotte, NC 28262 Charlotte, NC 28288-1153 Charlotte, NC 28288-1153
By Facsimile Transmission:
(704) 590-7628
Confirm By Telephone:
(704) 590-7413
Information:
(704) 590-7413
</Table>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE NUMBER
OTHER THAN THE ONE SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined in this Letter of Transmittal have
the same meaning given to them in the Prospectus (as defined below).
The Registration Statement on Form S-4 (File Nos. 333-89976; 333-89976-01)
of which such Prospectus is a part was declared effective by the Securities and
Exchange Commission on , 2002.
Holders of Outstanding Notes (as defined below) should complete this Letter
of Transmittal either if Outstanding Notes are to be forwarded herewith or if
tenders of Outstanding Notes are to be made by book-entry transfer to an account
maintained by the Exchange Agent at The Depository Trust Company ("DTC")
pursuant to the procedures set forth in "The Exchange Offer--Book-Entry Delivery
Procedures" and "The Exchange Offer--
<Page>
Tender of Outstanding Notes Held Through The Depository Trust Company" in the
Prospectus and an "Agent's Message" (as defined below) is NOT delivered. If
tender is being made by book-entry transfer, the Holder must have an Agent's
Message delivered in lieu of this Letter of Transmittal.
Holders of Outstanding Notes whose certificates (the "Certificates") for
such Outstanding Notes are not immediately available or who cannot deliver their
Certificates and all other required documents to the Exchange Agent on or prior
to the Expiration Date or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Outstanding Notes according to the
guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed
Delivery Procedures" in the Prospectus.
As used in this Letter of Transmittal, the term "Holder" with respect to the
Exchange Offer means any person in whose name Outstanding Notes are registered
on the books of K. Hovnanian Enterprises, Inc. (the "Issuer") or, with respect
to interests in the Global Outstanding Notes held by DTC, any DTC participant
listed in an official DTC proxy. The undersigned has completed, executed and
delivered this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer. Holders who wish to tender
their Outstanding Notes must complete this Letter of Transmittal in its
entirety.
SEE INSTRUCTION 1. DELIVERY OF DOCUMENTS TO DTC DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
<Page>
Ladies and Gentlemen:
The undersigned hereby acknowledges receipt of the Prospectus dated , 2002
(as it may be amended or supplemented from time to time, the "Prospectus") of
the Issuer, Hovnanian Enterprises, Inc., the parent of the Issuer ("Hovnanian")
and certain of the subsidiaries of Hovnanian (together with Hovnanian, the
"Guarantors," and each a "Guarantor") and this Letter of Transmittal, which
together constitute the Issuer's offer (the "Exchange Offer") to exchange $1,000
principal amount of each of their 8.000% Senior Notes due 2012 and 8.875% Senior
Subordinated Notes due 2012, in each case guaranteed by the Guarantors
(collectively, the "Exchange Notes") that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement of which the Prospectus is a part, for each $1,000
principal amount of their outstanding 8.000% Senior Notes due 2012 and 8.875%
Senior Subordinated Notes due 2012, in each case guaranteed by the Guarantors
(collectively the "Outstanding Notes"), respectively. Capitalized terms used but
not defined herein have the meaning given to them in the Prospectus.
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer the principal amount of the Outstanding
Notes indicated in Box 1A and/or 1B below. Subject to, and effective upon, the
acceptance for exchange of all or any portion of such Outstanding Notes tendered
hereby in accordance with the terms and conditions of the Exchange Offer
(including, if the Exchange Offer is extended or amended the terms and
conditions of any such extension or amendment), the undersigned hereby
exchanges, assigns and transfers to, or upon the order of, the Issuer all right,
title and interest in and to such Outstanding Notes as are being tendered
hereby, including all rights to accrued and unpaid interest thereon as of the
Expiration Date. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned
(with full knowledge that said Exchange Agent acts as the agent of the Issuer in
connection with the Exchange Offer) to cause the Outstanding Notes to be
assigned, transferred and exchanged with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to
(i) deliver Certificates for Outstanding Notes to the Issuer together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Issuer, upon receipt by the Exchange Agent, as the undersigned's agent, of
the Exchange Notes to be issued in exchange for such Outstanding Notes,
(ii) present Certificates for such Outstanding Notes for transfer, and to
transfer the Outstanding Notes on the books of the Issuer, and (iii) receive for
the account of the Issuer all benefits and otherwise exercise all rights of
beneficial ownership of such Outstanding Notes, all in accordance with the terms
and conditions of the Exchange Offer. The undersigned represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Outstanding Notes and to acquire Exchange Notes issuable upon the exchange
of such tendered Outstanding Notes, and that when the same are accepted for
exchange, the Issuer will acquire good and unencumbered title to the tendered
Outstanding Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
The undersigned represents and warrants that it will, upon request, execute
and deliver any additional documents deemed by the Exchange Agent or the Issuer
to be necessary or desirable to complete the exchange, assignment and transfer
of tendered Outstanding Notes or transfer ownership of such Outstanding Notes on
the account books maintained by a book-entry transfer facility. The undersigned
further agrees that acceptance of any tendered Outstanding Notes by the Issuer
and the issuance of Exchange Notes in exchange therefor shall constitute
performance in full by the Issuer of their obligations under the Registration
Rights Agreement for the 8.000% Senior Notes due 2012 and the Registration
Rights Agreement for the 8.875% Senior Subordinated Notes due 2012, each dated
March 26, 2002, and that the Issuer shall have no further obligation or
liabilities thereunder for the registration of the Outstanding Notes or the
Exchange Notes.
THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE
OFFER.
The name(s) and address(es) of the registered holder(s) of the Outstanding
Notes tendered hereby should be printed in Box 1A and/or 1B below, if they are
not already set forth therein, as they appear on the Certificates representing
such Outstanding Notes. The Certificate number(s) and the aggregate principal
amount of Outstanding Notes that the undersigned wishes to tender should also be
indicated in Box 1A and /or 1B below.
<Page>
If any tendered Outstanding Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Outstanding
Notes than are tendered or accepted for exchange, Certificates for such
nonexchanged or nontendered Outstanding Notes will be returned (or, in the case
of Outstanding Notes tendered by book-entry transfer, such Outstanding Notes
will be credited to an account maintained at DTC), without expense to the
tendering holder, promptly following the expiration or termination of the
Exchange Offer.
The undersigned understands that tenders of Outstanding Notes pursuant to
any one of the procedures described under "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will, upon the
Issuer's acceptance for exchange of such tendered Outstanding Notes, constitute
a binding agreement between the undersigned and the Issuer upon the terms and
subject to the conditions of the Exchange Offer.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer--Conditions to the Exchange
Offer." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Issuer), as more particularly set
forth in the Prospectus, the Issuer may not be required to exchange any of the
Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not
exchanged will be returned to the undersigned at the address shown below the
signature of the undersigned.
Unless otherwise indicated in the box entitled "Special Registration
Instructions" (Box 6) or the box entitled "Special Delivery Instructions" (Box
7) in this Letter of Transmittal, Certificates for all Exchange Notes delivered
in exchange for tendered Outstanding Notes, and any Outstanding Notes delivered
herewith but not exchanged, will be registered in the name of the undersigned
and shall be delivered to the undersigned at the address shown below the
signature of the undersigned. If an Exchange Note is to be issued to a person
other than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address(es)
shown on this Letter of Transmittal, the appropriate boxes of this Letter of
Transmittal should be completed. If Outstanding Notes are surrendered by
Holder(s) that have completed either the box entitled "Special Registration
Instructions" (Box 6) or the box entitled "Special Delivery Instructions" (Box
7) in this Letter of Transmittal, signature(s) on this Letter of Transmittal
must be guaranteed by an Eligible Institution (defined in Instruction 2).
The Exchange Offer is not being made to any broker-dealer who purchased
Outstanding Notes directly from the Issuer for resale pursuant to Rule 144A
under the Securities Act or any person that is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities Act. The undersigned
understands and agrees that the Issuer reserves the right not to accept tendered
Outstanding Notes from any tendering holder if the Issuer determines, in its
discretion, that such acceptance could result in a violation of applicable
securities laws or interpretations thereof.
BY TENDERING OUTSTANDING NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND WARRANTS TO THE ISSUER THAT (A) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE ISSUER (WITHIN THE MEANING OF RULE 405
UNDER THE SECURITIES ACT), (B) THE UNDERSIGNED IS NOT ENGAGED IN AND DOES NOT
INTEND TO ENGAGE IN, AND HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO
PARTICIPATE IN, A DISTRIBUTION OF THE EXCHANGE NOTES TO BE ISSUED IN THE
EXCHANGE OFFER, AND (C) THE UNDERSIGNED IS ACQUIRING THE EXCHANGE NOTES IN THE
ORDINARY COURSE OF ITS BUSINESS. IF THE UNDERSIGNED OR THE PERSON RECEIVING THE
EXCHANGE NOTES COVERED HEREBY IS A BROKER-DEALER THAT IS RECEIVING THE EXCHANGE
NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OUTSTANDING NOTES THAT WERE ACQUIRED
AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES (SUCH A
BROKER-DEALER TENDERING OUTSTANDING NOTES IS HEREIN REFERRED TO AS A
"PARTICIPATING BROKER-DEALER"), THE UNDERSIGNED ACKNOWLEDGES THAT IT OR SUCH
OTHER PERSON WILL DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE
SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE NOTES; HOWEVER, BY
SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, THE UNDERSIGNED WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES
ACT. THE UNDERSIGNED AND ANY SUCH OTHER PERSON ACKNOWLEDGE THAT, IF THEY ARE
PARTICIPATING IN THE EXCHANGE OFFER FOR THE PURPOSE
<Page>
OF DISTRIBUTING THE EXCHANGE NOTES, (1) THEY CANNOT RELY ON THE POSITION OF THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION ENUNCIATED IN MORGAN STANLEY &
CO., INC. (AVAILABLE JUNE 5, 1991), EXXON CAPITAL HOLDINGS CORPORATION
(AVAILABLE MAY 13, 1988), AS INTERPRETED IN THE SECURITIES AND EXCHANGE
COMMISSION'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 TRANSACTION AND (2) FAILURE TO COMPLY WITH SUCH
REQUIREMENTS IN SUCH INSTANCE COULD RESULT IN THE UNDERSIGNED OR ANY SUCH OTHER
PERSON INCURRING LIABILITY UNDER THE SECURITIES ACT FOR WHICH SUCH PERSONS ARE
NOT INDEMNIFIED BY THE ISSUER. IF THE UNDERSIGNED OR THE PERSON RECEIVING THE
EXCHANGE NOTES COVERED BY THIS LETTER IS AN AFFILIATE OF THE ISSUER, THE
UNDERSIGNED REPRESENTS TO THE ISSUER THAT THE UNDERSIGNED UNDERSTANDS AND
ACKNOWLEDGES THAT SUCH EXCHANGE NOTES MAY NOT BE OFFERED FOR RESALE, RESOLD OR
OTHERWISE TRANSFERRED BY THE UNDERSIGNED OR SUCH OTHER PERSON WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OR AN EXEMPTION THEREFROM.
Each Participating Broker-Dealer should check the box under the caption
"Participating Broker-Dealer" (Box 5) in order to receive additional copies of
the Prospectus and any amendments and supplements thereto, for use in connection
with resales of the Exchange Notes, as well as any notices from the Issuer to
suspend and resume use of the Prospectus.
Each Outstanding Note will bear interest from the most recent date on which
interest has been paid or duly provided for on the Outstanding Note surrendered
in exchange for such Exchange Note or, if no such interest has been paid or duly
provided for on such Exchange Note, from March 26, 2002. Holders of Outstanding
Notes whose Outstanding Notes are accepted for exchange will not receive accrued
interest on such Outstanding Notes for any period from and after the last
Interest Payment Date to which interest has been paid or duly provided for on
such Outstanding Notes prior to the original issue date of the Exchange Notes
or, if no such interest has been paid or duly provided for, will not receive any
accrued interest on such Outstanding Notes, and will be deemed to have waived
the right to receive any interest on such Outstanding Notes accrued from and
after such Interest Payment Date or, if no such interest has been paid or duly
provided for, from and after March 26, 2002.
The undersigned understands that the delivery and surrender of the
Outstanding Notes is not effective, and the risk of loss of the Outstanding
Notes does not pass to the Exchange Agent, until receipt by the Exchange Agent
of this Letter of Transmittal, or a manually signed facsimile hereof, properly
completed and duly executed, with any required signature guarantees, together
with all accompanying evidences of authority and any other required documents in
form satisfactory to the Issuer. All questions as to form of all documents and
the validity (including time of receipt) and acceptance of tenders and
withdrawals of Outstanding Notes will be determined by the Issuer, in its sole
discretion, which determination will be final and binding.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Outstanding Notes may be withdrawn at
any time prior to the Expiration Date.
Please read this entire Letter of Transmittal carefully before completing
the boxes below and follow the instructions included herewith.
The Exchange Offer is not being made to (nor will tenders of Outstanding
Notes be accepted from or on behalf of) holders in any jurisdiction in which the
making or acceptance of the Exchange Offer would not be in compliance with the
laws of such jurisdiction.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS
INCLUDED IN THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS
FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT, WHOSE ADDRESS AND TELEPHONE
NUMBER APPEAR ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL.
<Page>
SEE INSTRUCTION 10 BELOW.
List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate or Registration
Numbers and Principal Amounts should be listed on a separately signed schedule
affixed hereto. IF YOU ARE A HOLDER OF 8.000% SENIOR NOTES DUE 2012 (THE
"OUTSTANDING SENIOR NOTES"), PLEASE COMPLETE BOX 1A. IF YOU ARE A HOLDER OF
8.875% SENIOR SUBORDINATED NOTES DUE 2012, (THE "OUTSTANDING SENIOR SUBORDINATED
NOTES"), PLEASE COMPLETE BOX 1B. IF YOU ARE AN OWNER OF BOTH OUTSTANDING SENIOR
NOTES AND OUTSTANDING SENIOR SUBORDINATED NOTES YOU MUST COMPLETE BOTH BOX 1A
AND BOX 1B.
ALL TENDERING HOLDERS COMPLETE THE APPLICABLE BOX 1A AND/OR 1B:
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------------------------
BOX 1A
DESCRIPTION OF OUTSTANDING SENIOR NOTES TENDERED
(SEE INSTRUCTIONS 2 & 4 BELOW)
- ---------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OR AGGREGATE AGGREGATE
REGISTRATION PRINCIPAL AMOUNT PRINCIPAL AMOUNT
NUMBER(S) OF REPRESENTED BY OF OUTSTANDING
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) OUTSTANDING OUTSTANDING SENIOR NOTES
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) SENIOR NOTES* SENIOR NOTES BEING TENDERED**
- ---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
* Need not be completed by book-entry holders (see below).
** The minimum permitted tender is $1,000 in principal amount. All tenders must
be in integral multiples of $1,000 in principal amount. The aggregate
principal amount of all Outstanding Senior Note Certificates identified in
Box 1A, or delivered to the Exchange Agent herewith, will be deemed tendered
unless a lesser number is specified in this column. See Instruction 4.
<Page>
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------
BOX 1B
DESCRIPTION OF OUTSTANDING SENIOR SUBORDINATED NOTES TENDERED
(SEE INSTRUCTIONS 2 & 4 BELOW)
- -------------------------------------------------------------------------------------------------------------
CERTIFICATE OR
REGISTRATION AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
NUMBER(S) OF AMOUNT AMOUNT OF
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) OUTSTANDING SENIOR REPRESENTED BY OUTSTANDING SENIOR
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SUBORDINATED OUTSTANDING SENIOR SUBORDINATED NOTES
APPEAR(S) ON CERTIFICATE(S)) NOTES* SUBORDIANTED NOTES BEING TENDERED**
- -------------------------------------------------------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
TOTAL
- -------------------------------------------------------------------------------------------------------------
</Table>
* Need not be completed by book-entry holders (see below).
** The minimum permitted tender is $1,000 in principal amount. All tenders must
be in integral multiples of $1,000 in principal amount. The aggregate
principal amount of all Outstanding Senior Subordinated Note Certificates
identified in Box 1B, or delivered to the Exchange Agent herewith, will be
deemed tendered unless a lesser number is specified in this column. See
Instruction 4.
- --------------------------------------------------------------------------------
BOX 2
BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1 BELOW)
/ / CHECK HERE IF TENDERED OUTSTANDING SENIOR NOTES AND/OR OUTSTANDING
SENIOR SUBORDINATED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution_____________________________________________
DTC Account Number________________________________________________________
Transaction Code Number___________________________________________________
Holders of Outstanding Senior Notes and/or Outstanding Senior Subordinated
Notes that are tendering by book-entry transfer to the Exchange Agent's account
at DTC can execute the tender through DTC's Automated Tender Offer Program
("ATOP") for which the transaction will be eligible. DTC participants that are
accepting the Exchange Offer must transmit their acceptances to DTC, which will
verify the acceptance and execute a book-entry delivery to the Exchange Agent's
account at DTC. DTC will then send a computer-generated message (an "Agent's
Message") to the Exchange Agent for its acceptance in which the holder of the
Outstanding Senior Notes and/or Outstanding Senior Subordinated Notes
acknowledges and agrees to be bound by the terms of, and makes the
representations and warranties contained in, this Letter of Transmittal, and the
DTC participant confirms on behalf of itself and the beneficial owners of such
Outstanding Senior Notes and/or Outstanding Senior Subordinated Notes all
provisions of this Letter of Transmittal (including any representations and
warranties) applicable to it and such beneficial owner as fully as if it had
completed the information required herein and executed and transmitted this
Letter of Transmittal to the Exchange Agent. Each DTC participant transmitting
an acceptance of the Exchange Offer through the ATOP procedures will be deemed
to have agreed to be bound by the terms of this Letter of Transmittal. Delivery
of an Agent's Message by DTC will satisfy the terms of the Exchange Offer as to
execution and delivery of a Letter of Transmittal by the Participant identified
in
<Page>
the Agent's Message. DTC Participants may also accept the Exchange Offer by
submitting a Notice of Guaranteed Delivery through ATOP.
- --------------------------------------------------------------------------------
BOX 3
NOTICE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2 BELOW)
/ / CHECK HERE IF TENDERED OUTSTANDING SENIOR NOTES AND/OR OUTSTANDING SENIOR
SUBORDINATED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)_________________________________________________
Window Ticket Number (if any)________________________________________________
Date of Execution of Notice of Guaranteed Delivery___________________________
Name of Institution which guaranteed delivery________________________________
IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:
Name of Tendering Institution________________________________________________
DTC Account Number___________________________________________________________
Transaction Code Number______________________________________________________
- --------------------------------------------------------------------------------
BOX 4
RETURN OF NON-EXCHANGE OUTSTANDING NOTES
TENDERED BY BOOK-ENTRY TRANSFER
(SEE INSTRUCTIONS 1 & 2 BELOW)
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OUTSTANDING
NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
- --------------------------------------------------------------------------------
BOX 5
PARTICIPATING BROKER-DEALER
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OUTSTANDING SENIOR
NOTES AND/OR THE OUTSTANDING SENIOR SUBORDINATED NOTES FOR YOUR OWN ACCOUNT
AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER") AND WISH TO RECEIVE TEN ADDITIONAL COPIES OF THE PROSPECTUS
AND OF ANY AMENDMENTS OR SUPPLEMENTS THERETO, AS WELL AS ANY NOTICES FROM
THE COMPANY TO SUSPEND AND RESUME USE OF THE PROSPECTUS. PROVIDE THE NAME
OF THE INDIVIDUAL WHO SHOULD RECEIVE, ON BEHALF OF THE HOLDER, ADDITIONAL
COPIES OF THE PROSPECTUS, AND AMENDMENTS AND SUPPLEMENTS THERETO, AND ANY
NOTICES TO SUSPEND AND RESUME USE OF THE PROSPECTUS.
Name ________________________________________________________________________
Address ____________________________________________________________________
Telephone No. ______________________________________________________________
Facsimile No. ______________________________________________________________
<Page>
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in a distribution of the
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Outstanding Senior Notes and/or the
Outstanding Senior Subordinated Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a Prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a Prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
<Page>
- ------------------------------------------------
BOX 6
SPECIAL REGISTRATION INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6 BELOW)
To be completed ONLY if Certificates for the Outstanding Senior Notes
and/or the Outstanding Senior Subordinated Notes not exchanged and/or
Certificates for the Exchange Notes are to be issued in the name of someone
other than the registered holder(s) of the Outstanding Senior Notes and/or
the Outstanding Senior Subordinated Notes whose name(s) appear(s) above.
Name(s) ____________________________________________________________________
(PLEASE TYPE OR PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
BOX 7
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6 BELOW)
To be completed ONLY if Certificates for Outstanding Senior Notes and/or
the Outstanding Senior Subordinated Notes not exchanged and/or Certificates
for the Exchange Notes are to be sent to someone other than the registered
holder of the Outstanding Senior Notes and/or the Outstanding Senior
Subordinated Notes whose name(s) appear(s) above, or to such registered
holder(s) at an address other than that shown above.
Name(s) ____________________________________________________________________
(PLEASE TYPE OR PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
- -----------------------------------------------------
<Page>
- --------------------------------------------------------------------------------
BOX 8
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5 BELOW)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
Signature of registered holder(s) or
Authorized Signatory(ies): _____________________________________________________
Date: __________________________________________________________________________
Note: The above lines must be signed by the registered holder(s) of
Outstanding Senior Notes and/or Outstanding Senior Subordinated Notes as their
name(s) appear(s) on the Outstanding Senior Notes and/or the Outstanding Senior
Subordinated Notes or on a security position listing as the owner of the
Outstanding Senior Notes and/or the Outstanding Senior Subordinated Notes or by
person(s) authorized to become registered holder(s) by properly completed bond
powers transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below. See Instruction 5.
Name(s): _______________________________________________________________________
(Please Type or Print)
Capacity: ______________________________________________________________________
Address: _______________________________________________________________________
(Including Zip Code)
Area Code and Telephone Number: ________________________________________________
Tax Identification or Social Security Number: __________________________________
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by
an Eligible Institution: _______________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Title)
________________________________________________________________________________
(Name and Firm)
Date: __________________
Area Code and Telephone Number: ________________________________________________
Tax Identification or Social Security Number: __________________________________
<Page>
<Table>
- ---------------------------------------------------------------------------------------------------------------------------------
BOX 9
PAYER'S NAME: K. HOVNANIAN ENTERPRISES, INC.
- ------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR NAME AND ------------------------
FORM W-9 TIN IN THE BOX AT RIGHT AND CERTIFY BY Name
Department of the Treasury SIGNING AND DATING BELOW.
Internal Revenue Service ------------------------
Social Security Number
--------------------------------------
Payer's Request for Taxpayer PART 2 OR
Identification Number (TIN) CERTIFICATION--Under penalty of ------------------------
perjury, I certify that: Employer Identification Number
(1) The number shown on this form is my
correct Taxpayer Identification
Number (or I am waiting for a
number to be issued to me), and
---------------------------------------
(2) I am not subject to backup
withholding because (a) I am exempt
from backup withholding, or (b) I
have not been notified by the
Internal Revenue Service (the
"IRS") that I am subject to backup
withholding as a result of a
failure to report all interest or
dividends, or (c) the IRS has
notified me that I am no longer
subject to backup withholding, and
PART 3--
/ / Awaiting TIN
(3) I am a U.S. person (including a
U.S. resident alien).
---------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS Sign Here that you are currently subject to backup withholding
because of under-reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to backup
withholding, do not cross out such item (2).
---------------------------------------------------------------------------------
SIGN HERE --> The Internal Revenue Service does not require your consent to any provision of this
document other than the certifications required to avoid backup withholding.
SIGNATURE
------------------------------------------------------
DATE
------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF UP TO 30% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
<Table>
<Caption>
- ------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and either
(1) I have mailed or delivered an application to receive a
taxpayer identification number to the appropriate Internal
Revenue Service Center or Social Security Administration
Office, or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a
taxpayer identification number by the time of payment of
all reportable payments made to me will be withheld.
Signature ---------------------------------------- Date
-------------------------- , 20-----
- ------------------------------------------------------------
</Table>
<Page>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number for the Payee (You)
to Give the Payer.--Social security numbers have nine digits separated by two
hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer. All "Section" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
<Table>
- -----------------------------------------------------------------------
For this type of account: Give the social security number
of
- -----------------------------------------------------------------------
1. Individual The Individual
2. Two or more individuals (joint The actual owner of the account
account) or, if combined funds, the first
individual on the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is also
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- -----------------------------------------------------------------------
For this type of account: Give the employer identification
number of--
- -----------------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state
or local government, school
district, or prison) that
receives agricultural program
payments
- -----------------------------------------------------------------------
</Table>
1. List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
2. Circle the minor's name and furnish the minor's social security number.
3. You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number of
your employer identification number (if you have one).
4. List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
- ----------------------------------------------------------------------
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, at the local
Social Administration office, or Form SS-4, Application for Employer
Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
PAYEES SPECIFICALLY EXEMPTED FROM WITHHOLDING INCLUDE:
- - An organization exempt from tax under Section 501(a), an individual retirement
account (IRA), or a custodial account under Section 403(b)(7), if the account
satisfies the requirements of Section 401(f)(2).
- - The United States or a state thereof, the District of Columbia, a possession
of the United States, or a political subdivision or instrumentality of any one
or more of the foregoing.
- - An international organization or any agency or instrumentality thereof.
- - A foreign government and any political subdivision, agency or instrumentality
thereof.
PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
- - A corporation.
- - A financial institution.
- - A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under Section 584(a).
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A middleman known in the investment community as a nominee or custodian.
- - A futures commission merchant registered with the Commodity Futures Trading
Commission.
- - A foreign central bank of issue.
- - A trust exempt from tax under Section 664 or described in Section 4947.
PAYMENTS OF DIVIDENDS AND PATRONAGE DIVIDENDS GENERALLY EXEMPT FROM BACKUP
WITHHOLDING INCLUDE:
- - Payments to nonresident aliens subject to withholding under Section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Section 404(k) payments made by an ESOP.
PAYMENTS OF INTEREST GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
- - Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and you have
not provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
- - Payments described in Section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under Section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid to you.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see the regulations under sections 6041, 6041A,
6042, 6044, 6045, 6049, 6050A and 6050N.
EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO
AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER,
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE
FORM, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE--Section 6109 requires you to provide your correct taxpayer
identification number to payers, who must report the payments to the IRS. The
IRS uses the number for identification purposes and may also provide this
information to various government agencies for tax enforcement or litigation
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold up to 30% of
taxable interest, dividends, and certain other payments to a payee who does not
furnish a taxpayer identification number to payer. Certain penalties may also
apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish
your taxpayer identification number to a payer, you are subject to a penalty of
$50 for each such failure unless your failure is due to reasonable cause and not
to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
<Page>
INSTRUCTIONS TO LETTER OF TRANSMITTAL FORMING PART OF
THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
GENERAL
Please do not send Certificates for Outstanding Notes directly to the
Issuer. Your Outstanding Note Certificates, together with your signed and
completed Letter of Transmittal and any required supporting documents, should be
mailed or otherwise delivered to the Exchange Agent at the address indicated on
the first page hereof. The method of delivery of Certificates, this Letter of
Transmittal and all other required documents is at your sole option and risk and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, or overnight delivery service is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter of Transmittal is to be completed by holders of Outstanding
Notes (which term, for purposes of the Exchange Offer, includes any participant
in DTC whose name appears on a security position listing as the holder of such
Outstanding Notes) if either (a) Certificates for such Outstanding Notes are to
be forwarded herewith or (b) tenders are to be made pursuant to the procedures
for tender by book-entry transfer set forth in "The Exchange Offer--Book-Entry
Delivery Procedures" in the Prospectus and an Agent's Message is NOT delivered.
The term "Agent's Message" means a message, transmitted by DTC to and received
by the Exchange Agent and forming a part of a book-entry confirmation, which
states that DTC has received an express acknowledgment from the tendering
Participant, which acknowledgment states that such Participant has received and
agrees to be bound by, and makes the representations and warranties contained
in, this Letter of Transmittal and that the Issuer may enforce this Letter of
Transmittal against such Participant. Certificates representing the tendered
Outstanding Notes, or timely confirmation of a book-entry transfer of such
Outstanding Notes into the Exchange Agent's account at DTC, as well as a
properly completed and duly executed copy of this Letter of Transmittal, or a
facsimile hereof (or, in the case of a book-entry transfer, an Agent's Message),
a substitute Form W-9 and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to 5:00 p.m., New York City time, on the Expiration Date, or
the tendering holder must comply with the guaranteed delivery procedures set
forth below. Outstanding Notes may be tendered in whole or in part in the
principal amount of $1,000 and integral multiples of $1,000.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Outstanding Notes and (i) whose Outstanding
Notes are not immediately available or (ii) who cannot deliver their Outstanding
Notes, this Letter of Transmittal and all other required documents to the
Exchange Agent on or prior to the Expiration Date or (iii) who cannot complete
the procedures for delivery by book-entry transfer on a timely basis, may effect
a tender by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedures set forth in "The
Exchange Offer--Procedures for Tendering" in the Prospectus and by completing
Box 3. Pursuant to these procedures if:
(a) the tender is made through 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 an "eligible guarantor
institution". As used herein, "Eligible Institution" means a firm or
other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution", including (as such terms are defined
therein) (i) a bank; (ii) a broker, dealer, municipal securities broker
or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program.
(b) prior to the Expiration Date, the Exchange Agent received from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the registration
number(s) of such Outstanding Notes and the principal amount of
Outstanding Notes tendered, stating that the tender is
<Page>
being made thereby and guaranteeing that, within three (3) New York Stock
Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof), together with the Outstanding Notes
(or a confirmation of book-entry transfer of such Outstanding Notes into
the Exchange Agent's account at DTC) and any other documents required by
the Letter of Transmittal, will be deposited by the Eligible Institution
with the Exchange Agent; and
(c) 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 confirmation of book-entry transfer of such Outstanding
Notes into the Exchange Agent's account at DTC) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three (3) New York Stock Exchange trading days after the
Expiration Date.
Any Holder who wishes to tender Outstanding Notes pursuant to the guaranteed
delivery procedures described above must ensure that the Exchange Agent receives
the Notice of Guaranteed Delivery relating to such Outstanding Notes prior to
the Expiration Date. Failure to complete the guaranteed delivery procedures
outlined above will not, of itself, affect the validity or effect a revocation
of any Letter of Transmittal form properly completed and executed by a Holder
who attempted to use the guaranteed delivery procedures.
The Issuer will not accept any alternative, conditional or contingent
tenders. Each tendering Holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.
GUARANTEE OF SIGNATURES
No signature guarantee on this Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered Holder (which
term, for purposes of this document, shall include any participant in
DTC whose name appears on a security position listing as the owner of
the Outstanding Notes) of Outstanding Notes tendered herewith, unless
such Holder(s) has (have) completed either the box entitled "Special
Registration Instructions" (Box 6) or the box entitled "Special Delivery
Instructions" (Box 7) above; or
(ii) such Outstanding Notes are tendered for the account of a firm that is
an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
in Box 8 on this Letter of Transmittal. See Instruction 5.
INADEQUATE SPACE
If the space provided either of the boxes captioned "Description of
Outstanding Senior Notes Tendered" (Box 1A) or "Description of Outstanding
Senior Subordinated Notes Tendered" (Box 1B) is inadequate, the Certificate
number(s) and/or the principal amount of Outstanding Notes and any other
required information should be listed on a separate, signed schedule and
attached to this Letter of Transmittal.
3. BENEFICIAL OWNER INSTRUCTIONS.
Only a Holder of Outstanding Notes (i.e., a person in whose name Outstanding
Notes are registered on the books of the registrar or, with respect to interests
in the Global Outstanding Notes held by DTC, a DTC participant listed in an
official DTC proxy), or the legal representative or attorney-in-fact of a
Holder, may execute and deliver this Letter of Transmittal. Any beneficial owner
of Outstanding Notes who wishes to accept the Exchange Offer must arrange
promptly for the appropriate Holder to execute and deliver this Letter of
Transmittal on his or her behalf through the execution and delivery to the
appropriate Holder of the Instructions to Registered Holder and/or DTC
Participant from Beneficial Owner form accompanying this Letter of Transmittal.
4. PARTIAL TENDERS; WITHDRAWALS.
Tenders of Outstanding Notes will be accepted only in the principal amount
of $1,000 and integral multiples of $1,000. If less than the entire principal
amount of Outstanding Notes evidenced by a submitted Certificate is
<Page>
tendered, the tendering Holder should fill in the principal amount tendered in
the column entitled "Aggregate Principal Amount of Outstanding Senior Notes
Being Tendered" or "Aggregate Principal Amount of Outstanding Senior
Subordinated Notes Being Tendered", as applicable, in Box 1A and/or 1B. A newly
issued Note for the principal amount of Outstanding Notes submitted but not
tendered will be sent to such Holder as soon as practicable after the Expiration
Date. All Outstanding Notes delivered to the Exchange Agent will be deemed to
have been tendered in full unless otherwise indicated.
Outstanding Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time prior to the Expiration Date, after which tenders of Outstanding
Notes are irrevocable. To be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Exchange Agent.
Any such notice of withdrawal must (i) specify the name of the person having
deposited the Outstanding Notes to be withdrawn (the "Depositor"),
(ii) identify the Outstanding Notes to be withdrawn (including the registration
number(s) and principal amount of such Outstanding Notes, or, in the case of
Outstanding Notes transferred by book-entry transfer, the name and number of the
account at DTC to be credited), (iii) be signed by the Holder in the same manner
as the original signature on this Letter of Transmittal (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Outstanding Notes register the transfer of
such Outstanding Notes in the name of the person withdrawing the tender and
(iv) specify the name in which any such Outstanding Notes are to be registered,
if different from that of the Depositor. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Issuer, whose determination shall be final and binding on all parties.
Any Outstanding Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no Exchange Notes will be issued
with respect thereto unless the Outstanding Notes so withdrawn are validly
re-tendered. Any Outstanding Notes which have been tendered but which are not
accepted for exchange will be returned to the Holder thereof without cost to
such Holder as soon as practicable after withdrawal, rejection of tender or
termination of Exchange Offer.
Neither the Issuer, any affiliates or assigns of the Issuer, the Exchange
Agent nor any other person will be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give such notification (even if such notice is given to other
persons). Any Outstanding Notes that have been tendered but are withdrawn will
be returned to the holder thereof without cost to such holder promptly after
withdrawal.
5. SIGNATURE ON LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Outstanding Notes tendered hereby, the signature must correspond with the
name(s) as written on the face of the Certificates without alteration, addition,
enlargement or any change whatsoever. If this Letter of Transmittal is signed by
a participant in DTC, the signature must correspond with the name as it appears
on the security position listing as the owner of the Outstanding Notes.
If any of the Outstanding Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If a number of Outstanding Notes registered in different names are tendered,
it will be necessary to complete, sign and submit as many separate copies of
this Letter of Transmittal (or facsimiles thereof) as there are different
registrations of Outstanding Notes.
Signatures of this Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution unless the
Outstanding Notes tendered hereby are tendered (i) by a registered Holder who
has not completed Box 6 entitled "Special Registration Instructions" or Box 7
entitled "Special Delivery Instructions" in this Letter of Transmittal or
(ii) for the account of an Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder(s) of
Outstanding Notes (which term, for the purposes described herein, shall include
a participant in DTC whose name appears on a security position listing as the
owner of the Outstanding Notes) listed and tendered hereby, no endorsements of
the tendered Outstanding Notes or separate written instruments of transfer or
exchange are required. In any other case, the registered Holder(s) (or acting
Holder(s)) must either properly endorse the Outstanding Notes or transmit
properly
<Page>
completed bond powers with this Letter of Transmittal (in either case, executed
exactly as the name(s) of the registered Holder(s) appear(s) on the Outstanding
Notes, and, with respect to a participant in DTC whose name appears on such
security position listing), with the signature on the Outstanding Notes or bond
power guaranteed by an Eligible Institution (except where the Outstanding Notes
are tendered for the account of an Eligible Institution).
If this Letter of Transmittal, any Certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Issuer, must submit proper
evidence satisfactory to the Issuer, in its sole discretion, of such persons'
authority to so act.
6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable Box 6 or Box 7, the
name and address (or account at DTC) in which the Exchange Notes or substitute
Notes for principal amounts not tendered or not accepted for exchange are to be
issued (or deposited through DTC), if different from the names and addresses or
accounts of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the employer identification number or social
security number of the person named must also be indicated and the tendering
Holder should complete the applicable box.
If no instructions are given, the Exchange Notes (and any Outstanding Notes
not tendered or not accepted) will be issued in the name of and sent to the
acting Holder of the Outstanding Notes or deposited at such Holder's account at
DTC.
7. TRANSFER TAXES.
The Issuer shall pay all transfer taxes, if any, applicable to the transfer
and exchange of Outstanding Notes to them or their order pursuant to the
Exchange Offer. If a transfer tax is imposed for any other reason other than the
transfer and exchange of Outstanding Notes to the Issuer, or its order pursuant
to the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered Holder or any other person) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exception therefrom
is not submitted herewith, the amount of such transfer taxes will be collected
from the tendering Holder by the Exchange Agent.
Except as provided in this Instruction 7, it will not be necessary for
transfer stamps to be affixed to the Outstanding Notes listed in the Letter of
Transmittal.
8. WAIVER OF CONDITIONS.
The Issuer reserves the right, in its reasonable judgment, to waive, in
whole or in part, any of the conditions to the Exchange Offer set forth in the
Prospectus.
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES.
Any Holder whose Outstanding Notes have been mutilated, lost, stolen or
destroyed should promptly contact the Exchange Agent at the address indicated on
the first page hereof for further instructions. The Holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been completed.
10. QUESTIONS AND REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent at the address and telephone number indicated on
the first page hereof. In addition, all questions relating to the Exchange
Offer, as well as requests for assistance or additional copies of the Prospectus
and this Letter of Transmittal, may be directed to the Exchange Agent, Wachovia
Bank, National Association, by calling (704) 590-7413.
<Page>
11. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Outstanding Notes and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which would, in the opinion of counsel for the
Issuer, be unlawful. The Issuer also reserves the right, in its reasonable
judgment, to waive any defects, irregularities or conditions of tender as to
particular Outstanding Notes. The Issuer's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Outstanding Notes must
be cured within such time as the Issuer shall determine. Although the Issuer
intends to notify Holders of defects or irregularities with respect to tenders
of Outstanding Notes, neither the Issuer, the Exchange Agent nor any other
person shall incur any liability for failure to give such notification. Tenders
of Outstanding Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Outstanding Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holder as soon as practicable following the Expiration
Date.
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a Holder tendering Outstanding Notes is
required to provide the Exchange Agent with such Holder's correct TIN on
Substitute Form W-9 above and to certify that the TIN provided on Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN). If such Holder is
an individual, the TIN is his or her social security number. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service and any payments that are made
to such Holder may be subject to backup withholding (see below).
A Holder who does not have a TIN may check the box in Part 3 of the
Substitute Form W-9 if the Holder has applied for a number or intends to apply
for a TIN in the near future. If the box in Part 3 is checked, the Holder must
also complete the Certificate of Awaiting Taxpayer Identification Number above
in order to avoid backup withholding on any payments made to such Holder. If the
box is checked, payments made within 60 days of the date of the form will be
subject to backup withholding unless the Holder has furnished the Exchange Agent
with his or her TIN. A Holder who checks the box in Part 3 in lieu of furnishing
his or her TIN should furnish the Exchange Agent with his or her TIN as soon as
it is received.
Certain Holders (including, among others, all corporations and certain
foreign individuals), may be exempt from these backup withholding requirements.
In order for a foreign individual to qualify as an exempt recipient, that Holder
must submit a statement, signed under penalty of perjury, attesting to that
individual's exempt status (Form W-8BEN). Forms for such statements can be
obtained from the Exchange Agent. Holders are urged to consult their own tax
advisors to determine whether they are exempt from these backup withholding and
reporting requirements.
If backup withholding applies, the Exchange Agent is required to withhold up
to 30% of any payments to be made to the Holder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained by filing a tax
return with the Internal Revenue Service. The Exchange Agent cannot refund
amounts withheld by reason of backup withholding.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder, the
Holder is required to notify the Exchange Agent of his or her correct TIN by
completing the form herein certifying that the TIN provided on Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN) and that (i) such
Holder is exempt, (ii) such Holder has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of failure
to report all interest or dividends or (iii) the Internal Revenue Service has
notified such Holder that he or she is no longer subject to backup withholding.
<Page>
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the
Outstanding Notes. If Outstanding Notes are in more than one name or are not in
the name of the actual Holder, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9, for additional
guidance on which number to report.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
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