In connection with concurrent SEC-registered offerings, Davis Polk advised J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. as joint book-running managers in connection with the offering of 13,512,500 shares of common stock of Hovnanian Enterprises, Inc. (including 1,762,500 shares from the full exercise of the underwriters’ over-allotment option); Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC as joint book-running managers in connection with the offering of 3,450,000 7.25% tangible equity units of Hovnanian and K. Hovnanian (including 450,000 7.25% tangible equity units from the full exercise of the underwriters’ over-allotment option) and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC as joint-book running managers in connection with the offering of $155 million aggregate principal amount of 11⅞% senior notes due 2015 by K. Hovnanian Enterprises, Inc., a wholly owned subsidiary of Hovnanian. The notes are guaranteed by Hovnanian and substantially all of its subsidiaries. The gross proceeds from the common stock offering were approximately $54.9 million, the gross proceeds from the tangible equity units offering were approximately $83.4 million and the gross proceeds from the senior notes offering were approximately $147.9 million resulting in total gross proceeds of approximately $286.2 million. A portion of the proceeds of the offerings are being used to fund tender offers by K. Hovnanian for any and all of its 8% senior notes due 2012, 8⅞% senior subordinated notes due 2012 and 7¾% senior subordinated notes due 2013. Davis Polk advised Credit Suisse Securities (USA) LLC as dealer manager in connection with the tender offers.

Hovnanian is one of the nation’s largest builders of residential homes.

The Davis Polk capital markets team included partner Michael Kaplan, counsel Jeff Ramsay and associate Scott Lunin. The equity derivatives team included partners Ray Ibrahim and Mark M. Mendez and associates Marcel Fausten and Alison A. Haggerty (not yet admitted). The tax team included partner Lucy W. Farr and associates M. Ryan LaRosa (of the Menlo Park office) and Rachel Lerner (not yet admitted). Counsel Loyti Cheng and associate Connor Kuratek provided environmental advice and counsel Erin K. Cho (of the Washington DC office) provided ERISA advice. Natalie Chan was the legal assistant on the transaction. Except as noted above, all members of the Davis Polk team are based in the New York office.