FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended August 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 2-88333
AMERICAN SOUTHWEST FINANCE CO., INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0461972
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
2390 East Camelback Road, Suite 225, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602)381-8960
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None
Securities registered pursuant to section 12(g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].
Aggregate market value of voting stock held by non-affiliates of
the registrant as of August 31, 1994: No Active Market
Number of shares of common stock outstanding as of November 18,
1994:
Class A - 15,000 Class B - 34,000
<PAGE>
AMERICAN SOUTHWEST FINANCE CO., INC.
PART I.
Item 1. Business.
American Southwest Finance Co., Inc. (the "Company") was
organized for the purpose of issuing mortgage collateralized
bonds ("Bonds") in series ("Series") consisting of one or more
classes (each a "Class") to facilitate the financing of long-term
residential mortgage loans secured by single-family residences
and is not permitted to engage in any business or investment
activities other than those related to the issuance of Bonds.
As a result of changes in the mortgage securitization
industry including, among other factors, changes in federal and
state tax laws during 1986 and 1987, the creation of real estate
mortgage investment conduits ("REMICs") in 1987 and the emergence
of FNMA and Freddie Mac as the largest domestic issuers of
mortgage-collateralized securities, the Company has not issued
any mortgage-collateralized Bonds since July 1987. During the
last three fiscal years the Company has earned substantially all
of its net income from redemptions of its outstanding Bonds and
from other interest income. The Company is currently
accumulating collateral for future issuance possibilities as well
as considering other avenues of business.
See the Financial Statements included as part of Item 8 of
this Report for information with respect to the amounts of
revenue, operating profits and identifiable assets at August 31,
1994.
The Company and American Southwest Financial Services, Inc.
("ASFS"), an affiliate of the Company, are parties to an
agreement (the "Mortgage Securities Issuance and Administration
Agreement") dated as of January 1, 1988, and amended May 13,
1992, pursuant to which ASFS provides various services in
connection with the issuance and administration of securities
issued by the Company, and dictates the fees the Company will pay
for such services.
2
The Mortgage Securities Issuance and Administration
Agreement may be terminated by either party upon three month's
prior written notice to the other party, except that ASFS may not
terminate securities administration services provided as to any
Series of Bonds which has closed prior to the date of termination
without the consent of the Company.
Item 2. Properties.
None.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of shareholders of the Company was held
on May 16, 1994. The Class A voting shareholders elected the
Board of Directors of the Company by unanimous vote for the
ensuing year or until their successors are elected and have
qualified. The names of the Directors elected at the meeting are
as follows:
G. Thomas Eggebrecht Michael H. Feinstein
Jon A. Grove Alan D. Hamberlin
Kirby Korth Philip J. Polich
J. Larry Sorsby
3
AMERICAN SOUTHWEST FINANCE CO., INC.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
There is no trading market for the Company's common stock.
At November 18, 1994, there were 15 Class A and 34 Class B
shareholders of common stock. The Company has never paid a
dividend on its common stock. The Company's Articles of
Incorporation provide that only the holders of Class A stock are
entitled to receive dividends.
Item 6. Selected Financial Data.
The data presented herein is for the Company's last five
fiscal years ended August 31.
Summary of Operations
Year Ended August 31,
(in thousands, except Earnings per Share)
1994 1993 1992 1991 1990
Revenues $ 941 $ 6,806 $ 11,701 $ 14,596 $ 16,635
Income Before
Taxes $ 335 $ 1,980 $ 186 $ 496 $ 19
Income Taxes 133 788 62 196 4
Net Income $ 202 $ 1,192 $ 124 $ 300 $ 15
Earnings Per
Class A $ 11.02 $ 57.77 $ 5.18 $ 12.13 $ .60
Share
4
Item 6. Selected Financial Data (cont'd).
Financial Position
August 31,
(in thousands)
1994 1993 1992 1991 1990
Total Assets $ 1,928 $ 10,717 $116,655 $139,581 $166,380
Cash and Cash
Equivalents $ 637 $ 722 $ 543 $ 646 $ 160
Receivables
Pursuant
to Funding
Agreements,
net $ $ 8,861 $115,212 $137,883 $164,933
Bonds Payable,
net $ $ 8,861 $115,212 $137,883 $164,933
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The Company was organized for the purpose of issuing various
Series of Bonds to facilitate the financing of long-term
residential mortgage loans secured by single-family residences.
The Company does not have and is not expected to have any
significant assets other than cash and the assets pledged to
secure specific Series of Bonds. The Company last issued a
Series of Bonds in July 1987 and redeemed all of its then
outstanding Bonds in February 1994. On the closing of a Series
of Bonds issued by the Company, the Company applied the net
proceeds of the Bonds toward the simultaneous purchase or the
repayment of indebtedness with respect to the mortgage collateral
("Mortgage Collateral") securing such Series of Bonds or to fund
loans to participating finance companies ("Finance Companies")
pursuant to
5
funding agreements ("Funding Agreements"). See Note 2 of the
Financial Statements included in this Report.
Results of Operations
The Company's net income for the fiscal year ended
August 31, 1994 was significantly lower when compared to the
fiscal year ended August 31, 1993 and higher compared to the 1992
fiscal year. Net income for the past three fiscal years resulted
primarily from prepayment fees earned in connection with
redemptions (see below) and other interest income.
The Company's principal source of revenue was interest
pursuant to Funding Agreements which was completely offset by
interest expense on Bonds. See Note 2 of the accompanying
Financial Statements. Interest income and related interest
expense have declined over the last three fiscal years primarily
due to the sale of Mortgage Collateral in conjunction with Bond
redemptions, with the greatest impact to the Company taking place
during the 1993 fiscal year. Until the Company issues new Series
of Bonds, the Company will not receive redemption income
subsequent to its 1994 fiscal year. As a result of the
redemption of all of its then outstanding Bonds in February 1994,
future operations depend upon the Company's success in
accumulating collateral with which to issue new Series of Bonds
or its ability to engage in other business activities deemed
appropriate by the Company's Board of Directors.
Other interest income consists primarily of interest earned
on the Company's cash and cash equivalents and advances to
affiliates. The Company's increase in other interest income
during the fiscal year ended August 31, 1994 as compared to the
1993 and 1992 fiscal years is due to greater amounts of cash
generated from net income and available for investment.
6
While there were outstanding Series of Bonds, the Company
derived administrative fees by charging Finance Companies for
administration of funds used to pay Bond administration expenses.
Fees varied depending on investment returns on these funds. At
the time of each full redemption of a Series of Bonds (see
below), excess Bond administration funds were returned to the
participating Finance Companies, with all remaining funds held
being released in February 1994. Consequently, because of such
reductions in Bond Administration Funds being invested by the
Company, there is a reduction of administrative fees for the
fiscal year ended August 31, 1994 as compared to the fiscal years
ended August 31, 1993 and 1992.
The indenture supplements relating to each Series of Bonds
issued by the Company contained call provisions which gave the
Company the option to redeem such Bonds in whole or in part when
specific criteria were met. During the fiscal year ended
August 31, 1994, the Company redeemed one Series in the principal
amount of $7,113,317 as compared to 12 redemptions or partial
redemptions in the principal amount of $94,601,000 during the
1993 fiscal year. At the time of a redemption the underlying
Mortgage Collateral was sold and the proceeds from the sale were
used to redeem the Bonds. The Company remitted the remainder to
the participating Finance Companies after charging each a
prepayment fee. The prepayment fees are included in redemption
income.
Other expenses primarily include professional fees and other
similar redemption-related expenses. Redemptions during the
fiscal year ended August 31, 1994 incurred lower professional
fees compared to the redemptions that were effected during the
fiscal years ended August 31, 1993 and 1992.
7
Liquidity and Capital Resources
At August 31, 1994, the Company had cash and cash
equivalents of $637,473 and advances to affiliates of $1,270,000.
The primary use of capital during the fiscal year ended
August 31, 1994 was to lend funds to affiliates. Subsequent to
August 31, 1994 the Company used $607,153 of its cash to acquire
Mortgage Collateral. The Company anticipates that it will
finance additional purchases of Mortgage Collateral and it
intends to securitize the Mortgage Collateral so obtained,
subject to the amounts aggregated and the interest rate market.
Impact of Inflation and Changing Prices
The primary revenue producing activities of the Company,
Bond issuances and redemptions, are impacted by interest rates
which in turn are affected by numerous factors. These factors
include conditions in financial markets, the fiscal and monetary
policies of the United States government and the Board of
Governors of the Federal Reserve System, international economic
and financial conditions and other factors, none of which can be
predicted with any certainty.
Virtually all of the assets of the Company are monetary in
nature. As a result, interest rates have a more significant
impact on the performance of the Company than the effects of
general levels of inflation. Interest rates do not necessarily
move in the same direction or in the same magnitude as the price
of goods and services since such prices are affected by inflation
while interest rates generally are not affected to the same
degree.
8
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Report of Independent Certified Public
Accountants . . . . . . . . . . . . . . . . . . . . . 10
Balance Sheets, August 31, 1994 and 1993 . . . . . . . . 11
Statements of Income, For each of the
three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . . . . . 12
Statements of Shareholders' Equity, For each of the
three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . . . . . 13
Statements of Cash Flows, For each of the
three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . . . . . 14
Notes to Financial Statements . . . . . . . . . . . . . 15
9
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Shareholders and Board of Directors
American Southwest Finance Co., Inc.
We have audited the accompanying balance sheets of American
Southwest Finance Co., Inc. as of August 31, 1994 and 1993, and
the related statements of income, shareholders' equity and cash
flows for each of the three years in the period ended August 31,
1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of American Southwest Finance Co., Inc. as of August 31, 1994 and
1993, and the results of its operations and its cash flows for
each of the three years in the period ended August 31, 1994 in
conformity with generally accepted accounting principles.
KENNETH LEVENTHAL & COMPANY
Phoenix, Arizona
November 10, 1994
(except for Note 4, as to
which the date is November 28, 1994)
10
AMERICAN SOUTHWEST FINANCE CO., INC.
BALANCE SHEETS
ASSETS
August 31 August 31
1994 1993
Cash and cash equivalents $ 637,473 $ 722,092
Receivables pursuant to Funding Agreements
- Note 2
Principal - (Net of issue discount of
$119,688 at August 31, 1993) 8,860,887
Interest 92,612
Advances to affiliates - Note 4
Principal 1,270,000 979,704
Interest 14,657 6,531
Other receivables, primarily refundable
income taxes - Note 5 5,783 55,420
Total Assets $ 1,927,913 $ 10,717,246
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Bonds Payable - Note 2
Principal - (Net of issue discount of
$119,688 at August 31, 1993) $ $ 8,860,887
Interest 92,612
Accounts payable 499
Total Liabilities 8,953,998
Commitments and Contingencies - Note 4
Shareholders' Equity
Class A Common Stock, $.10 par value;
100,000 shares authorized; 25,000 shares
issued; 18,000 shares outstanding at
August 31, 1994; 19,000 shares
outstanding at August 31, 1993 2,500 2,500
Class B Common Stock, $.10 par value;
50,000 shares authorized; 36,000 shares
issued; 35,000 shares outstanding at
August 31, 1994; 36,000 shares
outstanding at August 31, 1993 3,600 3,600
Capital in excess of par value 100,200 100,200
Retained earnings 1,872,620 1,670,666
1,978,920 1,776,966
Less: Treasury Stock - at cost, Class A
Common Stock, 7,000 shares at August 31,
1994 and 6,000 shares at August 31,
1993; Class B Common Stock, 1,000
shares at August 31, 1994 - Note 3 51,007 13,718
Total Shareholders' Equity 1,927,913 1,763,248
Total Liabilities and Shareholders'
Equity $ 1,927,913 $ 10,717,246
The accompanying notes are an integral part of these financial statements.
11
AMERICAN SOUTHWEST FINANCE CO., INC.
STATEMENTS OF INCOME
For the For the For the
year ended year ended year ended
August 31 August 31 August 31
1994 1993 1992
REVENUES
Interest
Pursuant to Funding
Agreements - Note 2 $ 582,749 $ 4,797,493 $11,490,971
Other 95,586 56,336 26,953
Administrative fees 986 6,348 16,478
Redemption income - Note 2 261,462 1,945,366 167,030
940,783 6,805,543 11,701,432
COSTS AND EXPENSES
Interest on Bonds - Note 2 582,749 4,797,493 11,490,971
Other expenses 23,080 28,331 24,297
605,829 4,825,824 11,515,268
INCOME BEFORE TAXES 334,954 1,979,719 186,164
Provision for income taxes -
Note 5 133,000 788,000 62,000
NET INCOME $ 201,954 $ 1,191,719 $ 124,164
EARNINGS PER SHARE OF
CLASS A COMMON STOCK - Note 6 $ 11.02 $ 57.77 $ 5.18
Weighted average number of
Class A shares outstanding 18,332 20,630 23,979
The accompanying notes are an integral part of these financial statements.
12
AMERICAN SOUTHWEST FINANCE CO., INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED AUGUST 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
Number of Capital in
Shares Par Excess of Retained Treasury Total
Outstanding Value Par Value Earnings Stock Equity
<S> <C> <C> <C> <C> <C> <C>
Balance at
August 31, 1991 66,000 $6,600 $ 100,200 $ 354,783 $ $ 461,583
Net Income 124,164 124,164
Acquisition of
Treasury Stock:
Class A (7,000) (11,120) (11,120)
Class B (4,000) (400) (400)
Sale of Class A
Treasury Stock 4,000 6,942 6,942
Retirement of
Class B (400) 400
Treasury Stock
Balance at
August 31, 1992 59,000 6,200 100,200 478,947 (4,178) 581,169
Net Income 1,191,719 1,191,719
Acquisition of
Treasury Stock:
Class A (3,000) (9,540) (9,540)
Class B (1,000) (100) (100)
Retirement of
Class B (100) 100
Treasury Stock
Balance at
August 31, 1993 55,000 6,100 100,200 1,670,666 (13,718) 1,763,248
Net Income 201,954 201,954
Acquisition of
Treasury Stock:
Class A (1,000) (37,189) (37,189)
Class B (1,000) (100) (100)
Balance at
August 31, 1994 53,000 $6,100 $ 100,200 $1,872,620 $(51,007) $ 1,927,913
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
AMERICAN SOUTHWEST FINANCE CO., INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the For the For the
Year Year Year
Ended Ended Ended
August 31 August 31 August 31
1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net Income $ 201,954 $ 1,191,719 $ 124,164
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Decrease in interest receivable
pursuant to Funding Agreements 92,612 769,023 182,808
Decrease (increase) in other
receivables 49,637 (16,819) (30,846)
Increase in interest on advances to
affiliates (8,126) (6,531)
Decrease in interest payable - Bonds (92,612) (769,023) (182,808)
(Decrease) increase in accounts
payable (499) 499 (192,055)
Total Adjustments 41,012 (22,851) (222,901)
Net cash provided by (used in)
operating activities 242,966 1,168,868 (98,737)
CASH FLOWS FROM INVESTING ACTIVITIES
Collection of receivables pursuant to
Funding Agreements 8,980,574 106,396,048 22,717,804
Advances to affiliates for investment
benefiting the Company (290,296) (979,704)
Maturity of investments, net 175,000
Net cash provided by investing
activities 8,690,278 105,416,344 22,892,804
CASH FLOWS FROM FINANCING ACTIVITIES
Principal reduction of Bonds Payable (8,980,574) (106,396,048) (22,717,804)
Acquisition of Treasury Stock (37,289) (9,640) (11,520)
Sale of Class A Treasury Stock 6,942
Net cash used in financing
activities (9,017,863) (106,405,688) (22,722,382)
Net (decrease) increase in cash and cash
equivalents (84,619) 179,524 71,685
Cash and cash equivalents at beginning
of period 722,092 542,568 470,883
Cash and cash equivalents at end of
period $ 637,473 $ 722,092 $ 542,568
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for income taxes $ 134,403 $ 806,000 $ 290,687
Cash paid for interest $ 555,673 $ 5,521,708 $ 11,626,650
</TABLE>
Disclosure of accounting policy:
For purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with maturities of three months or less
to be cash equivalents.
The accompanying notes are an integral part of these financial statements.
14
AMERICAN SOUTHWEST FINANCE CO., INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
MATTERS
Organization
American Southwest Finance Co., Inc. (the "Company") was
organized for the purpose of issuing mortgage-collateralized
bonds ("Bonds") in series ("Series") to facilitate the financing
of long-term residential mortgage loans secured by single-family
residences. The Company last issued a Series of Bonds in July
1987 and redeemed all of its then outstanding Bonds in
February 1994. The Bonds were collateralized by certificates of
the Government National Mortgage Association, the Federal
National Mortgage Association and the Federal Home Loan Mortgage
Corporation (collectively, all such certificates are referred to
as "Mortgage Certificates") and by conventional mortgage loans
(together with Mortgage Certificates referred to as "Mortgage
Collateral"). The Company does not expect to have any
significant assets other than cash, Mortgage Collateral and any
assets pledged to secure outstanding Series of Bonds.
On the closing of a Series of Bonds issued by the Company,
the Company applied the net proceeds of the Bonds toward the
simultaneous purchase or the repayment of indebtedness with
respect to the Mortgage Collateral securing such Series of Bonds
or to fund loans to participating finance companies ("Finance
Companies") pursuant to funding agreements ("Funding Agreements")
(defined in Note 2).
Discounts on Receivables Pursuant to Funding Agreements and Bonds
Discounts incurred in connection with the issuance of Bonds
and the related Mortgage Collateral were amortized using the
interest method over the estimated life of the Bonds.
15
NOTE 2 - FUNDING AGREEMENTS AND BONDS PAYABLE
The Company and each participating Finance Company entered
into a Funding Agreement with respect to each Series of Bonds
pursuant to which the Finance Company borrowed and the Company
loaned all or a portion of the proceeds from the sale of the
Bonds of such Series. All Funding Agreement receivables had been
collected at August 31, 1994.
Funds generated by principal and interest payments on the
Funding Agreements were the source of funds for payments of
principal and interest on the Bonds. Each Mortgage Certificate
and mortgage loan was assigned an initial funding amount which in
the aggregate was at least equal to the principal amount of the
Bonds at the issue date.
The indenture supplements relating to each Series of Bonds
issued by the Company contained call provisions which gave the
Company the option to redeem such Bonds in whole or in part when
specific criteria were met. The Company exercised the right to
redeem the remaining outstanding Series of Bonds issued by the
Company during the fiscal year ended August 31, 1994. At the
time of a redemption the underlying Mortgage Collateral was sold
and the proceeds from the sale were used to redeem the Bonds.
The Company remitted the remainder to the participating Finance
Companies after charging each a prepayment fee (presented as
redemption income). Prepayment fees, including fees charged to
affiliates, were assessed in accordance with specific policies
established by the Company. NOTE 3 - TREASURY STOCK
The Company acquired 1,000 shares of Class A Common Stock
from one shareholder during the fiscal year ended August 31,
1994. During the fiscal year ended August 31, 1993, the Company
acquired from three shareholders a total
16
of 3,000 shares of Class A Common Stock. During the fiscal year
ended August 31, 1992, the Company acquired from seven
shareholders a total of 7,000 shares of Class A Common Stock and
sold a total of 4,000 Class A shares at cost to Directors. In
each case, the shareholder who sold the shares to the Company
simultaneously sold to two affiliates of the Company, the
shareholder's shares in such affiliates. The total purchase
price for the shares of all three companies, in each case, was
allocated to the shares based on the relative book value of the
companies on the date of the purchase. The Company also acquired
1,000 shares of Class B Common Stock during the fiscal year ended
August 31, 1994; acquired and subsequently retired 1,000 shares
of Class B Stock during the fiscal year ended August 31, 1993;
acquired and subsequently retired 4,000 shares of Class B Common
Stock during the fiscal year ended August 31, 1992; and utilized
the cost method of accounting in all cases for the acquisitions
of the Class A and Class B shares. See Note 4 relating to Class
A shares of stock acquired subsequent to August 31, 1994.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company receives the use of office space, equipment, and
certain managerial, administrative, financial and other services
from an affiliate, American Southwest Financial Services, Inc.
("ASFS"), pursuant to the terms of an agreement (the "Mortgage
Securities Issuance and Administration Agreement") between the
Company and ASFS. Management fees for services rendered by ASFS
are determined based on the number of Series of Bonds issued.
There were no Bonds issued during the fiscal years ended
August 31, 1994, 1993 and 1992; consequently, there were no
management fees paid to ASFS for these periods. While Series of
Bonds were outstanding, ASFS received administration fees which
17
were paid from the cash owned by Finance Companies (see Note 7 -
Escrowed Reserve Funds) and were not expenses of the Company.
The Company made advances to American Southwest Financial
Corporation ("ASFC") during the fiscal years ended August 31,
1994 and 1993. The advances are collectible upon demand and
interest accrues based on the prime rate of interest as published
in the Wall Street Journal. Prime rate was 7.75% at August 31,
1994 and 9.25% at August 31, 1993.
The holders of Class A Stock of the Company and of ASFC own
100% of the Class A Stock of American Southwest Affiliated
Companies ("ASAC"), parent company of ASFS and various other
affiliates.
The Company entered into a Letter of Understanding with one
of its Class A shareholders dated in July 1994, and as amended
and restated in September 1994, pursuant to which the Company,
ASFC and ASAC each agreed to purchase, upon such shareholder's
request made at any time prior to December 1, 1994, all of such
shareholder's shares of Class A Stock in the Company, ASFC and
ASAC (or any stock issued in exchange for such stock) at a price
equal to the higher of (i) $1,000,000 or, (ii) in the event the
Company has purchased Class A Stock from another shareholder
prior to December 1, 1994 at a purchase price higher than
$1,000,000, such higher price. On November 10, 1994 the Company,
ASFC and ASAC purchased the Class A Stock for $1,000,000. The
Company's allocated purchase price was $115,891. Additionally,
on November 16, 1994, the Company, ASFC and ASAC purchased Class
A Stock from two other shareholders at the same price.
18
NOTE 5 - INCOME TAXES
A reconciliation of income taxes at the statutory rate to
income tax expense at the Company's effective rate is as follows:
August 31 August 31 August 31
1994 1993 1992
Computed federal tax at the
expected statutory rate $ 113,900 $673,100 $ 63,300
Surtax exemption (7,400)
State income taxes, net
of federal tax benefit 19,100 114,900 6,100
Provision for income tax $ 133,000 $788,000 $ 62,000
At August 31, 1994 and 1993, other receivables include
refundable income taxes of approximately $5,783 and $54,700,
respectively, resulting from the overpayment of federal and state
estimated taxes. For the fiscal years ended August 31, 1994,
1993 and 1992, there were no timing differences between the
recognition of income for book and tax, nor were there any net
operating losses available to offset future book or taxable
income.
NOTE 6 - EARNINGS PER SHARE
Earnings per share calculations are based on the weighted
average number of Class A common shares outstanding, since voting
and dividend rights are limited to Class A shareholders. Class B
shareholders' rights are limited to a return of capital upon
dissolution together with a share of the Company's profits, if
any, upon dissolution, provided such profits were not paid to
Class A shareholders as dividends prior to such dissolution.
19
NOTE 7 - ESCROWED RESERVE FUNDS
While there were Series of Bonds outstanding, the Company
maintained and invested, on behalf of participating Finance
Companies, certain funds ("Escrowed Reserve Funds") held
primarily for future Bond administration expenses. After all of
the then outstanding Bonds were redeemed on February 1, 1994, all
Escrowed Reserve Funds were returned to the Finance Companies.
The Escrowed Reserve Funds are not included in the Company's
assets or liabilities on the accompanying balance sheet as of
August 31, 1993.
NOTE 8 - SUBSEQUENT EVENTS
On October 26, 1994, the Company purchased from its
affiliate, ASFC, ASFC's rights and obligations in and to certain
Funding Agreements that ASFC owned free and clear of any Bond
obligations. The purchase price, which was equal to ASFC's
carrying amount (par value of the Funding Agreements), included
principal of $2,342,221 and accrued interest of $26,440. The
Company paid $607,153 in cash, eliminated its receivable from
ASFC in the amount of $1,276,741 including accrued interest to
October 26, 1994 and signed an unsecured note to ASFC in the
amount of $484,767 which bears interest at prime as published in
the Wall Street Journal. The weighted average rate of the
Funding Agreements at the purchase date was 9.715%.
20
Item 9. Disagreements on Accounting and Financial Disclosure.
None.
21
AMERICAN SOUTHWEST FINANCE CO., INC.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Directors and Executive Officers of the Company are as follows:
Jon A. Grove..............50 Director and Chairman of the Board
G. Thomas Eggebrecht......51 Director
Michael H. Feinstein......59 Director, Acting President, Executive
Vice President and Chief Operating Officer
Alan D. Hamberlin.........45 Director
Kirby Korth...............42 Director
Philip J. Polich..........45 Director
J. Larry Sorsby...........39 Director
Richard H. Hackett........51 Executive Vice President, Treasurer, Chief
Financial and Accounting Officer
Jeffrey A. Newman.........32 Senior Vice President
Andrew J. Haggerty........40 Vice President
Mary C. Hislop............41 Vice President and Asst.Treasurer
Paul Martin...............37 Vice President
Joanne Morris.............39 Secretary
Jon A. Grove has been Chairman of the Board and a Director
of the Company and ASFC since each of their organizations in
September 1982. Mr. Grove also has served ASAC as Chairman of
the Board and a Director since its organization in March 1985.
Mr. Grove also has served as a Director of Westam Mortgage
Financial Corporation ("Westam") from its organization in May
1986 until October 1992, as President from its organization until
May 1987 and as Chairman of the Board from May 1987 until October
1992. Mr. Grove served as Chairman of the Board and a Director
of SecurNet Mortgage Securities Corporation I ("SecurNet I") from
June 1990 to December 1991. ASFC, Westam and SecurNet I, all of
which are engaged in financing residential mortgage loans, are
affiliates of the Company. Mr. Grove has served as Chairman of
the Board, President and a Director of ASR Investments
Corporation, a real estate investment trust, since its
organization in June 1987, and as the President and Chief
Executive Officer of the general partner of the managing general
partner of ASMA Mortgage Advisors Limited Partnership, a
management company that serves as the manager for ASR Investments
Corporation, since its organization.
G. Thomas Eggebrecht served as a Director of the Company
from April 1986 through November 16, 1994 and served as President
and Chief Executive Officer of the Company from June 1990 through
August 1994. Mr. Eggebrecht concurrently served in identical
positions with ASFC and ASAC. Mr. Eggebrecht served as Director,
President and Chief Executive Officer of Westam and SecurNet I
from June 1990 through August 1994. Mr. Eggebrecht served as
Chairman of the Board of Westam from November 1992 through August
1994 and as Chairman of the Board of SecurNet from April 1987 to
June 1988 and from December 1991 through August 1994.
Mr. Eggebrecht served as Chairman of the Board, Director,
President and Chief Executive Officer of American Southwest
Financial Securities Corporation ("ASFSC") from its organization
in September 1993 through August 1994. ASFSC is involved in
financing commercial and multi-family mortgage loans and is an
affiliate of the Company. Mr. Eggebrecht served as Chairman of
the Board, Director, President and Chief Executive Officer of
SecurNet Mortgage Securities Corporation II ("SMSCII") from its
organization August 9, 1994 through August 1994. SMSCII is
engaged in financing residential mortgage loans and is an
affiliate of the Company.
Michael H. Feinstein has been a Director of the Company
since October 1984, has been Executive Vice President and Chief
Operating Officer of the Company since September 1993 and has
served as Acting President since August 1994. Mr. Feinstein
concurrently served in identical positions with ASFC and ASAC.
Mr. Feinstein served as Executive Vice President and Chief
Operating Officer of Westam and SecurNet I from September 1993
through August 1994 and has served both companies as Chairman of
the Board, Director, President and Chief Executive Officer since
September 1994. Mr. Feinstein has served in identical
22
positions with ASFSC and SMSCII since each of their inceptions.
Mr. Feinstein served as Executive Vice President and Chief
Operating Officer of Asset Investors Corporation, a real estate
investment trust, from January 1990 until September 1993 and as
Treasurer and Chief Financial Officer of such company from its
organization in October 1986 to September 1993. Mr. Feinstein
also served as a Vice President and Treasurer of Financial Asset
Management Corporation, a management company that serves as the
manager for Asset Investors Corporation, from its organization in
October 1986 to September 1993. Mr. Feinstein, through
September 1993, served as a Senior Vice President of MDC
Holdings, Inc. from January 1987, and as Treasurer from January
1984.
Alan D. Hamberlin has been a Director of the Company and of
ASFC since their organizations in September 1982 and of ASAC
since April 1986. Mr. Hamberlin has been President of Courtland
Homes, Inc. since July 1983. In addition, Mr. Hamberlin has
served as Director, President and Chief Executive Officer of
Homeplex Mortgage Investments Corporation, a real estate
investment trust, since its organization in May 1988, and
Chairman of its Board since January 1990.
Kirby Korth has been a Director of the Company and of ASFC
since November 1982 and a Director of ASAC since April 1986. Mr.
Korth has served as a Division Manager for U.D.C. Homes, L.P.
since March 1989.
Philip J. Polich has been a Director of the Company and of
ASFC since their organizations and a Director of ASAC since
April 1986. Mr. Polich has been Chairman and Chief Executive
Officer of Emerald Texas, a home building company, since May
1987. From February 1990 to May 1990, Mr. Polich served as Vice
President of Verit Industries, and served as its Director and
President from May 1990 until June 1992. Mr. Polich was
President and Chief Executive Officer of the managing general
partner of Emerald Homes, L.P. from 1984 until June 1990,
23
and was its Chairman of the Board until June 1992. In 1993
Mr. Polich was discharged from a bankruptcy under Chapter 7 of
the United States Bankruptcy Code.
J. Larry Sorsby has been a Director of the Company and of
ASFC since December 1983 and a Director of ASAC since April 1986.
Mr. Sorsby has served as Senior Vice President/Finance and
Treasurer for K. Hovnanian Enterprises, Inc., a home building
company, since March 1991 and served as Vice President/Finance of
such company from September 1988 to February 1991.
Richard H. Hackett has been Executive Vice President of the
Company since September 1991, and Treasurer and Chief Financial
and Accounting Officer since May 1987. Mr. Hackett served as
Vice President from October 1986 to August 1991 and Controller
from October 1986 to May 1987. Mr. Hackett concurrently served
in identical positions with ASFC and ASAC. Mr. Hackett has been
Executive Vice President of Westam since September 1991 and a
Director and Chief Financial and Accounting Officer of such
company since November 1987. Mr. Hackett also has served as a
Director, Treasurer and Chief Financial and Accounting Officer of
SecurNet I since its organization in March 1987, Executive Vice
President since September 1991 and Vice President from March 1987
through August 1991. Mr. Hackett has served as Director,
Executive Vice President, Treasurer and Chief Financial and
Accounting Officer of ASFSC and SMSCII since each of their
inceptions.
Jeffrey A. Newman has served as a Senior Vice President of
the Company since May 1992 and served as Vice President from May
1987 until November 1988 and from May 1989 to May 1992. Mr.
Newman concurrently served in identical positions with ASFC and
ASAC. Mr. Newman also has been Senior Vice President of Westam
since May 1992, served as Vice President from November 1987 to
November 1988 and from May 1989 to May 1992, and as a Director
from May 1989 to June 1990 and since
24
September 1, 1994. Mr. Newman has served SecurNet I as Senior
Vice President since May 1992, and served as its Vice President
from June 1988 to November 1988, and from June 1990 to May 1992.
Mr. Newman has also served as a Director of SecurNet I since
September 1, 1994. Mr. Newman has served as Senior Vice
President of ASFSC and SMSCII since each of their inceptions and
has served as a Director for each of these entities since
September 1, 1994. Mr. Newman served the Company and its
affiliates in the capacity of Bond Administrator from July 1985
to November 1988, from February 1989 to September 1989 and again
since January 1993.
Andrew J. Haggerty has been a Vice President of the Company,
ASFC and ASAC since May 1987. Mr. Haggerty has been a Vice
President of Westam since November 1987 and served as a Director
from May 1988 to June 1990. Mr. Haggerty also has been a Vice
President of SecurNet I since March 1987 and served as a Director
from March 1987 to September 1990. Mr. Haggerty has served as a
Vice President of ASFSC and SMSCII since each of their
inceptions. Mr. Haggerty served the Company and its affiliates
in charge of Bond Origination since October 1984.
Mary C. Hislop has served as Vice President and Assistant
Treasurer of the Company since November 1992. Ms. Hislop has
concurrently served in identical positions with ASFC, ASAC,
Westam and SecurNet I. Ms. Hislop has served as Vice President
of ASFSC and SMSCII since each of their inceptions and has served
the Company and its affiliates in various positions in accounting
since May 1986.
Paul Martin has served as Vice President of the Company
since June 1991. Mr. Martin has concurrently served in an
identical position with ASFC, ASAC, Westam, and SecurNet I.
Mr. Martin has also served as a Vice President of ASFSC and
SMSCII since each of their inceptions. Since February 1988 Mr.
Martin has
25
served as a Residual Analyst for the Company and its affiliates
while providing consultation for Bond Origination and Bond
Administration.
Joanne Morris has served as Secretary of the Company since
May 1987. Ms. Morris has concurrently served in an identical
position with ASFC and ASAC. Ms. Morris has been Secretary of
Westam since May 1987 and has also served as Secretary of
SecurNet I, ASFSC and SMSCII since each of their inceptions.
Ms. Morris has served the Company and its affiliates in various
positions since June 1985.
Messrs. Feinstein, Grove, Hamberlin and Korth serve as
members of the Executive Committee of the Board of Directors;
Messrs. Feinstein, Hamberlin and Korth serve as members of the
Audit Committee of the Board of Directors; and Messrs. Grove,
Polich and Sorsby serve as members of the Compensation Committee
of the Board of Directors. Messrs. Grove, Korth and Sorsby also
serve on a special committee of the Board of Directors to study
stategic alliances. There are no nominating or other committees
of the Board of Directors. There are no family relationships
among any of the Directors or Executive Officers.
Item 11. Executive Compensation.
All officers of the Company are paid by ASFS for services
rendered to the Company, ASFC, ASAC and other affiliates. The
following table sets forth compensation paid by ASFS to the named
executives for the periods indicated:
26
<TABLE>
<CAPTION>
SUMMARY COMPENSATION
TABLE Long
Term
Compen-
sation
Payouts
(a) (b) (c) (d) (e) (h) (i)
Other All
Name Fiscal Annual Other
and Years Compen- LTIP Compen-
Principal Ended sation Payouts sation
Position Aug 31 Salary($) Bonus($) ($) ($) (2) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G. Thomas 1994 275,000 252,038 30,000 27,300 (3)
Eggebrecht, 1993 152,685 92,038 55,036 (1) 50,929
Former President 1992 126,094 71,316 60,000 881,792 38,225
and Chief Executive (1)
Officer
Michael H. 1994 158,173 (4) 63,887 27,032 (5) 17,490 (6)
Feinstein, 1993
Acting President, 1992
Executive Vice
President and Chief
Operating Officer
Richard H. Hackett, 1994 115,723 44,538 7,368 (7)
Executive Vice 1993 107,462 52,315 11,491
President, 1992 89,423 17,341 6,620
Treasurer, Chief
Financial and
Accounting Officer
Jeffrey A. Newman, 1994 83,308 119,079 9,240 (7)
Senior Vice 1993 68,808 51,825 11,691
President 1992 63,496 17,463 6,372
Paul Martin 1994 64,062 39,399 6,230 (7)
Vice President 1993 57,317 44,170 10,231
1992 56,042 20,278 7,161
</TABLE>
(1) Included in other annual compensation for Mr. Eggebrecht for
fiscal years ended August 31, 1993 and 1992, are housing
allowances of $50,000 and $60,000, respectively.
(2) The amount presented for the fiscal year ended August 31, 1994 is
related to an annual achievement bonus plan included in
Mr. Eggebrecht's previous employment agreement, which was
superseded by a new employment agreement effective July 1, 1993
(see below). The new agreement provided for a settlement of the
achievement bonus for 1992 at $30,000 which was paid in
October 1993.
(3) Mr. Eggebrecht's other compensation for the fiscal year ended
August 31, 1994 included Director's fees of $1,000, 401(k) Plan
employer contributions (see description of Plan below) made by
ASFS for the same
27
fiscal year in the amount of $9,240 and reverse split-dollar life
insurance premiums of $17,060.
(4) Mr. Feinstein's compensation is for a partial year, September 20,
1993 through August 31, 1994.
(5) Included in other annual compensation for Mr. Feinstein is a
housing allowance of $21,467.
(6) Mr. Feinstein's other compensation for the fiscal year ended
August 31, 1994 consists of Director's fees of $8,250 paid as a
Director prior to his full-time employment and 401(k) employer
contributions made by ASFS of $9,240 (see below).
(7) These amounts are employer contributions made by ASFS to the
401(k) Plan (see below) for the fiscal year ended August 31, 1994.
On January 1, 1986, ASFS established an Internal Revenue
Service Section 401(k) Profit Sharing Plan and Trust (the "401(k)
Plan"). Employees become eligible to participate in the 401(k)
Plan after 500 hours of service. 401(k) Plan participants make
pretax contributions based on their level of compensation to
total compensation paid, subject to IRS maximums. ASFS
contributes matching contributions at a percentage determined
from time to time by the Board of Directors of ASFS and
communicated to participants prior to such match. For the
calendar year ended December 31, 1993, ASFS contributed $91,048
to the 401(k) Plan and for the current calendar year ASFS has
contributed $74,304 through August 31, 1994.
ASFS entered into an employment agreement with its President
effective July 1, 1993, which superseded the previous three year
employment agreement entered into as of January 1, 1991. The new
agreement calls for compensation in the form of (1) base salary,
(2) an annual discretionary bonus, determined by the Company's
Compensation Committee and approved by the Board of Directors,
not to exceed 185% of the base salary, and (3) use of an
automobile, life insurance coverage and country club membership.
The agreement provides that Mr. Eggebrecht's employment shall
continue until December 31, 1996 unless sooner terminated upon
Mr. Eggebrecht's death or disability, breach of the agreement or
acts involving a
28
crime, moral turpitude, fraud or dishonesty. In addition, either
party at its option may terminate Mr. Eggebrecht's employment
upon notice to the other party. In August 1994, pursuant to the
terms of the employment agreement the Board of Directors of ASAC
terminated Mr. Eggebrecht's employment.
Directors of the Company, ASFC and ASAC (parent company of
ASFS) receive annual fees paid by ASFS of $25,000 and $500 for
each meeting attended including committee meetings. Directors
who are officers of the Company did not receive this compensation
after July 1, 1993.
The members of the Compensation Committee of the Board of
Directors are Jon A. Grove, Philip J. Polich and J. Larry Sorsby.
Mr. Grove served the Company as President from its organization
in September 1992 until April 1984. Mr. Polich served the
Company as Vice President and Secretary from its organization
until April 1986. Mr. Sorsby served the Company as Vice
President and Assistant Secretary from December 1983 until
May 1985.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth certain information regarding
shares of the Company's voting securities beneficially owned as
of November 18, 1994, by each person who is known by the Company
to own or exercise voting or dispositive control over more than
5% of such shares. Shares held by each of the Company's
shareholders and by all Directors and Officers as a group are
presented below:
Class of Stock
Name and and Amount of
Address of Direct Percent of
Beneficial Owners Beneficial Class
Ownership
Baldwin Financial Services 1,000 shares 6.67%
500 Newport Center Drive Class A Common
Suite 700 Stock
Newport Beach, CA 92660
CDM Financial Company 1,000 shares 6.67%
950 S. Cherry Class A Common
Suite 1100 Stock
Denver, CO 80222
29
Class of Stock
Name and and Amount of
Address of Direct Percent of
Beneficial Owners Beneficial Class
Ownership
CHC Financial Corporation 1,000 shares 6.67%
4550 N. Black Canyon Hwy. Class A Common
Phoenix, AZ 85017 Stock
Courtland Finance Company 1,000 shares 6.67% (1)
5333 N. 7th Street, Suite Class A Common
305 Stock
Phoenix, AZ 85014
Davidon Finance Co. 1,000 shares 6.67%
1600 S. Maine Street Class A Common
Suite 150 Stock
Walnut Creek, CA 94596
Jon A. Grove 1,000 shares 6.67%
335 N. Wilmot, Suite 250 Class A Common
Tucson, AZ 85711 Stock
Alan D. Hamberlin 1,000 shares 6.67%
5333N. 7th Street, Suite 305 Class A Common
Phoenix, AZ 85014 Stock
Hovnanian Financial 1,000 shares 6.67% (2)
Services I Class A Common
10 Highway 35 Stock
Red Bank, NJ 07701
Kirby Korth 1,000 shares 6.67%
10645 E. Gold Dust Class A Common
Scottsdale, AZ 85258 Stock
NGMC Finance Corp. 1,000 shares 6.67%
730 N.W. 107th Avenue Class A Common
Suite 410 Stock
Miami, FL 33172
Philip J. Polich 1,000 shares 6.67%
3612 W. Dunlap, Suite M Class A Common
Phoenix, AZ 85051 Stock
J. Larry Sorsby 1,000 shares 6.67%
10 Highway 35 Class A Common
Red Bank, NJ 07701 Stock
Toll Brothers Finance Co. 1,000 shares 6.67%
3103 Philmont Avenue Class A Common
Huntingdon Valley, PA 19006 Stock
Northgate Financial Group 1,000 shares 6.67%
1156 N. Mountain Avenue Class A Common
Upland, CA 91786 Stock
30
Class of Stock
Name and and Amount of
Address of Direct Percent of
Beneficial Owners Beneficial Class
Ownership
Weekley Investment Company 1,000 shares 6.67%
1300 Post Oak Blvd. Class A Common
Suite 1000 Stock
Houston, TX 77056
All Directors and 7,000 shares 46.67% (3)
Officers as a Group Class A Common
(12 people) Stock
(1) These shares are deemed to be beneficially owned by
Mr. Hamberlin. Mr. Hamberlin expressly disclaims such
beneficial ownership.
(2) These shares are deemed to be beneficially owned by
Mr. Sorsby. Mr. Sorsby expressly disclaims such
beneficial ownership.
(3) Includes 5,000 shares held directly and 2,000 shares
held in the name of two related Finance Companies as
discussed in (1) and (2) above.
Item 13. Certain Relationships and Related Transactions.
The Directors and Executive Officers of the Company also
serve in similar capacities with ASFC and ASAC. Each of such
Directors who owns shares of the Company also owns beneficially
the same percentage of Class A Common Stock of ASFC and ASAC and
in the same manner as the shares held in the Company. ASAC owns
100% of the outstanding capital stock of ASFS and SecurNet
Financial Corporation (parent company of SecurNet I and SMSCII)
as well as various other affiliates.
The Company is party to the Mortgage Securities Issuance and
Administration Agreement with ASFS. The Mortgage Securities
Issuance and Administration Agreement generally provides for ASFS
to render various services in connection with the issuance and
administration of each Series of Bonds issued by the Company, and
dictates the fees the Company will pay ASFS for such services.
The Company made advances to ASFC during the fiscal years
ended August 31, 1994 and 1993. The advances were collectible
upon demand and primarily earned interest at the prime rate as
published in the Wall Street Journal.
31
The Company entered into a Letter of Understanding with one
of its Class A shareholders dated in July 1994, and amended and
restated in September 1994, pursuant to which the Company, ASFC
and ASAC each agreed to purchase, upon such shareholder's request
made at any time prior to December 1, 1994 all of such
shareholder's shares of Class A stock in the Company, ASFC and
ASAC (or any stock issued in exchange for such stock) at a price
equal to the higher of (i) $1,000,000 or, (ii) in the event the
Company has purchased Class A stock from another shareholder
prior to December 1, 1994 at a purchase price higher than
$1,000,000, such higher price. On November 10, 1994 the Company,
ASFC and ASAC purchased the stock for $1,000,000. The Company's
allocated purchase price was $115,891. Additionally, on November
16, 1994, the Company, ASFC and ASAC purchased Class A Stock from
two other shareholders at the same price.
32
AMERICAN SOUTHWEST FINANCE CO., INC.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) (1) Financial Statements:
American Southwest Finance Co., Inc.
Report of Independent Certified Public
Accountants . . . . . . . . . . . . . . . . . 10
Balance Sheets, August 31, 1994 and 1993 . . . 11
Statements of Income, For each of the
three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . 12
Statements of Shareholders' Equity, For each of
the three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . 13
Statements of Cash Flows, For each of the
three years ended August 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . 14
Notes to Financial Statements . . . . . . . . 15
(2) Financial Statement Schedules:
All schedules have been omitted since required information
is not present, or is not present in amounts sufficient to require submission
of the schedule or because information required is included in the financial
statements or the notes thereto.
(3) Exhibits:
3.1 Articles of Incorporation of Registrant and
Bylaws of Registrant are incorporated by
reference to Exhibits 3(a) and (b) of
Registration No. 2-89316 of Registrant.
4.1 Indenture dated as of October 1, 1984 between
Registrant and Bank One, Arizona, NA
(formerly known as The Valley National Bank
of Arizona) is incorporated herein by
reference to Exhibit 4(a) of Registration No.
2-89316 of Registrant.
33
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K (cont'd).
4.2 First Supplemental Indenture dated as of
February 1, 1985 between Registrant and Bank
One, Arizona, NA is incorporated herein by
reference to Exhibit 4(h) of Registration No.
2-89316 of Registrant.
4.3 Second Supplemental Indenture dated as of
January 1, 1989 between Registrant and Bank
One, Arizona, NA is incorporated herein by
reference to Exhibit 4.3 of Registrant's
Annual Report on Form 10-K for the Fiscal
Year Ended August 31, 1989.
4.4 First Supplemental Indenture dated as of
January 1, 1989 between Registrant and Bank
One, Arizona, NA to Indenture for the
Mortgage-Collateralized Bonds, Series 1984-1
is incorporated herein by reference to
Exhibit 4.4 of Registrant's Annual Report on
Form 10-K for the Fiscal Year Ended August
31, 1989.
4.7 Trusteeship Succession Agreement dated as of
October 8, 1993 between Registrant,Bank One,
Arizona NA, First Bank National Association,
American Southwest Financial Corporation and
Westam Mortgage Financial Corporation.
4.8 Confirmation and First Amendment to
Trusteeship Succession Agreement dated
December 28, 1993 between Registrant, Bank
One, Arizona, NA, First Bank National
Association, American Southwest Financial
Corporation and Westam Mortgage Financial
Corporation.
10.1 Mortgage Securities Issuance and
Administration Agreement dated as of January
1, 1988 between the Registrant and American
Southwest Financial Services, Inc., is
incorporated herein by reference to Exhibit
10.1 of Form 10-K for the year ended August
31, 1991.
10.2 Agreement and Assignment dated October 26,
1994 between the Registrant and American
Southwest Financial Corporation.
23. Consent of Kenneth Leventhal & Company.
24. Power of Attorney.
(b) Reports on Form 8-K.
None.
34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AMERICAN SOUTHWEST FINANCE CO., INC.
By: /S/ Michael H. Feinstein
Michael H. Feinstein
Acting President, Executive Vice President
and Chief Operating Officer
Date: November 28, 1994
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
/S/ Michael H. Feinstein
Michael H. Feinstein
Acting President, Executive Vice President
and Chief Operating Officer
Date: November 28, 1994
/S/ Richard H. Hackett
Richard H. Hackett
Executive Vice President, Treasurer and Chief Financial and
Accounting Officer
Date: November 28, 1994
A Majority of the Board of Directors:
Michael H. Feinstein Philip J. Polich
Jon A. Grove J. Larry Sorsby
Alan D. Hamberlin Kirby Korth
By: /S/ Michael H. Feinstein
Michael H. Feinstein, For Himself and as Attorney-in-Fact
35
AMERICAN SOUTHWEST FINANCE CO., INC.
EXHIBITS
filed with report on
FORM 10-K
for fiscal year ended
August 31, 1994
EXHIBIT INDEX
EXHIBIT
4.7 Trusteeship Succession Agreement.
4.8 Confirmation and First Amendment to Trusteeship Succession
Agreement.
10.2 Agreement and Assignment between Registrant and American
Southwest Financial Corporaiton.
23. Consent of Kenneth Leventhal & Company.
24. Power of Attorney.
Execution Copy
TRUSTEESHIP SUCCESSION AGREEMENT
Dated as of October 8, 1993
Bank One, Arizona, NA ("Bank One"), First Bank National
Association ( First Bank ) and American Southwest Financial
Corporation, American Southwest Finance Co., Inc. and Westam
Mortgage Financial Corporation (collectively, the Issuers ),
agree as follows:
WHEREAS, Bank One currently serves as trustee for
certain of the bond issues for which the Issuers are obligors as
identified on Schedule I hereto (the "Bond Issues") pursuant to
the Bond Indentures and Supplemental Indentures set forth on
Schedule II hereto (the "Indentures").
WHEREAS, Bank One intends to resign as trustee, the
Issuers anticipate appointing First Bank and First Bank
anticipates accepting such appointment, as successor trustee
under each of the Indentures (the Trusteeship Succession ), and
to facilitate transfer of bond collateral, transition of bond
registrar and transfer functions and paying agency functions,
transition of bond trustee activities, transfer of records and
provision of successor notices, the parties desire that certain
actions and procedures be undertaken in accordance with the
Indentures and the terms and conditions herein.
NOW, THEREFORE, in consideration of the premises, and
the mutual agreements hereinafter set forth, Bank One, First Bank
and the Issuers agree as follows:
1. Bond Collateral. Prior to the Trusteeship
Succession, First Bank shall act as the custodial agent of Bank
One in connection with the transfer, custody and safe keeping,
trust account crediting and verification of all Bond Issue
collateral ( Collateral ), pursuant to that certain Collateral
Custody and Verification Agreement (the Collateral Agreement )
between Bank One and First Bank, in effect as of August 31, 1993,
a copy of which is attached hereto as Exhibit A.
2. Bond Registrar Functions. Prior to Trusteeship
Succession, First Bank shall act as Bank One s registrar agent to
perform all bond registration, transfer, exchange, authentication
and record keeping functions of the registrar and transfer agent
under each of the Indentures, pursuant to the Registrar Agency
Agreement (the Registrar Agency Agreement ) between Bank One and
First Bank, in effect as of August 31, 1993, a copy of which is
attached hereto as Exhibit B.
3. Bond Paying Agency Functions. Prior to and
following the Trusteeship Succession, First Bank shall act as the
Issuers paying agent for each Bond Issue as provided in the
related Indenture, commencing on October 1, 1993, pursuant to the
Paying Agency Agreement (the Paying Agency Agreement ) dated as
of September 29, 1993, among Bank One, First Bank and the
Issuers, a copy of which is attached hereto as Exhibit C.
Exhibit 4.7
4. Trusteeship Resignation, Appointment and
Acceptance; Conditions; Discharge. Effective upon the later of
November 30, 1993 or satisfaction of each of the conditions
precedent set forth below, Bank One shall resign as trustee for
each Bond Issue by its execution and delivery to the Issuers of a
Trustee Resignation instrument in the form attached hereto as
Exhibit D-1, the Issuers shall appoint First Bank as successor
trustee for each Bond Issue by execution and delivery to Bank One
and to First Bank of Trustee Appointment instruments in the form
attached hereto as Exhibit D-2, and First Bank shall accept such
appointment as Successor Trustee for each Bond Issue by its
execution and delivery to Bank One and to the Issuers of a
Trustee Acceptance instrument in the form attached hereto as
Exhibit D-3.
The parties agree that the following conditions
precedent shall be fully performed and satisfied prior to
Trusteeship Succession with respect to all Bond Issues:
(i) All Bond Issue Collateral shall be transferred to
the custody of First Bank and receipt of correct
and complete Collateral, together with necessary
endorsements, assignments or transfer notices,
shall be verified, or discrepancies resolved, as
provided in the Collateral Agreement.
Notwithstanding the foregoing, Trusteeship
Succession shall not be prevented based upon First
Bank s receipt of Collateral consisting of Pledged
Loans (as that term is defined in the Collateral
Agreement) evidenced by document files that
contain discrepancies of a de minimis nature,
i.e., which do not adversely affect the value or
security of such Pledged Loans.
(ii) All Bond Issue principal balance records by bond
holder and maturity date shall be reconciled as
correct, or discrepancies resolved, as
contemplated by the Paying Agency Agreement.
(iii) All Uniform Commercial Code ( UCC ) financing
statements or assignments thereof, naming First
Bank (in its capacity as Bond Issue successor
trustee), as direct or assigned secured party,
shall have been executed and filed in appropriate
public record offices to perfect such trustee s
security interests in all Bond Issue Collateral,
as determined by legal counsel to the Issuers.
The parties hereto agree to cooperate with
Issuers legal counsel in the preparation and
filing of such UCC financing statements and/or
assignments.
Upon Trusteeship Succession, Bank One shall be released
and discharged from any further claims and obligations under the
Indentures with respect to its administration of the Bond Issues
and the transfer of Bond Issue collateral, except that it shall
remain responsible for any undertakings made by it in connection
with the resolution of collateral discrepancies as provided in
Section 4 of the Collateral Agreement. For a period of fifteen
months following the date of Trusteeship Succession, Bank One
shall remain responsible for the accuracy and completeness of the
records and documents to be delivered to First Bank pursuant to
Section 5 hereof, the Certified Collateral List provided to First
Bank pursuant to Section 4 of the Collateral Agreement, the bond
2
Exhibit 4.7
registration information provided to First Bank pursuant to
Section 2 of the Registrar Agency Agreement and the payment
information provided to First Bank pursuant to Section 4 of the
Paying Agency Agreement. Bank One shall remain responsible for
the accuracy of principal and interest payments made by it as
paying agent prior to October 1, 1993, with respect to Bond
Issues as required by the Indentures.
5. Post-Trusteeship Succession Actions. Promptly
following Trusteeship Succession, Bank One shall transfer to
First Bank (i) all accounting records and statements of asset
credits, asset debits, and monthly ending balances for Indenture
trust accounts, (ii) records of all Bond Issue payments of
principal and interest, affidavits of lost, stolen or destroyed
bond certificates, and related indemnity agreements and surety
bonds, (iii) original Bond Issue closing documents and
certificates and all subsequent amendments and supplements
thereto and agreements executed by Bank One as trustee for any
such Bond Issue effecting the rights or security of bondholders
or the duties of the trustee thereunder, (iv) collateral asset
servicing reports and servicer compliance certificates and
financial statements, (v) Issuer Indenture compliance
certificates and reports, and (vi) trustee reports to
bondholders.
Within thirty (30) days following Trusteeship
Succession, the parties shall jointly prepare, and First Bank
shall mail, a notice of Trustee resignation, appointment and
acceptance to holders of all Bond Issues, Bond Issue credit
rating agencies, Bond Issuer collateral servicers and collateral
agreement parties.
Following Trusteeship Succession, Bank One shall
promptly remit to First Bank all cash payments received by Bank
One with respect to items of Bond Issue collateral, together with
a copy of the advice, notice or other indication of the nature
and source of such payment, specifying the item of collateral to
which such payment relates. Further, for a period of one year
following Trusteeship Succession, Bank One shall forward to First
Bank all Bond Issue certificates presented to Bank One for
payment of principal maturing after Trusteeship Succession.
6. Effective Period, Termination and Amendment, and
Interpretive and Additional Provisions. This Agreement shall
become effective as of the date hereof, and may be amended at
any time by mutual agreement by the parties hereto. This
Agreement, except with respect to the activities described in
Sections 3 and 5 and Bank One s continuing responsibilities as
provided in Section 4, shall terminate concurrently with the
Trusteeship Succession. In connection with the administration of
this Agreement, the parties may agree from time to time upon the
interpretation of the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor and
purposes of this Agreement any such interpretation to be signed
by all parties and annexed hereto.
3
Exhibit 4.7
7. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of
Arizona.
8. Notices. Notices and other writings shall be
delivered or mailed, postage prepaid, to Bank One at Bank One,
Arizona NA, by mail: Corporate Trust Mortgage Backed Bonds
Department (A834), P. O. Box 29559, Phoenix, Arizona 85038; by
delivery: Corporate Trust Mortgage Backed Bonds Department,
3
Exhibit 4.7
25th Floor, 241 North Central Avenue, Phoenix, Arizona 85004
Attention: Corporate Trust Department, to the Issuers at 2390
East Camelback Road, Suite 225, Phoenix, Arizona 85016,
Attention: Bond Administration, or to First Bank at First Bank
National Association, 180 East Fifth Street, St. Paul, Minnesota
55101, Attention: Corporate Trust Department, or to such other
address as each party may hereafter specify in writing, and if so
delivered or mailed, shall be conclusively presumed to have bene
duly given hereunder to the respective party, whether or not such
party receives such notice.
9. Binding Effect. This Agreement shall be binding
upon and shall enure to the benefit of the parties hereto and
their respective successors and assigns.
FIRST BANK NATIONAL ASSOCIATION
By /s/ Eve D. Kaplan
Its Vice President
BANK ONE, ARIZONA, NA
By /s/ Susan J. McCord
Its Vice President
AMERICAN SOUTHWEST FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
AMERICAN SOUTHWEST FINANCE CO., INC.
By /s/ Jeffrey A. Newman
Its Senior Vice President
WESTAM MORTGAGE FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
4
Exhibit 4.7
Exhibit A
COLLATERAL CUSTODY AND VERIFICATION AGREEMENT
Dated as of August 31, 1993
Bank One, Arizona NA (the Trustee ) and First Bank
National Association, a national banking association (the
Custodian ), agree as follows:
WHEREAS, the Trustee currently is trustee for each of
the bond issues identified on Schedule I hereto (the Bond
Issues ) pursuant to the Bond Indentures and Supplemental
Indentures set forth on Schedule II hereto (the Indentures ),
and in connection therewith, the Trustee maintains custody of (i)
separate groups of securities of the types described on Exhibit A
hereto ( Securities ), (ii) separate pools of mortgage loans
evidenced by the types of documents described on Exhibit B hereto
( Pledged Loans ), (iii) separate holdings of cash, letters of
credit ( Letters of Credit ) surety bonds ( Surety Bonds ), cash-
equivalent investment securities ( Cash Investments ),
reinvestment agreements ( Reinvestment Agreements ), insurance
policies ( Insurance Policies ) and Funding Agreements, Servicing
Agreements and Master Servicing Agreements (collectively, the
Agreements ), all individually recorded and credited to
Indenture trust accounts (collectively referred to herein as
Collateral ) in accordance with the terms of the Indentures.
WHEREAS, the Trustee intends to resign as trustee, and
Custodian anticipates being appointed and accepting as successor
trustee, under each of the Indentures ( Trusteeship Succession ),
and to facilitate transfer and control of and accounting for the
Collateral, the parties desire that Custodian shall act as the
Trustee s custodial agent to receive, hold and verify all
Collateral that is transferred from Trustee to Custodian prior to
Trusteeship Succession, in accordance with the terms and
conditions herein.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements hereinafter set forth, the Custodian and
the Trustee agree as follows:
1. Appointment as Custodian. Subject to the terms
and conditions herein, the Trustee hereby appoints the Custodian,
and the Custodian hereby accepts such appointment, as Trustee s
custodial agent to receive and maintain custody of the collateral
delivered to it as provided herein, for the benefit and
protection of the Trustee in order to continue and maintain the
lien perfection of the Collateral as security for the Bond
Issues, and to provide for the orderly transfer and verification
of the Collateral in connection with the Trusteeship Succession.
2. Custodial Account. The Custodian agrees to open a
segregated custody account in the Trustee s name for each Bond
Issue with itself at its office in St. Paul, Minnesota where
custody of the Collateral will be maintained on behalf of the
Trustee and to credit to such account by separate records on its
books the respective Collateral securing such Bond Issue.
3. Delivery of Collateral. Trustee shall deliver
Collateral to the Custodian in multiple deliveries from time to
time prior to Trusteeship Succession, upon at least two business
days advance written notice to Custodian ( Delivery Notice )
which may be made by facsimile transmission and shall
5
Exhibit 4.7
identify all Collateral by the Bond Issue and Indenture to and by
which it is pledged, the trust accounts to which it is to be
credited, the scheduled delivery date and specific information
regarding each item of Collateral as follows:
Securities and Cash Investments
Title of Security
CUSIP number and face amount
Whether Security is certificated, or if uncertificated,
FED registered or transfer agent if non-FED registered
Date of Transfer if uncertificated
Delivery information
Pledged Loans
Delivery mode of Loan files
Document files identification information
Cash
Amount
Wire transfer transmitting bank
Reinvestment Agreements, Letters of Credit and Surety Bonds
Document title
Names of providers
Dollar amount
Delivery mode
Agreements and Insurance Policies
Document title
Names of issuer or contract parties
Delivery mode
Each Delivery Notice shall be executed by an officer of the
Trustee and copies attached to this Agreement.
Trustee shall make the transfer and delivery of
Collateral on the scheduled delivery dates utilizing the modes of
physical delivery and book-entry transfer and reregistration
procedures and agents as agreed upon by the Custodian and the
Trustee for each item of Collateral in the form as held by
Trustee. Custodian s delivery address, registration and
electronic transfer account information for Securities and Cash
Investments and wire transfer instructions for cash are set out
in Exhibit C hereto. Uncertificated Securities and Cash
Investments delivery shall be evidenced by written delivery
confirmation forms or transfer agent generated electronic
confirmation notices sent to or available through on-line access
by Custodian. Certificated Securities and Cash Investments and
Pledged Loan notes, mortgages and deeds of trust will be endorsed
6
Exhibit 4.7
for transfer, or accompanied by duly executed assignment
instruments, sufficient to permit Custodian to reregister record
ownership of such Collateral. Certificated Securities held in
the physical possession of the Trustee shall be delivered to the
possession of Custodian employees at Trustee s place of business
in Phoenix, Arizona. Pledged Loan original document files will
be delivered to the Custodian s place of business in St. Paul,
Minnesota, grouped by related Bond Issue and accompanied by a
manifest of the documents contained therein; provided that
Pledged Loan documents that have been delivered to and are held
by mortgage loan servicers shall be noted on the related Delivery
Notice, and the Trustee shall direct such servicers to remit such
documents, or related remedies proceeds, to the Custodian upon
completion of servicing or remedies use thereof. Original
Letters of Credit, Surety Bonds, Reinvestment Agreements,
Insurance Policies and Agreements will be delivered to the
Custodian s place of business in St. Paul, Minnesota together
with Trustee-executed letters or transfer certificates to the
providers thereof advising and directing that Custodian become
the beneficiary thereof. Prior to delivery and receipt by
Custodian in the manner specified in the Delivery Notice, risk of
theft, destruction or loss of Collateral will be that of Trustee.
Custodian will provide Trustee with an initial receipt
(in the form attached hereto as Exhibit D) for all Securities and
Cash Investments, Pledged Loan document files, Letters of Credit,
Reinvestment Agreements, Insurance Policies and Agreements
delivered to Custodian. Such initial receipts shall be delivered
to the Trustee with respect to all Collateral other than Pledged
Loans, within three business days after delivery, and with
respect to Pledged Loans, within ten business days after
delivery. Custodian shall not confirm receipt of complete or
correct Collateral as required for each Bond Issue, and will not
release Trustee from appropriate claims for missing or incomplete
Collateral, until completion of the Collateral review and
verification procedures described in Section 4 below. The
Trustee shall remit to Custodian any cash income and
distributions received by Trustee with respect to transferred
Collateral that is to be (i) held as Collateral and not required
for Bond Issue payments or any other payments due prior to
October 1, 1993, or (ii) held as Collateral or applied to make
Bond Issue payments or other payments under the Indentures from
and after October 1, 1993; identifying such cash to the related
Bond Issue and item of Collateral.
4. Collateral Verification. Custodian shall receive
from the Trustee within ten business days following the date of
this Agreement, a certified list of all Collateral currently
required pursuant to the Indentures to secure each Bond Issue
(the Certified Collateral List ), setting forth sufficient
detail to identify each item of Collateral. Custodian shall
review and compare Collateral actually received from the Trustee
for each Bond Issue with the related Certified Collateral List.
With respect to Mortgage Loans, the Custodian shall determine
that each Mortgage Loan document file contains the documents
described on Exhibit B hereto. The Custodian shall note and
advise Trustee and American Southwest Financial Corporation in
writing of any Collateral received but not identified on the
Certified Collateral List, of Collateral identified on the List
but not received and of Pledged Loan document exceptions. Such
notice and advice shall be given, in the case of Collateral other
than Pledged Loans, within five business days following the date
on which Custodian
7
Exhibit 4.7
has given its initial receipt, and has received the Certified
Collateral List, for such Collateral, and in the case of Pledged
Loans, within ten business days following that date for such
Pledged Loans. Any such Collateral discrepancies will be
resolved and corrected prior to the Trusteeship Succession for
all Bond Issues. Immediately following either its determination
that no Collateral discrepancy exists, or all discrepancies are
resolved and corrected, with respect to a Bond Issue, the
Custodian shall provide a confirming receipt to the Trustee and
American Southwest for such Bond Issue s Collateral in the form
attached hereto as Exhibits E-1 or E-2.
5. Duties of Custodian. As Custodian, the Custodian
shall have and perform the following powers and duties with
respect to the Collateral:
(a) Safekeeping. The Custodian will hold the
Collateral on behalf of the Trustee. The Custodian will
promptly report to the Trustee any failure on its part to
hold the Collateral as herein provided and promptly take
appropriate action to remedy any such failure.
(b) Access to Collateral. The Custodian will, subject
to security requirements of the Custodian applicable to its
own employees having access to similar records held by the
Custodian and such regulations as may be reasonably imposed
by the Custodian, permit the Trustee or any of its duly
authorized representatives, servicing agents, attorneys or
auditors to inspect the Collateral at such times as the
Trustee may reasonably request during normal business hours.
(c) Release of Documents. The Custodian will release
any Pledged Loan documents for servicing as directed by the
Trustee and as required by the governing Indenture or
related servicing agreement.
(d) Administration; Reports. The Custodian will
collect any income and distributions on Securities, Pledged
Loans, Cash Investments, Surety Bonds, Reinvestment
Agreements, Insurance Policies and Agreements transferred
and registered to it, and remit to the Trustee such portion
thereof required for Bond Issue payments or other payments
by the Trustee prior to October 1, 1993, and in general,
will attend to all non-discretionary details in connection
with maintaining custody of the Collateral on behalf of the
Trustee. The Custodian shall assist the Trustee generally
in the preparation of routine reports to Bondholders or to
regulatory bodies, if any, to the extent necessitated by the
Custodian s custody of the Collateral.
(e) Trust Accounts. Custodian will establish on its
records separate trust accounts of the types described on
Exhibit F hereto, for each Bond Issue as directed in writing
by the Trustee, and (i) each item of Collateral received
hereunder from the Trustee will be credited to the
particular trust account specified in the related Delivery
Notice, (ii) cash received by the Custodian with respect to
items of Collateral other than Pledged Loans will be
credited to the trust account to which such Collateral is
credited and (iii) cash received by the Custodian with
respect to Pledged Loans will be credited to the Mortgage
Collateral
8
Exhibit 4.7
Proceeds Account for the related Bond Issue as specified by the
remitting loan servicer or master servicer.
6. Instructions; Authority to Act. The Custodian
shall be deemed to have received proper instructions with respect
to the Collateral upon its receipt of written instructions signed
by a Responsible Officer of the Trustee. A certified copy of a
resolution of the Board of Directors of the Trustee may be
received and accepted by the Custodian as conclusive evidence of
the authority of any such officer to act and may be considered as
in full force and effect until receipt of written notice to the
contrary by the Trustee. Such instructions may be general or
specific in terms.
7. Indemnification by the Custodian. The Custodian
agrees to indemnify the Trustee for any and all liabilities,
obligations, losses, damages, payments, costs or expenses of any
kind whatsoever which may be imposed on, incurred by or asserted
against the Trustee as the Trustee as the result of failure of
the Custodian to perform its duties hereunder, provided, however,
that the Custodian shall not be liable for any portion of any
such liabilities, obligations, losses, damages, payments or costs
due to the actions or omissions of the Trustee.
8. Advice of Counsel. The Custodian and the Trustee
further agree that the Custodian shall be entitled to rely and
act upon advice of counsel with respect to its performance
hereunder as custodian and shall be without liability for any
action reasonably taken pursuant to such advice, provided that
such action is not in violation of applicable federal or state
law.
9. Effective Period, Termination and Amendment, and
Interpretive and Additional Provisions. This Agreement shall
become effective as of the date hereof, shall continue in full
force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto
shall terminate concurrently with the Trusteeship Succession and
otherwise may be terminated by either party by written notice
delivered or mailed to the other party, postage prepaid,
termination to take effect no sooner than thirty (30) days after
the date of such delivery or mailing. Concurrently with, or as
soon as practicable after any termination other than upon
Trusteeship Succession, the Custodian shall return the Collateral
to the Trustee at such place as the Trustee may reasonably
designate. In connection with the administration of this
Agreement, the Custodian and the Trustee may agree from time to
time upon the interpretation of the provisions of this Agreement
as may in their joint opinion be consistent with the general
tenor and purposes of this Agreement, any such interpretation to
be signed by all parties and annexed hereto.
10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Minnesota.
11. Notices. Notices and other writings shall be
delivered or mailed, postage prepaid, to the Trustee at Bank One,
Arizona NA, by mail: Corporate Trust Mortgage Backed Bonds
Department (A834), P. O. Box 29559, Phoenix, Arizona 85038; by
delivery: Corporate Trust Mortgage Backed Bonds Department,
25th Floor, 241 North Central Avenue, Phoenix, Arizona 85004, or
to
9
Exhibit 4.7
the Custodian at First Bank National Association, 180 East Fifth
Street, St. Paul, Minnesota 55101, Attention: Corporate Trust
Agreement, or to such other address as the Trustee or the
Custodian may hereafter specify in writing, shall be conclusively
presumed to have been duly given hereunder to the respective
party, whether or not such party receives such notice.
12. Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the Trustee and the
Custodian and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date and year first written
above.
BANK ONE, ARIZONA NA,
as Trustee under the Indentures
referred to above
By /s/ Susan J. McCord
Its Vice President
By /s/ Anne Aldridge
Its Corporate Officer
FIRST BANK NATIONAL
ASSOCIATION, as Custodian
By /s/ Eve D. Kaplan
Its Vice President
By /s/ Sheryl A. Christopherson
Its Asst. Vice President
10
Exhibit 4.7
ACKNOWLEDGEMENT
Each of the undersigned does hereby acknowledge and agree to the
form and effect of the foregoing Agreement.
AMERICAN SOUTHWEST FINANCIAL
CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
AMERICAN SOUTHWEST FINANCE CO. INC.
By /s/ Jeffrey A. Newman
Its Senior Vice President
WESTAM MORTGAGE FINANCIAL
CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
11
Exhibit 4.7
SCHEDULE I
BOND ISSUES
ISSUER SERIES
American Southwest Financial Corporation
G
H
I
J
K
M
P
Q
R
S
T
U
V
X
Y
Z
37
38
39
40
41
42
43
44
45
46
48
49
50
51
53
54
55
56
59
68
American Southwest Finance Co., Inc. 1984-1
Westam Mortgage Financial Corporation W-3
12
Exhibit 4.7
SCHEDULE II
INDENTURES
Bond Series Indenture Date Supplemental Indenture Date
G 8/1/84 10/01/84
H 8/1/84 12/01/84
I 8/1/84 03/01/85
J 8/1/84 04/01/85
K 8/1/84 07/01/85
M 8/1/84 09/01/85
P 8/1/84 12/01/85
Q 8/1/84 12/01/85
R 8/1/84 12/31/85
S 8/1/84 12/31/85
T 8/1/84 04/01/86
U 8/1/84 03/01/86
V 8/1/84 04/01/86
X 8/1/84 06/01/86
Y 8/1/84 06/01/86
Z 8/1/84 07/01/86
37 8/1/84 08/01/86
38 8/1/84 07/01/86
39 8/1/84 08/01/86
40 8/1/84 10/01/86
41 8/1/84 10/01/86
42 8/1/84 11/01/86
43 8/1/84 01/01/87
44 8/1/84 02/01/87
45 8/1/84 02/01/87
46 8/1/84 05/01/87
48 8/1/84 06/01/87
49 8/1/84 05/01/87
50 8/1/84 06/01/87
51 8/1/84 07/01/87
53 8/1/84 07/01/87
54 8/1/84 09/01/87
55 8/1/84 10/01/87
56 8/1/84 10/01/87
59 8/1/84 12/01/87
68 8/1/84 09/01/88
1984-1 1/1/84 None
W-3 6/1/88 06/01/88
13
Exhibit 4.7
Ex. A
Types of Securities
1. GNMA I Certificates.
2. GNMA II Certificates.
3. Freddie Mac Certificates.
4. FNMA Certificates.
The GNMA Certificates (both I and II) are fully-
modified mortgage-backed certificates issued by Government
National Mortgage Association.
The Freddie Mac Certificates are Mortgage Participation
Certificates issued by Federal Home Loan Mortgage Corporation.
The FNMA Certificates are Guaranteed Mortgage Pass-
Through Certificates issued by Federal National Mortgage
Association.
The GNMA I and GNMA II Certificates are in certificated
form and the remaining securities are in uncertificated, book-
entry form.
14
Exhibit 4.7
Ex. B
Mortgage Loan Document Types
1. Promissory Note.
2. Deed of Trust or Mortgage.
3. Assignment of Deed of Trust or Mortgage.
4. Title Policy or commitment therefor.
5. Insurance certificates.
6. Appraisal.
7. PMI or Pool Mortgage Insurance certificate.
8. Loan Closing Statement.
15
Exhibit 4.7
Ex. C
Federal Reserve Bank Deliveries:
ABA 091000022
First MPLS/TRUST
AGENT ACCT # **
** to be completed for each Bond Issue Series with the
MCPA number set forth on the following two pages.
FED Wire Instructions:
ABA 091000022
First Bank National Association
for further credit to First Trust Acct
#180121167365
TSU: Corporate Trust
ATTN: Mary Rodgerson
ref. acct. #
16
Exhibit 4.7
Ex. D
INITIAL RECEIPT BY CUSTODIAN OF COLLATERAL
First Bank National Association, as custodian for Bank One,
Arizona NA in its capacity as Trustee, hereby acknowledges
receipt and delivery of each item of Collateral identified on the
Delivery Notice attached hereto, other than the exceptions set
forth on Schedule I attached hereto.
FIRST BANK NATIONAL
ASSOCIATION, as Custodian
By
Its
Dated: , 1993
17
Exhibit 4.7
Ex. E-1
[NAME OF ISSUER]
[TITLE OF BOND ISSUE]
CONFIRMING RECEIPT BY CUSTODIAN OF SECURITIES
AND PLEDGED LOAN COLLATERAL
First Bank National Association, as custodian (the
Custodian ) for Bank One, Arizona NA as Trustee under the
Indenture dated as of , 19 as
amended to the Delivery Date (the Indenture ), and the Series
Indenture Supplement thereto dated as of
, 19 relating to the Bonds (the Indenture
Supplement ), hereby acknowledges and confirms that:
1. The Custodian has received delivery of, and has in
its possession and custody, each GNMA Certificate, Freddie Mac
Certificate and FNMA Certificate (other than in book-entry form)
referred to in Schedules respectively, to the
Indenture Supplement, that has been certified by the Issuer
thereof to be currently outstanding.
2. The Custodian has received delivery of required
documents for each Pledged Loan referred to in Schedule to
the Indenture Supplement that has been certified by American
Southwest Financial Corporation to be currently outstanding.
3. Each such Pledged Loan has been assigned to the
Custodian and the assignment forwarded for recording.
4. Each such GNMA Certificate (other than in book-
entry form), Freddie Mac Certificate and FNMA Certificate has
been registered in the name of the Custodian or each GNMA
Certificate (other than in book-entry form), Freddie Mac
Certificate in the possession of the Trustee has attached to it a
Form of Detached Assignment (Form PD 1832) or such other form of
assignment acceptable to GNMA with respect to the assignment of
GNMA Certificates, Freddie Mac with respective to the assignment
of Freddie Mac Certificates and FNMA with respect to the
assignment of FNMA Certificates, each of which purports to be
executed by the registered holder of the respective Certificates,
and the Custodian hereby confirms that the following information
contained on each such form of assignment is in conformance with
what is shown on the face of the Certificates:
(i) The pool or group number;
(ii) The Certificate number; and
(iii) The original principal amount of the Certificate.
18
Exhibit 4.7
5. Each such form of assignment also contains the following:
(i) The name of the Custodian as the party in
whose name the Certificate is to be re-registered;
(ii) The address of the Custodian;
(iii) The federal tax identification number of the Issuer; and
(iv) The name and address of the commercial bank or trust
company guaranteeing the signature of the assignor.
6. Each GNMA Certificate in book-entry form has been
confirmed by the Custodian in writing by the financial
intermediary acting as depository (the Depository ), which has
represented to the Custodian that it is an appropriate depository
(as such term is defined in 1 CFR 462.4(b) and 24 CFR 81.44(b)),
as having been identified, pursuant to appropriate notice, by
book-entry or otherwise by the Depository as in the name of the
Custodian, as pledgee.
7. Each such book-entry GNMA Certificate has been
confirmed to the Custodian in writing by the Depository as having
been registered in the name of the Depository in an appropriate
book-entry account with a Federal Reserve Bank which maintains
such accounts.
8. The Custodian further acknowledges that it has
received custody and holds each such GNMA Certificate, Freddie
Mac Certificate, FNMA Certificate and Pledged Loan in good faith
and without notice of any adverse claim.
FIRST BANK NATIONAL
ASSOCIATION, as Custodian
By________________________
Dated:_______________________, 1993
19
Exhibit 4.7
Ex. E-2
[NAME OF ISSUER]
[TITLE OF BOND ISSUE]
CONFIRMING RECEIPT BY CUSTODIAN OF CASH, CASH INVESTMENTS,
LETTERS OF CREDIT, SURETY BONDS, REINVESTMENT AGREEMENT,
INSURANCE POLICIES AND AGREEMENTS COLLATERAL
First Bank National Association, as custodian (the
Custodian ) for Bank One Arizona NA as Trustee under the
Indenture dated as of _________________ , 19__ as
amended to date (the Indenture ), and the Series ___ indenture
supplement thereto dated as of__________________ , 19__
relating to the ____________ Bonds (the Indenture Supplement ),
hereby acknowledges receipt and delivery of the Cash, Cash
Investments, Letters of Credit, Surety Bonds and/or Reinvestment
Agreement, Insurance Policies, and/or Agreements that are
currently pledged to secure the Bonds, as certified by the Issuer
thereof, and certifies that it has acquired custody of such
Collateral in good faith and without notice of any adverse claim.
FIRST BANK NATIONAL
ASSOCIATION, as Custodian
By
Its
Dated: _____________________ , 1993
20
Exhibit 4.7
Ex. F
Types of Trust Accounts
1. Mortgage Collateral Proceeds Account.
2. Supplemental Debt Service Fund.
3. Buy-Down Debt Service Fund.
4. Reserve Fund.
5. Prepayment Provision Reserve Account.
6. Supplemental Custodial Reserve Fund.
7. Prepayment Account.
21
Exhibit 4.7
Exhibit B
REGISTRAR AGENCY AGREEMENT
Dated as of August 31, 1993
Bank One, Arizona NA, ( Trustee ), and First Bank
National Association, a national banking association (the
Agent ), agree as follows:
WHEREAS, the Trustee currently is trustee for each of
the bond issues identified on Schedule I hereto (the Bond
Issues ) pursuant to the Bond Indentures and Supplemental
Indentures set forth on Schedule II hereto (the Indentures ),
and in connection therewith, the Trustee acts as bond registrar
and transfer agent for each Bond Issue.
WHEREAS, the Trustee intends to resign as trustee, and
Agent anticipates being appointed and accepting as successor
trustee, under each of the Indentures (the Trusteeship
Succession ), and to facilitate transition of bond registrar and
transfer agent functions, the parties desire that Agent shall act
as the Trustee s agent to perform such functions prior to the
Trusteeship Succession, in accordance with the procedures set
forth in the Indentures, and terms and conditions herein.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements hereinafter set forth, the Agent and the
Trustee agree as follows:
1. Appointment as Agent. Subject to the terms and
conditions herein, the Trustee hereby appoints the Agent, and the
Agent hereby accepts such appointment, as the Trustee s registrar
agent to perform all bond registration, transfer, exchange,
authentication and recordkeeping functions of the registrar and
transfer agent ( Registrar Functions ) for each Bond Issue as
provided in the related Indenture, commencing for each Bond Issue
on the date (a Commencement Date ) specified for such Bond Issue
on Schedule III attached hereto and continuing until Trusteeship
Succession or prior termination of this Agreement.
2. Transfer of Registration Information. At least
[five] business days prior to the related Commencement Date, the
Trustee will provide the Agent with all bond registration,
information, for each Bond Issue in hard copy format compatible
with Agent s Bond Master processing system, together with
canceled bond records and unissued bond certificate inventory,
all as necessary or appropriate for Agent to perform Registrar
Functions for the Bond Issues on behalf of the Trustee. The
Trustee shall be responsible for loss, theft or destruction of
bond registration records and certificates inventory prior to
receipt thereof by the Agent.
3. Bond Certificate Delivery. From and after the
Commencement Date, Agent shall receive Bond Issue certificates
for transfer or exchange at its offices in St. Paul, Minnesota,
delivered to the following addresses:
Mail Delivery Hand Delivery
First Bank National First Bank National Association
Association Corporate Trust Department
P.O. Box 64111 180 East Fifth Street
St. Paul, Minnesota 55764 St. Paul, Minnesota 55701
22
Exhibit 4.7
The Trustee shall forward to the Agent for processing all Bond
Issue certificates received by the Trustee for transfer or
exchange or other Registrar Functions.
4. Instructions; Authority to Act. Trustee may
direct any particular aspect of the Agent s Registrar Functions
by providing instructions to Agent. The Agent shall be deemed to
have received proper instructions with respect to the Registrar
Functions upon its confirmation of its receipt of written
instructions signed by a Responsible Officer of the Trustee. All
such instructions shall contain receipt provisions which the
Agent shall countersign as such receipt confirmation. A
certified copy of a resolution of the Board of Directors of the
Trustee may be received and accepted by the Agent as conclusive
evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written
notice to the contrary by the Trustee. Such instructions may be
general or specific in terms.
5. Indemnification by the Agent. The Agent agrees to
indemnify the Trustee for any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind
whatsoever which may be imposed on, incurred by or asserted
against the Trustee as the Trustee as the result of failure of
the Agent to perform its duties hereunder, provided, however,
that the Agent shall not be liable for any portion of any such
liabilities, obligations, losses, damages, payments or costs due
to the actions or omissions of the Trustee.
6. Advice of Counsel. The Agent and the Trustee
further agree that the Agent shall be entitled to rely and act
upon advice of counsel with respect to its performance hereunder
as custodian and shall be without liability for any action
reasonably taken pursuant to such advice, provided that such
action is not in violation of applicable federal or state law.
7. Effective Period, Termination and Amendment, and
Interpretive and Additional Provisions. This Agreement shall
become effective as of the date hereof, shall continue in full
force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto
shall terminate concurrently with the Trusteeship Succession and
otherwise may be terminated by either party by written notice
delivered or mailed to the other party, postage prepaid,
termination to take effect no sooner than thirty (30) days after
the date of such delivery or mailing. Concurrently with, or as
soon as practicable after any termination other than upon
Trusteeship Succession, the Agent shall return all bond
registration information to the Trustee at such place as the
Trustee may reasonably designate. In connection with the
administration of this Agreement, the Agent and the Trustee may
agree from time to time upon the interpretation of the provisions
of this Agreement as may in their joint opinion be consistent
with the general tenor and purposes of this Agreement, any such
interpretation to be signed by all parties and annexed hereto.
8. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Minnesota.
9. Notices. Notices and other writings shall be
delivered or mailed, postage prepaid, to the Trustee at Bank One,
Arizona NA, by mail: Corporate Trust -
23
Exhibit 4.7
Mortgage Backed Bonds Department (A834), P.O. Box 29559, Phoenix,
Arizona 85038; by delivery: Corporate Trust Mortgage Backed
Bonds Department, 25th Floor, 241 North Central Avenue, Phoenix,
Arizona 85004 Attention: Corporate Trust Department, or to the
Agent at First Bank National Association, 180 East Fifth Street,
St. Paul, Minnesota 55101, Attention: Corporate Trust Agreement,
or to such other address as the Trustee or the Agent may
hereafter specify in writing, shall be conclusively presumed to
have bene duly given hereunder to the respective party, whether
or not such party receives such notice.
10. Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the Trustee and the Agent
and their respective successors and assigns.
FIRST BANK NATIONAL BANK ONE, ARIZONA NA,
ASSOCIATION, as Agent as Trustee under the Indentures
referred to above
By /s/ Eve D. Kaplan By /s/ Susan J. McCord
Its Vice President Its Vice President
By /s/ Sheryl A. Christopherson By /s/ Anne Aldridge
Its Asst. Vice President Its Corporate Officer
24
Exhibit 4.7
SCHEDULE I
BOND ISSUES
ISSUER SERIES
American Southwest Financial Corporation
G
H
I
J
K
M
P
Q
R
S
T
U
V
X
Y
Z
37
38
39
40
41
42
43
44
45
46
48
49
50
51
53
54
55
56
59
68
American Southwest Finance Co., Inc. 1984-1
Westam Mortgage Financial Corporation W-3
25
Exhibit 4.7
SCHEDULE II
INDENTURES
Bond Series Indenture Date Supplemental Indenture Date
G 8/1/84 10/01/84
H 8/1/84 12/01/84
I 8/1/84 03/01/85
J 8/1/84 04/01/85
K 8/1/84 07/01/85
M 8/1/84 09/01/85
P 8/1/84 12/01/85
Q 8/1/84 12/01/85
R 8/1/84 12/31/85
S 8/1/84 12/31/85
T 8/1/84 04/01/86
U 8/1/84 03/01/86
V 8/1/84 04/01/86
X 8/1/84 06/01/86
Y 8/1/84 06/01/86
Z 8/1/84 07/01/86
37 8/1/84 08/01/86
38 8/1/84 07/01/86
39 8/1/84 08/01/86
40 8/1/84 10/01/86
41 8/1/84 10/01/86
42 8/1/84 11/01/86
43 8/1/84 01/01/87
44 8/1/84 02/01/87
45 8/1/84 02/01/87
46 8/1/84 05/01/87
48 8/1/84 06/01/87
49 8/1/84 05/01/87
50 8/1/84 06/01/87
51 8/1/84 07/01/87
53 8/1/84 07/01/87
54 8/1/84 09/01/87
55 8/1/84 10/01/87
56 8/1/84 10/01/87
59 8/1/84 12/01/87
68 8/1/84 09/01/88
1984-1 1/1/84 None
W-3 6/1/88 06/01/88
26
Exhibit 4.7
Exhibit C
PAYING AGENCY AGREEMENT
Dated as of September 30, 1993
Bank One, Arizona, NA, ( Trustee ), American Southwest
Financial Corporation, American Southwest Finance Co. and Westam
Mortgage Financial Corporation (collectively, the Issuers ) and
First Bank National Association, (the Agent ), agree as follows:
WHEREAS, the Trustee currently is trustee for each of
the bond issues identified on Schedule I hereto (the Bond
Issues ) pursuant to the respective Bond Indentures between the
Issuers and The Valley National Bank of Arizona (the Original
Indentures ) and Supplemental Indentures set forth on Schedule II
hereto (together with the Original Indenture collectively, the
Indentures ), and in connection therewith, the Trustee acts as
paying agent for each Bond Issue.
WHEREAS, the Trustee intends to resign as trustee, and
the Issuers anticipate appointing Agent and Agent anticipates
accepting as successor trustee, under each of the Indentures (the
Trusteeship Succession ), and to facilitate transition of bond
paying agent functions, the parties desire that Agent shall act
as the paying agent to perform such functions prior to and after
the Trusteeship Succession, in accordance with the procedures set
forth in the Indentures, and terms and conditions herein.
WHEREAS, the Trustee and the Agent have entered into
that certain Collateral Custody and Verification Agreement dated
as of August 31, 1993 (the Collateral Agreement ) to provide for
the transfer of Bond Issue collateral to the Agent and the
establishment of separate trust accounts to which such
collateral, and cash received with respect to collateral, is
credited by the Agent.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements hereinafter set forth, the Agent, the
Issuers and the Trustee agree as follows:
1. Appointment as Agent. Subject to the terms and
conditions herein, the Issuers hereby appoints the Agent, and the
Agent hereby accepts such appointment, as the paying agent under
Section 9.02 of each of the Original Indentures to perform the
payment and recordkeeping functions thereof ( Paying Functions )
for each Bond Issue as provided in the related Indenture,
commencing for each Bond Issue on October 1, 1993 ( Commencement
Date ) and continuing until termination of this Agreement.
2. Transfer of Payment Information. At least ten
business days prior to the Commencement Date, the Trustee will
provide the Agent with all bond ownership and payment information
for each Bond Issue in hard copy format and compatible with
Agent s Bond Master processing system, all as necessary or
appropriate for Agent to perform Paying Functions for the Bond
Issues on behalf of the Issuer. As part of the said bond payment
information, the Trustee will provide and certify to the Agent
for each Bond Issue (i) the name and address of each registered
bondholder, (ii) the
27
Exhibit 4.7
principal amount of bonds with the same maturity date owned by
such bondholder, (iii) the IRS Taxpayer Identification Number of
such bondholder and (iv) whether or not an IRS Form W-9 has been
received from, making back-up withholding not required for, such
bondholder.
At least ten business days prior to the Commencement
Date, the Issuers will provide and certify to the Agent for each
Bond Issue the aggregate outstanding principal amount of bonds
with the same maturity date, as of September 1, 1993.
3. Payment Information Reconciliation. Within seven
business days following receipt of complete bond payment
information, as described in paragraph 2 above, for each Bond
Issue, the Agent will reconcile (i) the total of Bondholders
principal balances with the same maturity date as provided by the
Trustee (ii) with the aggregate principal balances for such
maturity date provided by the Issuers. Within three business
days of discovering any discrepancy in such principal balance
information or in other bond paying information, the Agent will
advise the Trustee and the Issuers. All such discrepancies shall
be resolved and corrected prior to Trusteeship Succession for all
Bond Issues.
4. Trust Account Payments. The Agent shall liquidate
investments and withdraw monies to pay Bond Issue principal and
interest as due, from the appropriate trust accounts established
by the Agent under the Collateral Agreement prior to Trusteeship
Succession and by the Agent as successor trustee under the
Indentures following Trusteeship Succession.
5. Payment Reports. The Issuers shall provide
payment and disbursement reports to the Agent in the form and
manner as heretofore provided to the Trustee, setting forth the
amounts of bondholder payments, releases of surplus funds and
expense payments and payees.
6. Advice of Counsel. The parties further agree that
the Agent shall be entitled to rely and act upon advice of
counsel with respect to its performance hereunder as paying
agent and shall be without liability for any action reasonably
taken pursuant to such advice, provided that such action is not
in violation of applicable federal or state law.
7. Effective Period, Termination and Amendment, and
Interpretive and Additional Provisions. This Agreement shall
become effective as of the date hereof, shall continue in full
force and effect until terminated as hereinafter provided, and
may be amended at any time by mutual agreement of the parties
hereto. This Agreement may be terminated by either the Issuers
or the Agent by written notice delivered or mailed to the other
parties, postage prepaid, termination to take effect no sooner
than thirty (30) days after the date of such delivery or mailing.
Concurrently with, or as soon as practicable after any
termination, the Agent shall transfer all bond payment
information to such successor paying agent as the Issuers shall
designate. In connection with the administration of this
Agreement, the Agent, the Issuers and the Trustee may agree from
time to time upon the interpretation of the provisions of this
Agreement as may in their joint opinion be consistent with the
general tenor and purposes of this Agreement, any such
interpretation to be signed by all parties and
28
Exhibit 4.7
annexed hereto. Following Trusteeship Succession, Bank One,
Arizona, NA shall have no further rights or responsibilities
hereunder.
8. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Arizona.
9. Notices. Notices and other writings shall be
delivered or mailed, postage prepaid, to the Trustee at Bank One,
Arizona, NA, by mail: Corporate Trust Mortgage Backed Bonds
Department (A834), P. O. Box 29559, Phoenix, Arizona 85038; by
delivery: Corporate Trust Mortgage Backed Bonds Department,
25th Floor, 241 North Central Avenue, Phoenix, Arizona 85004
Attention: Corporate Trust Department, to the Issuer at 2390
East Camelback Road, Suite 225, Phoenix, Arizona 85016, or to
the Agent at First Bank National Association, 180 East Fifth
Street, St. Paul, Minnesota 55101, Attention: Corporate Trust
Agreement, to the Issuer or to such other address as the Trustee
or the Agent may hereafter specify in writing, shall be
conclusively presumed to have bene duly given hereunder to the
respective party, whether or not such party receives such notice.
10. Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the Trustee, Issuer and
the Agent and their respective successors and assigns.
BANK ONE, ARIZONA, NA,
as Trustee under the Indentures
referred to above
By /s/ Susan J. McCord
Its Vice President
FIRST BANK NATIONAL ASSOCIATION,
as Agent
By /s/ Eve D. Kaplan
Its Vice President
AMERICAN SOUTHWEST FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
29
Exhibit 4.7
AMERICAN SOUTHWEST FINANCE CO., INC.
By /s/ Jeffrey A. Newman
Its Senior Vice President
WESTAM MORTGAGE FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
30
Exhibit 4.7
SCHEDULE I
BOND ISSUES
ISSUER SERIES
American Southwest Financial Corporation
G
H
I
J
K
M
P
Q
R
S
T
U
V
X
Y
Z
37
38
39
40
41
42
43
44
45
46
48
49
50
51
53
54
55
56
59
68
American Southwest Finance Co., Inc. 1984-1
Westam Mortgage Financial Corporation W-3
31
Exhibit 4.7
SCHEDULE II
INDENTURES
Bond Series Indenture Date Supplemental Indenture Date
G 8/1/84 10/01/84
H 8/1/84 12/01/84
I 8/1/84 03/01/85
J 8/1/84 04/01/85
K 8/1/84 07/01/85
M 8/1/84 09/01/85
P 8/1/84 12/01/85
Q 8/1/84 12/01/85
R 8/1/84 12/31/85
S 8/1/84 12/31/85
T 8/1/84 04/01/86
U 8/1/84 03/01/86
V 8/1/84 04/01/86
X 8/1/84 06/01/86
Y 8/1/84 06/01/86
Z 8/1/84 07/01/86
37 8/1/84 08/01/86
38 8/1/84 07/01/86
39 8/1/84 08/01/86
40 8/1/84 10/01/86
41 8/1/84 10/01/86
42 8/1/84 11/01/86
43 8/1/84 01/01/87
44 8/1/84 02/01/87
45 8/1/84 02/01/87
46 8/1/84 05/01/87
48 8/1/84 06/01/87
49 8/1/84 05/01/87
50 8/1/84 06/01/87
51 8/1/84 07/01/87
53 8/1/84 07/01/87
54 8/1/84 09/01/87
55 8/1/84 10/01/87
56 8/1/84 10/01/87
59 8/1/84 12/01/87
68 8/1/84 09/01/88
1984-1 1/1/84 None
W-3 6/1/88 06/01/88
32
Exhibit 4.7
EXHIBIT D-1
September 2, 1992
Mr. G. Thomas Eggebrecht
American Southwest Financial Corporation
American Southwest Finance Co., Inc.
Westam Mortgage Financial Corporation
2390 East Camelback Road, Suite 225
Phoenix, AZ 85016
Dear Mr. Eggebrecht:
After long and careful consideration, Valley National Bank had
made difficult decision to cease bond trustee activity in the
collateralized mortgage obligation ("CMO") field. We have become
increasingly aware that we lack the economics of scale available
to larger CMO trustees and cannot compete effectively given the
fees bid in today's marketplace. We therefore, tender our
resignation as Trustee of the bond issues of American Southwest
Financial Corporation, American Southwest Finance Co., Inc. and
Westam Mortgage Financial Corporation effective January 1, 1993.
We have enjoyed the many years of working with American Southwest
Financial Corporation, American Southwest Finance Co., Inc. and
Westam Mortgage Financial Corporation. The professionalism of
the staff has been exemplary and we will miss them all. Our
association has also provided us with the privilege to meet
people and develop working relationships throughout the country
which would otherwise have been missed. We will take every
opportunity to make the transition to your selected successor
trustee as smooth and uneventful as possible.
Very truly yours,
/s/ Susan J. McCord
Susan J. McCord
Vice President
SJM/prs
33
Exhibit 4.7
EXHIBIT D-2
SUCCESSOR TRUSTEE APPOINTMENT
First Bank National Association
First Trust Center
180 East Fifth Street
St. Paul, MN 55101
Bank One, Arizona, NA
241 North Central Avenue
Phoenix, AZ 85016
Ladies and Gentlemen:
Having received notice of the resignation of Bank One,
Arizona, NA as Trustee for each of the Bond issues identified on
Schedule I attached hereto (the "Bond Issues"), each of the
undersigned, with respect to the Bond Issues for which it is the
issuer as indicated on the said Schedule I, does hereby appoint
First Bank National Association as successor Trustee for the Bond
Issues pursuant to the respective Bond Indentures and
Supplemental Indentures set forth on Schedule II hereto, such
appointment to become effective upon acceptance by First Bank
National Association and delivery to Bank One, Arizona, NA of
executed instruments evidencing this appointment and such
acceptance.
In Witness Whereof, each of the undersigned has duly
executed and delivered this Appointment on December 28, 1993.
AMERICAN SOUTHWEST FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
AMERICAN SOUTHWEST FINANCE CO., INC.
By /s/ Jeffrey A. Newman
Its Senior Vice President
WESTAM MORTGAGE FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
34
Exhibit 4.7
SCHEDULE I
BOND ISSUES
ISSUER SERIES
American Southwest Financial Corporation
G
H
I
J
K
M
P
Q
R
S
T
U
V
X
Y
Z
37
38
39
40
41
42
43
44
45
46
48
49
50
51
53
54
55
56
59
68
American Southwest Finance Co., Inc. 1984-1
Westam Mortgage Financial Corporation W-3
35
Exhibit 4.7
SCHEDULE II
INDENTURES
Bond Series Indenture Date Supplemental Indenture Date
G 8/1/84 10/01/84
H 8/1/84 12/01/84
I 8/1/84 03/01/85
J 8/1/84 04/01/85
K 8/1/84 07/01/85
M 8/1/84 09/01/85
P 8/1/84 12/01/85
Q 8/1/84 12/01/85
R 8/1/84 12/31/85
S 8/1/84 12/31/85
T 8/1/84 04/01/86
U 8/1/84 03/01/86
V 8/1/84 04/01/86
X 8/1/84 06/01/86
Y 8/1/84 06/01/86
Z 8/1/84 07/01/86
37 8/1/84 08/01/86
38 8/1/84 07/01/86
39 8/1/84 08/01/86
40 8/1/84 10/01/86
41 8/1/84 10/01/86
42 8/1/84 11/01/86
43 8/1/84 01/01/87
44 8/1/84 02/01/87
45 8/1/84 02/01/87
46 8/1/84 05/01/87
48 8/1/84 06/01/87
49 8/1/84 05/01/87
50 8/1/84 06/01/87
51 8/1/84 07/01/87
53 8/1/84 07/01/87
54 8/1/84 09/01/87
55 8/1/84 10/01/87
56 8/1/84 10/01/87
59 8/1/84 12/01/87
68 8/1/84 09/01/88
1984-1 1/1/84 None
W-3 6/1/88 06/01/88
36
Exhibit 4.7
EXHIBIT D-3
SUCCESSOR TRUSTEE ACCEPTANCE
American Southwest Financial Corporation
American Southwest Finance Co., Inc.
Westam Mortgage Financial Corporation
2390 Camelback Road
Suite 225
Phoenix, AZ 85016
Bank One, Arizona NA
241 North Central Avenue
Phoenix, AZ 85016
Ladies and Gentlemen:
First Bank National Association, a national banking
association, does hereby accept appointment and agrees to serve
as successor Trustee for each of the Bond issues identified on
Schedule I hereto pursuant to the respective Bond Indentures and
Supplemental Indentures set forth on Schedule II hereto, subject
to the provisions of such documents but without responsibility or
liability for the actions or omissions of the prior Trustee
thereunder.
In Witness Whereof, First Bank National Association has
caused this Acceptance to be duly executed and delivered on
December 28, 1993.
FIRST BANK NATIONAL
ASSOCIATION
By /s/ Eve D. Kaplan
Its Vice President
By /s/ Lynn M. Steiner
Its Trust Officer
37
Exhibit 4.7
SCHEDULE I
BOND ISSUES
ISSUER SERIES
American Southwest Financial Corporation
G
H
I
J
K
M
P
Q
R
S
T
U
V
X
Y
Z
37
38
39
40
41
42
43
44
45
46
48
49
50
51
53
54
55
56
59
68
American Southwest Finance Co., Inc. 1984-1
Westam Mortgage Financial Corporation W-3
38
Exhibit 4.7
SCHEDULE II
INDENTURES
Bond Series Indenture Date Supplemental Indenture Date
G 8/1/84 10/01/84
H 8/1/84 12/01/84
I 8/1/84 03/01/85
J 8/1/84 04/01/85
K 8/1/84 07/01/85
M 8/1/84 09/01/85
P 8/1/84 12/01/85
Q 8/1/84 12/01/85
R 8/1/84 12/31/85
S 8/1/84 12/31/85
T 8/1/84 04/01/86
U 8/1/84 03/01/86
V 8/1/84 04/01/86
X 8/1/84 06/01/86
Y 8/1/84 06/01/86
Z 8/1/84 07/01/86
37 8/1/84 08/01/86
38 8/1/84 07/01/86
39 8/1/84 08/01/86
40 8/1/84 10/01/86
41 8/1/84 10/01/86
42 8/1/84 11/01/86
43 8/1/84 01/01/87
44 8/1/84 02/01/87
45 8/1/84 02/01/87
46 8/1/84 05/01/87
48 8/1/84 06/01/87
49 8/1/84 05/01/87
50 8/1/84 06/01/87
51 8/1/84 07/01/87
53 8/1/84 07/01/87
54 8/1/84 09/01/87
55 8/1/84 10/01/87
56 8/1/84 10/01/87
59 8/1/84 12/01/87
68 8/1/84 09/01/88
1984-1 1/1/84 None
W-3 6/1/88 06/01/88
39
Exhibit 4.7
CONFIRMATION AND FIRST AMENDMENT
TO
TRUSTEESHIP SUCCESSION AGREEMENT
BANK ONE, ARIZONA, NA ( Bank One ), FIRST BANK NATIONAL
ASSOCIATION ( First Bank ) and AMERICAN SOUTHWEST FINANCIAL
CORPORATION, AMERICAN SOUTHWEST FINANCE CO., INC. and WESTAM
MORTGAGE FINANCIAL CORPORATION (collectively, the Issuers ),
hereby amend that certain Trusteeship Succession Agreement, among
the parties hereto (the Trusteeship Succession Agreement ), as
follows:
1. All terms and provisions of the Trusteeship
Succession Agreement, to the extent not modified by this
Confirmation and First Amendment, are hereby confirmed to be in
full force and effect. All capitalized terms used in this
Confirmation and First Amendment shall have the meaning ascribed
thereto in the Trusteeship Succession Agreement.
2. Bank One has previously resigned as trustee for
each Bond Issue by its execution and delivery to the Issuers of a
letter, a copy of which is attached hereto as Exhibit D-1.
Effective on December 28, 1993, the Issuers shall appoint First
Bank as successor trustee for each Bond Issue by execution and
delivery to Bank One and to First Bank of a Trustee Appointment
in the form attached to the Trusteeship Succession Agreement as
Exhibit D-2, and First Bank shall accept such appointment as
Successor Trustee for each Bond Issue by its execution and
delivery to Bank One and to the Issuers of a Trustee Acceptance
instrument in the form attached to the Trusteeship Succession
Agreement as Exhibit D-3.
3. Certified lists of Bond Issue Collateral received
by First Trust identify certain items of Collateral that have not
been transferred to First Bank because such Collateral has been
sold or the related Bond Issue is not subject to the Trusteeship
Succession. In addition, such certified lists of Collateral
contain certain incorrect factors or original face amounts. Bank
One, First Bank and the Issuers agree that such certified list
Collateral discrepancies will be corrected or reconciled
following Trusteeship Succession through the diligent and good
faith efforts of each party to be concluded no later than March
1, 1994.
4. First Bank has received delivery of document files
for all Pledged Loans, other than the Pledged Loans identified on
Exhibit A hereto (the "Undelivered Files"), but final review of
such files is not complete. Undelivered Files shall be delivered
to First Bank no later than January 15, 1994. Pledged Loan
document file review will be completed by First Bank, and
document delivery exceptions identified to Bank One and the
Issuers, no later than January 30, 1994 and replacement of
missing documents, or correction of incomplete or defective
documents will be undertaken by First Bank; provided, however,
that Bank One shall not hereby be released from any liability for
which it could be liable under the Indentures for any financial
loss resulting from, and the Issuers shall pay all costs related
to obtaining certified copies of documents filed of public record
evidencing correction of such Pledged Loan document exceptions.
5. First Bank by March 1, 1994, shall review the
contents of Bond Issue records, correspondence and statements not
constituting Collateral and request receipt from Bank One of
missing information. Bank One shall deliver to First Bank by
April 1,
Exhibit 4.8
1994, any information so requested to the extent such information
is in the possession of Bank One and is not privileged.
6. On or before January 30, 1994, the Issuers and
First Bank shall use their best efforts to execute and deliver
supplemental indentures to the Indentures, consistent with the
amendment terms thereof, providing for modified financial and
distribution reports to the Trustee from the Issuers conforming
Indenture provisions to current reporting practices and formats.
7. On or before January 10, 1994, First Bank will
identify in writing to Bank One certain Uniform Commercial Code
financing statements that were previously filed with respect to
certain Collateral and have lapsed without continuation or
without new financing statement filing. On or before February 1,
1994, Bank One will provide First Bank with filed copies of
financing statements reestablishing perfection of such liens in
the related Collateral, and the Issuers, to the extent not
previously addressed in an opinion delivered to Bank One, shall
provide First Bank with an opinion of counsel that such
Collateral liens are perfected, first priority security
interests.
8. On or before January 20 , 1994, Bank One shall
execute and the Issuers shall file of record assignments to First
Bank, as trustee, of those Uniform Commercial Code financing
statements currently in effect that must be so assigned to
perfect such trustee s security interests in the Collateral. On
or before January 30, 1994, the Issuers shall execute and file in
the office of Secretary of State of the State of Minnesota,
Uniform Commercial Code financing statements naming First Bank,
as trustee, as secured party for all Collateral for which lien
perfection is accomplished by such financing statement filing.
On or before February 15, 1994, the Issuers shall provide to
First Bank an opinion of counsel under the laws of all governing
jurisdictions other than Minnesota, and First Bank shall obtain
an opinion from its counsel under the laws of Minnesota, to the
effect that First Bank as trustee under the Indentures, holds
valid, perfected, first priority security interests in the
Collateral under the governing Uniform Commercial Code.
IN WITNESS WHEREOF, the parties hereto have duly
executed and delivered this Confirmation and First Amendment to
Trusteeship Succession Agreement as of December 28, 1993.
BANK ONE, ARIZONA, NA,
as Trustee under the Indentures
referred to above
By /s/ Susan J. McCord
Its Vice President
2
Exhibit 4.8
FIRST BANK NATIONAL ASSOCIATION,
as Agent
By /s/ Eve D. Kaplan
Its Vice President
AMERICAN SOUTHWEST FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
AMERICAN SOUTHWEST FINANCE CO., INC.
By /s/ Jeffrey A. Newman
Its Senior Vice President
WESTAM MORTGAGE FINANCIAL CORPORATION
By /s/ Jeffrey A. Newman
Its Senior Vice President
3
Exhibit 4.8
EXHIBIT A
The following pledged loan files have not been delivered to First
Bank as of 12/27/93.
Undelivered Files
Series I: 4513273 Callahan
Series K: 8117101 Day
8117201 Buchanan
8117303 Mauritson
8117306 Uible
8118206 Berlowitz
Series P: 1020512 Buckley
Series T: 310309 Sanders
3231685 Rockman
Series 42: 1022085 Lozano
Series 46: 7600099 Aragon
4
Exhibit 4.8
AGREEMENT AND ASSIGNMENT
AGREEMENT AND ASSIGNMENT dated as of the 26th day of
October, 1994 by and between American Southwest Financial
Corporation, an Arizona corporation (hereinafter called
"Assignor") and American Southwest Finance Co., Inc., an Arizona
corporation (hereinafter called "Assignee").
WHEREAS, Assignor is a party to various funding agreements
between itself and KBASW Mortgage Acceptance Corporation, a
California corporation ("KBASW"), all of which are identified in
Schedule A hereto (collectively, the "Funding Agreements"). The
Funding Agreements were entered into between Assignor and KBASW
in connection with the issuance by Assignor of various series of
its Mortgage-Collateralized Bonds (all such series of bonds are
collectively referred to as the "Bonds" and are identified on
Schedule A hereto). Under the terms of the Funding Agreements,
Assignor agreed to issue the Bonds and to loan to KBASW a portion
of the proceeds of the Bond offerings (all such loans are
collectively referred to as the "Loans") for application and
payment by KBASW solely for the purposes enumerated in the
Funding Agreements. As collateral security for repayment of the
Loans and the performance by KBASW thereunder, KBASW did grant
unto Assignor a security interest in the Collateral, which
included the Mortgage Collateral (each as defined in the Funding
Agreements).
WHEREAS, consistent with the terms of the Funding
Agreements, the Bonds were issued pursuant to certain indentures
(collectively referred to as the "Indentures"), by and between
Assignor and The Valley National Bank of Arizona (now known as
Bank One, Arizona, NA), as Trustee, and as collateral security
for the Bonds, Assignor repledged to the Trustee the security
interest in the Mortgage Collateral created by KBASW in favor of
Assignor, to the extent provided in the Indentures, together with
Assignor's security interest in the other collateral pledged to
Assignor by other limited purpose finance companies.
WHEREAS, under the Funding Agreements, KBASW agreed to repay
the Loans by causing payments on the Mortgage Collateral to be
made directly to Trustee on behalf of Assignor.
WHEREAS, the Bonds secured by such Funding Agreements have
been paid or redeemed in full and such Funding Agreements have
been released from the lien of the Indentures; however, the Loans
continue to be paid in accordance with the terms of the
respective Funding Agreements.
WHEREAS, Assignor desires to assign, transfer and convey its
rights and obligations under the Funding Agreements to Assignee
and Assignee desires to acquire and assume such rights and
obligations.
NOW THEREFORE, in consideration of the foregoing and of the
mutual agreements hereinafter contained, and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Assignment and Transfer by Assignor to Assignee of the
Funding Agreement Rights.
Assignor hereby assigns, transfers and conveys to Assignee,
effective as of the date of this Agreement, the Funding
Agreements in exchange for Assignee's delivery of the Purchase
Price in accordance with Section 2 hereof.
2. Purchase Price.
In exchange for the assignment provided in Section 1 hereof,
Assignee shall pay to Assignor the sum of Two Million Three
Hundred Sixty-Eight Thousand Six Hundred Sixty-One Dollars
($2,368,661) of which $607,157 shall be paid in cash (receipt of
which is hereby acknowledged), $1,276,741 shall be paid by the
cancellation of debt owed by Assignor to Assignee and $484,767
shall be paid pursuant to an unsecured note which shall bear
interest at the prime rate as published in the Wall Street
Journal.
3. Assumption of Obligations.
Assignee hereby assumes and agrees to pay all of the debts
and liabilities and perform all of the obligations of Assignor
which are to be paid or performed by Assignor under each of the
Funding Agreements from and after the date hereof, including, but
not limited to, the due and punctual payment of all amounts due
under the Funding Agreements and performance of every covenant
which Assignor is obligated to perform thereunder.
Exhibit 10.2
4. Binding Nature of Agreement and Assignment.
This Agreement and Assignment shall be binding upon and
inure to the benefit of the parties hereto and their successors
and assigns, except that no party may assign or transfer its
rights or obligations hereunder without the prior written consent
of all other parties hereto.
5. Entire Agreement.
This Agreement and Assignment contains the entire agreement
and understanding between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The
express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of
the terms hereof. This Agreement and Assignment may not be
modified or amended other than by an agreement in writing.
6. Controlling Law.
This Agreement and Assignment and all questions relating to
its validity, interpretation, performance and enforcement, shall
be governed by and construed, interpreted and enforced in
accordance with the laws of the State of Arizona, notwithstanding
any conflict-of-law provisions or decisions to the contrary.
7. Schedule.
The Schedule to this Agreement and Assignment referred to
herein is hereby incorporated by reference into, and made a part
of, this Agreement and Assignment.
2
Exhibit 10.2
8. Indulgences, Not Waivers.
Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this
Agreement and Assignment shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power
or privilege preclude any other or further privilege, nor shall
any waiver of any right, remedy, power or privilege with respect
to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.
9. Titles Not to Affect Interpretation.
The titles of paragraphs and subparagraphs contained in this
Agreement and Assignment are for convenience only, and
they neither form a part of this Agreement and Assignment nor are
they to be used in the construction or interpretation hereof.
3
Exhibit 10.2
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Assignment to be executed by their respective
officers thereunto duly authorized as of the day and year first
above written.
ASSIGNOR:
AMERICAN SOUTHWEST FINANCIAL
CORPORATION, an Arizona corporation
By:/s/ Michael H. Feinstein
Name: Michael H. Feinstein
Its: Acting President, Executive Vice President
and Chief Operating Officer
ASSIGNEE:
AMERICAN SOUTHWEST FINANCE CO.,
INC., an Arizona corporation
By:/s/ Michael H. Feinstein
Name: Michael H. Feinstein
Its: Acting President, Executive Vice President
and Chief Operating Officer
4
Exhibit 10.2
SCHEDULE A
Funding Agreements
1. Funding Agreement dated as of December 31, 1985 between
American Southwest Financial Corporation and KBASW Mortgage
Acceptance Corporation, which Funding Agreement relates to
American Southwest Financial Corporation's Mortgage-
Collateralized Bonds, Series R.
2. Funding Agreement dated as of October 1, 1986 between
American Southwest Financial Corporation and KBASW Mortgage
Acceptance Corporation, which Funding Agreement relates to
American Southwest Financial Corporation's Mortgage-
Collateralized Bonds, Series 40.
3. Funding Agreement dated as of November 1, 1986 between
American Southwest Financial Corporation and KBASW Mortgage
Acceptance Corporation, which Funding Agreement relates to
American Southwest Financial Corporation's Mortgage-
Collateralized Bonds, Series 42.
4. Funding Agreement dated as of January 1, 1987 between
American Southwest Financial Corporation and KBASW Mortgage
Acceptance Corporation, which Funding Agreement relates to
American Southwest Financial Corporation's Mortgage-
Collateralized Bonds, Series 43.
5. Funding Agreement dated as of September 1, 1987 between
American Southwest Financial Corporation and KBASW Mortgage
Acceptance Corporation, which Funding Agreement relates to
American Southwest Financial Corporation's Mortgage-
Collateralized Bonds, Series 54.
5
Exhibit 10.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in Registration
Statement No. 2-89316 on Form S-3 of our report dated November
10, 1994 (except for Note 4, as to which the date is November 28,
1994) on the financial statements as of August 31, 1994 and 1993,
and for each of the three years in the period ended August 31,
1994 included in the Annual Report on Form 10-K of American
Southwest Finance Co., Inc.
KENNETH LEVENTHAL & COMPANY
Phoenix, Arizona
November 28, 1994
Exhibit 23.
<PAGE>
Power of Attorney
AMERICAN SOUTHWEST FINANCE CO., INC.
KNOW ALL MEN BY THESE PRESENTS that the undersigned directors and
officers of American Southwest Finance Co., Inc., an Arizona
corporation, hereby constitute and appoint Jon A Grove, Alan
Hamberlin and Michael H. Feinstein and each of them, as the true
and lawful agents and attorneys-in-fact of the undersigned with
full power and authority in said agents and attorneys-in-fact,
and each of them, to sign for the undersigned in their respective
capacities as directors or officers of American Southwest Finance
Co., Inc., the Annual Report on Form 10-K of American Southwest
Finance Co., Inc. for the fiscal year ended August 31, 1994 to be
filed with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. Each of the
undersigned further hereby confirm all acts taken by such agents
and attorneys-in-fact, and each of them, as herein authorized.
Signature Title Date
/s/ Jon A. Grove Chairman of the Board November 23, 1994
Jon A. Grove and Director
____________________ Director
G. Thomas Eggebrecht
/s/ Michael H. Feinstein Director, Acting President, November 23, 1994
Michael H. Feinstein Executive Vice President
and Chief Operating Officer
/s/ Alan Hamberlin Director November 23, 1994
Alan Hamberlin
/s/ Kirby Korth Director November 23, 1994
Kirby Korth
/s/ Philip Polich Director November 23, 1994
Philip Polich
/s/ J. Larry Sorsby Director November 23, 1994
Exhibit 24.
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1994
<PERIOD-START> SEP-01-1993
<PERIOD-END> AUG-31-1994
<CASH> 637,473
<SECURITIES> 0
<RECEIVABLES> 1,290,440
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,927,913
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<COMMON> 6,100
0
0
<OTHER-SE> 1,921,813
<TOTAL-LIABILITY-AND-EQUITY> 1,927,913
<SALES> 0
<TOTAL-REVENUES> 940,783
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,080
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 582,749
<INCOME-PRETAX> 334,954
<INCOME-TAX> 133,000
<INCOME-CONTINUING> 201,954
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 201,954
<EPS-PRIMARY> 11.02
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