<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH
13, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
CONTINENTAL HOMES HOLDING CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 86-0554624
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
7001 N. SCOTTSDALE ROAD
SUITE 2050
SCOTTSDALE, ARIZONA 85253
(602) 483-0006
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------------
DONALD R. LOBACK
CHIEF EXECUTIVE OFFICER
7001 N. SCOTTSDALE ROAD
SUITE 2050
SCOTTSDALE, ARIZONA 85253
(602) 483-0006
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------------
Copies to:
JOHN P. MITCHELL, ESQ. VINCENT J. PISANO,
ESQ.
CAHILL GORDON & REINDEL SKADDEN, ARPS,
SLATE,
80 PINE STREET MEAGHER &
FLOM
NEW YORK, NEW YORK 10005 919 THIRD
AVENUE
(212) 701-3000 NEW YORK, NEW YORK
10022
(212)
735-3000
--------------------
Name of Additional State of Incorporation I.R.S.
Employer
Registrants or Organization
Identification No.
- ------------------ ----------------------
- -------------------
ACHETER, INC. TEXAS
74-2528175
CH MORTGAGE COMPANY COLORADO
84-0834739
CHI CONSTRUCTION COMPANY ARIZONA
86-0533370
CHI FINANCE CORP. ARIZONA
86-0527430
CONTINENTAL HOMES, INC. DELAWARE
86-0515339
CONTINENTAL HOMES OF FLORIDA, INC. FLORIDA
59-1237314
CONTINENTAL HOMES OF TEXAS, INC. TEXAS
74-2695183
KDB HOMES, INC. DELAWARE
86-0565376
L&W INVESTMENTS INC. CALIFORNIA
86-0596757
MILBURN INVESTMENTS, INC. TEXAS
74-2209385
MILTEX FINANCIAL IV GENERAL TEXAS
74-2209385
PARTNERSHIP
MILTEX MANAGEMENT, INC. TEXAS
74-2648358
MILTEX MORTGAGE OF TEXAS TEXAS
74-2209385
LIMITED PARTNERSHIP
RANCHO CARILLO, INC. DELAWARE
84-0724231
R.O.S. CORPORATION TEXAS
74-2665796
SETTLEMENT CORPORATION TEXAS
74-2209385
<PAGE>
TRAVIS COUNTY TITLE COMPANY TEXAS
74-2111971
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: As soon as
practicable after the effective date of this Registration
Statement. If the only
securities being registered on this Form are being offered
pursuant to dividend
or interest reinvestment plans, please check the following box.
/__/
If any of the securities being registered on this Form are to
be offered on
a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of
1933, other than securities offered only in connection with
dividend or interest
reinvestment plans, check the following box./__/
If this Form is filed to register additional securities for an
offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box
and list the Securities Act registration statement number of the
earlier
effective registration statement for the same offering./__/
If this Form is a post-effective amendment filed pursuant
to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act
registration statement number of the earlier effective
registration statement
for the same offering./__/
If delivery of the prospectus is expected to be made pursuant
to Rule 434,
please check the following box./_X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================
==============
Proposed Proposed
Title of Each Class Amount Maximum Maximum
Amount
of Securities to to be Offering Price Aggregate
of Regis-
be Registered Registered Per Unit(1) Offering
Price(1) tration Fee
- -----------------------------------------------------------------
- ---------------
<S> <C> <C> <C>
<C>
% Senior Notes
due 2006.......... $150,000,000 100% $150,000,000
$51,725
- -----------------------------------------------------------------
- ---------------
Guarantees of the
Senior Notes...... $150,000,000 (2) (2)
--------
=================================================================
===============
<FN>
(1) ESTIMATED SOLELY FOR PURPOSES OF CALCULATING THE
REGISTRATION FEE
PURSUANT TO RULE 457 UNDER THE SECURITIES ACT OF 1933.
(2) NO SEPARATE CONSIDERATION WILL BE RECEIVED FOR THE
GUARANTEES.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A),
MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment.
A
registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may
not be sold
nor may offers to buy be accepted prior to the time the
registration statement
becomes effective. This prospectus shall not constitute an offer to
sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities
in any State in which such offer, solicitation or sale would be
unlawful prior
to registration or qualification under the securities laws of any
such State.
<PAGE>
PRELIMINARY SUBJECT TO COMPLETION, DATED MARCH 13, 1996
PROSPECTUS
$150,000,000
CONTINENTAL HOMES HOLDING CORP.
% SENIOR NOTES DUE 2006
------------------
The % Senior Notes due 2006 (the "Senior Notes") are being
offered hereby
(the "Offering") by Continental Homes Holding Corp. (the
"Company"). Interest on
the Senior Notes is payable semi-annually on and of each year,
commencing ,
1996. The Senior Notes mature on , 2006.
The Senior Notes will be redeemable at the option of the
Company, in whole
or in part, at any time on or after , 2001 at the redemption prices
set forth
herein, plus accrued and unpaid interest, if any, to the date of
redemption. In
addition, at any time on or prior to , 1999, the Company may redeem
up to 33% of
the aggregate principal amount of the Senior Notes originally
issued with the
net proceeds of one or more public offerings of its common stock at
a redemption
price equal to % of the aggregate principal amount of each Senior
Note so
redeemed, plus accrued and unpaid interest, if any, to the date of
redemption;
provided, however, that immediately after giving effect to any such
redemption,
not less than $100,000,000 principal amount of the Senior Notes
remains
outstanding.
In the event of a Change of Control (as defined), the Company
is required to
offer to repurchase all of the Senior Notes at a price equal to
101% of the
aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to
the date of repurchase. In addition, the Company will be obligated
to make an
offer to repurchase Senior Notes for cash at a price equal to 100%
of the
principal amount thereof, plus accrued and unpaid interest, if any,
to the date
of repurchase with the net cash proceeds of certain asset sales and
if the
Company's Net Worth (as defined) falls below a specified level for
two
consecutive fiscal quarters.
The Senior Notes will be general unsecured obligations of the
Company,
ranking senior in right of payment to all existing and future
subordinated
indebtedness of the Company and pari passu in right of payment with
all existing
and future senior indebtedness of the Company; however, the Senior
Notes will be
effectively subordinated to all secured indebtedness of the Company
to the
extent of the value of the assets securing such indebtedness. As of
November 30,
1995, after giving effect to the Offering and the application of
the proceeds
therefrom, the Company would have had no secured indebtedness
outstanding. The
Senior Notes will be guaranteed (the "Guarantees"), on a joint and
several
basis, by all of the Restricted Subsidiaries (as defined) of the
Company
existing on the closing date of this Offering (collectively, the
"Guarantors").
The Guarantees will be general unsecured obligations of the
Guarantors, ranking
senior in right of payment to all existing and future subordinated
indebtedness
of the Guarantors and pari passu in right of payment with all
existing and
future senior indebtedness of the Guarantors; however, the
Guarantees will be
effectively subordinated to all secured indebtedness of the
Guarantors to the
extent of the value of the assets securing such indebtedness. As of
November 30,
1995, after giving effect to the Offering and the application of
the proceeds
therefrom, the Guarantors would have had approximately $3,650,000
of secured
indebtedness outstanding.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS FOR
A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN
INVESTMENT IN THE
SENIOR NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE
<PAGE>
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
<TABLE>
<CAPTION>
=================================================================
===============
Underwriting
PRICE TO Discounts and
Proceeds to
PUBLIC(1) Commissions(2)
Company(3)
<S> <C> <C>
<C>
- -----------------------------------------------------------------
- ---------------
Per Senior Note.............. % %
%
- -----------------------------------------------------------------
- ---------------
Total........................ $ $
$
=================================================================
===============
<FN>
(1) PLUS ACCRUED INTEREST, IF ANY, FROM THE DATE OF ORIGINAL
ISSUANCE.
(2) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS
AGAINST
CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF
1933, AS AMENDED. SEE "UNDERWRITING."
(3) BEFORE DEDUCTING EXPENSES OF THE OFFERING PAYABLE BY THE
COMPANY ESTIMATED AT $ .
</TABLE>
--------------------
The Senior Notes are being offered, subject to prior sale,
when, as and if
delivered to and accepted by the Underwriters and subject to
certain conditions.
It is expected that delivery of the Senior Notes will be made at
the offices of
Smith Barney Inc., 388 Greenwich Street, New York, New York 10013,
on or about
April , 1996.
--------------------
SMITH BARNEY INC. SALOMON
BROTHERS INC
April , 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT
OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SENIOR NOTES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance
therewith, files reports and other information with the Securities
and Exchange
Commission (the "Commission"). Reports, proxy and information
statements and
other information filed by the Company with the Commission pursuant
to the
informational requirements of the Exchange Act may be inspected and
copied at
the Public Reference Section maintained by the Commission at 450
Fifth Street,
N.W., Washington, D.C. 20549 and at the following Regional Offices
maintained by
the Commission: New York Regional Office, 7 World Trade Center,
Suite 1300, New
York, New York 10048 and Chicago Regional Office, Citicorp Center,
500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may
be obtained from the Public Reference Section of the Commission at
450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, reports,
proxy statements and other information concerning the Company
(symbol "CON") can
be inspected and copied at the offices of the New York Stock
Exchange, 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a registration
statement (the
"Registration Statement") under the Securities Act of 1933, as
amended (the
"Securities Act"), with respect to the Senior Notes offered hereby.
This
Prospectus does not contain all the information set forth in the
Registration
Statement, certain parts of which are omitted in accordance with
the rules and
regulations of the Commission. Reference is made to the
Registration Statement
and to the exhibits relating thereto for further information with
respect to the
Company and the Senior Notes offered hereby.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with
the
Commission pursuant to the Exchange Act, are hereby incorporated by
reference:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended
May 31, 1995;
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended
August 31, 1995; and
3. The Company's Quarterly Report on Form 10-Q for the
quarter
ended November 30, 1995.
Each document filed subsequent to the date of this Prospectus
pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination
of this Offering shall be deemed to be incorporated by reference in
this
Prospectus and shall be part hereof from the date of filing of such
document.
Any statement contained herein or in a document incorporated or
deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded
for purposes of this Prospectus to the extent that a statement
contained herein
or in any other subsequently filed document which also is or is
deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such
statement so modified or superseded shall not be deemed, except as
so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person,
including any
<PAGE>
beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the
written or oral request of any such person, a copy of any document
2
described
above (other than exhibits). Requests for such copies should be
directed to
Continental Homes Holding Corp., 7001 N. Scottsdale Road, Suite
2050,
Scottsdale, Arizona 85253, Attention: Secretary, telephone number
(602)
483-0006.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by
reference to the more
detailed information and financial statements (including the notes
thereto)
appearing elsewhere or incorporated by reference in this
Prospectus.
THE COMPANY
Continental Homes Holding Corp. (the "Company") designs,
constructs and
sells high quality single-family homes targeted primarily to
entry-level and
first-time move-up homebuyers. As of November 30, 1995, the Company
was offering
homes for sale in 59 communities in six markets. The Company is
geographically
diversified, currently operating in Phoenix, Arizona; Austin and
San Antonio,
Texas; Denver, Colorado; South Florida; and Southern California.
The Company's
revenues from home sales have increased from approximately
$130,611,000 in
fiscal 1991 to approximately $414,718,000 in fiscal 1995, while the
Company's
EBITDA (as defined) has increased from approximately $14,134,000 to
approximately $43,531,000 over the same period. These increases are
attributable
to internal growth as well as acquisitions of existing
homebuilders.
The Company is a leading homebuilder in the Phoenix and Austin
markets. The
Phoenix metropolitan area is the Company's primary market and
accounted for
approximately 49% of the Company's revenues from homebuilding
operations for the
fiscal year ended May 31, 1995. In calendar 1995, the Company
continued to be
the leading non-retirement homebuilder in Phoenix for the eleventh
consecutive
year. The Phoenix market ranked second nationally for single-family
housing
starts in calendar 1995. The Austin market contributed
approximately 26% of the
Company's revenues from homebuilding operations for the fiscal year
ended May
31, 1995. The Company retained its number one ranking in Austin in
calendar 1995
by delivering more single-family homes than any other homebuilder.
The Company
also has expanding operations in Denver, San Antonio, South Florida
and Southern
California. The Company complements its homebuilding activities by
providing
mortgage banking services in Arizona to its homebuyers and in Texas
to its
homebuyers and to third parties.
The Company markets its homes by emphasizing quality housing
at affordable
prices. The Company's operating strategy is to (i) design efficient
floorplans
to minimize construction costs, (ii) negotiate favorable pricing
and terms from
certain of its subcontractors which perform a high volume of work
for the
Company, (iii) closely monitor construction costs using the
Company's
custom-designed management information systems and (iv) maintain a
supply of
land to meet anticipated homebuilding requirements for
approximately two to
three years.
The Company believes that it will continue to capitalize on
the operating
strategy that it has successfully implemented in the different
geographical
markets in which it operates. The Company entered the Austin, San
Antonio and
South Florida markets in July 1993, January 1994 and November 1994,
respectively, through acquisitions of existing homebuilders. The
Company will
continue to review opportunities to enter new housing markets that
have
demonstrated periods of strong population and employment growth.
The Company may
enter such markets through either acquisitions or start-up
operations.
The Company has continued to experience improved demand for
its homes. The
aggregate sales value of new contracts signed increased 56% in the
six months
ended November 30, 1995 to approximately $294,769,000 representing
2,256 homes
(including approximately $14,317,000 in South Florida representing
103 homes) as
compared with approximately $188,771,000 representing 1,437 homes
(including
$1,133,000 in South Florida representing seven homes) for the six
months ended
November 30, 1994. Sales in South Florida were included from
November 1, 1994.
At November 30, 1995, the Company had a backlog of signed contracts
of 1,692
<PAGE>
homes with an aggregate sales value of approximately $229,934,000,
as compared
with 1,145 homes with an aggregate sales value of approximately
$155,909,000 at
the same time last year. The Company expects that substantially all
homes under
contract at November 30, 1995 will be delivered during the fiscal
year ending
May 31, 1996.
The Company was incorporated in Delaware in June 1986. The
Company's
executive offices are located at 7001 N. Scottsdale Road, Suite
2050,
Scottsdale, Arizona 85253; its telephone number is (602) 483-0006.
4
<PAGE>
THE OFFERING
Securities Offered.................. $150,000,000 aggregate
principal
amount of % Senior Notes
due 2006 (the
"Senior Notes").
Maturity Date....................... , 2006.
Interest Rate and
Payment Dates................. The Senior Notes will bear
interest at
the rate of % per annum.
Interest will
accrue from the Issue Date
(as defined)
and will be payable
semi-annually on and
of each year, commencing ,
1996.
Optional Redemption................. The Senior Notes will be
redeemable at
the option of the Company,
in whole or
in part, at any time on or
after , 2001
at the redemption prices
set forth
herein, plus accrued and
unpaid interest
if any, to the date of
redemption. In
addition, at any time on or
prior to ,
1999, the Company may
redeem up to 33%
of the aggregate principal
amount of the
Senior Notes originally
issued with the
net proceeds of one or more
public
offerings of its common
stock at a
redemption price equal to
% of the
aggregate principal of
each Senior Note
so redeemed, plus accrued
and unpaid
interest, if any, to the
date of
redemption; provided,
however, that
immediately after giving
effect to
any such redemption, not
less than
$100,000,000 principal
amount of the
Senior Notes remains
outstanding.
See "Description of the
Senior Notes
-- Optional Redemption."
Offers to Purchase................. In the event of a Change of
Control (as
defined), the Company is
required to
offer to repurchase all of
the Senior
Notes at a price equal to
101% of the
aggregate principal amount
thereof, plus
accrue and unpaid interest,
if any, to
the date of repurchase.
See
"Description of the Senior
Notes--
Certain Covenants-- Change
of Control."
In addition, the Company
will be
obligated to make an offer
to
repurchase Senior Notes
for cash at
a price equal to 100% of
the principal
amount thereof, plus
accrued and
unpaid interest, if any,
to the date
of repurchase with the
net cash
proceeds of certain asset
sales and
if the Company's Net
Worth (as
defined) falls below a
specified level
for two consecutive fiscal
quarters.
See "Description of the
Senior Notes--
Certain Covenants --
Limitation on
Asset Sales and--
Maintenance of Net
<PAGE>
Worth."
Ranking............................. The Senior Notes will
be general
unsecured obligations of
the Company,
ranking senior in right of
payment to
all existing and future
subordinated
indebtedness of the Company
and pari
passu in right of payment
with all
existing and future
senior
indebtedness of the
Company; however,
the Senior Notes will be
effectively
subordinated to all
secured
indebtedness of the
Company to the
extent of the value of the
assets
securing such indebtedness.
As of
November 30, 1995, after
giving effect
to the Offering and the
application of
the proceeds therefrom,
the Company
would have had no secured
indebtedness
outstanding.
Guarantees.......................... The Senior Notes will be
guaranteed
(the "Guarantees"), on a
joint and
several basis, by all of
the
Restricted Subsidiaries
(as defined)
of the Company existing on
the closing
date of this Offering
(collectively,
the "Guarantors"). The
Guarantees
will be general unsecured
obligations
of the Guarantors, ranking
senior in
right of payment to all
existing and
future subordinated
indebtedness of
the Guarantors and pari
passu in right
of payment with all
existing and future
senior indebtedness of
the Guarantors;
however, the Guarantees
will be
effectively subordinated to
all
secured indebtedness of
the Guarantors
to the extent of the value
of the
assets securing such
Indebtedness. As
of November 30, 1995, after
giving
effect to the Offering and
the
application of the
5
proceeds therefrom,
the Guarantors would have
had
approximately $3,650,000
of secured
indebtedness outstanding.
See
"Description of the Senior
Notes--
The Guarantees."
Certain Covenants................... The Indenture (as defined)
will impose
certain limitations on
the
ability of the Company
and its
Restricted Subsidiaries
to, among
other things, incur
additional
indebtedness, pay
dividends or make
certain other restricted
payments and
investments, consummate
certain
asset sales, enter into
certain
<PAGE>
transactions with
affiliates,
redesignate an
Unrestricted
Subsidiary (as defined)
to be a
Restricted Subsidiary,
designate a
<PAGE>
Restricted Subsidiary as
an
Unrestricted Subsidiary,
incur liens,
merge or consolidate with
any other
person or sell, assign,
transfer,
lease, convey or otherwise
dispose of
all or substantially all of
its
assets. The Indenture will
also impose
limitations on the
Company's ability to
restrict the ability of its
Restricted
Subsidiaries to pay
dividends or make
certain payments to the
Company or any
of its Restricted
Subsidiaries and on
the ability of the
Company's
subsidiaries to issue
preferred stock.
See "Description of the
Senior Notes
-- Certain Covenants."
Use of Proceeds..................... The net proceeds of this
Offering are
estimated to be
approximately $
million. Such net
proceeds will be
used to repurchase the
Company's 12%
Senior Notes due 1999 (the
"Old Senior
Notes"); to reduce certain
other
indebtedness; and for
working capital
and general corporate
purposes. See
"Use of Proceeds."
6
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following table sets forth summary financial information
regarding the
results of operations and financial position of the Company. The
summary
financial information of the Company as of and for the five years
ended May 31,
1995 has been derived from financial statements of the Company
audited by Arthur
Andersen LLP. The summary financial information of the Company as
of November
30, 1995 and for the six months ended November 30, 1994 and 1995
have been
derived from unaudited financial statements which, in the opinion
of management,
include all adjustments, consisting of only normal recurring
adjustments,
necessary for a fair presentation of such information for the
unaudited interim
periods. The operating results for the six months ended November
30, 1995 are
not necessarily indicative of results for the full fiscal year.
This information
should be read in conjunction with "Management's Discussion and
Analysis of
Results of Operations and Financial Condition" and the Company's
Consolidated
Financial Statements and Notes thereto incorporated by reference in
this
Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR
ENDED MAY 31, NOVEMBER 30,
- --------------------------------------------------------------
----------------
1991 1992
1993 1994 1995 1994 1995
------ ------
- ------ ------ ------ ------ ------
<S> <C> <C> <C>
<C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INCOME STATEMENT DATA
Revenues
Home sales........................ $ 130,611 $ 164,815 $
200,012 $ 340,031 $ 414,718 $ 201,270 $ 268,330
Land sales........................ 4,977 3,114
4,113 1,095 10,658 -- 11,267
Mortgage banking and title
operations...................... 2,930 1,905
2,426 6,967 6,707 3,483 4,946
Other income, net................. 97 590
482 527 369 232 106
--------- ---------
- --------- --------- --------- --------- ---------
Total revenues...................... 138,615 170,424
207,033 348,620 432,452 204,985 284,649
--------- ---------
- --------- --------- --------- --------- ---------
Costs and expenses
Homebuilding
Cost of home sales............... 106,463 135,141
161,960 277,878 339,288 164,644 218,857
Cost of land sales............... 4,994 3,156
4,766 1,499 10,958 150 11,329
Selling, general and
administrative expenses......... 15,514 18,648
20,836 37,065 46,308 21,805 30,028
Interest, net.................... 2,239 1,341
5,498 4,456 4,993 2,246 2,454
Inventory writedown.............. 5,000 7,500
-- -- -- -- --
Mortgage banking and title
operations
Selling, general and
administrative expenses......... 2,637 1,713
1,544 4,818 5,639 2,741 3,255
Interest, net.................... (51) (178)
14 (233) (199) (289) 34
-------- ----------
- --------- --------- -------- -------- -------
Total costs and expenses............ 136,796 167,321
194,618 325,483 406,987 191,297 265,957
-------- ----------
- --------- --------- -------- -------- -------
Equity in loss of unconsolidated
joint ventures..................... (1,342) (948)
(332) -- -- -- --
-------- ----------
- --------- --------- -------- -------- -------
Income before taxes and
extraordinary credits.............. 477 2,155
12,083 23,137 25,465 13,688 18,692
<PAGE>
Income taxes........................ 361 863
4,983 10,054 11,644 6,080 8,153
-------- ----------
- --------- --------- -------- -------- -------
Income from operations.............. 116 1,292
7,100 13,083 13,821 7,608 10,539
Extraordinary gain from
extinguishment of debt (1)......... -- 5,299
-- -- -- -- --
-------- ---------
- --------- --------- --------- --------- --------
Net income.......................... $ 116 $ 6,591 $
7,100 $ 13,083 $ 13,821 $ 7,608 $ 10,539
======== ==========
========= ========= ========= ========= ========
Ratio of earnings to fixed charges,
including mortgage banking
operations (2).................... (3) 1.44x
1.91x 2.36x 1.99x 2.24x 2.48x
Ratio of earnings to fixed charges,
excluding mortgage banking
operations (2)(4)................. (3) 1.51x
2.01x 2.62x 2.11x 2.39x 2.66x
HOUSING DATA (5)
Deliveries.......................... 1,249 1,470
1,769 2,831 3,202 1,560 2,057
New contracts, net.................. 1,317 1,627
2,000 2,844 3,427 1,437 2,256
Backlog at end of period (units).... 486 669
900 1,136 1,493 1,145 1,692
Backlog at end of period ($ value).. $ 53,180 $76,215
$107,499 $147,242 $198,126 $155,909 $229,934
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
FOUR FISCAL QUARTERS ENDED
- -----------------------------------------------------------------
- --------------------
MAY 31,
NOVEMBER 30,
- --------------------------------------------------------------
------------
1991 1992
1993 1994 1995 1995
------ ------
- ------ ------ ------ ------
<S> <C> <C> <C>
<C> <C> <C>
(DOLLARS IN THOUSANDS)
OTHER FINANCIAL DATA(6)
EBITDA(7)......................... $ 14,134 $ 17,599 $
24,846 $ 36,923 $ 43,531 $ 51,823
Consolidated Interest Incurred.... 10,233 9,366
12,040 13,378 19,693 21,790
Coverage Ratio.................... 1.38x 1.88x
2.06x 2.76x 2.21x 2.38x
Consolidated Interest
Incurred, as adjusted(8) -- --
-- -- $ 19,219 $ 20,451
Coverage Ratio, as adjusted(8).... -- --
-- -- 2.26x 2.53x
</TABLE>
<TABLE>
<CAPTION>
MAY 31,
NOVEMBER 30, 1995
- --------------------------------------------------------------
---------------------
AS
1991 1992
1993 1994 1995 ACTUAL ADJUSTED(8)
------ ------
- ------ ------ ------ ------ -----------
<S> <C> <C> <C>
<C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA
Assets
Homes, lots and improvements
in production................ $ 93,739 $ 116,450 $
142,589 $ 205,369 $ 291,331 $ 309,735 $ 309,735
========= =========
========= ========= ========= ========= =========
Total homebuilding assets.... $ 118,411 $ 140,598 $
172,798 $ 266,384 $ 350,659 $ 375,541 $ 376,495
Mortgage banking assets...... 24,301 22,176
14,727 39,106 36,174 35,753 35,753
--------- ---------
- --------- --------- --------- --------- ---------
Total assets................ $ 142,712 $ 162,774 $
187,525 $ 305,490 $ 386,833 $ 411,294 $ 412,248
========= =========
========= ========= ========= ========= =========
Debt
Homebuilding................. $ 82,235 $ 81,293 $
106,183 $ 144,048 $ 198,814 $ 216,267 $ 228,650
Mortgage banking............. 22,146 20,448
8,604 24,271 34,011 23,596 23,596
--------- ---------
- --------- --------- --------- --------- ---------
Total debt.................. $ 104,381 $ 101,741 $
114,787 $ 168,319 $ 232,825 $ 239,863 $ 252,246
========= =========
========= ========= ========= ========= ==========
Stockholders' equity........... $ 28,562 $ 44,428 $
51,550 $ 98,560 $ 110,479 $ 120,556 $ 113,813
========= =========
========= ========= ========= ========= ==========
<FN>
(1) Fiscal 1992 reflects the retirement of a note payable at an
amount less
than par.
(2) For purposes of calculating the ratio of earnings to fixed
charges,
earnings consist of income from operations before income taxes
plus fixed
charges (net of capitalized interest). Fixed charges include
interest
<PAGE>
expense plus capitalized interest and a portion of operating
lease rental
expense deemed to be representative of interest.
(3) Fiscal 1991 includes a pre-tax writedown of $5,000,000. After
giving effect
to such writedown, earnings for the fiscal year ended May 31,
1991 were
inadequate to cover fixed charges and resulted in a coverage
deficiency of
$3,009,000.
(4) The Company believes that the ratio of earnings to fixed
charges excluding
interest expense attributable to the Company's mortgage
banking operations
may be helpful to investors in understanding the Company's
ability to cover
fixed charges for its homebuilding operations. See
"Business--Mortgage
Banking."
(5) Data for fiscal 1991 excludes the Company's proportionate
share of
homes sold and closed in unconsolidated joint ventures.
(6) Calculated in accordance with the definitions of such terms
contained in
the Indenture and set forth herein under "Description of the
Senior Notes--
Certain Definitions."
(7) EBITDA is a widely accepted financial indicator of a company's
ability to
service debt. However, EBITDA should not be construed as an
alternative to
operating income or to cash flows from operating activities
(as determined
in accordance with generally accepted accounting principles)
and should not
be construed as an indication of the Company's operating
performance or as
a measure of liquidity.
(8) As adjusted to give effect to the issuance and sale by the
Company of the
Senior Notes, the application of the estimated net proceeds
therefrom as
described under "Use of Proceeds" (assuming an interest rate
of % for the
Senior Notes and that all Old Senior Notes are acquired at a
tender price
of $ for each Old Senior Note, and the extraordinary loss, net
of taxes,
related to the tender offer premium pursuant to the Offer to
Purchase
(as defined) and the writeoff of debt issuance costs and the
net premium
relating to the repurchase of the Old Senior Notes).
</TABLE>
8
<PAGE>
RISK FACTORS
Prospective purchasers of the Senior Notes should consider
carefully the
factors set forth below as well as the other information set forth
or
incorporated by reference in this Prospectus prior to investing in
the Senior
Notes.
THE HOUSING INDUSTRY
Homebuilders, including the Company, are subject to various
risks, such as
economic recession, competitive overbuilding, changes in
governmental
regulation, increases in real estate taxes, energy costs or costs
of materials
and labor, the availability of suitable land, and the availability
of
construction funds or mortgage loans at rates acceptable to
builders and
homebuyers. In addition, increases in interest rates or a reduction
in the
deductibility of mortgage interest for federal tax purposes may
have an adverse
effect upon the Company's sales and could affect the availability
of home
financing to present and potential customers of the Company.
LEVERAGE; POTENTIAL ADVERSE EFFECT OF INDEBTEDNESS ON FUTURE
OPERATIONS
As of November 30, 1995, after giving effect to the Offering
and the
application of the proceeds therefrom, the outstanding consolidated
indebtedness
of the Company would have been $228,650,000 (excluding mortgage
banking related
indebtedness) and the Company would have had stockholders' equity
of
$113,813,000. In addition, subject to the restrictions in the
Indenture, the
Company may incur additional indebtedness in the future, some of
which may be
secured. The Company's ability to make required debt service
payments in the
future will be dependent upon the Company's operating results,
which are subject
to financial, economic and other factors affecting the Company that
are beyond
its control. No assurance can be given that the Company will be
able to make
required debt service payments.
The degree to which the Company is leveraged could have an
adverse impact
on the Company, including (i) increased vulnerability to adverse
general
economic and market conditions, (ii) impaired ability to expand and
to respond
to increased competition, (iii) impaired ability to obtain
additional financing
for future working capital, capital expenditures, general corporate
or other
purposes and (iv) requiring that a significant portion of cash
provided by
operating activities be used for the payment of debt obligations,
thereby
reducing funds available for operations and future business
opportunities.
COMPETITION
The single-family residential housing industry is highly
competitive and
the Company competes in each of its markets with numerous other
national,
regional and local homebuilders, some of which have greater
resources than the
Company. The Company's homes compete on the basis of quality,
price, design,
mortgage financing terms and location. See "Business--Operating
Strategy." The
Company also competes with developers of rental housing units and,
to a lesser
extent, condominiums.
GROWTH THROUGH ACQUISITIONS
During the past three years, the Company has expanded its
operations into
new housing markets primarily by means of acquisitions of existing
homebuilders.
The Company entered the Austin, San Antonio and South Florida
markets in July
1993, January 1994 and November 1994, respectively, through
acquisitions of
<PAGE>
existing homebuilders. The Company will continue to review
opportunities to
enter new housing markets that have demonstrated periods of strong
population
and employment growth. However, there can be no assurance that the
Company will
be able to locate or acquire other suitable acquisition candidates
on acceptable
terms, or that it will be successful in managing the operations of
the entities
acquired and effectively and profitably integrating such operations
into the
Company. Additionally, there can be no
9
assurance that any future acquisitions
will not have a material adverse effect on the Company's operating
results,
particularly during the period immediately following such
acquisitions.
DEPENDENCE ON KEY PERSONNEL
The Company's business is managed by a small number of
executive officers.
The loss of the services of one or more of these executive officers
could have a
material adverse effect on the business and operations of the
Company.
FRAUDULENT CONVEYANCE
The Company is a holding company which derives all of its
operating income
from its subsidiaries. The Company must rely on dividends and other
distributions from its subsidiaries to generate the funds necessary
to meet its
obligations, including the payment of principal and interest on the
Senior
Notes. The ability of the Company's subsidiaries to pay such
dividends or make
such distributions will be subject to, among other things,
applicable state laws
and, under certain circumstances, restrictions contained in
agreements or debt
instruments that the Company or its subsidiaries may enter into
after the date
of the Indenture. All of the subsidiaries of the Company have
jointly and
severally guaranteed the Senior Notes.
The Guarantees may be subject to review under federal or state
fraudulent
conveyance law. To the extent that a court were to find that (x) a
Guarantee was
incurred by a Guarantor with intent to hinder, delay, or defraud
any present or
future creditor, or the Guarantor contemplated insolvency with a
design to
prefer one or more creditors to the exclusion in whole or in part
of others, or
(y) such Guarantor did not receive fair consideration or reasonable
equivalent
value for issuing its Guarantee and such Guarantor (i) was
insolvent, (ii) was
rendered insolvent by reason of the issuance of such Guarantee,
(iii) was
engaged or about to engage in a business or transaction for which
the remaining
assets of such Guarantor constituted unreasonably small capital to
carry on its
business, or (iv) intended to incur, or believed that it would
incur, debts
beyond its ability to pay such debts as they matured, a court could
avoid or
subordinate such Guarantee in favor of the Guarantor's creditors.
Among other
things, a legal challenge of a Guarantee on fraudulent conveyance
grounds may
focus on the benefits, if any, realized by each Guarantor as a
result of the
issuance by the Company of the Senior Notes. The measure of
insolvency for
purposes of the foregoing will vary depending on the law of the
jurisdiction
being applied. Generally, however, an entity would be considered
insolvent if
the sum of its debts (including contingent or unliquidated debts)
is greater
than all its property at a fair valuation or if the present fair
saleable value
of its assets is less than the amount that will be required to pay
its probable
liability on its existing debts as they become absolute and
matured. Pursuant to
the terms of the Guarantees, the liability of each Guarantor is
limited to the
maximum amount of indebtedness permitted, at the time of the grant
of such
Guarantee, to be incurred in compliance with fraudulent conveyance
or similar
laws.
<PAGE>
To the extent any Guarantee was avoided or subordinated as a
fraudulent
conveyance, limited as described above, or held unenforceable for
any other
reason, holders of the Senior Notes would, to such extent, cease to
have a claim
in respect of such Guarantee and, to such extent, would be
creditors solely of
<PAGE>
the Company and any Guarantor whose Guarantee was not avoided,
subordinated,
limited, or held unenforceable. In such event, the claims of the
holders of the
Senior Notes against the issuer of an avoided, subordinated,
limited or
unenforceable Guarantee would be subject to the prior payment of
all liabilities
of such Guarantor. There can be no assurance that, after providing
for all prior
claims, there would be sufficient assets to satisfy the claims of
the holders of
the Senior Notes.
10
REPURCHASE OF SENIOR NOTES UPON A CHANGE OF CONTROL
In the event of a Change of Control, the Company will be
required to offer
to repurchase all of the outstanding Senior Notes at a purchase
price equal to
101% of the aggregate principal amount thereof, plus accrued and
unpaid
interest, if any, to the repurchase date. There can be no assurance
that the
Company will have sufficient funds available or will be permitted
by its other
indebtedness agreements to repurchase the Senior Notes upon the
occurrence of a
Change of Control. The Change of Control purchase feature of the
Senior Notes
may in certain circumstances make more difficult or discourage a
takeover of the
Company and, thus, the removal of incumbent management. The Change
of Control
purchase feature, however, is not the result of management's
knowledge of any
specific effort to obtain control of the Company by means of a
merger, tender
offer, solicitation or otherwise, or part of a plan by management
to adopt a
series of anti-takeover provisions. See "Description of the Senior
Notes --
Certain Covenants -- Change of Control."
ABSENCE OF PUBLIC MARKET
The Senior Notes are a new issue of securities which have no
established
trading market. It is expected that the Senior Notes will be sold
to a limited
number of investors. The Company has been advised by the
Underwriters that they
intend to make a market in the Senior Notes after the consummation
of this
Offering; however, the Underwriters are not obligated to do so, and
any such
market-making, if commenced, may be terminated at any time without
notice. No
assurance can be given as to the liquidity of the trading market,
if any, for
the Senior Notes.
11
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Senior
Notes are
estimated to be $ . The Company intends to use approximately $ of
the net
proceeds to repurchase all of the Old Senior Notes and
approximately $________
of the net proceeds to reduce temporarily outstanding amounts under
certain of
the Company's revolving lines of credit (bearing interest at rates
varying from
prime plus 1/4% to prime plus 1/2% at November 30, 1995) which were
incurred for
working capital purposes. The balance of the net proceeds will be
used for
working capital and general corporate purposes. The Company
continually
evaluates acquisition opportunities; however, the Company currently
has no
agreements or understandings with respect to the acquisition of any
homebuilding
operations.
The Company has made an offer to purchase (the "Offer to
Purchase") for
cash all of the outstanding Old Senior Notes at a price equal to %
of the
principal amount thereof, plus accrued and unpaid interest, if any,
to the
repurchase date. If all of the Old Senior Notes are not tendered to
the Company
pursuant to the Offer to Purchase, the Company may seek to acquire
the remaining
Old Senior Notes by means of open market purchases or privately
negotiated
acquisitions. Although it has no obligation to do so, the Company
currently
intends to redeem on August 1, 1997 (the first day on which the Old
Senior Notes
are redeemable) any Old Senior Notes not tendered pursuant to the
Offer to
Purchase or otherwise repurchased by the Company at a redemption
price equal to
104% of the principal amount thereof, plus accrued and unpaid
interest, if any,
to the redemption date. The Old Senior Notes bear interest at a
rate of 12% per
annum and mature on August 1, 1999.
12
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the
Company at
November 30, 1995, and as adjusted to give effect to the issuance
and sale by
the Company of the Senior Notes and the application of the
estimated net
proceeds therefrom. See "Use of Proceeds."
<TABLE>
<CAPTION>
NOVEMBER
30, 1995
- ---------------------
ACTUAL
AS ADJUSTED
------
- -----------
<S> <C>
<C>
(IN
THOUSANDS)
Cash and cash equivalents....................... $ 18,745
$ 18,745
========
========
Debt(1)
Homebuilding
Notes payable (including current
maturities of approximately
$18,000,000)(2)............................. $ 30,000
$ 3,650
% Senior Notes due 2006.................... --
150,000
12% Senior Notes due 1999(3)................ 111,267
--
67/8% Convertible Subordinated Notes
due November 1, 2002(4)..................... 75,000
75,000
--------
- --------
Total.................................. 216,267
228,650
--------
- -------
Mortgage banking
Notes payable due within one year......... 6,379
6,379
Bonds payable............................. 17,217
17,217
--------
- -------
Total.................................. 23,596
23,596
--------
- -------
Total debt........................... 239,863
252,246
--------
- -------
Stockholders' equity............................
Common Stock, $.01 par value; 20,000,000 shares
authorized; 7,080,900 shares issued(5).... 71
71
Treasury stock, at cost, 130,685 shares.... (361)
(361)
Capital in excess of par value............. 59,610
59,610
Retained earnings(6)....................... 61,236
54,493
--------
- -------
Total stockholders' equity....... 120,556
113,813
--------
- -------
Total capitalization............................ $360,419
$366,059
========
========
- --------------------
<FN>
(1) See Note E of "Notes to Consolidated Financial Statements"
incorporated
herein by reference for further information regarding the terms
of the
Company's indebtedness. All of the Company's 6 7/8% Convertible
Subordinated Notes due March 15, 2002 were called for
redemption on November
10, 1995 and were redeemed on December 11, 1995.
(2) The Company is currently in discussions with a group of banks
to obtain an
<PAGE>
unsecured revolving credit facility to be used for working
capital and
general corporate purposes. The new facility will replace all
of the
Company's existing lines of credit (other than warehouse lines)
which had
aggregate commitments of $90 million at November 30, 1995.
(3) Assumes all $110 million principal amount of the Old Senior
Notes is
repurchased by the Company pursuant to the Offer to Purchase.
(4) On December 5, 1995, the Company issued and sold an additional
$11,250,000
principal amount of 67/8% Convertible Subordinated Notes due
November 1,
2002 pursuant to an over-allotment option. The Company reserved
an
additional 473,681 shares of its common stock for issuance upon
conversion
of such notes.
(5) Excludes 3,157,875 shares reserved for issuance upon conversion
of the 67/8%
Convertible Subordinated Notes due November 1, 2002 and 409,185
shares
reserved for issuance pursuant to options granted under the
Company's stock
option plans.
(6) Adjusted to reflect the extraordinary loss, net of taxes,
related to the
tender offer premium pursuant to the Offer to Purchase and the
write-off of
debt issuance costs and the net premium relating to the
repurchase of the
Old Senior Notes.
</TABLE>
13
<PAGE>
BUSINESS
The Company designs, constructs and sells high quality
single-family homes
targeted to primarily entry-level and first- time move-up
homebuyers. As of
November 30, 1995, the Company was offering homes for sale in 59
communities in
six markets. The Company is geographically diversified, currently
operating in
Phoenix, Arizona; Austin and San Antonio, Texas; Denver, Colorado;
South
Florida; and Southern California. The Company also offers mortgage
banking
services in Arizona to its homebuyers and in Texas to its
homebuyers and to
third parties.
OPERATING STRATEGY
The following are the major elements of the Company's
operating strategy:
Geographic Diversification. The Phoenix metropolitan area is
the Company's
primary market and accounted for approximately 49% of the Company's
revenues
from homebuilding operations for the fiscal year ended May 31,
1995. The Company
began diversifying its operations by expanding into Denver in 1987
and Southern
California in 1988. Over the last three years, the Company entered
the Austin,
San Antonio and South Florida markets through the acquisition of
homebuilders
with established operations. The Company will continue to review
opportunities
to enter new housing markets that have demonstrated periods of
strong population
and employment growth. The Company may enter such markets through
either
acquisitions or start-up operations.
Product. The Company sells single-family homes targeted
primarily to
entry-level and first-time move-up buyers. The Company emphasizes
quality homes
with distinctive design features offered at affordable prices
within each of its
markets. The Company believes that today's homebuyers are
particularly
value-oriented and that the entry-level and first-time move-up
markets represent
the largest segments of the homebuilding market. During fiscal
1995, the average
sales price of the Company's homes was approximately $129,500.
Additionally, the
Company has entered into a joint venture to begin constructing
retirement homes
in Phoenix. This represents the Company's first project in the
retirement market
and may represent an area of future growth.
Cost Control. The Company controls the costs of construction
through the
efficient design of its homes and the favorable pricing it receives
from certain
subcontractors which perform a high volume of work for the Company.
The
Company's custom-designed management information systems also
assist in
controlling construction costs by making information available
which allows the
Company to monitor subcontractor performance and expenditures for
each house
built. As part of management's control of general and
administrative expense,
internal operations are continually monitored to reduce overhead
and improve
efficiency.
Inventory Management. The Company's objective is to maintain
a supply of
land to meet anticipated homebuilding requirements for
approximately two to
three years. At November 30, 1995, the Company had approximately 35
months of
inventory based on actual deliveries in fiscal 1995. To further
control
inventory, the Company builds speculative units only to maintain a
limited
inventory of homes available for quick delivery or to continue the
construction
sequence in a particular subdivision.
Mortgage Banking. The Company's mortgage banking operations
offer
competitive financing alternatives to many of its homebuyers in
Arizona and
Texas (and to third parties in Texas), assisting customers through
the loan
application and approval process. These operations augment the
Company's
earnings and assist in home sales by enabling the Company to
monitor the
progress of mortgage applications.
<PAGE>
14
<PAGE>
LAND ACQUISITION AND DEVELOPMENT
As of November 30, 1995, the Company operated 16 subdivisions
in Phoenix,
18 subdivisions in Austin, eight subdivisions in Denver, eight
subdivisions in
San Antonio, four subdivisions in South Florida and five
subdivisions in
Southern California. The following table summarizes the Company's
available lot
inventory at November 30, 1995 by location:
<TABLE>
<CAPTION>
AVAILABLE LOT INVENTORY
Sites
Available
Total Lots Homes Under
for Future
Available Construction
Construction
--------- ------------
------------
Sold Specs(1) Models
Unsold Sold
---- ------- ------
- ----- ----
<S> <C> <C> <C> <C>
<C> <C>
Phoenix............................. 4,233 872 230 47
3,019 65
Texas(2)............................ 4,440 381 198 37
3,784 40
Denver.............................. 1,381 107 72 18
1,161 23
South Florida....................... 1,267 61 70 18
1,063 55
Southern California................. 404 73 76 13
227 15
------ ----- --- ----
----- ---
Total...............................11,725 1,494 646 133
9,254 198
====== ===== === ====
===== ===
<FN>
(1) Speculative units are unsold homes under construction.
(2) Includes operations in Austin and San Antonio.
</TABLE>
The Company's objective is to maintain a supply of land to
meet
anticipated homebuilding requirements for approximately two to
three years. At
November 30, 1994 and 1995, the Company had an aggregate of 10,701
and 9,254
unsold lots, respectively, which represents approximately 45 and 35
months of
inventory, respectively, based on actual deliveries in each of
fiscal 1994 and
1995. The Company believes that an adequate supply of undeveloped
land is
available in its markets to maintain current levels of
homebuilding.
As of November 30, 1995, the Company also owned 417 acres in
Carlsbad,
California, located in San Diego County. Discretionary city
entitlements for
this project, which will result in approximately 760 dwelling
units, were
approved by the Carlsbad City Council in March 1995. The Company is
currently
working with state and federal governmental agencies regarding
environmental
issues with regard to the property and is preparing final
improvement plans for
the project. The Company is unable to predict the date on which all
additional
approvals necessary to commence development will be received, but
it is
currently actively seeking these additional approvals and will
commence
development as soon as the aforementioned approvals are received
and financing
is obtained.
PRODUCT LINES
The product line constructed by the Company in a particular
subdivision is
dependent upon many factors, including the housing generally
available in the
<PAGE>
area, the needs of the particular market and the Company's cost of
lots in the
<PAGE>
subdivision. The Company typically offers between three and sixteen
floorplans
within the same product line in each subdivision and often offers
the same
models in similar subdivisions. Models are periodically reviewed
and updated to
reflect changing homebuyer preferences. Both new models and design
modifications
are generally developed by Company employees.
Homes sold by the Company typically have three to five
bedrooms, two or
more bathrooms and at least a two car garage. The Company offers a
variety of
options and upgrades, including the placement of certain walls, the
style of
kitchen and bathroom cabinetry, a selection of floor coverings and
light
fixtures, patios, decks, french doors and fireplaces, which allow
homebuyers to
customize their homes. Options and upgrades are generally priced to
have a
positive effect on profit margins.
15
<TABLE>
<CAPTION>
PRODUCT LINES
Living Area Base
Price Range
(Square Feet) at
November 30, 1995
-------------
- --------------------
<S> <C> <C>
Phoenix
Move-up single-family............. 1,391-- 3,761 $103,900
- -- $185,100
Entry-level single-family......... 1,287-- 2,484 $ 85,800
- -- $161,700
Texas(1)
Move-up single-family............. 1,799 -- 3,230
$122,300 -- $165,400
Entry-level single-family......... 924 -- 2,695 $
58,950 -- $144,550
Denver
Move-up single-family............. 1,820 -- 3,096
$150,800 -- $235,600
South Florida
Move-up single-family............. 1,615 -- 2,511
$134,900 -- $171,900
Entry-level single-family......... 1,314 -- 2,012 $
89,900 -- $140,900
Southern California
Move-up single-family............. 2,883 -- 4,093
$335,000 -- $439,000
Entry-level single-family........ 1,803 -- 3,165
$149,900 -- $204,900
- --------------------
<FN>
(1) Includes operations in Austin and San Antonio.
</TABLE>
HOMES
DELIVERED
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED MAY 31, ENDED
NOVEMBER 30,
------------------------------
- -----------------
1993 1994 1995
1994 1995
------- ------- -------
- ------- ------
<S> <C> <C> <C> <C>
<C>
Move-up single-family
<PAGE>
Revenues (000's)........... $ 56,293 $ 128,494 $208,026
$101,912 $113,087
Units...................... 350 811 1,281
645 675
<PAGE>
Average sales price........ $160,800 $ 158,400 $162,400
$158,000 $167,500
Entry-level single-family
Revenues (000's)........... $143,719 $ 206,615 $206,692 $
99,358 $155,243
Units...................... 1,419 1,976 1,921
915 1,382
Average sales price........ $101,300 $ 104,600 $107,600
$108,600 $112,300
Townhomes and duplex homes
Revenues (000's)........... $ -- $ 4,922 $ -- $
-- $ --
Units...................... -- 44 --
-- --
Average sales price........ $ -- $ 111,900 $ -- $
-- $ --
Total
Revenues (000's)........... $200,012 $ 340,031 $414,718
$201,270 $268,330
Units...................... 1,769 2,831 3,202
1,560 2,057
Average sales price........ $113,100 $ 120,100 $129,500
$129,000 $130,400
</TABLE>
16
<PAGE>
Fluctuations in the number of homes delivered by product type
are generally
related to product availability, market conditions or the
introduction of a new
product.
CONTRACT BACKLOG
Sales of the Company's homes are made pursuant to standard
sales contracts
which require a $500 to $2,500 deposit upon signing. The contract
is generally
cancellable if the customer is unable to obtain a mortgage
commitment, usually
within 60 days. A sale becomes part of backlog only upon receipt of
a signed
contract and a deposit. See "--Construction and Customer Service".
The following table summarizes information related to the
Company's backlog
at the dates indicated:
<TABLE>
<CAPTION>
November
30,
- -----------------------------------
1994
1995
----------------
- --------------
Units Dollars
Units Dollars
----- -------
- ----- -------
<S> <C> <C> <C>
<C>
(Dollars in
thousands)
Phoenix................................ 617 $ 80,021
937 $117,972
Texas.................................. 278 30,157
421 46,539
South Florida.......................... 109 14,991
116 16,738
Denver................................. 91 16,644
130 27,284
Southern California.................... 50 14,096
88 21,401
----- --------
- ----- --------
Total backlog...................... 1,145 $155,909
1,692 $229,934
===== ========
===== ========
</TABLE>
The Company anticipates that substantially all of the homes in
backlog at
November 30, 1995 will be delivered during the fiscal year ending
May 31, 1996.
MARKETING
The Company markets its homes to first-time and move-up
buyers. Although
the Company utilizes the services of independent brokers,
approximately 42% of
the Company's homes sold in the six months ended November 30, 1995
were sold by
Company commissioned personnel (without the assistance of
independent brokers)
from sales offices located in furnished model homes in the
subdivisions. Sales
personnel are trained by the Company and attend weekly meetings to
be updated on
financing availability, construction schedules and marketing and
advertising
plans. Company sales personnel and independent brokers are
generally paid a
commission at the time of closing of between 1% to 2% (depending on
the market)
and 3%, respectively, of the sales price of the home. The Company
uses radio,
newspapers, magazines, billboard displays, special promotional
events and,
occasionally, television in its marketing program.
The Company builds its homes under the guidelines and
specifications of the
Federal Housing Administration ("FHA") and the Veterans
Administration ("VA"),
<PAGE>
thereby providing prospective buyers the added benefits of
FHA-insured and VA-
guaranteed mortgages.
CONSTRUCTION AND CUSTOMER SERVICE
The Company designs and supervises the development and
building of its
projects. The construction period for the Company's homes during
fiscal 1995
ranged from 100 to 180 days in Phoenix, from 75 to 120 days in
Texas, from 120
to 180 days in Denver, from 90 to 120 days in South Florida and
from 100 to 150
days in Southern California.
17
The actual construction is performed for a fixed price by
independent
subcontractors, who are generally selected on a competitive basis.
All stages of
construction are supervised by the Company's on-site
superintendents who
coordinate the activities of subcontractors, subject their work to
quality and
cost controls and monitor compliance with zoning and building
codes. The
Company's management information systems also assist the Company in
controlling
the costs of construction by making information available which
allows the
Company to monitor subcontractor performance and expenditures. The
Company
believes its relationships with its subcontractors are good.
The Company provides homebuyers with a one-year warranty on
its homes for
non-structural defects and a two-year warranty with respect to
structural
defects. In addition, the Company purchases, in certain locations,
builder's
liability insurance protection for major structural defects in the
third through
tenth year.
In Phoenix, Denver, South Florida and Southern California, the
Company
constructs homes principally against orders which are evidenced by
written
contracts and modest escrow deposits. In fiscal 1995 and for the
six months
ended November 30, 1995, approximately 16% and 17%, respectively,
of such
contracts have been cancelled, a majority of such cancellations
being
attributable to the inability of the prospective purchaser to
qualify for
financing. The Company attempts to limit cancellations by training
its sales
force to determine the qualification of potential homebuyers at the
sales
office. The Company classifies a unit as speculative when
construction commences
on a unit that does not have a written contract. The Company may
construct
speculative units in order to maintain an inventory for quick
delivery or to
continue the construction sequence. The majority of the Company's
speculative
units are less than 50% complete. Historically, the Texas market
constructs a
proportionally larger number of speculative units than the
Company's other
markets. As a result of such cancellations and construction
procedures, at
November 30, 1994 and November 30, 1995 the Company had
respectively 481 and 646
(including 197 and 198, respectively in Texas) speculative units
under
construction.
MORTGAGE BANKING
The Company commenced mortgage banking operations in 1986 and
all mortgage
operations of the Company have been conducted by American Western
Mortgage
Company ("AWMC") and Miltex Management, Inc., which are approved by
the FHA and
VA as qualified mortgage lenders. As of July 1, 1995, all mortgage
operations of
the Company are being conducted by AWMC which has changed its name
to CH
Mortgage Company ("CHMC").
As a mortgage banker, CHMC completes the processing of loan
applications,
performs credit checks, submits applications to mortgage lenders
for approval,
<PAGE>
and originates and sells mortgage loans. CHMC has a $25,000,000
warehouse line
of credit to fund the mortgage loans on an interim basis. CHMC
bears the
interest expense and receives the interest income while mortgages
are
<PAGE>
warehoused. Accordingly, depending upon the relative interest rates
of such
loans and the related mortgages and the extent to which mortgages
are financed,
CHMC may have net interest income or expense during the warehouse
period.
CHMC establishes its interest rates and terms to facilitate
the sale of the
Company's homes through the originations of first mortgage loans
utilizing
programs established by the FHA, VA, GNMA and FNMA. Interest rates
are generally
established by prevailing market rates, although lower rates may be
offered from
time to time to remain competitive in certain markets.
Each mortgage originated by CHMC contains the provision for a
servicing fee
(which is included as a part of the monthly payment made by the
mortgagor) to be
paid for the collection of, and accounting for, mortgage payments.
This
servicing fee provision is a separate interest in the mortgage that
may be sold
independently of, or together with, the mortgage itself. CHMC began
retaining a
portion of the servicing portfolio in fiscal 1991 and from time to
time may
continue to do so, although this is not expected to become a
material part of
the Company's business. During fiscal 1995, the Company sold
significantly all
of the servicing rights that were originated during such year, and
during the
third quarter of fiscal 1996, the Company sold significantly all of
the
servicing rights it had previously retained.
18
COMPETITION
The single-family residential housing industry is highly
competitive, and
the Company competes in each of its markets with numerous other
national,
regional and local homebuilders, some of which have greater
resources than the
Company. The Company's homes compete on the basis of quality,
price, design,
mortgage financing terms and location. See "--Operating Strategy".
The Company
also competes with developers of rental housing units and, to a
lesser extent,
condominiums.
REGULATION
The housing and mortgage banking industries are subject to
extensive and
complex regulations. The Company and its subcontractors must comply
with various
federal, state and local laws and regulations including zoning and
density
requirements, building, environmental, advertising and consumer
credit rules and
regulations as well as other rules and regulations in connection
with its
homebuilding and sales activities. These include requirements as to
building
materials to be used, building designs and minimum elevation of
properties. The
Company's homes are inspected by local authorities where required,
and homes
eligible for insurance or guarantees provided by the FHA and VA,
respectively,
are subject to inspection by the FHA or VA.
The Company is also subject to a variety of local, state and
federal
statutes, ordinances, rules and regulations concerning protection
of health and
the environment ("environmental laws"), as well as effects of
environmental
factors. The particular environmental laws which apply to any given
homebuilding
site vary greatly according to the site's location, the site's
environmental
condition and the present and former uses of the site. These
environmental laws
may result in delays, may cause the Company to incur substantial
compliance and
other costs, and can prohibit or severely restrict homebuilding
activity in
certain environmentally sensitive regions or areas.
The Company's mortgage banking subsidiary must also comply
with various
federal and state laws and consumer credit rules and regulations as
well as
rules and regulations in connection with its mortgage lending
activities.
<PAGE>
Additionally, mortgage loans originated under the FHA, VA, FNMA and
GNMA are
<PAGE>
subject to rules and regulations imposed by such agencies.
EMPLOYEES
At November 30, 1995, the Company and its subsidiaries
employed
approximately 491 persons, including corporate staff, sales
personnel,
construction personnel and mortgage and title staff. None of the
Company's
employees is covered by a collective bargaining agreement. The
Company believes
that its relations with its employees are good.
19
<PAGE>
DESCRIPTION OF THE SENIOR NOTES
The Senior Notes offered hereby are to be issued under an
Indenture,
dated as of April , 1996 (the "Indenture"), among the Company, the
Guarantors
and First Union National Bank, as Trustee (the "Trustee"), a copy
of which is an
exhibit to the Registration Statement of which this Prospectus is
a part. The
following summaries of certain provisions of the Indenture do not
purport to be
complete and are subject to, and are qualified in their entirety by
reference
to, all of the provisions of the Indenture, including the
definitions therein of
certain terms. Wherever particular defined terms of the Indenture
are referred
to, such defined terms are incorporated herein by reference. For
purposes of
this section and the Indenture, references to the "Company" include
only the
Company and not its subsidiaries.
GENERAL
The Senior Notes will be limited to $150,000,000 aggregate
principal
amount. The Senior Notes will mature on , 2006. The Senior Notes
will bear
interest from the date of issuance, or from the most recent date to
which
interest has been paid or provided for, at the rate stated on the
cover page
hereof, payable in arrears on and of each year, commencing , 1996
to the persons
in whose names the Senior Notes are registered at the close of
business on the
fifteenth day of the month preceding the month in which the
interest payment
date occurs. Interest will be computed on the basis of a 360-day
year of twelve
30-day months.
The Senior Notes will be general unsecured obligations of the
Company,
ranking senior in right of payment to all existing and future
subordinated
indebtedness of the Company and pari passu in right of payment with
all existing
and future senior indebtedness of the Company; however, the Senior
Notes will be
effectively subordinated to all secured indebtedness of the Company
to the
extent of the value of the assets securing such indebtedness. As of
November 30,
1995, after giving effect to the Offering and the application of
the proceeds
therefrom, the Company would have had no secured indebtedness
outstanding.
Principal and premium, if any, and interest on the Senior
Notes are to be
payable, and the Senior Notes offered hereby will be exchangeable
and transfers
thereof will be registrable, at the offices of the Company or its
agent
maintained for such purposes in The City of New York; provided that
payment of
interest may, at the option of the Company, be made by check mailed
to a holder
at his registered address.
The Senior Notes offered hereby will be issued only in
fully registered
form without coupons, in denominations of $1,000 and any integral
multiple
thereof. The Senior Notes are exchangeable and transfers thereof
will be
registered without charge therefor, but the Company may require
payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection
therewith.
THE GUARANTEES
Each of the Guarantors will (so long as they remain
Subsidiaries of the
Company) unconditionally guarantee on a joint and several basis all
of the
Company's obligations under the Senior Notes, including its
obligations to pay
principal, premium, if any, and interest with respect to the Senior
Notes. The
Guarantees will be general unsecured obligations of the Guarantors,
ranking
senior in right of payment to all existing and future subordinated
indebtedness
of the Guarantors and pari passu in right of payment with all
existing and
future senior indebtedness of the Guarantors; however, the
Guarantees will be
effectively subordinated to all secured indebtedness of the
Guarantors to the
extent of the value of the assets securing such indebtedness. As of
November 30,
<PAGE>
1995, after giving effect to the Offering and the application of
the proceeds
therefrom, the Guarantors would have had approximately $3,650,000
of secured
indebtedness outstanding. Except as provided in "Certain Covenants"
below, the
Company is not restricted from selling or otherwise disposing of
any of the
Guarantors.
The Indenture will provide that each Restricted Subsidiary
(other than,
in the Company's discretion, any Restricted Subsidiary the assets
of which have
a book value of not more than $1,000,000) will be a Guarantor.
20
The Indenture provides that if all or substantially all of
the assets
of any Guarantor or all of the capital stock of any Guarantor is
sold (including
by issuance or otherwise) by the Company or any of its Subsidiaries
in a
transaction constituting an Asset Sale, and if the Net Proceeds
from such Asset
Sale are used in accordance with the covenant, "Limitation on Asset
Sales," then
such Guarantor (in the event of a sale or other disposition of all
of the
capital stock of such Guarantor) or the corporation acquiring such
assets (in
the event of a sale or other disposition of all or substantially
all of the
assets of such Guarantor) shall be released and discharged of its
Guarantee
obligations.
OPTIONAL REDEMPTION
The Senior Notes are redeemable at the option of the
Company, in whole
or in part (in any integral multiple of $1,000), at any time on or
after , 2001,
on not less than 30 days nor more than 60 days notice mailed to the
registered
holders thereof at their last registered addresses, at the
following redemption
prices (expressed as percentages of the principal amount thereof),
plus accrued
and unpaid interest, if any, to the redemption date:
<TABLE>
<CAPTION>
Year Percentage
<S> <C> <C>
2001.............................. %
2002.............................. %
2003 and thereafter............... 100%
</TABLE>
In addition, if the Company consummates one or more public
offerings of its
Common Stock subsequent to the date of this Prospectus and on or
prior to ,
1999, the Company may, at its option, redeem up to 33% of the
original principal
amount of the Senior Notes with the net proceeds of such offerings
at % of the
principal amount thereof, plus accrued and unpaid interest, if any,
to the
redemption date; provided, however, that immediately after giving
effect to any
such redemption not less than $100,000,000 principal amount of the
Senior Notes
remains outstanding.
If less than all of the Senior Notes are to be redeemed,
the Trustee
will select the particular Senior Notes (or the portions thereof)
to be redeemed
either by lot, pro rata or by such other method as the Trustee
shall deem fair
and appropriate, but in any such event, in such manner as complies
with
applicable legal and stock exchange requirements. On or after the
redemption
date, interest will cease to accrue on Senior Notes or portions
thereof called
for redemption.
CERTAIN COVENANTS
Change of Control.
<PAGE>
In the event of a Change of Control, each holder of Senior
Notes shall
<PAGE>
have the right upon receipt of a Change of Control Notice (as
defined below), at
such holder's option, to require the Company to repurchase all of
such holder's
Senior Notes, or a portion thereof which is $1,000 or any integral
multiple
thereof, on the date (the "Change of Control Repurchase Date") that
is 45 days
after the date of the Change of Control Notice at a price equal to
101% of the
principal amount thereof, plus accrued interest to the Change of
Control
Repurchase Date.
Within 30 days after the occurrence of a Change of
Control, the Company
or, at the request of the Company, the Trustee, shall deliver to
all holders of
record of the Senior Notes a notice (the "Change of Control
Notice") of the
occurrence of such Change of Control and of the repurchase right
arising as a
result thereof. The Company shall deliver a copy of the Change of
Control Notice
to the Trustee. To exercise the repurchase right, on or before the
30th day
after the date of the Change of Control Notice, holders of Senior
Notes must
deliver written notice to the Company (or an agent designated by
the Company for
such purposes) of the holder's exercise of such right, together
with the Senior
Notes with respect to which the right is being exercised, duly
endorsed for
transfer. Such written notice shall be irrevocable.
21
The right to require the repurchase of Senior Notes shall
not continue
after a discharge of the Company from its obligations under the
Senior Notes and
the Indenture with respect to the Senior Notes in accordance with
Article 8 of
the Indenture.
If the Change of Control Repurchase Date is between a
regular record
date for the payment of interest and the next succeeding interest
payment date,
any Note to be repurchased must be accompanied by funds equal to
the interest
payable on such succeeding interest payment date on the principal
amount to be
repurchased (unless such Note shall have been called for
redemption, in which
case no such payment shall be required), and the interest on the
principal
amount of the Note being repurchased will be paid on such next
succeeding
interest payment date to the registered holder of such Note on the
immediately
preceding record date. A Note repurchased on an interest payment
date need not
be accompanied by any payment, and the interest on the principal
amount of the
Note being repurchased will be paid on such interest payment date
to the
registered holder of such Note on the immediately preceding record
date.
As used herein, a "Change of Control" of the Company means
the
occurrence of any of the following events: (a) any "person" or
"group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding the
Management Group (as defined below), is or becomes the "beneficial
owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person
shall be deemed to have "beneficial ownership" of all securities
that such
person has the right to acquire, whether such right is exercisable
immediately,
after the passage of time, upon the happening of an event or
otherwise),
directly or indirectly, of more than 50% of the total Voting Stock
of the
Company; provided, however, that the members of the Management
Group do not have
the right or ability by voting power, contract or otherwise to
elect or
designate for election a majority of the Board of Directors of the
Company; (b)
the Company consolidates with, or merges with or into, another
Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person
consolidates with,
or merges with or into, the Company, in any such event pursuant to
a transaction
in which the outstanding Voting Stock of the Company is converted
into or
exchanged for cash, securities or other property, other than any
such
transaction where immediately after such transaction no "person" or
"group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), excluding
the Management Group, is the "beneficial owner" (as defined in
Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed
to have
<PAGE>
"beneficial ownership" of all securities that such person has the
right to
acquire, whether such right is exercisable immediately, after the
passage of
<PAGE>
time, upon the happening of an event or otherwise), directly or
indirectly, of
more than 50% of the total Voting Stock of the surviving or
transferee
corporation; provided, however, that the members of the Management
Group do not
have the right or ability by voting power, contract or otherwise,
to elect or
designate for election a majority of the Board of Directors of the
Company; (c)
at any time during any consecutive two-year period, individuals who
at the
beginning of such period constituted the Board of Directors of the
Company
(together with any new directors whose election by such Board of
Directors or
whose nomination for election by the stockholders of the Company
was approved by
a vote of a majority of the directors then still in office who were
either
directors at the beginning of such period or whose election or
nomination for
election was previously so approved) cease for any reason to
constitute a
majority of the Board of Directors of the Company then in office;
or (d) the
Company is liquidated or dissolved or adopts a plan of liquidation.
The
"Management Group" shall consist of the executive officers of the
Company as of
the date of the Indenture, members of their immediate families,
certain trusts
for their benefit, and legal representatives of, or heirs,
beneficiaries or
legatees receiving Common Stock (or securities convertible or
exchangeable for
Common Stock) under, any such person's estate.
If any repurchase pursuant to the foregoing provisions
constitutes a
tender offer as defined under the Exchange Act, the Company will
comply with the
requirements of Rule 14e-1 and any other tender offer rules under
the Exchange
Act which then may be applicable. The Company could, in the future,
enter into
certain significant transactions that would not constitute a Change
of Control
with respect to the Change of Control purchase feature of the
Senior Notes. The
Change of Control purchase feature of the Senior Notes may in
certain
circumstances make more difficult or discourage a takeover of the
Company and,
thus, the removal of incumbent management. The Change of Control
purchase
feature, however, is not the result of management's knowledge of
any specific
effort to obtain control of the Company by means of a merger,
tender offer,
solicitation or otherwise, or part of a plan by management to adopt
a series of
anti-takeover provisions.
22
The meaning of the phrase "all or substantially all" as
used in the
Indenture in the definition of "Change of Control" with respect to
a sale of
assets varies according to the facts and circumstances of the
subject
transaction, has no clearly established meaning under relevant law
and is
subject to judicial interpretation. Accordingly, in certain
circumstances, there
may be a degree of uncertainty in ascertaining whether a particular
transaction
would involve a disposition of "all or substantially all" of the
assets of the
Company, and therefore it may be unclear whether a Change of
Control has
occurred and whether the Senior Notes are subject to a Change of
Control Offer.
Maintenance of Net Worth.
In the event that the Company's Net Worth at the end of
each of any two
consecutive fiscal quarters (the last day of such second fiscal
quarter being
referred to as the "Trigger Date") is less than $20,000,000 (the
"Minimum Net
Worth"), then the Company shall make an offer to all holders (a
"Net Worth
Offer") to acquire on a pro rata basis on the date (the "Net Worth
Repurchase
Date") that is 45 days following the date of the Net Worth Notice
(as defined
below), Senior Notes in an aggregate principal amount equal to 10%
of the
initial outstanding principal amount of the Senior Notes (or if
less than 10% of
the aggregate principal amount of the Senior Notes issued are then
outstanding,
all the Senior Notes outstanding at the time) (the "Net Worth Offer
Amount") at
a purchase price of 100% of the principal amount thereof, plus
accrued interest
to the Net Worth Repurchase Date (the "Net Worth Price"). The
Company may credit
against the Net Worth Offer Amount the principal amount of Senior
Notes acquired
by the Company prior to the Trigger Date through purchase, optional
redemption
<PAGE>
or exchange. The Company, however, may not credit a specific Note
in more than
one Net Worth Offer. In no event shall the failure to meet the
Minimum Net Worth
<PAGE>
at the end of any fiscal quarter be counted toward the making of
more than one
Net Worth Offer. The Company shall notify the Trustee promptly
after the
occurrence of any of the events specified in this provision and
shall notify the
Trustee in writing if its Net Worth is equal to or less than the
Minimum Net
Worth for any fiscal quarter.
Within 30 days after the Trigger Date, the Company, or, at
the request
of the Company, the Trustee, shall give notice of the Net Worth
Offer to each
holder (the "Net Worth Notice"). To accept a Net Worth Offer a
holder shall
deliver to the Company (or to a Paying Agent designated by the
Company for such
purpose), on or before the 30th day after the date of the Net Worth
Notice, a
written notice of the holder's acceptance of such offer, together
with the
Senior Notes with respect to which the offer is being accepted,
duly endorsed
for transfer to the Company. Such written notice may be withdrawn
upon further
written notice delivered to the Trustee on or prior to the third
day preceding
the Net Worth Repurchase Date.
If the Net Worth Repurchase Date is between a regular
record date for
the payment of interest and the next succeeding interest payment
date, any Note
to be repurchased must be accompanied by funds equal to the
interest payable on
such succeeding interest payment date on the principal amount to be
repurchased
(unless such Note shall have been called for redemption, in which
case no such
payment shall be required), and the interest on the principal
amount of the Note
being repurchased will be paid on such next succeeding interest
payment date to
the registered holder of such Note on the immediately preceding
record date. A
Note repurchased on an interest payment date need not be
accompanied by any
payment, and the interest on the principal amount of the Note being
repurchased
will be paid on such interest payment date to the registered holder
of such Note
on the immediately preceding record date.
If any repurchase pursuant to the foregoing provisions
constitutes a
tender offer as defined under the Exchange Act, the Company will
comply with the
requirements of Rule 14e-1 and any other tender offer rules under
the Exchange
Act which then may be applicable.
Limitation on Debt.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or
otherwise become liable for ("Incur"), any Debt, except Permitted
Debt.
"Permitted Debt" means (a) Debt evidenced by the Senior Notes and
the
Guarantees, (b) Debt Incurred by the Company or any Guarantor under
or in
respect of a Bank Facility (including any guarantees related
thereto) for
working capital or general corporate purposes or evidenced by
letters of credit;
provided that the aggregate amount of all such Debt outstanding at
any time
pursuant to this
23
clause (b) may not exceed $110,000,000, (c) Debt Incurred under
a Warehouse Facility; provided that the amount of such Debt
(including funding
drafts issued thereunder) outstanding at any time pursuant to this
clause (c)
guaranteed by the Company or a Restricted Subsidiary may not exceed
$30,000,000
and the amount of such Debt (excluding funding drafts issued
thereunder) may not
exceed 98% of the value of the Mortgages pledged to secure Debt
thereunder, (d)
Debt of the Company to any Guarantor or of any Restricted
Subsidiary of the
Company to the Company or to any Guarantor, (e) Existing Debt
(without
duplication of Debt indicated under clauses (a)-(d) above) of the
Company and
its Restricted Subsidiaries other than Debt to be repaid from the
proceeds of
the sale of the Senior Notes, (f) Non-Recourse Debt, (g) Debt in
respect of
performance, completion, guarantee, surety and similar bonds or
banker's
acceptances provided by the Company or any of its Restricted
Subsidiaries in the
<PAGE>
ordinary course of business, (h) additional Debt of the Company or
any Guarantor
in an amount not to exceed $5,000,000 at any time outstanding, (i)
Debt referred
to in the definition of Interest Rate Protection Agreements, and
(j) Refinancing
Debt.
<PAGE>
Notwithstanding the foregoing, and subject to the
immediately
succeeding paragraph, the Company and the Guarantors may Incur Debt
if, at the
time such Debt is so Incurred and after giving effect thereto and
the
application of the proceeds therefrom, the Company's Coverage Ratio
shall not be
less than 2.0 to 1.0.
The Company shall not, and the Company will not cause or
permit any
Guarantor to, directly or indirectly, Incur any Debt that purports
to be by its
terms (or by the terms of any agreement governing such Debt)
subordinated to any
other Debt of the Company or of such Guarantor, as the case may be,
unless such
Debt is also by its terms (or by the terms of any agreement
governing such Debt)
made expressly subordinated to the Senior Notes or the Guarantee of
such
Guarantor, as the case may be, to the same extent and in the same
manner as such
Debt is subordinated to such other Debt.
Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly, make any Restricted
Payment, if, after
giving effect thereto (a) an Event of Default, or an event that
through the
passage of time or the giving of notice, or both, would become an
Event of
Default, shall have occurred and be continuing, or (b) the Company
would be
unable to incur $1.00 of additional Debt under the second paragraph
set forth
under the caption "Limitation on Debt," or (c) the aggregate amount
of all
Restricted Payments made by the Company and its Restricted
Subsidiaries (the
amount expended or distributed for such purposes, if other than in
cash, to be
determined in good faith by the board of directors of the Company)
from and
after the date of the Indenture shall exceed the sum of (i) the
aggregate of 50%
of the Consolidated Net Income of the Company accrued for the
period (taken as
one accounting period) commencing with , 1996 to and including the
first full
month ended immediately prior to the date of such calculation (or,
in the event
Consolidated Net Income is a deficit, then minus 100% of such
deficit), (ii) the
aggregate net proceeds (the amount of such proceeds, if other than
cash, to be
determined in good faith by the board of directors of the Company)
received by
the Company from the issuance or sale (other than to a Subsidiary
of the
Company) of its Capital Stock (other than Redeemable Stock),
including the
principal amount of any convertible or exchangeable notes or other
convertible
or exchangeable securities that are converted or exchanged into
Capital Stock,
from and after the date of the Indenture, and options, warrants and
rights to
purchase its Capital Stock (other than Redeemable Stock), (iii) in
the case of
the disposition or repayment of any Investment constituting a
Restricted Payment
made after the date of the Indenture (excluding any Investment
described in
clause (4) of the following paragraph, but including upon the
redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary), an amount
equal to the
lesser of the return of capital with respect to such Investment and
the cost of
such Investment, in either case, reduced (but not below zero) by
the excess, if
any, of the cost of the disposition of such Investment over the
gain, if any,
realized by the Company or such Restricted Subsidiary in respect of
such
disposition of such Investment and (iv) $5,000,000.
The foregoing paragraph will not prevent: (1) the payment
of any
dividend within 60 days after the date of its declaration if such
dividend could
have been made on the date of its declaration in compliance with
the foregoing
provisions; (2) so long as no Default or Event of Default shall
have occurred
and be continuing, the redemption, repurchase or other acquisition
or retirement
of any shares of any class of Capital Stock of the Company or any
Subsidiary of
the Company in exchange for, or out of the net cash proceeds of, a
substantially
concurrent (x) capital contribution to the Company from any
24
Person (other than a
<PAGE>
Subsidiary of the Company) or (y) issue and sale of other shares of
Capital
Stock (other than Redeemable Stock) of the Company to any Person
(other than to
a Subsidiary of the Company); provided, however, that the amount of
any such net
cash proceeds that are utilized for any such redemption, repurchase
or other
<PAGE>
acquisition or retirement shall be excluded from clause (ii) of the
preceding
paragraph; (3) so long as no Default or Event of Default shall have
occurred and
be continuing, any redemption, repurchase or other acquisition or
retirement of
subordinated Debt by exchange for, or out of the net cash proceeds
of, a
substantially concurrent (x) capital contribution to the Company
from any Person
(other than a Subsidiary of the Company) or (y) issue and sale of
(A) Capital
Stock (other than Redeemable Stock) of the Company to any Person
(other than to
a Subsidiary of the Company); provided, however, that the amount of
any such net
cash proceeds that are utilized for any such redemption, repurchase
or other
acquisition or retirement shall be excluded from clause (ii) of the
preceding
paragraph; or (B) Debt of the Company issued to any Person (other
than a
Subsidiary of the Company), so long as such Debt (x) has no stated
maturity
earlier than , 2006, (y) has a Weighted Average Life to Maturity
equal to or
greater than the remaining Weighted Average Life to Maturity of the
Senior Notes
and (z) is subordinated to the Senior Notes in the same manner and
at least to
the same extent as the subordinated Debt so purchased, exchanged,
redeemed,
acquired or retired; (4) Investments constituting Restricted
Payments made as a
result of the receipt of non-cash consideration from any Asset Sale
made
pursuant to and in compliance with the covenant described under
"Limitation on
Asset Sales"; (5) so long as no Default or Event of Default has
occurred and is
continuing, the repurchase or redemption of shares of Capital Stock
from any
officer, director or employee of the Company or its Restricted
Subsidiaries
whose employment has been terminated or who has died or become
disabled in an
aggregate amount not to exceed $250,000 per annum; and (6) so long
as no Default
or Event of Default shall have occurred and be continuing, the
making of
Restricted Payments in an aggregate amount not to exceed
$5,000,000, provided
that amounts paid pursuant to clauses (5) and (6) (but not clauses
(1), (2), (3)
or (4)) shall reduce amounts available for future Restricted
Payments.
Limitation on Dividend and Other Payment Restrictions
Affecting Restricted
Subsidiaries.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly, create, assume or
otherwise cause or
suffer to exist or to become effective any consensual encumbrance
or restriction
on the ability of any Restricted Subsidiary of the Company to (a)
pay dividends
or make any other distributions on its Capital Stock to the Company
or any of
its Restricted Subsidiaries; (b) make payments in respect of any
Debt owed to
the Company or any of its Restricted Subsidiaries; or (c) make
loans or advances
to the Company or any of the Company's Restricted Subsidiaries;
provided,
however, that the following restrictions shall not be prohibited
pursuant to
this provision: (i) those contained in the Indenture, the Bank
Facility, the
Warehouse Facility, any Non-Recourse Debt Incurred by the Carlsbad
Subsidiary
(to the extent that, restrictions in such Non-Recourse Debt apply
only to the
Carlsbad Subsidiary or any Subsidiary thereof) and Refinancing Debt
(to the
extent restrictions contained in such Refinancing Debt are not more
restrictive
than those contained in the Debt being refinanced); (ii) consensual
encumbrances
or restrictions binding upon any person at the time such Person
becomes a
Subsidiary of the Company; provided that such encumbrances or
restrictions are
not created, incurred or assumed in contemplation of such Person
becoming a
Subsidiary of the Company and do not extend to any other property
of the Company
or another of its Subsidiaries; (iii) restrictions contained in
security
agreements permitted by the Indenture securing Debt permitted by
the Indenture
to the extent such restrictions restrict the transfer of assets
subject to such
security agreements; (iv) any encumbrance or restriction consisting
of customary
non-assignment provisions in leases to the extent such provisions
restrict the
transfer of the leases; (v) any encumbrance or restriction pursuant
to an
agreement in effect on the date of the Indenture; or (vi) any
restrictions with
respect to a Subsidiary of the Company imposed pursuant to an
agreement which
has been entered into for the sale or disposition of all or
substantially all
the capital stock or assets of such Subsidiary.
<PAGE>
Limitation on Liens.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or
permit to
exist any Lien upon or with respect to any of the assets of the
Company or any
such Subsidiary, whether now owned or hereafter acquired, or on any
income or
profits therefrom, other than Liens which constitute Permitted
Liens at the date
such Liens are created, unless contemporaneously therewith or prior
thereto all
payments due under the Indenture and the Senior Notes are secured
on an equal
and ratable basis with the obligation or liability so secured until
such time as
such obligation or liability is no longer secured by a Lien. The
Indenture will
also provide that no Liens will be permitted
25
to be created or suffered to exist
on any Debt from the Company in favor of any Restricted Subsidiary
and that such
Debt will not be permitted to be sold, disposed of or otherwise
transferred.
Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly, enter into any
transactions with
Affiliates of the Company unless (i) such transactions are between
or among the
Company and its Restricted Subsidiaries, (ii) such transactions are
in the
ordinary course of business and consistent with past practice or
(iii) the terms
of such transactions are fair and reasonable to the Company or such
Restricted
Subsidiary, as the case may be, and are at least as favorable as
the terms which
could be obtained by the Company or such Restricted Subsidiary, as
the case may
be, in a comparable transaction made on an arm's-length basis
between
unaffiliated parties. In the event of any transaction or series of
transactions
occurring subsequent to the date of the Indenture with an Affiliate
of the
Company which involves in excess of $2,500,000 and is not permitted
under clause
(i) of the preceding sentence, all of the disinterested members of
the Board of
Directors shall by resolution determine that such transaction or
series of
transactions meets the criteria set forth in clause (iii) of the
preceding
sentence. In the event of any transaction or series of transactions
occurring
subsequent to the date of the Indenture with an Affiliate of the
Company which
involves in excess of $10,000,000 and is not permitted under clause
(i) above,
the Company will be required to deliver to the Trustee an opinion
of an
Independent Financial Advisor to the effect that the transaction is
fair to the
Company or the relevant Restricted Subsidiary, as the case may be,
from a
financial point of view. Notwithstanding the foregoing, such
provisions do not
prohibit and will not apply to (1) any Restricted Payment which is
permitted by
the "Limitation on Restricted Payments" covenant or (2) the payment
of
compensation to directors of the Company who are not employees of
the Company
and wages and other compensation to officers of the Company or any
of its
Subsidiaries.
Limitation on Asset Sales.
The Company will not, and will not permit any of its
Restricted
Subsidiaries to, directly or indirectly consummate an Asset Sale,
unless (i) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the
fair market
value (as determined in good faith by the board of directors of the
Company or
the Restricted Subsidiary, as the case may be) of the assets
disposed of, and
(ii) the consideration for such Asset Sale consists of at least 85%
cash;
provided that the amount of (x) liabilities assumed by the
transferee, (y) any
notes or other obligations received by the Company or such
Restricted Subsidiary
<PAGE>
and immediately converted into cash or (z) with respect to the sale
or other
disposition of all of the Capital Stock of any Restricted
Subsidiary, the amount
of liabilities that remain the obligation of such Restricted
Subsidiary
subsequent to such sale or other disposition, shall be deemed to be
"cash".
<PAGE>
Within 12 months from the date that any Asset Sale is
consummated, the
Net Proceeds thereof will be reinvested in Additional Assets or
applied to the
redemption or repurchase of Debt of the Company which ranks pari
passu with the
Senior Notes or Debt of a Restricted Subsidiary of the Company
which is not
subordinated to other debt of such Restricted Subsidiary (which, in
each case,
will be a permanent reduction of such Debt). To the extent that the
Net Proceeds
of an Asset Sale are not so applied, the Company or such Restricted
Subsidiary,
as the case may be, will, within 30 days from the expiration of
such 12-month
period, use the remaining Net Proceeds (less any amounts used to
pay reasonable
fees and expenses connected with a Net Proceeds Offer) to make an
offer to
repurchase the Senior Notes at a price equal to 100% of the
principal amount
thereof, plus accrued interest to the Net Proceeds Repurchase Date
("a Net
Proceeds Offer").
Notwithstanding the foregoing, the Net Proceeds of an
Asset Sale are
not required to be applied in accordance with the preceding
paragraph, unless
and until the aggregate Net Proceeds for all such Asset Sales in a
12-month
period exceeds $10,000,000.
To accept a Net Proceeds Offer a holder shall deliver to
the Company
(or to a Paying Agent designated by the Company for such purpose)
on or before
the 30th day after the date of the Net Proceeds Offer, a written
notice of the
holder's
26
acceptance of the Net Proceeds Offer, together with the Senior
Notes
with respect to which the offer is being accepted, duly endorsed
for transfer to
the Company. Such written notice may be withdrawn upon further
written notice to
the Trustee on or prior to the third day preceding the Net Proceeds
Repurchase
Date.
If the Net Proceeds Repurchase Date is between a regular
record date
for the payment of interest and the next succeeding interest
payment date, any
Note to be repurchased must be accompanied by funds equal to the
interest
payable on such succeeding interest payment date on the principal
amount to be
repurchased (unless such Note shall have been called for
redemption, in which
case no such payment shall be required), and the interest on the
principal
amount of the Note being repurchased will be paid on such next
succeeding
interest payment date to the registered holder of such Note on the
immediately
preceding record date. A Note repurchased on an interest payment
date need not
be accompanied by any payment, and the interest on the principal
amount of the
Note being repurchased will be paid on such interest payment date
to the
registered holder of such Note on the immediately preceding record
date.
If any repurchase pursuant to the foregoing provisions
constitutes a
tender offer as defined under the Exchange Act, the Company will
comply with the
requirements of Rule 14e-1 and any other tender offer rules under
the Exchange
Act which then may be applicable.
Any amount of Net Proceeds remaining after a Net Proceeds
Offer shall
be returned by the Trustee to the Company and may be used by the
Company for any
purpose not inconsistent with the Indenture.
CERTAIN DEFINITIONS
In addition to the terms defined above, the Indenture
contains, among
other things, the following definitions:
"Additional Assets" means assets used or usable by the
Company or any
of its Restricted Subsidiaries in the operation of the existing
lines of
<PAGE>
business of the Company and its Restricted Subsidiaries.
"Affiliate" of any Person means (i) any other Person
directly or
indirectly controlling or controlled by or under direct or indirect
common
<PAGE>
control with such Person and (ii) any other Person that
beneficially owns at
least 10% of the voting common stock of such Person. For the
purposes of this
definition, "control" when used with respect to any Person means
the power to
direct the management and policies of such Person, directly or
indirectly,
whether through the ownership of voting securities, by contract or
otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the
foregoing.
"Asset Sale" for any Person means the sale, lease,
conveyance or other
disposition (including, without limitation, by merger,
consolidation or sale and
leaseback transaction, and whether by operation of law or
otherwise) of any of
that Person's assets (including, without limitation, the sale or
other
disposition of Capital Stock of any Subsidiary of such Person,
whether by such
Person or such Subsidiary) outside the ordinary course of business,
whether
owned on the date of the Indenture or subsequently acquired in one
transaction
or a series of related transactions, in which such Person and/or
its
Subsidiaries receive cash and/or other consideration (including,
without
limitation, the unconditional assumption of Indebtedness of such
Person and/or
its Subsidiaries) of $5,000,000 or more as to each such transaction
or series of
related transactions; provided, however, that (i) a transaction or
series of
related transactions that results in a Change of Control shall not
constitute an
Asset Sale, (ii) sales, leases, conveyances or other dispositions
of real estate
related to the homebuilding business of the Company or its
Subsidiaries will not
constitute Asset Sales, and (iii) transactions between the Company
and any
Guarantor, or among such Guarantors will not constitute Asset
Sales.
"Bank Facility" means, collectively, one or more
commitments from one
or more banks or other lending institutions to lend funds, together
with any and
all agreements, documents and instruments from time to time
delivered in
connection therewith as such commitments or any such agreements,
documents or
instruments may be in effect or amended, amended and restated,
renewed,
extended, restructured, supplemented or otherwise modified from
time to time and
any credit
27
agreement, loan agreement, note purchase agreement, indenture or
other agreement, document or instrument refinancing, refunding or
otherwise
replacing such Bank Facility, whether or not with the same agent,
trustee,
representative lenders or holders, and, subject to the proviso to
the next
Succeeding sentence, irrespective of any changes in the terms and
conditions
thereof. Without limiting the generality of the foregoing, the term
"Bank
Facility" shall include any amendment, amendment and restatement,
renewal,
extension, restructuring, supplement or modification to any Bank
Facility and
all refundings, refinancings and replacements of any Bank Facility,
including
any agreement (i) extending the maturity of any Debt incurred
thereunder or
contemplated thereby, (ii) adding or deleting borrowers or
guarantors
thereunder; provided that such borrowers and issuers include one or
more of the
Company and its Subsidiaries and their respective successors and
assigns, (iii)
increasing the amount of Debt Incurred thereunder or available to
be borrowed
thereunder; provided that on the date thereof such Debt would not
be prohibited
by clause (b) of the definition of Permitted Debt set forth under
the
"Limitation on Debt" covenant, or (iv) otherwise altering the terms
and
conditions thereof in a manner not prohibited by the terms of the
Indenture.
"Carlsbad Property" means the 417 acres owned by the
Carlsbad
Subsidiary in Carlsbad, California, located in San Diego County.
"Common Stock" means the common stock, par value $.01 per
share, of the
Company.
"Consolidated Interest Expense" of the Company means, for
any period,
<PAGE>
the aggregate amount of interest which, in accordance with
generally accepted
accounting principles, would be included on an income statement for
the Company
and its Restricted Subsidiaries on a consolidated basis, whether
expensed
directly, or included as a component of cost of goods sold, or
allocated to
<PAGE>
joint ventures or otherwise (including, but not limited to, imputed
interest
included on capitalized lease obligations, all commissions,
discounts and other
fees and charges owed with respect to letters of credit and
bankers' acceptance
financing, the net costs associated with hedging obligations,
amortization of
other financing fees and expenses, the interest portion of any
deferred payment
obligation, amortization of discount or premium, if any, and all
other non-cash
interest expense), excluding interest expense related to mortgage
banking
operations, plus the product of (x) the sum of (i) cash dividends
paid on any
Preferred Stock of the Company plus (ii) cash dividends, the
principal amount of
any debt securities issued as a dividend, the liquidation value of
any Preferred
Stock issued as a dividend and the fair market value (as determined
by the
Company's board of directors in good faith) of any other non-cash
dividends, in
each case, paid on any Preferred Stock of any Restricted Subsidiary
of Company
(other than a Wholly-Owned Restricted Subsidiary), times (y) a
fraction, the
numerator of which is one and the denominator of which is one minus
the then
current effective aggregate federal, state and local tax rate of
the Company,
expressed as a decimal.
"Consolidated Interest Incurred" of the Company means, for
any period,
(a) the aggregate amount of interest which, in accordance with
generally
accepted accounting principles, would be included on an income
statement for the
Company and its Restricted Subsidiaries on a consolidated basis,
whether
expensed directly, or included as a component of cost of goods
sold, or
allocated to joint ventures or otherwise (including, but not
limited to, imputed
interest included on capitalized lease obligations, all
commissions, discounts
and other fees and charges owed with respect to letters of credit
and bankers'
acceptance financing, the net costs associated with hedging
obligations,
amortization of other financing fees and expenses, the interest
portion of any
deferred payment obligation, amortization of discount or premium,
if any, and
all other non-cash interest expense), excluding interest expense
related to the
Company's mortgage banking operations, plus or minus, without
duplication, (b)
the difference between capitalized interest for such period and the
interest
component of cost of goods sold for such period, plus (c) the
product of (x) the
sum of (i) cash dividends paid on any Preferred Stock of the
Company plus (ii)
cash dividends, the principal amount of any debt securities issued
as a
dividend, the liquidation value of any Preferred Stock issued as a
dividend and
the fair market value (as determined by the Company's Board of
Directors in good
faith) of any other non-cash dividends, in each case, paid on any
Preferred
Stock of any Subsidiary of the Company (other than a Wholly-Owned
Restricted
Subsidiary), times (y) a fraction, the numerator of which is one
and the
denominator of which is one minus the then current effective
aggregate federal,
state and local tax rate of the Company, expressed as a decimal.
"Consolidated Net Income" of the Company, for any period,
means the net
income (loss) of the Company and its Restricted Subsidiaries for
such period,
determined on a consolidated basis, in accordance with generally
accepted
accounting principles; provided that, without duplication, (i) the
net income of
any Person, other than a Restricted Subsidiary which is
28
consolidated with the
Company, in which any Person other than the Company and its
Restricted
Subsidiaries has an interest shall be included only to the extent
of the amount
of cash dividends or distributions actually paid to the Company or
a Restricted
Subsidiary during such period, (ii) the net income of any Person
acquired in a
pooling of interests transaction for any period prior to the date
of such
acquisition shall be excluded, (iii) the net income of any
Subsidiary of the
Company shall be excluded to the extent such Subsidiary is
prohibited, directly
or indirectly, from distributing such net income or any portion
thereof to the
Company or a Restricted Subsidiary, (iv) all extraordinary gains
and losses
(after taxes) that would be included on an income statement for
such period
<PAGE>
shall be excluded and (v) all gains and losses (after taxes)
attributable to
Asset Sales shall be excluded; provided, that there shall be
included in such
net income, without duplication, the net income of any Unrestricted
Subsidiary
to the extent such net income is actually received by the Company
or any of its
<PAGE>
Restricted Subsidiaries in cash during such period.
"Consolidated Non-cash Charges" of the Company means, for
any period,
the aggregate depreciation, amortization and other non-cash charges
(other than
reserves or expenses established in anticipation of future cash
requirements
such as reserves for taxes and uncollectible accounts) of the
Company and its
Restricted Subsidiaries, on a consolidated basis, for such period,
as determined
in accordance with generally accepted accounting principles;
provided that
Consolidated Non-cash Charges shall exclude (i) any charges that
are not
included for the purpose of determining Consolidated Net Income,
(ii) any
charges that are included for the purpose of determining
Consolidated Interest
Expense or Consolidated Tax Expense and (iii) any charges
representing
capitalized selling, general and administrative expenses that are
expensed
during such period as cost of goods sold.
"Consolidated Tangible Assets" of the Company as of any
date means the
total amount of assets of the Company and its Restricted
Subsidiaries (less
applicable reserves and less the assets securing the payment of
Non-Recourse
Debt of the Company and Restricted Subsidiaries) on a consolidated
basis at the
end of the fiscal quarter immediately preceding such date, as
determined in
accordance with generally accepted accounting principles, less: (i)
unamortized
debt and debt issuance expense, deferred charges, goodwill,
patents, trademarks,
copyrights, and all other items which would be treated as
intangibles on the
consolidated balance sheet of the Company and its Restricted
Subsidiaries
prepared in accordance with generally accepted accounting
principles and (ii)
appropriate adjustments on account of minority interests of other
Persons
holding equity investments in Restricted Subsidiaries, in the case
of each of
clauses (i) and (ii) above, as reflected on the consolidated
balance sheet of
the Company and its Restricted Subsidiaries.
"Consolidated Tangible Net Worth" of the Company means the
Company's
Net Worth less unamortized debt and debt issuance expense, deferred
charges,
goodwill, patents, trademarks, copyrights, and all other items
which would be
treated as intangibles on the consolidated balance sheet of the
Company and its
Restricted Subsidiaries prepared in accordance with generally
accepted
accounting principles.
"Consolidated Tax Expense" of the Company means, for any
period, the
aggregate of the tax expense of the Company and its Restricted
Subsidiaries for
such period, determined on a consolidated basis, in accordance with
generally
accepted accounting principles.
"Coverage Ratio" of the Company means the ratio of the
Company's EBITDA
to its Consolidated Interest Incurred for the four fiscal quarters
ending
immediately prior to the date of determination. Notwithstanding
clause (ii) of
the definition of Consolidated Net Income, if the Debt which is
being Incurred
is Incurred in connecting with an acquisition by the Company or a
Restricted
Subsidiary, the Coverage Ratio shall be determined after giving
effect to both
the Consolidated Interest Incurred related to the Incurrence of
such Debt and
the EBITDA (x) of the Person becoming a Restricted Subsidiary of
the Company or
(y) in the case of an acquisition of assets that constitute
substantially all of
an operating unit or business, relating to the assets being
acquired by the
Company or a Restricted Subsidiary of the Company.
"Debt" means, as to any Person, without duplication, (a)
any
indebtedness of such Person for borrowed money, (b) all
indebtedness of such
Person evidenced by bonds, debentures, notes, letters of credit,
drafts or
similar instruments, (c) all indebtedness of such Person to pay the
deferred
purchase price of property or services, but not including accounts
payable and
accrued expenses arising in the ordinary course of business, (d)
all capitalized
lease obligations of such Person, (e) all
<PAGE>
29
Debt of others secured by a Lien on
any asset of such Person, whether or not such Debt is assumed by
such Person or
<PAGE>
guaranteed by such Person, (f) Redeemable Stock of such Person and
Preferred
Stock of any Subsidiary of such Person, (g) all obligations of such
Person with
respect to Interest Rate Protection Agreements and (h) all Debt of
others
guaranteed by such Person. The amount of Debt of any Person at any
date pursuant
to clauses (a)-(d) and (f) above shall be as would appear as a
liability upon a
balance sheet of such Person prepared on a consolidated basis in
accordance with
generally accepted accounting principles. Notwithstanding the
foregoing, "Debt"
of the Company shall not include the amount reflected on a
consolidated balance
sheet of the Company with respect to options to acquire real
property which was
purchased by the Company and sold to a third party within 360 days
of such
purchase for consideration at least equal to the amount paid by the
Company for
such property less an amount equal to the value of such option.
"EBITDA" for the Company, for any period, means, without
duplication,
the Consolidated Net Income of the Company plus, to the extent
deducted in
calculating Consolidated Net Income, the sum of (a) Consolidated
Tax Expense,
(b) Consolidated Interest Expense and (c) Consolidated Non-cash
Charges.
"Existing Debt" means all of the Debt of the Company and
its Restricted
Subsidiaries that was outstanding on , 1996.
"guarantee" by any Person means any obligation, contingent
or
otherwise, of such Person directly or indirectly guaranteeing any
Debt of any
other Person and, without limiting the generality of the foregoing,
any
obligation, direct or indirect, contingent or otherwise, of such
Person to
purchase or pay (or advance or supply funds for the purchase or
payment of) such
Debt of such other Person (whether by agreement to keepwell or to
maintain
financial condition or otherwise), provided that the term
"guarantee" shall not
include endorsements for collection or deposit in the ordinary
course of
business.
"Independent Financial Advisor" means a firm (i) which
does not, and
whose directors, officers and employees or Affiliates do not, have
a direct or
indirect financial interest in the Company and (ii) which, in the
judgment of
the Board of Directors of the Company, is otherwise independent and
qualified to
perform the task for which it is to be engaged.
"Interest Rate Protection Agreement" means any arrangement
with any
other Person whereby, directly or indirectly, such Person is
entitled to receive
from time to time periodic payments calculated by applying either
a floating or
a fixed rate of interest on a stated notional amount in exchange
for periodic
payments made by such Person calculated by applying a fixed or a
floating rate
of interest on the same notional amount and shall include, without
limitation,
interest rate swaps, caps, floors, collars and similar agreements;
provided that
any arrangement which is entered into by the Company or any of its
Restricted
Subsidiaries in connection with Debt incurred by the Company or any
of its
Restricted Subsidiaries shall constitute Permitted Debt.
"Investment" means, with respect to any Person, any direct
or indirect
loan or other extension of credit or capital contribution to (by
means of any
transfer of cash or other property to others or any payment for
property or
services for the account or use of others), or any purchase or
acquisition by
such Person of any Capital Stock, bonds, notes, debentures or other
securities
or evidences of Debt issued by, any other Person. "Investments"
shall exclude
extensions of trade credit by the Company and its Subsidiaries in
the ordinary
course of business in accordance with normal trade practices of the
Company or
such Subsidiary, as the case may be.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge,
assignment (including any assignment of rights to receive payments
of money
other than in connection with mortgage banking operations in the
ordinary course
of business), charge, security interest or encumbrance of any kind
(including
<PAGE>
any conditional sale or other title retention agreement or any
lease in the
nature thereof) in respect of such asset, any agreement to grant to
any Person
any such Lien and any sale and leaseback of any asset.
"Material Subsidiary" means any Restricted Subsidiary of
the Company
which accounted for 10 percent or more of the Consolidated Tangible
Assets or
EBITDA of the Company for the fiscal year ending immediately prior
to any
Default or Event of Default.
30
"Mortgage" means a first priority mortgage or first
priority deed of
trust on improved real property.
"Net Proceeds" with respect to any Asset Sale means (i)
cash (in U.S.
dollars or freely convertible into U.S. dollars) received by the
Company or any
of its Restricted Subsidiaries from such Asset Sale (including cash
received as
consideration for the assumption or incurrence of liabilities
incurred in
connection with or in anticipation of such Asset Sale), after (a)
provision for
all income or other taxes measured by or resulting from such Asset
Sale to the
Company or any of its Restricted Subsidiaries, whether or not
offset by net
operating loss and tax credit carry-forwards, (b) payment of all
brokerage
commissions and the underwriting fees and, without limitation, all
other fees
and expenses related to such Asset Sale, and (c) deduction of
appropriate
amounts to be provided by the Company or any of its Restricted
Subsidiaries as a
reserve, in accordance with generally accepted accounting
principles, against
any liabilities associated with the assets sold or otherwise
disposed of in such
Asset Sale (including, without limitation, pension and other
post-employment
benefit liabilities and liabilities related to environmental
matters) or against
any indemnification obligations associated with the sale or other
disposition of
the assets sold or otherwise disposed of in such Asset Sale, and
(ii) all
noncash consideration received by the Company or any of its
Restricted
Subsidiaries from such Asset Sale upon the liquidation or
conversion of such
consideration into cash.
"Net Worth" of the Company means, at any date, the
aggregate of
capital, surplus and retained earnings of the Company and its
Restricted
Subsidiaries as would be shown on a consolidated balance sheet of
the Company
prepared in accordance with generally accepted accounting
principles, adjusted
to exclude (to the extent included) investments by the Company and
its
Subsidiaries in joint ventures and the amount of equity
attributable to
Affiliates other than Restricted Subsidiaries of such Person.
"Non-Recourse Debt" with respect to any Person means Debt
of such
Person for which the sole legal recourse for collection of
principal and
interest on such Debt is against the specific property identified
in the
instruments evidencing or securing such Debt and such property was
acquired with
the proceeds of such Debt or such Debt was Incurred (i) within 90
days after the
acquisition of such property or (ii) in respect of the Carlsbad
Property.
"Permitted Investments" of any Person means Investments of
such Person
in (i) direct obligations of the United States or any agency
thereof or
obligations guaranteed by the United States or any agency thereof,
in each case
maturing within 180 days of the date of acquisition thereof, (ii)
certificates
of deposit maturing within 180 days of the date of acquisition
thereof issued by
a bank, trust company or savings and loan association which is
organized under
the laws of the United States or any state thereof having capital,
surplus and
undivided profits aggregating in excess of $250 million and a Keefe
Bank Watch
Rating of C or better, (iii) certificates of deposit maturing
within 180 days of
the date of acquisition thereof issued by a bank, trust company or
savings and
loan association organized under the laws of the United States or
any state
thereof other than banks, trust companies or savings and loan
associations
<PAGE>
satisfying the criteria in (ii) above; provided that the aggregate
amount of all
certificates of deposit issued to the Company at any one time by
such bank,
<PAGE>
trust company or savings and loan association will not exceed
$100,000, (iv)
commercial paper given the highest rating by two established
national credit
rating agencies and maturing not more than 180 days from the date
of the
acquisition thereof, (v) repurchase agreements or money-market
accounts which
are fully secured by direct obligations of the United States or any
agency
thereof and (vi) in the case of the Company and its Subsidiaries,
(1) any
receivables or loans taken by the Company or a Subsidiary in
connection with the
sale of any asset otherwise permitted by the Indenture, (2)
Investments in any
Guarantor, (3) Investments in the Senior Notes, (4) Investments in
evidences of
Debt, securities or other property received from another Person by
the Company
or any of its Restricted Subsidiaries in connection with any
bankruptcy
proceeding or by reason of a composition or readjustment of debt or
a
reorganization of such Person or as a result of foreclosure,
perfection or
enforcement of any Lien in exchange for evidences of Debt,
securities or other
property of such Person held by the Company or any of its
Restricted
Subsidiaries, or for other liabilities or obligations of such other
Person to
the Company or any of its Restricted Subsidiaries that were
created, in
accordance with the terms of the Indenture, (5) Investments in
Interest Rate
Protection Agreements on commercially reasonable terms entered into
by the
Company or any of its Restricted Subsidiaries in the ordinary
course of business
in connection with the operations of the business of the Company or
its
Restricted Subsidiaries to hedge against fluctuations in interest
rates and (6)
Investments in an aggregate amount outstanding not greater than
$30,000,000.
31
"Permitted Liens" with respect to the Company and its
Restricted
Subsidiaries means (i) Liens on assets of the Company or any
Restricted
Subsidiary of the Company securing Debt which may be incurred
pursuant to the
"Limitation on Debt" covenant, provided that the aggregate amount
of Debt
secured by Liens (excluding Non-Recourse Debt of the Company and
Restricted
Subsidiaries and Debt outstanding under the Warehouse Facility) may
not exceed
40 percent of the Company's Consolidated Tangible Assets; (ii)
Liens securing a
Warehouse Facility; provided that such Liens shall not extend to
any assets
other than the mortgages, promissory notes and other collateral
that secures
mortgage loans made by the Company or any of its Restricted
Subsidiaries; (iii)
Liens securing Non-Recourse Debt of the Company or any Restricted
Subsidiary of
the Company, provided that such Liens apply only to the property
financed out of
the net proceeds of such Non-Recourse Debt within 90 days of the
incurrence of
such Non-Recourse Debt (except that such 90 day limitation shall
not apply with
respect to Carlsbad Property); (iv) Liens securing Debt of a Person
existing at
the time that such Person is merged into or consolidated with the
Company or a
Restricted Subsidiary; provided that such Liens were not created in
contemplation of such merger or consolidation and do not extend to
any assets or
property of the Company or any Restricted Subsidiary, other than
the surviving
Person and its Subsidiaries; (v) Liens on assets or property
acquired by the
Company or a Restricted Subsidiary; provided that such Liens were
not created in
contemplation of such acquisition and do not extend to any other
assets or
property (other than proceeds of such acquired assets or property);
(vi) Liens
in respect of Interest Rate Protection Agreements which constitute
Permitted
Debt; (vii) Liens for taxes, assessments or governmental charges or
claims that
either (a) are not yet delinquent or (b) are being contested in
good faith by
appropriate proceedings and as to which appropriate reserves have
been
established or other provisions have been made in accordance with
generally
accepted accounting principles; (viii) statutory Liens of landlords
and
carriers', warehousemen's, mechanics', suppliers', materialmen's,
repairmen's or
other Liens imposed by law and arising in the ordinary course of
business; (ix)
Liens (other than any Lien imposed by the Employee Retirement
Income Security
Act of 1974, as amended) incurred or deposits made in the ordinary
course of
business in connection with workers' compensation, unemployment
insurance and
other types of social security; (x) Liens incurred or deposits made
to secure
the performance of tenders, bids, leases, statutory obligations,
surety and
<PAGE>
appeal bonds, progress payments, government contracts and other
obligations of
like nature (exclusive of obligations for the payment of borrowed
money), in
<PAGE>
each case, incurred in the ordinary course of business; (xi)
attachment or
judgment Liens not giving rise to a Default or Event of Default;
(xii)
easements, rights-of-way, restrictions and other similar charges or
encumbrances
not materially interfering with the ordinary conduct of the
business of the
Company or any of its Subsidiaries; (xii) leases or subleases
granted to others
not materially interfering with the ordinary conduct of the
business of the
Company or any of its Restricted Subsidiaries; (xiv) Liens securing
Refinancing
Debt; provided that such Liens only extend to the assets securing
the Debt being
refinanced, such refinanced Debt was previously secured and such
Liens do not
extend to any other assets of the Company or the assets of any of
the Company's
other Subsidiaries; (xv) Liens securing Purchase Money Obligations
(including
capitalized lease obligations); (xvi) Liens existing on the date of
the
Indenture; (xvii) any contract to sell an asset provided such sale
is otherwise
permitted under the Indenture and (xviii) Liens on property or
assets of any
Restricted Subsidiary securing Debt of such Restricted Subsidiary
owing to the
Company or one or more Restricted Subsidiaries of the Company.
"Person" means any individual, corporation, partnership,
association,
trust or other entity or organization, including a government or
political
subdivision or agency or instrumentality thereof.
"Preferred Stock " means, with respect to any Person, any
and all
shares, interests, participations or other equivalents (however
designated) of
such Person's preferred or preference stock whether now outstanding
or issued
after the date of the Indenture, and including, without limitation,
all classes
and series of preferred or preference stock.
"Purchase Money Obligations" means Debt of any Person
secured by Liens
(i) on property purchased, acquired, or constructed by such Person
or its
Subsidiaries after the date of the Indenture and used in the
ordinary course of
business by such Person and (ii) securing the payment of all or any
part of the
purchase price or construction cost of such assets and limited to
the property
so acquired and improvements thereof; provided that such Debt is
incurred no
later than 90 days after the acquisition of such property or
completion of such
construction or improvements.
"Redeemable Stock" means, with respect to any Person, any
class or
series of Capital Stock of such Person that is redeemable at the
option of the
holder (except pursuant to a change in control provision that does
not (i) cause
such Capital Stock to become redeemable in circumstances which
would not
constitute a Change in Control and (ii) require the Company
32
to pay the
redemption price therefor prior to the Change in Control Repurchase
Date) or is
subject to mandatory redemption or otherwise matures prior to the
final stated
maturity of the Senior Notes.
"Refinancing Debt" means Debt that refunds, refinances or
extends any
Senior Notes, Existing Debt (other than Existing Debt to be repaid
with the net
proceeds of the offering of the Senior Notes) or other Debt
incurred by the
Company or its Restricted Subsidiaries pursuant to the terms of the
Indenture,
but only to the extent that (i) the Refinancing Debt is
subordinated to the
Senior Notes to the same extent as the Debt being refunded,
refinanced or
extended, if at all, (ii) the Refinancing Debt is scheduled to
mature either (a)
no earlier than the Debt being refunded, refinanced or extended, or
(b) after
the maturity date of the Senior Notes, (iii) the portion, if any,
of the
Refinancing Debt that is scheduled to mature on or prior to the
maturity date of
the Senior Notes has a Weighted Average Life to Maturity at the
time such
Refinancing Debt is Incurred that is equal to or greater than the
Weighted
Average Life to Maturity of the portion of the Debt being refunded,
refinanced
<PAGE>
or extended that is scheduled to mature on or prior to the maturity
date of the
Senior Notes, and (iv) the gross proceeds of such Refinancing Debt
is an amount
that is equal to or less than the aggregate principal amount then
outstanding
under the Debt being refunded, refinanced or extended (plus the
premiums or
<PAGE>
other payments paid in connection therewith (which shall not exceed
the stated
amount of any premium or other payment required to be paid in
connection with
such a renewal, extension, substitution, refunding, refinancing,
redemption,
repurchase or replacement pursuant to the terms of the Debt being
renewed,
extended, substituted, refunded, refinanced, amended, modified,
supplemented,
redeemed, repurchased or replaced) and the expenses incurred in
connection
therewith).
"Restricted Payments" means with respect to the Company or
any
Restricted Subsidiary (i) the declaration or payment of any
dividend or other
distribution on any shares of such Person's Capital Stock ((x)
except dividends
or distributions in additional shares of Capital Stock of the
Company other than
Redeemable Stock or (y) the declaration or payment of any dividend
or other
distribution by a Restricted Subsidiary to the Company or another
Restricted
Subsidiary), (ii) any payment on account of the purchase,
redemption or other
acquisition of (a) any shares of such Person's Capital Stock or (b)
any option,
warrant or other right to acquire shares of such Person's Capital
Stock, except,
in each case, Capital Stock held by the Company or a Restricted
Subsidiary,
(iii) any Investment (other than a Permitted Investment) in any
Person, or (iv)
any principal payment, redemption, repurchase, defeasance or other
acquisition
or retirement, prior to scheduled principal payment or scheduled
maturity, of
Debt of the Company or its Subsidiaries which is subordinated in
right of
payment to the Senior Notes (other than Debt held by the Company or
a Restricted
Subsidiary).
"Restricted Subsidiary" means any Subsidiary which is not an
Unrestricted
Subsidiary.
"Subsidiary" means, with respect to any Person, (i) any
corporation or
entity of which a majority of the capital stock having ordinary
voting power to
elect a majority of the board of directors or other Persons
performing similar
functions is at the time directly or indirectly owned by such
Person or one or
more of the other Subsidiaries of that Person or (ii) any
partnership or joint
venture at least a majority of the voting power of which is at the
time directly
or indirectly owned by such Person or one or more of the other
Subsidiaries of
that Person, or a combination thereof or a successor thereto.
"Unrestricted Subsidiary" means each of the Subsidiaries
of the Company
(other than a Guarantor) so designated by a resolution adopted by
the Board of
Directors of the Company as provided below; provided that (a)
neither the
Company nor any of its other Subsidiaries (other than Unrestricted
Subsidiaries)
(1) provides any direct or indirect credit support for any Debt of
such
Subsidiary (including any undertaking, agreement or instrument
evidencing such
Debt) or (2) is directly or indirectly liable for any Debt of such
Subsidiary,
and (b) the creditors with respect to Debt for borrowed money of
such Subsidiary
have agreed in writing that they have no recourse, direct or
indirect, to the
Company or any other Subsidiary of the Company (other than
Unrestricted
Subsidiaries), including, without limitation, recourse with respect
to the
payment of principal or interest on any Debt of such Subsidiary.
The Board of
Directors of the Company may designate an Unrestricted Subsidiary
to be a
Restricted Subsidiary; provided that (i) any such redesignation
will be deemed
to be an Incurrence by the Company and its Restricted Subsidiaries
of the Debt
(if any) of such redesignated Subsidiary for purposes of the
"Limitation on
Debt" covenant set forth in the Indenture as of the date of such
redesignation,
(ii) immediately after giving effect to such redesignation and the
Incurrence of
any such additional Debt, the Coverage Ratio of the Company would
be no less
than the Coverage Ratio of the Company immediately prior to such
redesignation
and (iii) the Liens of such Unrestricted Subsidiary
33
could then be incurred in accordance with the "Limitation on Liens"
covenant set
<PAGE>
forth in the Indenture as of the date of such redesignation.
Subject to the
foregoing, the Board of Directors of the Company also may designate
any
Restricted Subsidiary to be an Unrestricted Subsidiary; provided
that (i) all
previous Investments by the
<PAGE>
Company and its Restricted Subsidiaries in such Restricted
Subsidiary (net of
any returns previously paid on such Investments) will be deemed to
be Restricted
Payments at the time of such designation and will reduce the amount
available
for Restricted Payments under the "Limitations on Restricted
Payments" covenant
set forth in the Indenture, (ii) the Company and its Restricted
Subsidiaries
could incur $1.00 of additional Indebtedness under the Coverage
Ratio test
contained in the "Limitations on Debt" covenant set forth in the
Indenture and
(iii) no Default or Event of Default shall have occurred or be
continuing. Any
such designation or redesignation by the Board of Directors of the
Company will
be evidenced to the Trustee by the filing with the Trustee of a
certified copy
of the resolution of the Board of Directors of the Company giving
effect to such
designation or redesignation and an Officers' Certificate
certifying that such
designation or redesignation complied with the foregoing conditions
and setting
forth the underlying calculations.
"Warehouse Facility" means a Bank Facility to finance the
making of
mortgage loans originated by the Company or any of its
Subsidiaries.
"Weighted Average Life to Maturity" means, when applied to
any Debt or
portion thereof, if applicable, at any date, the number of years
obtained by
dividing (i) the then outstanding principal amount of such Debt or
portion
thereof, if applicable, into (ii) the sum of the products obtained
by
multiplying (a) the amount of each then remaining installment,
sinking fund,
serial maturity or other required payment of principal, including
payment at
final maturity, in respect thereof, by (b) the number of years
(calculated to
the nearest one-twelfth) that will elapse between such date and the
making of
such payment.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary of
the Company of which 100% of the outstanding Capital Stock is owned
by one or
more Wholly Owned Restricted Subsidiaries of the Company or by the
Company and
one or more Wholly Owned Restricted Subsidiaries of the Company.
For purposes of
this definition, any directors' qualifying shares shall be
disregarded in
determining the ownership of a Subsidiary.
EVENTS OF DEFAULT
The following shall constitute Events of Default with
respect to the
Senior Notes: (i) failure to pay the principal of any Note when
such principal
becomes due and payable at maturity, upon acceleration or
otherwise, (ii)
failure to pay interest when due, and such failure continues for a
30-day
period; (iii) a default in the observance or performance of any
other covenant
or agreement of the Company or the Guarantors in the Note, the
Guarantee or the
Indenture that continues for the period and after the notice
specified below;
(iv) an event of default shall have occurred under one or more
evidences of Debt
of the Company or any of its Restricted Subsidiaries (other than
Non-Recourse
Debt) with an outstanding aggregate principal amount of $5,000,000
or more,
whether such Debt now exists or is created hereafter, which event
of default (1)
consists of the failure by the Company or any Restricted Subsidiary
to make any
payment in respect of such Debt at its final maturity or (2)
results in the
acceleration of such Debt which acceleration shall be in effect;
(v) any final
judgment or judgments for payment of money in excess of $5,000,000
in the
aggregate shall be rendered against the Company or any of its
Restricted
Subsidiaries and shall remain unstayed, unsatisfied or undischarged
for the
period and after the notice specified below; (vi) certain events of
bankruptcy,
insolvency or reorganization of the Company or Material
Subsidiaries and (vii)
any Guarantee of a Material Subsidiary ceases to be in full force
and effect
(other than in accordance with the terms of such Guarantee and the
Indenture) or
is declared null and void and unenforceable or found to be invalid
or any
Guarantor denies its liability under its Guarantee (other than by
reason of
release of a Guarantor from its Guarantee in accordance with the
terms of the
Indenture and the Guarantee). The Company is required to deliver to
the Trustee
<PAGE>
within 120 days after the end of each fiscal year of the Company,
an officer's
certificate stating whether or not the signatories know of any
default by the
Company under the Indenture and the Senior Notes and, if any
default exists,
describing such default.
A default under clause (iii) or (v) above is not an Event
of Default
until the Trustee or the holders of at least 25% in principal
amount of the
Senior Notes then outstanding notify the Company of the default and
the Company
does not cure the default within 60 days. The notice must specify
the default,
demand that it be remedied and state that the notice is a "Notice
34
of Default."
If the holders of 25% in principal amount of Senior Notes then
outstanding
request the Trustee to give such notice on their behalf, the
Trustee shall do
so.
In case an Event of Default (other than an Event of
Default resulting
from certain events of bankruptcy, insolvency or reorganization of
the Company)
shall have occurred and be continuing, the Trustee, by notice to
the Company, or
the holders of 25% of the principal amount of the Senior Notes then
outstanding,
by notice to the Company and the Trustee, may declare the principal
of the
Senior Notes, plus accrued interest, to be immediately due and
payable. In case
an Event of Default resulting from certain events of bankruptcy,
insolvency or
reorganization of the Company shall occur, such amounts shall be
due and payable
without any declaration or any act on the part of the Trustee or
the holders of
the Senior Notes. Any declaration of acceleration may be rescinded
and past
defaults may be waived by the holders of a majority of the
principal amount of
the Senior Notes then outstanding upon conditions provided in the
Indenture.
Except to enforce the right to receive payment of principal or
interest when
due, no holder of a Note may institute any proceeding with respect
to the
Indenture or for any remedy thereunder unless such holder has
previously given
to the Trustee written notice of a continuing Event of Default and
unless the
holders of 25% of the principal amount of the Senior Notes then
outstanding have
requested the Trustee to institute proceedings in respect of such
Event of
Default and have offered the Trustee reasonable indemnity against
loss,
liability and expense to be thereby incurred, the Trustee has
failed so to act
for 60 days after receipt of the same and during such 60-day period
the holders
of a majority of the principal amount of the Senior Notes then
outstanding have
not given the Trustee a direction inconsistent with the request.
Subject to
certain restrictions, the holders of a majority in principal amount
of the
Senior Notes then outstanding will have the right to direct the
time, method and
place of conducting any proceeding for any remedy available to the
Trustee or
exercising any trust or power conferred on the Trustee. The
Trustee, however,
may refuse to follow any direction that conflicts with law or the
Indenture,
that is unduly prejudicial to the rights of any holder of a Note or
that would
involve the Trustee in personal liability and the Trustee may take
any other
action deemed proper by the Trustee which is not inconsistent with
such
direction.
MERGERS AND CONSOLIDATIONS
Neither the Company nor any Guarantor will consolidate or
merge with or
into, or sell, lease, convey or otherwise dispose of all or
substantially all of
its assets (including, without limitation, by way of liquidation or
dissolution), or assign any of its obligations under the Senior
Notes, the
Guarantees or the Indenture (as an entirety or substantially as an
entirety in
one transaction or series of related transactions), to any Person
or permit any
of its Restricted Subsidiaries to do any of the foregoing (in each
case other
than with the Company or another Wholly Owned Restricted
Subsidiary) unless: (i)
the Person formed by or surviving such consolidation or merger (if
other than
<PAGE>
the Company or such Guarantor, as the case may be), or to which
such sale,
lease, conveyance or other disposition or assignment will be made
(collectively,
the "Successor"), is a corporation or other legal entity organized
and existing
under the laws of the United States or any state thereof or the
District of
<PAGE>
Columbia, and the Successor assumes by supplemental indenture in a
form
reasonably satisfactory to the Trustee all of the obligations of
the Company or
such Guarantor, as the case may be, under the Senior Notes or such
Guarantor's
Guarantee, as the case may be, and the Indenture, (ii) immediately
after giving
effect to such transaction, no Default or Event of Default has
occurred and is
continuing, (iii) immediately after giving effect to such
transaction and the
use of any net proceeds therefrom, on a pro forma basis, the
Consolidated
Tangible Net Worth of the Company or the Successor (in the case of
a transaction
involving the Company), as the case may be, would be at least equal
to the
Consolidated Tangible Net Worth of the Company immediately prior to
such
transaction and (iv) in the case of a transaction involving the
Company,
immediately after giving effect to such transaction and the use of
any net
proceeds therefrom, on a pro forma basis, the Coverage Ratio of the
Company or
the Successor (in the case of a transaction involving the Company),
as the case
may be, would be such that the Company or the Successor (in the
case of a
transaction involving the Company), as the case may be, would be
entitled to
Incur at least $1.00 of additional Debt under such Coverage Ratio
test in the
"Limitation on Debt" covenant set forth in the Indenture. The
foregoing
provisions shall not apply to a transaction involving the
consolidation or
merger of a Guarantor with or into another person, or the sale,
lease,
conveyance or other disposition of all or substantially all of the
assets of
such Guarantor, that results in such Guarantor being released from
its Guarantee
as provided under "The Guarantees" above.
35
DEFEASANCE
Under the terms of the Indenture and the Senior Notes, the
Company, at its
option, (a) will be Discharged (as defined in the Indenture) from
any and all
obligations in respect of the Senior Notes (except in each case for
certain
obligations to register the transfer or exchange of Senior Notes,
replace
stolen, lost or mutilated Senior Notes, maintain paying agencies
and hold moneys
for payment in trust) or (b) need not comply with the covenants of
the Indenture
nor be subject to the operation of the cross acceleration
provisions described
under "Events of Default," in each case, if the Company irrevocably
deposits
with the Trustee, in trust, money or U.S. Government Obligations
(as defined in
the Indenture) which through the payment of interest thereon and
principal
thereof in accordance with their terms will provide money in an
amount
sufficient to pay the principal of and interest on the Senior Notes
on the dates
such payments are due in accordance with the terms of the Senior
Notes.
To exercise either option above, the Company is required
to deliver to
the Trustee an opinion of counsel that the holders of the Senior
Notes will not
recognize income, gain or loss for Federal income tax purposes as
a result of
such defeasance and will be subject to Federal income tax on the
same amounts,
in the same manner and at the same times as would have been the
case if such
defeasance had not occurred.
In the event the Company exercises its options under
clause (b) of the
second preceding paragraph and the Senior Notes are declared due
and payable
because of the occurrence of any Event of Default (other than the
cross
acceleration provisions described under "Events of Default" which
will be
inapplicable), the amount of money and U.S. Government Obligations
on deposit
with the Trustee will be sufficient to pay amounts due on the
Senior Notes at
the time of their stated maturity but may not be sufficient to pay
amounts due
on the Senior Notes at the time of the acceleration resulting from
such Event of
Default. However, the Company shall remain liable for such
payments.
REPORTS
As long as any of the Senior Notes are outstanding, the
Company will
<PAGE>
deliver to the Trustee and mail to each Holder within 15 days after
the filing
of the same with the Commission copies of the quarterly and annual
reports and
<PAGE>
of the information, documents and other reports with respect to the
Company and
the Guarantors, if any, which the Company and the Guarantors may be
required to
file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
The Indenture will provide that, notwithstanding that neither the
Company nor
any of the Guarantors may be required to remain subject to the
reporting
requirements of Section 13 or 15(d) of the Exchange Act, the
Company will
continue to file with the Commission and provide the Trustee and
Holders with
such annual and quarterly reports and such information, documents
and other
reports with respect to the Company and the Guarantors as are
required under
Sections 13 and 15(d) of the Exchange Act. If filing of documents
by the Company
with the Commission as aforementioned in this paragraph is not
permitted under
the Exchange Act, the Company shall promptly upon written notice
supply copies
of such documents to any prospective holder. The Company and each
Guarantor will
also comply with the other provisions of Section 314(a) of the
Trust Indenture
Act.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Senior
Notes may be
amended or supplemented with the consent (which may include
consents obtained in
connection with a tender offer or exchange offer for Senior Notes)
of the
Holders of at least a majority in principal amount of Senior Notes
then
outstanding, and any existing Default or Event of Default (other
than any
continuing Default or Event of Default in the payment of interest
on or the
principal of the Senior Notes) under, or compliance with any
provision of, the
Indenture may be waived with the consent (which may include
consents obtained in
connection with a tender offer or exchange offer for Senior Notes)
of the
Holders of a majority in principal amount of the Senior Notes then
outstanding.
Without the consent of any Holder, the Company, the Guarantors and
the Trustee
may amend the Indenture or the Senior Notes or waive any provision
of the
Indenture to cure any ambiguity, defect or inconsistency, to comply
with the
"Mergers and Consolidations" section set forth in the Indenture, to
provide for
uncertificated Senior Notes in addition to certificated Senior
Notes, to make
any change that does not adversely affect the
36
legal rights under the Indenture
of any Holder, to comply with the qualification of the Indenture
under the Trust
Indenture Act, or to reflect a Guarantor ceasing to be liable on
the Guarantees
because it is no longer a Subsidiary of the Company.
Without the consent of each Holder affected, the Company
may not (i)
reduce the amount of Senior Notes whose Holders must consent to an
amendment,
supplement or waiver, (ii) reduce the rate of or change the time
for payment of
interest, including default interest, on any Note, (iii) reduce the
principal of
or change the fixed maturity of any Note or alter the provisions
with respect to
redemption under the "Optional Redemption" section set forth in the
Indenture,
(iv) make any Senior Notes payable in money other than that stated
in the Note,
(v) make any change in the "Waiver of Past Defaults and Compliance
with
Indenture Provisions," "Rights of Holders to Receive Payment" or,
in part, the
"With Consent of Holders" sections set forth in the Indenture, (vi)
adversely
modify the ranking or priority of the Senior Notes or any
Guarantee, (vii)
release any Guarantor from any of its obligations under its
Guarantee or the
Indenture otherwise than in accordance with the terms of the
Indenture, or
(viii) waive a continuing Default or Event of Default in the
payment of
principal of or interest on the Senior Notes.
NO PERSONAL LIABILITY OF SHAREHOLDERS, OFFICERS, DIRECTORS OR
EMPLOYEES
The Indenture will provide that no recourse for the
payment of the
principal of, premium, if any, or interest on any of the Senior
Notes, or for
<PAGE>
any claim based thereon or otherwise in respect thereof, and no
recourse under
or upon any obligation, covenant or agreement of the Company or any
Guarantor in
the Indenture or in any of the Senior Notes or because of the
creation of any
Debt represented thereby, shall be had against any shareholder,
officer,
<PAGE>
director, employee or controlling person of the Company, any
Guarantor or any
successor Person thereof. Each Holder, by accepting such Senior
Notes, waives
and releases all such liability.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights
of the
Trustee, should it become a creditor of the Company, to obtain
payment of claims
in certain cases, or to realize on certain property received in
respect of any
such claim as security or otherwise. The Trustee will be permitted
to engage in
other transactions; however, if it acquires any conflicting
interest (as defined
in the Indenture), it must eliminate such conflict or resign.
The Holders of a majority in principal amount of the then
outstanding
Senior Notes will have the right to direct the time, method and
place of
conducting any proceeding for exercising any remedy available to
the Trustee,
subject to certain exceptions. The Indenture provides that in case
an Event of
Default occurs and is not cured, the Trustee will be required, in
the exercise
of its power, to use the degree of care of a prudent person in
similar
circumstances in the conduct of his own affairs. Subject to such
provisions, the
Trustee will be under no obligation to exercise any of its rights
or powers
under the Indenture at the request of any Holder, unless such
Holder shall have
offered to the Trustee security and indemnity satisfactory to the
Trustee.
GOVERNING LAW
The Indenture, the Senior Notes and the Guarantees will be
governed by
the internal laws of the State of New York.
37
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions of the
Underwriting
Agreement dated the date hereof, each Underwriter named below has
agreed to
purchase, and the Company has agreed to sell to such Underwriter,
the principal
amount of Senior Notes set forth opposite the name of such
Underwriter below:
NAME
PRINCIPAL AMOUNT
Smith Barney Inc............................... $
Salomon Brothers Inc...........................
____________
Total......................................
$150,000,000
============
The Underwriters are obligated to take and pay for all of the
Senior Notes
offered hereby if any such Senior Notes are taken.
The Underwriters have advised the Company that they propose
initially to
offer part of the Senior Notes directly to the public at the public
offering
price set forth on the cover page hereof and part to certain
dealers at a price
that represents a concession not in excess of % of the public
offering price of
the Senior Notes. The Underwriters may allow, and such dealers may
reallow, a
concession not in excess of % of the public offering price of the
Senior Notes
to certain other dealers. After the public offering, the public
offering price
and such concessions may be changed from time to time by the
Underwriters. The
Underwriters have informed the Company that the Underwriters do not
intend to
confirm sales to accounts over which they exercise discretionary
authority.
The Company and the Underwriters have agreed to indemnify each
other
against certain liabilities, including liabilities under the
Securities Act.
The Senior Notes are a new issue of securities which have no
established
trading market. It is expected that the Senior Notes will be sold
to a limited
number of investors. The Company has been advised by the
Underwriters that they
intend to make a market in the Senior Notes after the consummation
of this
Offering; however, the Underwriters are not obligated to do so, and
any such
market-making, if commenced, may be terminated at any time without
notice. No
assurance can be given as to the liquidity of the trading market,
if any, for
the Senior Notes.
Smith Barney Inc. has been retained by the Company to act as
dealer manager
in connection with the Offer to Purchase. In addition, Smith
Barney Inc. has
from time to time performed investment banking and other
financial advisory
services for the Company in the ordinary course of business and
has received
customary compensation. Smith Barney Inc. was one of the
underwriters of the
Company's public offering of $86,250,000 principal amount of 67/8%
Convertible
Subordinated Notes due November 1, 2002 in 1995.
Under the Rules of Fair Practice of the National Association
of Securities
Dealers, Inc. (the "NASD"), when more than 10% of the proceeds of
a public
offering of debt securities, not including underwriting
compensation, is to be
paid to a member of the NASD or an affiliate of a member, the yield
at which the
debt securities are distributed to the public must be no lower than
that
recommended by a "qualified independent underwriter" meeting
certain standards.
Smith Barney Inc. is a member of the NASD and will receive more
than 10% of the
net proceeds from the Senior Notes Offering as a result of the use
of a portion
of such proceeds to repurchase approximately $17.3 million of Old
Senior Notes
held by Smith Barney Inc. Salomon Brothers Inc has agreed to act as
a qualified
independent underwriter in connection with pricing the Senior Notes
offered
<PAGE>
hereby and conducting due diligence. The yield on the Senior Notes,
when sold to
the public at the public offering price set forth on the cover page
of this
Prospectus, will be no less than that recommended by Salomon
Brothers Inc.
Salomon Brothers Inc will receive no additional compensation for
its services as
qualified independent underwriter.
38
LEGAL MATTERS
Certain legal matters relating to the issuance and sale of the
Notes
offered hereby are being passed upon for the Company by Cahill
Gordon & Reindel
(a partnership including a professional corporation), New York, New
York, and
for the Underwriters by Skadden, Arps, Slate, Meagher & Flom, New
York, New
York.
EXPERTS
The audited financial statements incorporated by reference in
this
Prospectus have been audited by Arthur Andersen LLP, independent
public
accountants, as indicated in their report with respect thereto, and
are
incorporated herein in reliance upon the authority of said firm as
experts in
giving said report.
39
<PAGE>
====================================================
========================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER
$150,000,000
CONTAINED HEREIN OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
Continental Homes
AN OFFER TO BUY ANY SECURITY OTHER THAN THOSE TO
Holding Corp.
WHICH IT RELATES NOR DOES IT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS % Senior
Notes due 2006
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------------------
- ----------------
TABLE OF CONTENTS
PROSPECTUS
Available Information........................ 2
April , 1996
Incorporation of Documents by Reference...... 2
Prospectus Summary........................... 4
- ----------------
Risk Factors................................. 9
Use of Proceeds.............................. 12
Capitalization............................... 13
Business..................................... 14
Description of the Senior Notes.............. 20 Smith
Barney Inc.
Underwriting................................. 38
Legal Matters................................ 39 Salomon
Brothers Inc
Experts...................................... 39
=====================================================
=========================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses (other than the SEC registration and
NASD filing
fees) are estimated.
Securities and Exchange Commission registration
fee..... $ 51,725
NASD filing
fee......................................... 15,500
Blue Sky fees and
expenses..............................
Printing and
engraving..................................
Accountants' fees and
expenses..........................
Legal fees and
expenses.................................
Trustee fees and
expenses...............................
Miscellaneous...........................................
---------
Total.............................................. $
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation, as amended,
provides that the
Company shall, to the full extent permitted by Sections 102 and 145
of the
General Corporation Law of the State of Delaware, as amended from
time to time,
indemnify all persons whom it may indemnify pursuant thereto and
eliminates the
personal liability of its directors to the full extent permitted by
Section
102(b)(7) of the General Corporation Law of the State of Delaware,
as amended
from time to time.
Section 145 of the General Corporation Law of the State of
Delaware permits
a corporation to indemnify its directors and officers against
expenses
(including attorney's fees), judgments, fines and amounts paid in
settlements
actually and reasonably incurred by them in connection with any
action, suit or
proceeding brought by third parties, if such directors or officers
acted in good
faith and in a manner they reasonably believed to be in or not
opposed to the
best interests of the corporation and, with respect to any criminal
action or
proceeding, had no reasonable cause to believe their conduct was
unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and
reasonably incurred
by directors and officers in connection with the defense or
settlement of an
action or suit, and only with respect to a matter as to which they
shall have
acted in good faith and in a manner they reasonably believed to be
in or not
opposed to the best interests of the corporation, except that no
indemnification
shall be made if such person shall have been adjudged liable for
negligence or
misconduct in the performance of his respective duties to the
corporation,
although the court in which the action or suit was brought may
determine upon
application that the defendant officers or directors are reasonably
entitled to
indemnity for such expenses despite such adjudication of liability.
Section 102(b)(7) of the General Corporation Law of the State
of Delaware
provides that a corporation may eliminate or limit the personal
liability of a
director to the corporation or its stockholders for monetary
damages for breach
of fiduciary duty as a director, provided that such provision shall
not
eliminate or limit the liability of a director (i) for any breach
of the
director's duty of loyalty to the corporation or its stockholders,
(ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law
of the State of Delaware, or (iv) for any transaction from which
the director
<PAGE>
derived an improper personal benefit. No such provision shall
eliminate or limit
the liability of a director for any act or omission occurring prior
to the date
when such provision becomes effective.
II-1
<PAGE>
Section of the Underwriting Agreement filed as Exhibit 1
provides that the
Underwriters named therein will indemnify and hold harmless the
Company and each
director, officer or controlling person of the Company from and
against certain
liabilities, including liabilities under the Securities Act of
1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Number Exhibit
1** --Form of Underwriting Agreement.
2.1 --Stock Purchase Agreement between William O. Milburn
and the Company dated July 28, 1993. Incorporated by
reference to the Company's report on Form 8-K dated
July 29, 1993.
2.2(a) --Stock Purchase Agreement between Seller and the Company
dated
November 3, 1994. Incorporated by reference to Exhibit
2.1 to the
Company's report on Form 8-K dated November 18, 1994.
2.2(b) --Amendment to Stock Purchase Agreement between Seller
and the
Company dated November 18, 1994. Incorporated by
reference to
Exhibit 2.2(b) to the Company's report on Form 10-K for
the year
ended May 31, 1995.
2.2(c) --Second Amendment to Stock Purchase Agreement between
Seller and
the Company dated November 18, 1994. Incorporated by
reference to
Exhibit 2.2(c) to the Company's report on Form 10-K for
the year
ended May 31, 1995.
2.2(d) --Third Amendment to Stock Purchase Agreement between
Seller and the
Company dated July 12, 1995. Incorporated by reference
to Exhibit
2.2(d) to the Company's report on Form 10-K for the
year ended
May 31, 1995.
2.3 --Agreement dated as of September 18, 1995 between Robert
J. and
Kathleen R. Wade and the Company. Incorporated by
reference to
Exhibit 2.1 to the Company's report on Form 10-Q for
the quarter
ended August 31, 1995.
4.1** --Form of Indenture.
4.2** --Form of Note (Included in Exhibit 4.1).
4.3 --Indenture dated as of November 1, 1995 between the
Company and
Manufacturers and Traders Trust Company, as Trustee.
Incorporated
by reference to Exhibit 4.1 to the Company's report on
Form 10-Q
for the quarter ended November 30, 1995.
4.4 --Indenture dated as of August 1, 1992 between the
Company and Fidelity
Bank, National Association, as Trustee. Incorporated by
reference
to Exhibit 4.1 to the Company's report on Form 10-Q for
the quarter
ended August 31, 1992.
4.5 --First Supplemental Indenture dated as of March 22, 1994
to the
Indenture dated as of August 1, 1992, between the
Company and
First Fidelity Bank, National Association (formerly
Fidelity Bank,
National Association), as Trustee. Incorporated by
reference to
Exhibit 4.1 to the Company's report on Form 10-Q for
the quarter
ended February 28, 1994.
5** --Opinion of Cahill Gordon & Reindel.
<PAGE>
12* --Statement of Computation of Ratio of Earnings to Fixed
Charges.
<PAGE>
23.1* --Consent of Arthur Andersen LLP
23.2** --Consent of Cahill Gordon & Reindel (included in Exhibit
5).
II-2
24* --Powers of Attorney (included on signature pages).
25** --Statement of Eligibility on Form T-1 of Trustee.
- -----------------------
* Filed herewith.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that:
For purposes of determining any liability under the Securities
Act of 1933,
each filing of the Registrant's annual report pursuant to Section
13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by
reference in this Registration Statement shall be deemed to be a
new
Registration Statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be the
initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes that:
Insofar as indemnification for liabilities arising under the
Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant
has been advised that in the opinion of the Securities and Exchange
Commission
such indemnification is against public policy as expressed in the
Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against
such liabilities (other than the payment by the Registrant of
expenses incurred
or paid by a director, officer or controlling person of the
Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such
director, officer or controlling person in connection with the
securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate
jurisdiction the question whether such indemnification by it is
against public
policy as expressed in the Act and will be governed by the final
adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of
1933, the information omitted from the form of prospectus filed as
a part of
this Registration Statement in reliance upon Rule 430A and
contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall
be deemed to be a new Registration Statement relating to the
securities offered
therein, and the offering of such securities at that time shall be
deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CONTINENTAL HOMES HOLDING CORP.
BY: /S/ DONALD R. LOBACK
-----------------------------
DONALD R. LOBACK
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK Chairman, Chief Executive
March 11, 1996
- ---------------------------
(DONALD R. LOBACK) Officer and Director
/s/ KENDA B. GONZALES Chief Financial Officer,
March 11, 1996
- ---------------------------
(KENDA B. GONZALES) Treasurer and Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ W. THOMAS HICKCOX President, Chief Operating
March 11, 1996
- ---------------------------
(W. THOMAS HICKCOX) Officer and Director
/s/ BRADLEY S. ANDERSON Director
March 11, 1996
- ---------------------------
(BRADLEY S. ANDERSON)
<PAGE>
/s/ JO ANN RUDD Director
March 11, 1996
- ---------------------------
(JO ANN RUDD)
/s/ WILLIAM STEINBERG Director
March 11, 1996
- ---------------------------
(WILLIAM STEINBERG)
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
ACHETER, INC.
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD
R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- --------------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- --------------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- --------------------------
(TIMOTHY C. WESTFALL)
/s/ TERRY E. MITCHELL Director
March 11, 1996
- --------------------------
(TERRY E. MITCHELL)
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CH MORTGAGE COMPANY
BY: /S/ RANDY PRESENT
- --------------------------
RANDY PRESENT
CHAIRMAN AND
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ RANDY PRESENT Chairman and President
March 11, 1996
- -------------------------
(RANDY PRESENT)
/s/ JULIE COLLINS Vice President, Treasurer
March 11, 1996
- -------------------------
(JULIE COLLINS) and Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Director
March 11, 1996
- -------------------------
(DONALD R. LOBACK)
/s/ W. THOMAS HICKCOX Director
March 11, 1996
- -------------------------
(W. THOMAS HICKCOX)
<PAGE>
/s/ KENDA B. GONZALES Director
March 11, 1996
- -------------------------
(KENDA B. GONZALES)
/s/ RANDALL C. PRESENT Director
March 11, 1996
- -----------------------
(RANDALL C. PRESENT)
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CHI
CONSTRUCTION COMPANY
BY: /S/ W.
THOMAS HICKCOX
- ---------------------
W. THOMAS
HICKCOX
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ W. THOMAS HICKCOX President and Director
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX)
/s/ KENDA B. GONZALES Vice President, Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) and Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
---------------------
(DONALD R. LOBACK) Director
II-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CHI FINANCE
CORP.
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD
R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Financial Vice President
March 11, 1996
- ----------------------
(KENDA B. GONZALES) and Director
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ W. THOMAS HICKCOX Secretary, Treasurer
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX) and Director
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CONTINENTAL
HOMES, INC.
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD
R. LOBACK
CHIEF
EXECUTIVE OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK Chief Executive Officer
March 11, 1996
- ---------------------
(DONALD R. LOBACK) and Director
/s/ KENDA B. GONZALES Financial Vice President,
March 11, 1996
- ---------------------
(KENDA B. GONZALES) Treasurer and Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ W. THOMAS HICKCOX Director
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX)
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- -----------------------
(TIMOTHY C. WESTFALL)
<PAGE>
II-9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CONTINENTAL
HOMES OF FLORIDA, INC.
BY: /S/ JOHN
P. MORONEY
- -------------------
JOHN P.
MORONEY
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ JOHN P. MORONEY President
March 11, 1996
- --------------------
(JOHN P. MORONEY)
/s/ KENDA B. GONZALES Treasurer and Director
March 11, 1996
- ---------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
- ---------------------
(DONALD R. LOBACK) Director
/s/ W. THOMAS HICKCOX Director
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX)
<PAGE>
II-10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
CONTINENTAL
HOMES OF TEXAS, INC.
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD R.
LOBACK
CHAIRMAN
AND PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK Chairman and President
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Vice President and
March 11, 1996
- ----------------------
(KENDA B. GONZALES) Treasurer
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ W. THOMAS HICKCOX Vice President and
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX) Director
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
<PAGE>
II-11
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
KDB HOMES, INC.
BY: /S/ DOUGLAS
WILLIAM CHAMPION
- ----------------------------
DOUGLAS WILLIAM
CHAMPION
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DOUGLAS WILLIAM CHAMPION President
March 11, 1996
- -----------------------------
(DOUGLAS WILLIAM CHAMPION)
/s/ KENDA B. GONZALES Treasurer and Secretary
March 11, 1996
- -----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
- ---------------------
(DONALD R. LOBACK) Director
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-12
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
L & W INVESTMENTS,
INC.
BY: /S/
CHRISTOPHER J. CHAMBERS
- ----------------------------
CHRISTOPHER
J. CHAMBERS
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ CHRISTOPHER J. CHAMBERS President
March 11, 1996
- ----------------------------
(CHRISTOPHER J. CHAMBERS)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
- ---------------------
(DONALD R. LOBACK) Director
/s/ W. THOMAS HICKCOX Vice President and
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX) Director
<PAGE>
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-13
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
MILBURN
INVESTMENTS, INC.
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD
R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ W. THOMAS HICKCOX Vice President and
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX) Director
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-14
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
MILTEX FINANCIAL IV GENERAL
PARTNERSHIP
BY: /S/ DONALD R. LOBACK
- ------------------------
DONALD R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-15
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
MILTEX
MANAGEMENT, INC.
BY: /S/ RANDALL
C. PRESENT
- ----------------------
RANDALL C.
PRESENT
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ RANDALL C. PRESENT President
March 11, 1996
- -----------------------
(RANDALL C. PRESENT)
/s/ RICHARD MAREK Treasurer and Assistant
March 11, 1996
- ------------------
(RICHARD MAREK) Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
- ---------------------
(DONALD R. LOBACK) Director
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
<PAGE>
/s/ KENDA B. GONZALES Director
March 11, 1996
- ----------------------
(KENDA B. GONZALES)
II-16
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
MILTEX MORTGAGE OF TEXAS LIMITED
PARTNERSHIP
BY: /S/ DONALD R. LOBACK
--------------------------
DONALD R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-17
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
RANCHO CARILLO, INC.
BY: /S/ CHRISTOPHER
J. CHAMBERS
- ---------------------------
CHRISTOPHER J.
CHAMBERS
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ CHRISTOPHER J. CHAMBERS President
March 11, 1996
- ----------------------------
(CHRISTOPHER J. CHAMBERS)
/s/ KENDA B. GONZALES Treasurer and Secretary
March 11, 1996
- ---------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Vice President and
March 11, 1996
---------------------
(DONALD R. LOBACK) Director
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-18
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
R.O.S.
CORPORATION
BY: /S/
DONALD R. LOBACK
- --------------------
DONALD
R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
/s/ TERRY E. MITCHELL Director
March 11, 1996
- ----------------------
(TERRY E. MITCHELL)
II-19
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
SETTLEMENT
CORPORATION
BY: /S/
DONALD R. LOBACK
- ---------------------
DONALD
R. LOBACK
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ DONALD R. LOBACK President and Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ KENDA B. GONZALES Treasurer
March 11, 1996
- ----------------------
(KENDA B. GONZALES) (Principal Financial
Officer and Principal
Accounting Officer)
/s/ TIMOTHY C. WESTFALL Secretary and Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
/s/ TERRY E. MITCHELL Director
March 11, 1996
- ----------------------
(TERRY E. MITCHELL)
II-20
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY
AUTHORIZED, IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON MARCH
11, 1996.
TRAVIS COUNTY
TITLE COMPANY
BY: /S/
JACKIE MANUEL
- --------------------
JACKIE
MANUEL
PRESIDENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears
below hereby constitutes and appoints Donald R. Loback and Kenda B.
Gonzales, or
either of them, his true and lawful attorneys-in-fact and agents,
with full
power of substitution and resubstitution, for him and in his name,
place and
stead, in any and all capacities, to sign this Registration
Statement and to
sign any and all amendments to this Registration Statement,
including
post-effective amendments, and registration statements filed
pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with
all exhibits
thereto, and other documents in connection therewith, with the
Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents full power
and authority to do and perform each and every act and thing
requisite and
necessary to be done in and about the premises, as fully to all
intents and
purposes as he might or could do in person, hereby ratifying and
confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES
INDICATED.
Signature Title
Date
/s/ JACKIE MANUEL President
March 11, 1996
- ----------------------
(JACKIE MANUEL)
/s/ BILL MCCLENDON Treasurer and Assistant
March 11, 1996
- -------------------
(BILL MCCLENDON) Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ DONALD R. LOBACK Director
March 11, 1996
- ---------------------
(DONALD R. LOBACK)
/s/ W. THOMAS HICKCOX Director
March 11, 1996
- ----------------------
(W. THOMAS HICKCOX)
<PAGE>
/s/ TIMOTHY C. WESTFALL Director
March 11, 1996
- ------------------------
(TIMOTHY C. WESTFALL)
II-21
<PAGE>
Exhibit Index
Number
12 Statement of Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Arthur Andersen LLP.
<PAGE>
Exhibit 12
<TABLE>
<CAPTION>
Continental Homes Holding Corp.
Computation of Ratio of Earnings to Fixed
Charges
(Dollars in thousands)
SIX MONTHS ENDED
YEAR ENDED
MAY 31, NOVEMBER 30,
- -------------------------------------------- ------------------
<S> <C> <C> <C>
<C> <C> <C> <C>
1991 1992 1993
1994 1995 1994 1995
------- -------
- ------- ------- ------- ------- --------
Fixed Charges:
Rent expense............................ $ 197 $ 178 $
165 $ 305 $ 363 $ 182 $ 182
Interest (expensed or capitalized) -
homebuilding........................... 8,889 8,662
11,896 13,378 19,528 8,665 10,762
Interest (expensed or capitalized) -
joint ventures(1)...................... 2,868 885
144 -- -- -- --
Interest - mortgage banking.............. 2,364 1,557
1,343 2,707 2,360 1,048 1,368
------ -------
- ------- ------- ------- ------- -------
Total fixed charges................... $14,318 $11,282
$13,548 $16,390 $22,251 $ 9,895 $12,312
======= =======
======= ======= ======= ======= =======
Earnings:
Income before taxes and extraordinary
credits............................... $ 477 $ 2,155
$12,083 $23,137 $25,465 $13,688 $18,692
Fixed charges........................... 14,318 11,282
13,548 16,390 22,251 9,895 12,312
Interest capitalized(1)(2).............. (3,486) 2,783
202 (920) (3,421) (1,405) (507)
Total earnings before fixed charg....... $11,309 $16,220
$25,833 $38,607 $44,295 $22,178 $30,497
Ratio of earnings to fixed charge......... (3) 1.44x
1.91x 2.36x 1.99x 2.24x 2.48x
======== ========
======== ======== ======= ======== ========
- --------------------------
<FN>
(1) Reflects the Company's proportionate share of the joint
venture.
(2) Since interest capitalized is charged to interest expense when
the related
assets are sold, this amount represents the change in
capitalized interest
from the previous period end.
(3) Fiscal 1991 includes a pre-tax writedown of $5,000,000. After
giving effect
to such writedown, earnings for the fiscal year ended May 31,
1991 were
inadequate to cover fixed charges and resulted in a coverage
deficiency of
$3,009,000.
</TABLE>
<PAGE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by
reference in this registration statement of our report dated June
19, 1995
incorporated by reference in Continental Homes Holding Corp.'s Form
10-K for the
year ended May 31, 1995 and to all references to our Firm included
in this
registration statement.
Phoenix, Arizona
March 8, 1996
<PAGE>
