SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Information to be Included in Statements Filed Pursuant
to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to
Rule 13d-2(a)
(Amendment No. 6)
THE PRESLEY COMPANIES
(Name of Issuer)
Series A Common Stock $0.01 Par Value Per Share
(Title of Class of Securities)
741030-10-0
(CUSIP Number)
General William Lyon
c/o William Lyon Homes, Inc.
4490 Von Karman
Newport Beach, California 92660
(949) 833-3600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
David A. Krinsky, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660-6429
(949) 823-7902
May 3, 1999
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(e),
13d-1(f) or 13d-1(g), check the following box: [ ]
<PAGE>
CUSIP No. 741030-10-0 Schedule 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
General William Lyon
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 SOLE VOTING POWER
Number of
Shares 7,939,589
Beneficially
Owned by
Each Reporting
Person With
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
7,939,589
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
7,939,589
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
15.2%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 4. Purpose of Transaction
Item 4 of this Statement on Schedule 13D, filed by
General William Lyon (the "Reporting Person") with respect to the
Series A Common Stock, $0.01 par value, of The Presley Companies,
a Delaware corporation (the "Company"), is hereby amended and
supplemented as follows:
On May 3, 1999, the Company, Presley Homes, a
California corporation ("Presley-Cal."), and William Lyon Homes,
Inc. ("WL Homes"), a corporation which is controlled by the
Reporting Person, entered into an amended and restated letter of
intent (the "Restated Letter of Intent") with respect to (i) the
proposed purchase by Presley-Cal. of all or substantially all of
the assets of WL Homes and (ii) the proposed concurrent purchase
by WL Homes of a portion of the outstanding Common Stock of the
Company. The full text of the Restated Letter of Intent is filed
as Exhibit 1 hereto and is incorporated herein by reference.
The Restated Letter of Intent contemplates that (i)
Presley-Cal. will purchase all or substantially all of the assets
of WL Homes for a cash purchase price of $48 million and the
assumption of all or substantially all of the liabilities of WL
Homes (such purchase and assumption being referred to herein as
the "Acquisition"), and (ii) WL Homes will make a tender offer to
the holders of the Company's Series A Common Stock (the "Series A
Offer") and offers to the holders of the Company's Series B
Common Stock (the "Series B Offer") to purchase, for a cash
purchase price of $0.655 per share, an aggregate number of shares
of the Company's Common Stock which, when added to the number of
shares of the Company's Common Stock owned by WL Homes and its
affiliates (and after giving effect to the disposition of up to
8% of the shares of the Company's Common Stock presently owned by
WL Homes and its affiliates), will cause WL Homes and its
affiliates to own an aggregate of approximately 49% (but in no
event more than 49.9%) of the outstanding shares of the Company's
Common Stock. The Restated Letter of Intent also contemplates that
the parties will structure the Series A Offer and the Series B
Offer (including possible amendments to the Company's charter
documents to limit certain transfers of shares) so as to avoid
triggering the change of control tax provisions that could result
in the loss of the Company's net operating losses for tax purposes.
The proposed terms and conditions of the Series B Offer
are set forth in a preliminary term sheet (the "Series B Term
Sheet") which is attached as Exhibit A to the Restated Letter of
Intent and incorporated herein by reference. The Series B Term
Sheet contemplates that WL Homes will purchase from each Series B
shareholder a number of shares of Series B Common Stock, at a
cash purchase price of $0.655 per share, such that following the
transaction, each Series B shareholder will own less than 5% of
the outstanding shares of the Company's Common Stock. In the
case of Foothill Capital Corporation, which is the beneficial
owner of less than 5% of the outstanding shares of the Company's
Common Stock, WL Homes would propose to purchase 710,574 shares
of Series B Common Stock. The Series B Term Sheet also
contemplates the following:
(i) if the Series A Offer is under-subscribed, each
holder of Series B shares would agree to sell additional
shares of the Company's Common Stock to WL Homes at the same
price on a pro rata basis;
(ii) the Series B shareholders would agree that, prior
to the completion of the Series A Offer, the Series B
shareholders would not (a) transfer or tender any Series A
shares which they may own, or (b) transfer or convert their
remaining Series B shares into Series A shares;
(iii) the Reporting Person, Mr. Wade Cable, Chief Executive
Officer of the Company, and their respective affiliates will
not tender any Series A shares which they may own in the
Series A Offer; and
(iv) WL Homes would agree that for a period of three
(3) years following the transaction, WL Homes and its
affiliates would not sell any shares of the Company's Common
Stock, other than shares which are presently beneficially
owned by any of such persons, unless such sale takes place
in connection with a transaction in which all other
shareholders of the Company are treated equally.
Each of the Series B shareholders has signed a copy of the Series
B Term Sheet and indicated that the Series B Term Sheet is
acceptable to them as a basis for proceeding toward a definitive
agreement with WL Homes. As of the date hereof, WL Homes does
not have a binding or enforceable agreement with any of the
Series B shareholders with respect to the terms and conditions of
the Series B Offer.
The proposed Acquisition, Series A Offer and Series B
Offer (collectively, the "Transactions") are subject to the
negotiation and execution of a definitive agreements among the
parties and various other terms and conditions as set forth in
the Restated Letter of Intent and the Series B Term Sheet. There
can be no assurances that the parties will ultimately enter into
definitive agreements with respect to the Transactions or that
all of the conditions to the Transactions will be satisfied. WL
Homes, the Company and Presley-Cal. have agreed in the Restated
Letter of Intent, subject to the fiduciary duties of their
respective boards of directors, to negotiate exclusively with
each other towards a definitive agreement until July 15, 1999.
Nothing contained in the Restated Letter of Intent, the
Series B Term Sheet or this Schedule 13D is intended or shall
constitute an offer by the Reporting Person or any of his
affiliates to purchase securities of the Company. The offer and
sale of any securities of the Company will be made only in
compliance with applicable federal and state securities laws.
Except as described in this Item 4, as amended, the
Reporting Person currently does not have any plans or proposals
that relate to or would result in any of the matters described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
The information contained in Item 4 of this
Schedule 13D is hereby incorporated by reference.
Item 7. Material To Be Filed as Exhibits
Exhibit 1 Restated Letter of Intent and Series B Term Sheet as
described in Item 4 of this Schedule 13D.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that this statement is true,
complete and correct.
/s/ William Lyon
-------------------------------
William Lyon
Dated: May 4, 1999
EXHIBIT 1
WILLIAM LYON HOMES
May 3, 1999
The Presley Companies
19 Corporate Plaza
Newport Beach, California 92660
Attention: General James Dalton
Re: Revised Agreement in Principle Concerning
The Presley Companies and
William Lyon Homes, Inc.
Ladies and Gentlemen:
This letter amends and restates those certain letters dated
December 30, 1998 and March 30, 1999 and sets forth our mutual,
preliminary understanding with respect to the proposed
acquisition by The Presley Companies, a Delaware corporation
("Presley-Del."), of substantially all of the assets of William
Lyon Homes, Inc., a California corporation ("WL Homes"), and the
proposed purchase by WL Homes of a portion of the outstanding
shares of Common Stock of Presley-Del.
1. The Transaction. On the conditions set forth below and to
be included in a definitive agreement (the "Definitive
Agreement"):
(a) Presley Homes, a California corporation and a wholly owned
subsidiary of Presley-Del. ("Presley-Cal.," and together with
Presley-Del., "Presley"), will purchase all or substantially all
of the assets of WL Homes for a cash purchase price of
$48 million and the assumption of all or substantially all of the
liabilities of WL Homes (such purchase and assumption being
referred to herein as the "Acquisition");
(b) WL Homes will make offers to the holders of Presley-Del.
Series B Common Stock (the "Series B Offer") and a tender offer
to the holders of Presley-Del. Series A Common Stock (the
"Series A Offer") to purchase, for a cash purchase price of
$0.655 per share, an aggregate number of shares of Presley-Del.
Common Stock which, when added to the number of shares of Presley-
Del. Common Stock already owned by WL Homes and its affiliates
and after giving effect to any disposition of shares of Presley-
Del. Common Stock by WL Homes and its affiliates as contemplated
in Section 2(c) hereof, will cause WL Homes and its affiliates to
own an aggregate of approximately 49% (but in no event more than
49.9%) of the outstanding shares of Presley-Del. Common Stock.
The Series A Offer and the Series B Offer are collectively
referred to herein as the "Offers."
The Acquisition and the Offers are hereinafter referred
to collectively as the "Transactions."
2. Terms and Conditions. Our preliminary understanding
includes the following additional terms and conditions, which
will be addressed in greater detail in the Definitive Agreement:
(a) The consummation of the Acquisition and the Offers shall
each be conditioned upon the successful completion of the others.
(b) The Offers are premised on (i) Presley-Del. having an
aggregate of 52,195,678 shares of Series A Common Stock and
Series B Common Stock outstanding, (ii) there being no
outstanding options to acquire Presley-Del. Common Stock with an
exercise price of less than $1.00 per share, (iii) there being no
other securities outstanding which are convertible into or
exchangeable for shares of Common Stock of Presley-Del., and
(iv) the Series B shareholders not acquiring or disposing of any
beneficial interest in shares of Presley-Del. Common Stock prior
to the closing of the Transactions.
(c) The Transactions will be structured to permit WL Homes
and/or its affiliates, prior to consummation of the Transactions
and consistent with the requirements of applicable securities
laws, to sell shares of Presley-Del. Common Stock which are
currently owned by such persons, up to a maximum of 8% of the
total number of shares of Presley-Del. Common Stock outstanding.
(d) The Transactions shall be conditioned upon there being
purchased in the Offers a number of shares of Presley-Del. Common
Stock that, when added to the number of shares of Presley Del.
Common Stock already owned by WL Homes and its affiliates (after
giving effect to any sale of Presley Del. shares as contemplated
in the preceding subparagraph (c)), causes WL Homes and its
affiliates to own at least 49% (but in no event more than 49.9%)
of the outstanding Presley-Del. Common Stock. In the event that
the Series A Offer is over-subscribed, WL Homes will purchase
shares of Series A Common Stock from each tendering stockholder
on a pro rata basis. In the event that the Series A Offer is
under-subscribed, WL Homes will purchase additional shares of
Presley-Del. Common Stock from each Series B shareholder on a pro
rata basis.
(e) Concurrent with or prior to the execution and delivery of
the Definitive Agreement, each of the following entities shall
have consented to the Transactions and executed a written
agreement to sell shares of Presley-Del. Series B Common Stock in
the Series B Offer such that, upon closing of the Series B Offer,
each of the following entities shall own less than 5% of the
outstanding shares of Presley-Del. Common Stock:
(i) Foothill Capital Corporation;
(ii) GS Credit Partners, L.P.;
(iii) First Plaza Group Trust; and
(iv) International Nederlande (U.S.) Capital
Corporation.
The agreements for the purchase of the Series B shares shall
incorporate substantially the terms and conditions set forth
on Exhibit A attached hereto, and otherwise shall be in form
and substance satisfactory to WL Homes and to Presley-Del.
(f) The parties contemplate that Presley-Del.'s 12-1/2%
Senior Notes due 2001 (the "Presley Notes") shall remain outstanding
without modification following consummation of the Transactions.
The parties shall use reasonable efforts to structure the
Transactions so as to eliminate the need to obtain any consents
to the Transactions from holders of the Presley Notes.
(g) Presley and WL Homes shall have received all required
regulatory approvals (including, without limitation, expiration
of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act) and third party consents (including,
without limitation, lender consents), in each case without the
imposition of any condition which is reasonably unacceptable to
Presley or WL Homes. The parties shall use reasonable efforts to
structure the Transactions so as to eliminate the need to obtain
any consents to the Transactions from the lenders under Presley's
existing bank credit facility (the "Presley Bank Facility").
(h) The respective Boards of Directors of Presley and WL Homes
shall have approved the Definitive Agreement by July 15, 1999 and
caused the Definitive Agreement to have been executed by such
date (unless the term of this letter is extended by mutual
agreement of the parties).
(i) Presley shall have received a fairness opinion or opinions
with respect to the Transactions from Warburg Dillon Read LLC (or
such other investment banking firm or firms of national standing
and reasonably acceptable to Presley and WL Homes), which opinion
or opinions shall include an opinion to the effect that the
Acquisition is fair to Presley from a financial point of view.
With respect to the real property to be acquired from WL Homes by
Presley Cal., Presley shall also have received a determination of
value by a real estate appraisal firm which is of regional
standing in the region in which the subject property is located
and is MAI certified, in form and substance reasonably
satisfactory to Presley and WL Homes. In addition, Presley shall
have received a solvency opinion from a firm of national standing
with respect to the solvency of Presley following the
consummation of the Transactions.
(j) The parties shall structure the Transactions (including, if
necessary, the amendment of Presley's certificate of
incorporation and bylaws to restrict transfers of shares) so as
to avoid triggering the change of control tax provisions that
would result in the loss of Presley-Del.'s net operating losses
for tax purposes ("NOL's"). Shareholders of Presley-Del. which,
after giving effect to the proposed Transactions, would exceed
any applicable percentage ownership limitations shall have
approved and agreed to be bound by such restrictions, and, to the
extent required by applicable law, such amendments shall have
been approved by Presley-Del. shareholders.
(k) Prior to the execution of the Definitive Agreement, Presley
shall have completed to its satisfaction its due diligence review
of the business, financial condition, assets, liabilities,
results of operations and prospects of WL Homes.
(l) The closing of the Offers shall be
conditioned upon the absence of any material adverse change
in the business, financial condition, assets, liabilities,
operations or prospects of Presley. The closing of the
Acquisition shall be conditioned upon the absence of any
material adverse change in the business, financial
condition, assets, liabilities, results of operations or
prospects of WL Homes.
(m) The Closing of the Acquisition shall be
conditioned upon Presley (i) having borrowing capacity under
the terms of the Presley Bank Facility, and/or
(ii) obtaining other bank or third-party financing on terms
reasonably acceptable to Presley, in any case, in an amount
sufficient to enable Presley to finance the Transactions as
contemplated herein.
3. The Definitive Agreement. The Definitive Agreement shall
contain terms, conditions, representations, warranties and
covenants customary and appropriate for transactions of the type
contemplated, including those summarized herein, together with a
commitment on behalf of Presley to issue a favorable
recommendation to its shareholders with respect to the Offers,
such obligation being subject to the Presley-Del. Board of
Directors' fiduciary duties under applicable law. The Definitive
Agreement may be terminated at any time by mutual consent of the
parties, or, among other circumstances, unilaterally by either
party (provided that such party is not then in breach of the
Definitive Agreement) if (a) the closing of the Transactions has
not occurred by August 31, 1999, or (b) there has been a material
adverse change in the business, financial condition, assets,
liabilities, results of operations or prospects of the other
party. Notwithstanding the foregoing, if the closing of the
Transactions has not occurred by August 31, 1999 due to delays in
obtaining governmental or regulatory approvals of the
transactions contemplated hereunder, then the parties agree to
extend the term of the Definitive Agreement for up to an
additional 30 calendar days to allow the process of obtaining
such approvals to be completed.
4. Exclusive Negotiations. To induce the parties to expend
money and otherwise devote resources to structure and negotiate
the proposed Transactions, each of the parties agrees that until
11:59 p.m. PDT on July 15, 1999 (the "Exclusivity Period"), it
will negotiate exclusively with the other party hereto with
respect to any proposal to acquire (whether by merger, stock or
asset purchase, direct investment, or otherwise) any equity
interest in the other party hereto, any of its subsidiaries, or
all or any material portion of its assets (except with respect to
sales of homes in the ordinary course of business). Any such
proposal is hereinafter referred to as an "Acquisition Proposal."
Each of the parties further agrees that, during the
Exclusivity Period, neither it nor any of its directors,
officers, employees, representatives or agents (including
financial advisors and attorneys) (collectively referred to
herein as "Representatives") will (i) solicit, initiate,
encourage or facilitate the submission of, or consider, enter
into discussions concerning or agree to, any Acquisition Proposal
other than from the other party hereto, or (ii) provide any
information concerning it or its assets or business operations to
any person or permit any person to visit its premises in
connection with or for the purpose of soliciting or facilitating
any Acquisition Proposal, in each case, other than the other
party hereto and its Representatives. In the event any other
potential acquiror or Representative thereof contacts a party or
any of its Representatives with respect to an Acquisition
Proposal, such party shall notify the other party hereto and
provide such party with the details of such contact. Further,
the person so contacted will inform the contacting party that the
party is in a period of exclusive negotiations and terminate such
contact without disclosing any details concerning the
negotiations with the other party hereto.
Notwithstanding the foregoing provisions of this
Section 4, if prior to the execution of a Definitive Agreement,
the Board of Directors of Presley-Del. or WL Homes, as the case
may be, after receiving advice from outside legal counsel,
determines that a failure to act would be inconsistent with such
Board of Directors' fiduciary duties to stockholders under
applicable law, such party may (a) furnish information with
respect to such party to any person in response to an unsolicited
request pursuant to a confidentiality agreement with terms and
conditions similar to those contained in the confidentiality
agreements by and between Presley-Del. and WL Homes, and
(b) participate in discussions and negotiations regarding any
potential Acquisition Proposal. Such party shall promptly notify
the other party hereto of any request received by such party with
respect to a potential competing Acquisition Proposal. If a
party receives a competing Acquisition Proposal, such party shall
promptly, and in any event at least three (3) business days prior
to entering into any agreement with respect to such competing
Acquisition Proposal, notify the other party of the receipt of
such competing Acquisition Proposal, specifying the material
terms and conditions of the proposal and identifying the person
making such proposal. If a party enters into a definitive
agreement with respect to a competing Acquisition Proposal, such
party shall concurrently with entering into such agreement pay,
or cause to be paid, all fees and expenses incurred by the other
party through such date in connection the proposed Transactions
(including, without limitation, all attorneys', accountants',
financial advisors', bankers', appraisers' and similar
professional fees and expenses).
Notwithstanding the Exclusivity Period, the parties
agree to use their best efforts to structure the proposed
Transactions, to draft and complete negotiation of the Definitive
Agreement and to close the Transactions as soon as practicable.
5. Access; Confidentiality. Each party, subject to the need to
preserve attorney-client privilege, will make available such
financial, legal, business and other documents and information
concerning its business, assets, liabilities and operations as
the other party may reasonably request. All such documents and
information provided hereunder shall be subject to, and governed
by, the applicable confidentiality agreements existing between WL
Homes and Presley. Presley acknowledges that General William
Lyon and Wade Cable, directors of Presley, have participated in
the preparation of WL Homes' proposal and are sharing information
regarding Presley with WL Homes' advisors in connection with the
proposed Transactions.
In furtherance of the foregoing, WL Homes shall,
promptly following the execution and delivery of this letter by
each of the parties hereto, provide Presley and its
Representatives with access to copies of all loan agreements,
instruments and other documents governing or relating to any
indebtedness of WL Homes which is proposed to be assumed by
Presley in connection with the Acquisition.
6. Publicity. Presley and WL Homes shall endeavor to
coordinate all publicity relating to the proposed Transactions.
No party herein shall issue any press release, publicity
statement or other notice relating to the proposed Transactions
or this letter without the prior consent of the other parties
hereto unless required under applicable securities laws (in which
case each party agrees to give reasonable notice to and consult
with the other parties prior to issuing any such release,
statement or other notice).
7. Finder's Fee. Each party represents that it has not engaged
or authorized any broker, finder or similar agent who would be
entitled to a commission or other fee in respect of the proposed
Transactions, except for Presley's engagement of Warburg Dillon
Read LLC, whose fees will be paid by Presley. It is further
understood that, in connection with the Transactions, Presley
may, after consultation with WL Homes, engage additional firms
with respect to the fairness opinions, appraisals and solvency
issues set forth in Section 2(h) hereof.
8. Expenses. Subject to Section 4 hereof, (a) Presley shall
pay all fees, costs and expenses incurred in connection with
obtaining the fairness and solvency opinions referenced in
Section 2(h) hereof and any appraisals of Presley assets that may
be required in connection with the Transactions, and (b) WL Homes
shall pay all fees, costs and expenses incurred in connection
with obtaining any financing commitments and any appraisals of WL
Homes assets that may be required in connection with the
Transactions. Except as provided in Section 4 hereof and in the
foregoing sentence of this Section 8, each party shall otherwise
pay its own expenses incurred in connection with the proposed
Transactions.
9. Not an Offer. This letter is not intended as an offer to
stockholders of Presley. The Offer by WL Homes will be made
pursuant to and only in compliance with applicable federal and
state securities laws.
10. Effect of Letter; Enforceability. Except as provided in
this Section, this letter is not intended to be, and does not
constitute, a binding or enforceable agreement, but is merely an
outline of intention to facilitate the negotiation and
preparation of a Definitive Agreement and related documents.
This letter merely lists proposed points that may or may not
become part of a Definitive Agreement. It is not based on any
existing agreement between the parties and (except as provided in
this Section) is not intended to impose any obligation whatsoever
on any party, including but not limited to any obligation to
bargain in good faith or in any way other than at arms' length.
Except as to Sections 4 through 9 above, and this Section 10, no
legal or equitable duties, responsibilities or rights are created
hereby. Each party covenants not to institute or participate in
any proceeding seeking to establish a contrary position. Neither
party may reasonably rely on any promises inconsistent with this
Section.
This Section supersedes any and all other conflicting
or ambiguous language in this letter or any contemporaneous or
other communication preceding this letter.
11. Term. This letter, unless extended by mutual agreement,
shall terminate (other than Sections 6 through 9, which shall
survive) at 11:59 p.m. PDT on July 15, 1999 or upon the earlier
to occur of either of the following:
(a) the execution of the Definitive Agreement; or
(b) ten days following the delivery of written notice by
Presley to WL Homes (together with copies of all supporting
correspondence received from Presley's financial advisors) to the
effect that (i) Presley and its financial advisors have
substantially completed the appraisal and due diligence processes
contemplated in Sections 2(h) and 2(j) hereof, and (ii) one or
more of Presley's financial advisors have confirmed to Presley in
writing that they do not reasonably believe that they will be
able to render the fairness or solvency opinions contemplated in
Section 2(h) hereof.
Notwithstanding the foregoing, the parties agree to
extend the term of this letter for up to an additional 30
calendar days in the event that the signing of a Definitive
Agreement is postponed due to delays in obtaining governmental or
regulatory approvals of the transactions contemplated hereunder.
12. Compliance. All matters referred to herein are subject to
and conditioned upon compliance with all applicable laws and the
consistency of the terms hereof with any material rights of any
third parties.
If this letter is satisfactory to you as a basis for
proceeding toward a Definitive Agreement, please so signify on
the enclosed copy of this letter and return it to us at the above
address.
WILLIAM LYON HOMES, INC.,
a California corporation
By: /s/ William Lyon
_______________________________
William Lyon
Chairman, President & CEO
AGREED, AS OF MAY 3, 1999:
THE PRESLEY COMPANIES,
a Delaware corporation
By: /s/ Nancy Harlan
_____________________________
Nancy Harlan
Senior Vice President and General Counsel
By: /s/ Linda Foster
_____________________________
Linda Foster
Vice President and Corporate Secretary
[Signatures continued on next page.]
<PAGE>
PRESLEY HOMES,
a California corporation
By: /s/ Nancy Harlan
____________________________
Nancy Harlan
Senior Vice President and General Counsel
By: /s/ Linda Foster
____________________________
Linda Foster
Vice President and Corporate Secretary
<PAGE>
EXHIBIT A
PROPOSED TERMS AND CONDITIONS
FOR THE
PURCHASE BY WILLIAM LYON HOMES, INC.
OF
SERIES "B" COMMON STOCK OF THE PRESLEY COMPANIES
The following terms relate to the proposed purchase by William
Lyon Homes, Inc. ("Lyon") of Series "B" common stock of The
Presley Companies ("Presley"):
1. Purchase Price. The purchase price will be $0.655 per share
in cash. This is the same price to be offered to the Series "A"
shareholders in the proposed tender offer.
2. Number of Shares to be Purchased. Lyon will agree to
purchase (a) 710,574 Series "B" shares from Foothill Capital
Corporation, and (b) from each other Series "B" shareholder, such
number of Series "B" shares as is necessary to reduce the total
number of common shares owned by each Series "B" shareholder
(including any Series "A" common shares) below 5% of the
52,195,678 total common shares of Presley that are outstanding.
The reduction of each Series "B" shareholder's ownership to below
the 5% threshold will enable each Series "B" shareholder, after
completion of the tender offer by Lyon for the Series "A" shares,
to convert its remaining Series "B" shares into Series "A" shares
and trade such Series "A" shares without being subject to
restrictions which are proposed to be imposed on holders of more
than 5% of Presley's common stock pursuant to Presley's charter
documents (as proposed to be amended).
Based on the number of Presley common shares currently
outstanding and the current share ownership of each
Series "B" shareholder as reflected below, the number
and percentage of Series "B" shares to be purchased by
Lyon from each Series "B" shareholder are specified
below:
<TABLE>
<CAPTION>
Series "B" Total Series "B" % of Shares
Shareholders Shares Shares to Be Total Retained
Owned Purchased Shares
Purchased
<S> <C> <C> <C> <C>
First Plaza (GM) 6,796,531(1) 4,186,748 61.6% 2,609,783(1)
GS Credit
Partners, L.P. 5,920,362 3,310,579 55.9% 2,609,783
L.P.
ING 4,547,269 1,937,486 42.6% 2,609,783
Foothill 1,836,109 710,574 38.7% 1,125,535
_____________ __________ ______ _____________
19,100,271 10,145,387 53.1% 8,954,884
============= ========== ====== =============
(1) Includes 1,697,325 Series "A" shares.
</TABLE>
3. Sale of Additional Series "B" Shares. In addition to the
acquisition of the Series "B" shares as described in Section 2
above, Lyon is proposing (a) to dispose of a portion of the
Presley Series "A" shares which are currently held by Lyon and
its affiliates, and (b) to make a tender offer for a portion of
Presley's outstanding Series "A" shares which are not currently
held by Lyon or its affiliates. Lyon's objective, following
consummation of each of the Series "A" and Series "B"
transactions referenced above, is to own an aggregate of
approximately 49% (but in no event more than 49.9%) of Presley's
outstanding common stock. In the event that the Series "A"
shareholders do not tender a sufficient number of shares in the
proposed tender offer to enable Lyon (after taking into account
the Series "B" shares to be acquired as described in Section 2
above) to achieve the desired ownership target, the Series "B"
shareholders will agree to sell to Lyon additional Series "B"
shares (over and above the 10,145,387 shares to be acquired as
described in Section 2 above) to enable Lyon to reach the desired
ownership target. Any such sales of additional Series "B" shares
shall be made at $0.655 per share in cash and, unless otherwise
agreed by Lyon and each of the Series "B" shareholders, shall be
made pro rata on the basis of the number of remaining Series "A"
and Series "B" shares then held by each Series "B" shareholder.
4. Agreements Not to Tender. The Series "B" shareholders will
agree that, prior to completion of the Series "A" tender offer,
(a) they will not transfer or tender any Series "A" shares which
they may own, and (b) they will not transfer their remaining
Series "B" shares or convert their remaining Series "B" shares
into Series "A" shares (except under the circumstances
contemplated in Section 3 above). General Lyon and Wade Cable
(and their respective affiliates) will not tender their
Series "A" shares in the tender offer.
5. Signing Date; Conditions to Closing. Lyon and the
Series "B" shareholders expect to enter into definitive
agreements for the purchase of the Series "B" shares as described
above on or before May 12, 1999. Lyon's purchase of the
Series "B" shares shall be conditioned upon the unanimous
agreement of each of the Series "B" shareholders to the terms and
conditions contained herein. The closing of such purchases shall
be conditioned upon and shall take place concurrently with the
closing of Lyon's proposed tender offer for the Series "A" shares
and the proposed purchase by Presley of substantially all of
Lyon's assets. Such transactions are currently expected to close
on or about August 31, 1999, following the receipt of shareholder
approval of the proposed amendments to Presley's charter
documents at a duly-called special meeting. Such date may be
extended in the event of unforeseen delays in the S.E.C.'s review
and approval of Presley's registration statement and solicitation
materials relating to the special meeting.
6. Lyon will agree that for the three (3) years following the
consummation of the transaction, Lyon and its affiliates will not
sell any shares of Presley common stock in excess of the shares
which any of them may currently beneficially own unless such sale
takes place in connection with a transaction in which all other
shareholders of Presley are treated equally.
The foregoing terms and conditions assume the accuracy of the
share ownership information set forth in Section 2 above and
that, prior to the closing of the proposed transactions
referenced above, none of the Series "B" shareholders will
acquire or dispose of any beneficial interest in shares of
Presley Series "A" or Series "B" common stock.
The foregoing is not intended to be, and does not constitute, a
binding or enforceable agreement, but is merely an outline of
intention to facilitate the preparation of definitive agreements
with respect to the proposed transactions. The foregoing is not
intended as an offer to purchase securities of Presley. The
offer and sale of any securities of Presley will be made only
after satisfaction of applicable state and federal securities
laws.
If the foregoing is acceptable to you as a basis for proceeding
toward a definitive agreement, please so signify by signing in
the space provided below and returning a copy of this term sheet
to William Lyon at William Lyon Homes, Inc., 4490 Von Karman
Avenue, Newport Beach, California 92660, facsimile (949) 252-
2525, telephone (949) 833-2421.
WILLIAM LYON HOMES, INC.
Date: April 23, 1999 By: /s/ William Lyon
_____________________________
William Lyon
Chairman, President and CEO
FIRST PLAZA GROUP TRUST
Date: April 30, 1999 By: /s/ Charles Froland
_____________________________
Charles Froland
Managing Director, General
Motors Investment Management
Corporation
GS CREDIT PARTNERS, L.P.
Date: April 30, 1999 By: /s/ Edward A Mule
_____________________________
Edward A. Mule
[Signatures continued on next page.]
<PAGE>
INTERNATIONAL NEDERLANDE (U.S.)
CAPITAL CORPORATION
Date: April 30, 1999 By: /s/ Gregory P. Flynn
_____________________________
Gregory P. Flynn
FOOTHILL CAPITAL CORPORATION
Date: April 30, 1999 By: /s/ Karen Sandler
_____________________________
Karen Sandler
Senior Vice President
