SEC Info

Home

Search

My Interests

Help

Sign In

Please Sign In

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 7/16/03  Preferred Home Mortgage Co        S-4                   16:331                                    Bowne of Atlanta/FA
          Newmark Homes Purchasing LP
          Engle Homes Delaware Inc
          Universal Land Title Investment No 4 LLC
          Universal Land Title of the Palm Beaches Ltd
          Newmark Homes Business Trust
          Pacific United LP
          Newmark Homes LP
          Tousa Associates Services Co
          Tousa Homes Inc
          Tousa Financing Inc
          Tousa Shared Services LLC
          Alliance Insurance & Information Services LLC
          McKay Landing LLC
          Engle James LLC
          DP Nh Investments LP
          DP Nh Management LLC
          Century Title Agency Ltd
          Engle Homes Virginia Inc
          Preferred Builders Realty Inc
          Universal Land Title Inc
          Technical Olympic USA Inc
          Universal Land Title of South Florida Ltd
          Prestige Abstract & Title LLC
          Universal Land Title Investment 1 LLC
          Silverlake Interests L C
          Professional Advantage Title Ltd
          Universal Land Title Investment 3 LLC
          Universal Land Title Investment 2 LLC
          Universal Land Title of Texas Inc
          Tousa Ventures LLC
          Newmark Homes LLC
          Engle Homes Residential Construction LLC

Document/Exhibit                   Description                      Pages   Size 

 1: S-4         Technical Olympic Usa, Inc.                         HTML  2,100K 
 2: EX-5.1      EX-5.1 Opinion of Akerman Senterfitt                   2±    19K 
 3: EX-10.31    EX-10.31 Employment Agreement With Mark Upton         20     98K 
 4: EX-10.32    EX-10.32 First Amendment to Employment Agreement       4     31K 
 5: EX-10.34    Fourth Amendment to Credit Agreement                   7     35K 
 6: EX-12       Statement Re: Computation of Earnings                  1     17K 
 7: EX-21       Subsidiaries                                           2±    20K 
 8: EX-23.1     EX-23.1 Consent of Ernst & Young Llp                   1     14K 
 9: EX-23.2     EX-23.2 Consent of Bdo Seidman Llp                     1     15K 
10: EX-23.3     EX-23.3 Consent of Bdo Seidman Llp                     1     14K 
11: EX-25.1     EX-25.1 Statement of Eligibility of Trustee            7     40K 
12: EX-99.1     EX-99.1 Letter of Transmittal                       HTML     79K 
13: EX-99.2     EX-99.2 Notice of Guaranteed Delivery               HTML     24K 
14: EX-99.3     EX-99.3 Letter to Brokers                           HTML     20K 
15: EX-99.4     EX-99.4 Letter to Clients                           HTML     22K 
16: EX-99.5     EX-99.5 Guidelines for Certification                HTML     33K 

Table of Contents

Form S-4

Technical Olympic USA, Inc.

4000 Hollywood Boulevard

Patricia M. Petersen, Esq.

Copy To:

     Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement.

     If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:    o

     If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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.    o

     If this form is a post-effective amendment filed pursuant to Rule 462(d) 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.    o

Calculation of Registration Fee

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933 as the market value of the securities to be cancelled in the exchange.
(2)	See the following pages for a list of the guarantors, which are direct and indirect subsidiaries of Technical Olympic USA, Inc.
(3)	Not applicable, as provided in Rule 457(n) under the Securities Act of 1933.

     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.

Table of Contents

Table of Contents

The information in this prospectus is not complete and may be changed. We may not exchange these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to exchange these securities and it is not soliciting an offer to exchange these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated July 16, 2003

Technical Olympic USA, Inc.

Exchange Offer for $35,000,000 10 3/8% Senior Subordinated Notes due 2012 that are

Exchange Offer

    We will exchange new notes that are registered under the Securities Act for old notes that were sold on April 22, 2003. All old notes that are validly tendered and not validly withdrawn will be exchanged. We will receive no proceeds from the exchange offer.

Exchange Offer Expiration

    The exchange offer will expire at 5:00 p.m., New York City time on [21 business days after commencement of offer], or a later date and time to which it may be extended.

Old Notes

    On April 22, 2003, we issued and sold $35,000,000 of 10 3/8% Senior Subordinated Notes due 2012. If you tender your old notes in the exchange offer, interest will cease to accrue when your new notes are issued. If you do not tender your old notes in the exchange offer, your old notes will continue to be subject to the same terms and restrictions except that we will not be required to register your old notes under the Securities Act.

New Notes

    The new notes are identical to the old notes except that the new notes will be registered under the Securities Act. The new notes are expected to trade in the Private Offerings, Resales and Trading through Automatic Linkages Market referred to as the PORTAL Market.

•	Maturity: July 1, 2012.
•	Change of Control: You can require us to purchase all or part of your notes at 101% of the aggregate principal amount plus accrued and unpaid interest, if any, to the date of repurchase.
•	Interest: Paid semi-annually on January 1 and July 1 of each year, beginning on July 1, 2003.
•	Guarantors: Our material domestic subsidiaries.
•	Redemption by us: We may redeem all or part of the notes on or after July 1, 2007. Prior to July 1, 2005, we may redeem up to 35% of the notes from the proceeds of certain sales of our equity securities. Redemption prices are specified in this prospectus under “Description of the Notes — Optional Redemption.”
•	Ranking: The new notes will be senior subordinated unsecured obligations of Technical Olympic USA, Inc. The notes will rank equal in right of payment with our currently outstanding 10?% senior subordinated notes and future unsecured senior subordinated debt, will rank senior in right of payment to all of our existing and future subordinated debt, and will be junior in right of payment to all of our existing and future senior debt, including our 9% senior notes and our revolving credit facility.

      Investment in the notes to be issued in the exchange offer involves risks. See the risk factors section beginning on page 14.

    This prospectus and the accompanying letter of transmittal are first being mailed to holders of outstanding notes on or about                    , 2003.

    Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2003.

Table of Contents

      Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with the resales of new notes received in exchange for old notes where such old notes were acquired by such broker-dealer as a result of market making activities or other trading activities. We have agreed that for a period ending upon the earlier of (1) 180 days after the exchange offer has been completed or (2) the date on which broker-dealers no longer own any new notes, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

Table of Contents

TABLE OF CONTENTS

Table of Contents

PROSPECTUS SUMMARY

      This prospectus summary highlights selected information about us. In addition to reading this summary, you should carefully review the entire prospectus, especially the “Risk Factors” section of this document beginning on page 14. In addition certain statements include forward-looking information which involves risks and uncertainties.

      Unless this prospectus otherwise indicates or the context otherwise requires, the terms “we,” “our,” or “us,” as used in this prospectus refer to Technical Olympic USA, Inc. and its subsidiaries and the term Technical Olympic refers to Technical Olympic, Inc. our majority stockholder.

Overview

      We design, build and market high quality detached single-family residences, town homes and condominiums. We operate in markets characterized by strong population and income growth. Currently, we conduct homebuilding operations in 14 metropolitan markets, located in four major geographic regions: Florida, the Mid-Atlantic, Texas and the West.

      For the twelve months ended December 31, 2002, we delivered 5,085 homes, with an average sales price of $265,000, and generated approximately $1.3 billion in revenues from home sales and $67.0 million in income from continuing operations. For the three months ended March 31, 2003, we delivered 1,234 homes, with an average sales price of $254,000, and generated approximately $313.8 million in revenues from home sales and $17.7 million in income from continuing operations. Our backlog of homes at March 31, 2003 was 2,826 homes under contract, representing $764.0 million in expected revenues.

      We market our homes to a diverse group of homebuyers, including “first-time” homebuyers, “move-up” homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers and homebuyers with grown children who want a smaller home (“empty-nesters”). Our homes are marketed under various brand names, including Engle Homes, Newmark Homes, Fedrick, Harris Estate Homes, Marksman Homes, D.S. Ware Homes, Masonry Homes, Trophy Homes and James Company. As of March 31, 2003, we either owned or had options to acquire 31,651 homesites, and we were actively marketing in 176 communities.

      As part of our objective to provide homebuyers a seamless home purchasing experience, we have developed, and are expanding, our complementary financial services business. As part of this business, we provide mortgage financing and closing services and offer title, homeowners’ and other insurance products. Our mortgage financing operation derives most of its revenues from origination and brokerage fees, as we sell substantially all of our mortgages to third parties. Our mortgage financing services are used primarily by buyers of our homes, although we also offer these services to existing homeowners refinancing their mortgages. By comparison, our closing services and our insurance agency operations are used by our homebuyers as well as a broad range of other clients purchasing or refinancing residential or commercial real estate.

Competitive Strengths

      High Growth Markets. We believe that by focusing our homebuilding operations in high growth markets, we are well positioned to expand our business and maximize our financial returns. We operate in five of the eight fastest growing states in the United States, based on population growth from 1990 to 2000. The average median population growth in the eight states where we operate was 28.1% from 1990 to 2000, as compared to the U.S. average of 13.1%. In addition, each of the states in which we operate has demonstrated a history of solid economic growth. These eight states had an average median income growth of 13.3%, as compared to the U.S. average of 4.0%, from 1989 to 1999. We expect that these growth trends will increase future housing demand in our markets. Additionally, based on our relative position in each of these markets, we believe we have the opportunity to expand our operations.

1

Table of Contents

      Geographic and Customer Diversification. We operate in 14 geographically diverse markets. For the twelve months ended December 31, 2002, none of our metropolitan markets represented more than 18% of our total revenues. Within our markets, we target a diverse customer base including first-time, move-up, relocating, active-adult and empty-nester homebuyer segments. In 2002, we generated 42% of our revenues from home sales from homes in the $200,000 to $300,000 price range, 26% of our revenues from home sales from homes in the $300,000 to $400,000 price range, 16% of our revenues from home sales from homes in the under $200,000 price range, and 16% of our revenues from home sales from homes in the over $400,000 price range. We believe that this diversification protects us from downturns in any one market or price segment and provides us with additional growth opportunities.

      Experienced Management Team. We balance our local expertise and focus with a seasoned and professional senior management team. Our regional and divisional managers have an average of more than 20 years of homebuilding experience in their local markets. As a result, they have developed in-depth market expertise and familiarity with their customers and subcontractors. In addition, as a result of their long-standing relationships with local land sellers and developers, our regional and divisional managers are well-positioned to acquire premium land and homesites. Our senior corporate managers have an average of more than 18 years of experience in the homebuilding business and have a successful track record of delivering strong results in varying homebuilding cycles. The experience and depth of our management team provides us the capability to quickly evaluate and successfully capitalize on market opportunities and adjust to changing national, regional and local business conditions.

      Strong Land Positions and Disciplined Acquisition Strategy. Land is our key raw material and one of our most valuable assets. We believe that by acquiring land and homesites in premier locations, we enhance our competitive standing and reduce our exposure to economic downturns. We believe that homes in premier locations continue to attract homebuyers in both strong and weak economic conditions. We consider that our disciplined acquisition strategy of balancing homesites and land we own and those we can acquire under option contracts provides us access to a substantial supply of quality homesites and land while conserving our invested capital and optimizing our returns. Generally, we acquire only homesites and entitled land suitable for homesite development and residential construction.

      Strong Brand Recognition and Customer Service. We market our homes under various brand names, including Engle Homes, Newmark Homes, Fedrick, Harris Estate Homes, Marksman Homes, D.S. Ware Homes, Masonry Homes, Trophy Homes and James Company. We believe our brands are widely recognized in the markets in which we operate for providing quality homes in desirable locations and enjoy a solid reputation among potential homebuyers. We believe that customer satisfaction enhances our reputation for quality and service and leads to significant repeat and referral business. In our industry, customer satisfaction is based in large part on our ability to respond promptly and courteously to homebuyers before, during and after the sale of our homes. As part of our customer service program, we conduct pre-delivery inspections to promptly address any outstanding construction issues and contract independent third parties to conduct periodic post-delivery evaluations of the customer’s satisfaction with their home, as well as the customer’s experience with our sales personnel, construction department and title and mortgage services.

Business Strategies

      Capitalize on Growth Potential in Our Current Markets. We believe that a significant portion of our future growth will stem from our ability to increase our homes sales and capture additional market share within our current markets. Currently, we conduct homebuilding operations in 14 metropolitan markets, each of which is highly fragmented with numerous smaller homebuilders. Our reputation as a high quality homebuilder combined with our financial resources gives us an advantage over many smaller homebuilders with whom we compete. Based on management estimates, we are positioned as a top-five homebuilder in three of our current markets. Consequently, we have an opportunity to significantly strengthen our market position by expanding our product offerings and increasing the number of our active selling communities. Our current markets have demonstrated solid income and population growth trends. As a result, we expect that strong demand for new housing in our current markets will also contribute to our growth. By

2

Table of Contents

      Implement Performance Improvement and Best Practices Initiatives. As part of our goal of strengthening our financial returns, we continuously monitor and evaluate our systems, practices and procedures in order to improve our operations. We recently adopted a detailed “Performance Improvement Plan” that focuses on techniques to enhance operating efficiencies. We have, and will continue to, implement best practices across our operating divisions and believe that this operating strategy has allowed, and will continue to allow, us to:

	•	implement innovative information systems to, among other things, monitor homebuilding production, scheduling and budgeting and facilitate communication among our divisions with respect to the design and construction of our homes;
	•	reduce the time necessary to complete each stage in the homebuilding process;
	•	effectively manage our inventory of homes;
	•	use our purchasing power to achieve volume discounts and the best possible service from our vendors; and
	•	achieve more favorable pricing of homesite premiums and options.

      Grow Our Financial Services Business. Our financial services operations require minimal capital investment and are highly profitable because of the high margins we obtain from our mortgage financing operation and the high volume of transactions generated from our title insurance and closing services operations. We believe that these financial services complement our homebuilding operations and provide homebuyers a seamless home purchasing experience. For the three months ended March 31, 2003, approximately 53% of our homebuyers utilized the services of our mortgage business, while 80% of our homebuyers used our title and closing services and 25% used our insurance agencies to obtain insurance. We believe that we have an opportunity to grow our financial services business by:

	•	increasing the percentage of our homebuyers who use our financial services;
	•	marketing our financial services more actively to buyers of homes built by other homebuilders, including smaller homebuilders that do not provide their own financial services; and
	•	offering additional services that complement our existing financial services in all our markets.

      Selectively Expand Into New Markets. We intend to supplement our primary growth strategy of expansion in our current markets with a disciplined, financial return oriented approach to entering new markets. We will focus on entering metropolitan areas that have favorable homebuilding characteristics, including availability of strong management with local market expertise as well as solid income and population growth trends, significant single-family home permit activity, a diversified economy and an adequate supply of obtainable homesites. We believe this long-term emphasis on geographic diversification across a range of growing markets with strong fundamentals will enable us to minimize our exposure to adverse economic conditions, seasonality and housing cycles in individual local markets. We will enter new markets through strategic acquisitions of other homebuilders and, to the extent we enter new markets that complement and/or are in close proximity to our current markets, we will utilize our existing management expertise and resources to establish operations.

Recent Developments

      On June 26, 2003, we filed a registration statement relating to the proposed sale by Technical Olympic, our principal stockholder, of 2,000,000 shares of our common stock held by them. The underwriters named in the registration statement have an option to purchase up to an additional 300,000 shares of our common stock from Technical Olympic. We will not receive any proceeds from the sale of common stock by Technical Olympic. Technical Olympic currently owns 90.73% of our common stock and will own approximately 83.56% after consummation of the proposed offering, or 82.48% if the

3

Table of Contents

Principal Executive Offices

      Our executive offices are located at 4000 Hollywood Blvd., Suite 500 North, Hollywood, Florida 33021. Our telephone number is (954) 364-4000. Our Web address is www.tousa.com. We do not intend the information on our Website to constitute part of this prospectus.

4

Table of Contents

The Exchange Offer

5

Table of Contents

		offer, you must do so pursuant to the book-entry transfer facility’s procedures for book entry transfer (or other applicable procedures), contained in this prospectus and the letter of transmittal.
Expiration Date; Withdrawal		The exchange offer will expire at 5:00 p.m., New York City time on [21 business days after commencement of offer] or a later date and time to which it may be extended. However, it may not be extended beyond                     , 2003. We will accept for exchange any and all old notes that are validly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. The tender of old notes may be withdrawn at any time prior to the expiration date. Any old note not accepted for exchange for any reason will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer. The new notes issued in the exchange offer will be delivered promptly following the expiration date.
Guaranteed Delivery Procedures		If you wish to tender your old notes and (1) your old notes are not immediately available or (2) you cannot deliver your old notes together with the letter of transmittal to the exchange agent prior to the expiration date, you may tender your old notes according to the guaranteed delivery procedures contained in the letter of transmittal.
Tax Considerations		For U.S. federal income tax purposes, the exchange of old notes for new notes should not be considered a sale or exchange or otherwise a taxable event to the holders of notes.
Use of Proceeds		We will not receive any proceeds from the exchange offer.
Appraisal Rights		Holders of old notes will not have dissenters’ rights or appraisal rights in connection with the exchange offer.
Exchange Agent		Wells Fargo Bank Minnesota, National Association is serving as exchange agent in connection with the exchange offer for the notes.
Resales of new notes		Based on an interpretation by the Commission set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer new notes issued in the exchange offer in exchange for old notes without restrictions under the federal securities laws. However, there are exceptions to this general statement.
		You may not freely transfer the new notes if:
		• you are an affiliate of ours;
		• you did not acquire the new notes in the ordinary course of your business;
		• you intend to participate in the exchange offer for the purpose of distributing new notes; or
		• you are a broker-dealer who acquired the old notes directly from us.

6

Table of Contents

Summary Description of the New Notes

      The terms of the new notes and the old notes are identical in all respects, except that the terms of the new notes do not include the transfer restrictions and registration rights relating to the old notes.

7

Table of Contents

8

Table of Contents

9

Table of Contents

10

Table of Contents

		outstanding, including the June 2002 Senior Subordinated Notes, may declare all of the notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an event of default arising from the bankruptcy provisions, all outstanding notes will become due and payable without further action or notice. Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power.
		The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing default or event of default and its consequences under the indenture except a continuing default or event of default in the payment of interest on, or the principal of, the notes.
No Prior Market		The new notes will be new securities for which there is currently no market. Although the initial purchaser has informed us of its intention to make a market in the new notes, it is not obligated to do so and it may discontinue any market-making at any time without notice. Accordingly we cannot assure you as to the development or liquidity of any market for the new notes.
Trustee		Wells Fargo Bank Minnesota, National Association

      For additional information concerning the notes, see “Description of the Notes.”

11

Table of Contents

SUMMARY FINANCIAL AND OPERATING DATA

      The following table sets forth our summary financial and operating data. The summary financial data in the table for the three years ended December 31, 2002 have been derived from our audited consolidated financial statements. The summary financial data in the table for the three month periods ended March 31, 2002 and 2003 have been derived from unaudited financial statements. The unaudited financial statements include all adjustments, consisting of normal recurring accruals, which we consider necessary for a fair presentation of the financial position and the results of operations for these periods. Operating results for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2003. The data should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein.

12

Table of Contents

(1)	On June 25, 2002, we completed the merger with Engle Holdings, Inc. As both entities were under the common control of Technical Olympic, the merger was accounted for as a reorganization of entities under common control. In accordance with Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations,” we recognized the acquired assets and liabilities of Engle Holdings at their historical carrying amounts. As both entities came under common control of Technical Olympic on November 22, 2000, our financial statements and other operating data have been restated to include the operations of Engle Holdings from November 22, 2000. See note 1 to our consolidated financial statements included elsewhere in this prospectus.
(2)	On April 15, 2002, we completed the sale of Westbrooke Acquisition Corp., formerly one of our Florida homebuilding subsidiaries. In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the results of Westbrooke’s operations have been classified as discontinued operations, and prior periods have been restated. See note 8 to our consolidated financial statements included elsewhere in this prospectus.
(3)	Cash dividends per share have been restated to reflect the total shares outstanding as a result of the merger with Engle Holdings.
(4)	For purposes of computing the ratio of earnings to fixed charges, earnings represents the sum of income from continuing operating before income taxes and before adjustments for minority interests in consolidated subsidiaries and income or loss from equity investments, distributed income from equity investments, interest amortized in cost of sale, amortization of deferred finance costs, interest expense and the portion of rent expense deemed to represent interest. Fixed charges include interest incurred, whether expensed or capitalized, including amortization of deferred finance costs and the portion of rent expense deemed to represent interest.
(5)	Total borrowings includes Homebuilding borrowings and Financial Services borrowings.

13

Table of Contents

RISK FACTORS

      Holders of old notes should carefully consider the following factors and all other information set forth in this prospectus before tendering their old notes in the exchange offer.

Risks Related to Our Business

      We currently have a significant amount of debt, and our ability to meet our debt service obligations will depend on our future performance. Numerous factors outside of our control, including changes in economic or other business conditions generally or in the markets or industry in which we do business, may adversely affect our operating results and cash flows, which in turn may affect our ability to meet our debt service obligations. As of March 31, 2003, on a consolidated basis, we had approximately $540.2 million aggregate principal amount of debt outstanding (including our revolving credit facility, our senior notes, our June 2002 Senior Subordinated Notes, our warehouse line of credit and our other credit facilities, but excluding consolidated land bank obligations of $12.9 million) and would have had approximately $546.2 million, as adjusted for the offering of the old notes and application of the net proceeds. At March 31, 2003, as adjusted for the offering of the old notes and the application of the net proceeds, and the amendment of our revolving credit facility, we would have had the ability to borrow an additional $221.1 million under our revolving credit facility and $30.4 million under our warehouse line of credit, subject to our satisfying the relevant borrowing conditions in those facilities. In addition, subject to restrictions in our financing documents, we may incur additional debt.

      If we are unable to meet our debt service obligations, we may need to restructure or refinance our debt, seek additional equity financing or sell assets. We may be unable to restructure or refinance our debt, obtain additional equity financing or sell assets on satisfactory terms or at all.

      The indentures governing our outstanding notes and our revolving credit facility impose significant operating and financial restrictions on us. These restrictions limit our ability to, among other things:

	•	incur additional debt;
	•	pay dividends or make other restricted payments;
	•	create or permit certain liens, other than customary and ordinary liens;
	•	sell assets other than in the ordinary course of our business;
	•	create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;
	•	engage in transactions with affiliates; and
	•	consolidate or merge with or into other companies or sell all or substantially all of our assets.

      These restrictions could limit our ability to finance our future operations or capital needs, make acquisitions or pursue available business opportunities. In addition, our revolving credit facility requires us to maintain specified financial ratios and satisfy certain financial covenants, the indentures governing our outstanding notes require us to maintain a specified minimum consolidated net worth, and our warehouse line of credit requires us to maintain the collateral value of our borrowing base. We may be required to take action to reduce our debt or to act in a manner contrary to our business objectives to meet these ratios and satisfy these covenants. A breach of any of the covenants in, or our inability to maintain the required financial ratios under, our revolving credit facility and warehouse line of credit would prevent us

14

Table of Contents

      Although we operate in 14 major metropolitan markets, our operations are concentrated in the southwestern and southeastern United States. Adverse economic or other business conditions in these regions or in the particular markets in which we operate, all of which are outside of our control, could have an adverse effect on our revenues and earnings.

      We have experienced an increase in competition for available land and developed homesites in some of our markets as a result of the strength of the economy in many of these markets over the past few years and the availability of more capital to major homebuilders. Our ability to continue our development activities over the long-term depends upon our ability to locate and acquire suitable parcels of land or developed homesites to support our homebuilding operations. As competition for land increases, the cost of acquiring it may rise, and the availability of suitable parcels at acceptable prices may decline. If we are unable to acquire suitable land or developed homesites at reasonable prices, it could limit our ability to develop new projects or result in increased land costs that we may not be able to pass through to our customers. Consequently, it could reduce our earnings and profit margins.

      A principal component of our strategy is to continue to grow profitably in a controlled manner, including, where appropriate, by acquiring other property developers or homebuilders. We may not be successful in implementing our acquisition strategy, and growth may not continue at historical levels or at all. We completed the merger with Engle Homes on June 25, 2002, we acquired the assets of D.S. Ware Homes and Masonry Homes in the fourth quarter of 2002, and we acquired the assets of Trophy Homes and The James Construction Company in the first quarter of 2003. The failure to identify or complete business acquisitions, or successfully integrate the businesses we acquire, could adversely affect our results of operations and future growth. Specifically, any delays or difficulties in converting our various information systems or implementing our internal policies and procedures could increase costs and otherwise affect our results of operations. Even if we overcome these challenges and risks, we may not realize the expected benefits of our acquisitions.

      Our operations require significant amounts of cash. If our business does not achieve the levels of profitability or generate the amount of cash that we anticipate or if we expand through acquisitions or organic growth faster than anticipated, we may need to seek additional debt or equity financing to operate and expand our business. If we are unable to obtain sufficient financing to fund our operations or expansion, it could adversely affect our results of operations and future growth. We may be unable to obtain additional financing on satisfactory terms or at all. If we raise additional funds through the incurrence of debt, we will incur increased debt service costs and may become subject to additional restrictive financial and other covenants.

15

Table of Contents

      Technical Olympic currently owns 90.73% of the voting power of our common stock and will own approximately 83.56% after the proposed offering of our common stock by Technical Olympic (82.48% if the underwriters’ over-allotment option is exercised in full). As a result, Technical Olympic has the ability to control the outcome of virtually all corporate actions requiring stockholder approval, including the election of a majority of our directors, the approval of any merger and other significant corporate actions. Technical Olympic may authorize actions or have interests that could conflict with your interests.

Risks Related to Our Industry

      The homebuilding industry historically has been cyclical and is affected significantly by adverse changes in general and local economic conditions, such as:

	•	employment levels;
	•	population growth;
	•	consumer confidence and stability of income levels;
	•	availability of financing for land and homesite acquisitions, construction and permanent mortgages;
	•	interest rates;
	•	inventory levels of both new and existing homes;
	•	supply of rental properties; and
	•	conditions in the housing resale market.

      Adverse changes in one or more of these conditions, all of which are outside of our control, could reduce demand and/or prices for new homes in some or all of the markets in which we operate. A decline in demand or the prices we can obtain for our homes could decrease our revenues.

      As a homebuilder, we must constantly locate and acquire new tracts of land for development and developed homesites to support our homebuilding operations. There is a lag between the time we acquire land for development or developed homesites and the time that we can bring the communities to market and sell homes. Lag time varies on a project-by-project basis; however, historically, we have experienced a lag time of approximately 9 to 12 months. As a result, we face the risk that demand for housing may decline during this period and that we will not be able to dispose of developed properties or undeveloped land or homesites acquired for development at expected prices or within anticipated time frames or at all. The market value of home inventories, undeveloped land and developed homesites can fluctuate significantly because of changing market conditions. In addition, inventory carrying costs (including interest on funds used to acquire land or build homes) can be significant and can adversely affect our performance. Because of these factors, we may be forced to sell homes or other property at a loss or for prices that generate lower profit margins than we anticipate. We may also be required to make material write-downs of the book value of our real estate assets in accordance with generally accepted accounting principles if values decline.

16

Table of Contents

      The homebuilding industry from time to time has experienced significant difficulties with respect to:

	•	shortages of qualified trades people and other labor;
	•	inadequately capitalized local subcontractors;
	•	shortages of materials; and
	•	volatile increases in the cost of certain materials, including lumber, framing and cement, which are significant components of home construction costs.

      These difficulties can, and often do, cause unexpected short-term increases in construction costs and cause construction delays. In addition, to the extent our subcontractors incur increased costs associated with recent increases in insurance premiums and compliance with state and local regulations, these costs are passed on to us as homebuilders. We are generally unable to pass on any unexpected increases in construction costs to those customers who have already entered into sales contracts, as those contracts generally fix the price of the house at the time the contract is signed, which may be up to one year in advance of the delivery of the home. Furthermore, sustained increases in construction costs may, over time, erode our profit margins. We have historically been able to offset sustained increases in the costs of materials with increases in the prices of our homes and through operating efficiencies. However, in the future, pricing competition may restrict our ability to pass on any additional costs, and we may not be able to achieve sufficient operating efficiencies to maintain our current profit margins.

      Almost all of our customers finance their purchases through mortgage financing obtained from us or other sources. Increases in interest rates or decreases in the availability of Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Housing Administration or Veteran’s Association mortgage financing could cause a decline in the market for new homes as potential homebuyers may not be able to obtain affordable financing. Increased interest rates can also limit our ability to realize our backlog because our sales contracts typically provide our customers with a financing contingency. Financing contingencies allow customers to cancel their home purchase contracts in the event they cannot arrange for financing at interest rates that were prevailing when they signed their contracts. In particular, because the availability of mortgage financing is an important factor in marketing many of our homes, any limitations or restrictions on the availability of those types of financing could reduce our home sales and the lending volume at our mortgage subsidiary. Even if our potential customers do not need financing, changes in interest rates and mortgage availability could make it harder for them to sell their existing homes to potential buyers who need financing. Interest rates currently are at one of their lowest levels in decades, and any future increases in interest rates could adversely affect our revenues and profitability.

      The homebuilding industry is highly competitive and fragmented. We compete in each of our markets with numerous national, regional and local builders. Some of these builders have greater financial resources, more experience, more established market positions and better opportunities for land and homesite acquisitions than we do and have lower costs of capital, labor and material than us. Builders of

17

Table of Contents

	•	increase our costs and reduce our revenues;
	•	make it difficult for us to acquire suitable land or homesites at acceptable prices;
	•	require us to increase selling commissions and other incentives;
	•	result in delays in construction if we experience a delay in procuring materials or hiring laborers; and
	•	result in lower sales volumes.

      We also compete with resales of existing homes, available rental housing and, to a lesser extent, condominium resales. An oversupply of attractively priced resale or rental homes in the markets in which we operate could adversely affect our ability to sell homes profitably.

      Our financial services operations are also subject to competition from third-party providers, many of which are substantially larger, may have a lower cost of funds or overhead than we do, and may focus exclusively on providing such services.

      As a homebuilder, we are subject in the ordinary course of our business to product liability and home warranty claims. We provide our homebuyers with a one-year or two-year limited warranty covering workmanship and materials and an eight-year or ten-year limited warranty covering major structural defects. Claims arising under these warranties and general product liability claims are common in the homebuilding industry and can be costly. Although we maintain product liability insurance, the coverage offered by, and availability of, product liability insurance for construction defects is currently limited and, where coverage is available, it may be costly. We recently obtained a homebuilder protective policy which covers warranty claims for structure and design defects related to homes sold by us during the policy period, subject to a retention amount. However, our product liability insurance and homebuilder protective policies contain limitations with respect to coverage, and there can be no assurance that these insurance rights will be adequate to cover all product liability and warranty claims for which we may be liable or that coverage will not be further restricted and become more costly. In addition, although we generally seek to require our subcontractors and design professionals to indemnify us for liabilities arising from their work, we may be unable to enforce any such contractual indemnities. Uninsured and unindemnified product liability and warranty claims, as well as the cost of product liability insurance and our homebuilder protective policy, could adversely affect our results of operations.

      Recently, lawsuits have been filed against homebuilders and insurers asserting claims of property damages and personal injury caused by the presence of mold in residential dwellings. Some of these lawsuits have resulted in substantial monetary judgments or settlements. It is possible that insurance carriers may exclude coverage for claims arising from the presence of mold. Uninsured mold liability and claims could adversely affect our results of operations.

      Several states, cities and counties in which we operate have approved, and others in which we operate may approve, various “slow growth” or “no growth” initiatives and other ballot measures that could negatively impact the availability of land and building opportunities within those localities. Approval of slow or no growth measures would reduce our ability to build and sell homes in the affected markets and

18

Table of Contents

      We are subject to extensive and complex laws and regulations that affect the land development and homebuilding process, including laws and regulations related to zoning, permitted land uses, levels of density, building design, elevation of properties, water and waste disposal and use of open spaces. In addition, we and our subcontractors are subject to laws and regulations relating to workers health and safety. We also are subject to a variety of local, state and federal laws and regulations concerning the protection of health and the environment. In some of the markets in which we operate, we are required to pay environmental impact fees, use energy saving construction materials and give commitments to provide certain infrastructure such as roads and sewage systems. We must also obtain permits and approvals from local authorities to complete residential development or home construction. The laws and regulations under which we and our subcontractors operate, and our and their obligations to comply with them, may result in delays in construction and development, cause us to incur substantial compliance and other increased costs, and prohibit or severely restrict development and homebuilding activity in certain areas in which we operate.

      Our financial services operations are subject to numerous federal, state and local laws and regulations. Failure to comply with these requirements can lead to administrative enforcement actions, the loss of required licenses and claims for monetary damages.

      Homebuilders are particularly subject to natural disasters and severe weather conditions as it can delay our ability to timely complete homes, damage the partially complete or other unsold homes that are in our inventory and/or negatively impact the demand for homes. Our operations are located in many areas that are especially subject to natural disasters. To the extent that hurricanes, severe storms, floods, tornadoes or other natural disasters or similar weather events occur, our business may be adversely affected. To the extent our insurance is not adequate to cover business interruption or losses resulting from these events, our revenues and profitability may be adversely affected.

Risks Related to the Notes

      If a change of control occurs, we will be required, subject to certain conditions, to offer to purchase all outstanding notes plus all of our other outstanding senior and senior subordinated notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase.

      In addition, if our consolidated net worth falls below $150.0 million for any two consecutive fiscal quarters, we are required to make an offer to purchase at least 10% of the aggregate principal amount of these notes, the June 2002 Senior Subordinated Notes and the senior notes we offered in June 2002 and February 2003 (we refer to these as the Senior Notes) then outstanding at a price equal to 100% of the principal amount, together with accrued and unpaid interest, if any, to the date of purchase. As of March 31, 2003, on a consolidated basis, our net worth was $963.2 million.

      As of March 31, 2003, we did not have sufficient funds available to purchase all of our outstanding notes were they to be tendered in response to an offer made as a result of a change of control. In addition, we may not have sufficient funds available, from time to time, to fund a net worth offer. The source of funds for any purchase of these notes in either event will be our available cash or cash generated from our operations or other sources, including borrowings, sales of assets or sales of equity. If we do not have

19

Table of Contents

      Our failure to purchase, or give notice of purchase of, the notes would be a default under the indenture for the notes, which would in turn be a default under our credit facility. In addition, a change of control will constitute an event of default under our credit facility. A default under our credit facility would result in an event of default under the indenture for the notes if the lenders were to accelerate the debt under the credit facility. Furthermore, if the holders of the notes exercise their right to require us to repurchase notes in either event, the financial effect of this repurchase could cause a default under our other debt, even if the event itself would not cause a default.

      Payment on the notes will be subordinated in right of payment to all of our senior debt, including our revolving credit facility and the Senior Notes. Payment on the guarantee of each guarantor of the notes will be subordinated in right of payment to that guarantor’s senior debt, including its guarantee of our revolving credit facility and the Senior Notes. Upon any distribution to our creditors or the creditors of the guarantors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or the guarantors or our or their property, the holders of senior debt will be entitled to be paid in full in cash before any payment may be made on the notes or the guarantees thereof, as the case may be. In these cases, we or a guarantor, as the case may be, may not have sufficient funds to pay all of our or its creditors and holders of the notes may receive less, ratably, than the holders of senior debt, including our revolving credit facility and the Senior Notes, and due to the turnover provisions in the notes indenture, less ratably than the holders of unsubordinated obligations, including trade payables. In addition, all payments on the notes and the related guarantees will be blocked in the event of a payment default on any senior debt and may be blocked for up to 179 consecutive days in the event of certain non-payment defaults on designated senior debt.

      As of March 31, 2003, as adjusted for the offering of the old notes and the application of the net proceeds, the notes would have been junior in right of payment to $355.4 million of senior debt. As of March 31, 2003, as adjusted for the offering of the old notes and the application of the net proceeds, the related guarantees of all the guarantors, other than Preferred Home Mortgage Company and Pacific United LP, would have been junior in right of payment to $316.0 million of senior debt; the guarantee of Preferred Home Mortgage Company would have been junior in right of payment to $350.6 million of senior debt; and the guarantee of Pacific United LP would have been junior in right of payment to $320.8 million of senior debt. As of March 31, 2003, as adjusted for the offering of the old notes and the application of the net proceeds, and the amendment of our revolving credit facility, we could have incurred up to $251.5 million of additional senior debt, which would be senior in right of payment to the notes.

      The notes are effectively subordinated to claims of our secured creditors and the guarantees of each guarantor are effectively subordinated to the claims of the existing and future secured creditors of that guarantor. Our revolving credit facility, our warehouse line of credit and certain of our development loans are secured obligations. At March 31, 2003, we had approximately $89.4 million aggregate principal amount of secured debt outstanding. At March 31, 2003, as adjusted for the offering of the old notes and the application of the net proceeds, and the amendment of our revolving credit facility, we would have had

20

Table of Contents

      Substantially all of our operations are conducted through our subsidiaries. Therefore, our ability to service our debt, including the notes, is dependent upon the cash flows of those subsidiaries and, to the extent they are not guarantors, their ability to distribute those cash flows as dividends, loans or other payments to the entities which are obligors under the notes and the guarantees. If their ability to make these distributions were restricted, by law or otherwise, then we would not be able to use the earnings of the non-guarantor subsidiaries to make payments on the notes. In addition, our subsidiaries that are not guarantors may have liabilities, including trade payables and contingent liabilities, that may be significant. Our rights as an equity holder of those subsidiaries to receive any of their assets, upon a liquidation or reorganization, and therefore the right of the holders of the notes to participant in those assets, effectively will be subordinated to the claims of those subsidiaries’ creditors, including trade creditors, if any.

      Although the notes are our obligations, they are unconditionally guaranteed on a senior subordinated unsecured basis by all of our material domestic subsidiaries. The performance by each guarantor of its obligations with respect to its guarantee may be subject to review under relevant federal and state fraudulent conveyance and similar statutes in a bankruptcy or reorganization case or lawsuit by or on behalf of unpaid creditors of such guarantor. Under these statutes, if a court were to find under relevant federal or state fraudulent conveyance statutes that a guarantor did not receive fair consideration or reasonably equivalent value for incurring its guarantee of the notes, and that, at the time of such incurrence, the guarantor:

	•	was insolvent;
	•	was rendered insolvent by reason of such incurrence or grant;
	•	was engaged in a business or transaction for which the assets remaining with such guarantor constituted unreasonably small capital; or
	•	intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured;

then the court, subject to applicable statutes of limitation, could void the guarantors obligations under its guarantee, recover payments made under the guarantee, subordinate the guarantee to other indebtedness of the guarantor or take other action detrimental to the holders of the notes.

      A court could also avoid an incurrence of indebtedness, including the guarantees, if it determined that such transaction was made with the intent to hinder, delay or defraud creditors. In addition, a court could subordinate the indebtedness, including the guarantees, to the claims of all existing and future creditors on similar grounds. The guarantees could also be subject to the claim that, since the guarantees were incurred for our benefit (and only indirectly for the benefit of the subsidiary guarantors), the obligations of the guarantors under the guarantees were incurred for less than reasonably equivalent value or fair consideration.

21

Table of Contents

      There is no established trading market for the notes, and neither the old notes nor the new notes will be listed on any securities exchange or quoted on any automated dealer quotation system. We expect the notes to be eligible for trading in the PORTAL Market.

      The initial purchaser has indicated to us that it intends to make a market in the old notes and the new notes, but it is not obliged to do so. The initial purchaser may discontinue any market making in the old notes or the new notes at anytime in its sole discretion. Accordingly, we cannot ensure that a liquid market will develop for any, of the old notes or the new notes, that you will be able to sell your old notes or the new notes at a particular time or that the prices that you receive when you sell will be favorable. Future trading prices of the old notes or the new notes will depend on many factors, including, our operating performance and financial condition, our ability to complete the offer to exchange the old notes for new notes, prevailing interest rates and the market for similar securities. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. Any such disruptions may adversely affect the ability of holders of notes to dispose of them for a profit or at all.

22

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus contains “forward-looking statements.” Discussions containing forward-looking statements may be found in the material set forth in the sections entitled “Summary,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

      These statements concern expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this prospectus contains forward-looking statements regarding:

	•	our expectations regarding growth opportunities in the homebuilding industry and our ability to successfully take advantage of such opportunities to expand our operations and maximize our financial returns;
	•	our expectations regarding population growth and median income growth trends and their impact on future housing demand in our markets;
	•	our expectation regarding the impact of geographic and customer diversification;
	•	our expectations that strong demand for new housing in our current markets will contribute to our growth;
	•	our belief that by leveraging our current operations, we will, over time, maximize our financial returns, strengthen our margins and increase our revenues and profitability;
	•	our ability to successfully integrate our current operations and any future acquisitions, and to recognize anticipated operating efficiencies, cost savings and revenue increases;
	•	our expectations regarding our land and homesite acquisition strategy and its impact on our business;
	•	our belief that homes in premier locations will continue to attract homebuyers in both strong and weak economic conditions;
	•	our intention to grow the financial services business;
	•	our belief regarding growth opportunities within our financial services business;
	•	our expectations regarding the impact of our business initiatives on our ability to capture repeat business, to minimize our exposure to adverse economic conditions and to increase our revenue;
	•	our expectations regarding the implementation of the Performance Improvement Plan and best practices initiatives across our operating divisions;
	•	our belief that we have adequate financial resources to meet our current and anticipated working capital and land and homesite acquisition and development needs;
	•	our expectation that we will continue to incur significant professional and other fees only through the third quarter of 2003;
	•	the impact of inflation on our future results of operations; and
	•	our ability to pass through to our customers any increases in our costs in the form of increased sales prices.

      These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual

23

Table of Contents

	•	our significant level of debt and the impact of the restrictions imposed on us by the terms of this debt;
	•	our ability to borrow or otherwise finance our business in the future;
	•	our ability to identify and acquire, at anticipated prices, additional homebuilding opportunities;
	•	our ability to successfully integrate and to realize the expected benefits of recent acquisitions;
	•	economic or other business conditions that affect the desire or ability of our customers to purchase new homes in markets in which we conduct our business;
	•	a decline in the demand for, or the prices of, housing;
	•	a decline in the value of the land and home inventories we maintain;
	•	an increase in the cost of, or shortages in the availability of, skilled labor or construction materials;
	•	an increase in interest rates;
	•	our ability to successfully dispose of developed properties or undeveloped land or homesites at expected prices and within anticipated time frames;
	•	our ability to compete in our existing and future markets; and
	•	an increase or change in governmental regulations.

      We urge you to review carefully the section entitled “Risk Factors” in this prospectus for a more complete discussion of the risks related to our business and industry.

24

Table of Contents

USE OF PROCEEDS

      We will not receive any proceeds from the issuance of the new notes offered in the exchange offer. In consideration for issuing the new notes, we will receive in exchange old notes in like principal amount the terms of which are identical in all respects to the new notes except for the transfer restrictions and registration rights. The old notes surrendered in exchange for new notes will be retired and cancelled and cannot be reissued. Accordingly, issuance of the new notes will not result in any increase in our indebtedness.

      The net proceeds from the sale of the old notes was approximately $34.5 million, after deducting the underwriting discount and the offering expenses payable by us. We used the net proceeds to repay $34.5 million of the $65.0 million of outstanding debt under our revolving credit facility on the date we issued the old notes. At March 31, 2003, the weighted average interest rate on the loans outstanding under our revolving credit facility was 5.5% per annum. The loans were scheduled to mature on June 25, 2005. Amounts borrowed under our revolving credit facility were used to acquire Trophy Homes and The James Construction Company, to fund land acquisitions and for general corporate purposes.

25

Table of Contents

CAPITALIZATION

      The following table sets forth our consolidated capitalization as of March 31, 2003 on a historical basis and as adjusted for the sale of the old notes and the application of the net proceeds. You should read this table in conjunction with “Selected Financial Data” included elsewhere in this prospectus and our consolidated financial statements and the related notes included elsewhere in this prospectus.

(1)	Represents deposits held in escrow by our title subsidiaries pursuant to purchase contracts or as required by law and compensating balances under letters of credit.
(2)	As of July 14, 2003, we had approximately $65.0 million outstanding under the revolving credit facility.
(3)	Represents primarily construction and homesite loans from financial institutions.
(4)	Represents a warehouse line of credit used to provide financing for the origination of mortgage loans.

26

Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION

      The following table sets forth our selected financial data and other operating information. The selected financial data in the table for the five years ended December 31, 2002 have been derived from our audited consolidated financial statements. The selected financial data in the table for the three month periods ended March 31, 2002 and 2003 have been derived from unaudited financial statements. The unaudited financial statements include all adjustments, consisting of normal recurring accruals, which we consider necessary for a fair presentation of the financial position and the results of operations for these periods. Operating results for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2003. The data should be read in conjunction with the consolidated financial statements, related notes, and other financial information included herein.