Horizon Corporation

Text (OCR of the scan at left; may contain errors)

DECISION, IN THE MATTER OF HORIZON CORPORATION;. DOCKET NO. 9017 Note: These modifications are in addition to those noted in the Commission s opinion.

Pale Line Addition or Deletion 493 Add footnote "None of the findings of fact 1 to 23 applies to the time period after October 10 1978 unless otherwise indicated herein.

493 22 Change to read: "Horizon as of the date the record in this proceeding closed and for some time past had been engaged.

495 Delete: "the balance has been or will become available for sale" and insert: "it is uncertain whether all or any part of the balance will become available for sale to consumers.

502 Insert footnote to read: "'fila maps " Footnote placed at bottom of page 502 should read: ,, A TEA map depicted an entire property and the surrounding area and included certain information relating thereto.

504 Change period to comma at the end of the sentence and add the following phrase: "but were challenged primarily on the grounds that they contained deceptive and misleading statements and representations. 504 Delete the word "requirements and place in lieu thereof the word guidelines.

504 Delete the sentence beginning, "The evidence of record" and add the following sentence in lieu thereof: OILSR never brought any proceeding seeking to enforce those guidelines against Horizon.

505 Delete the words "recent years" and insert in lieu thereof 1973 and 1974"

506 Delete the phrase " and early 70' 1",,, 1"1"' '1"" iI,. .11".",,,,\1' ild". II". " .Ii, II' I L I,.. , 1""lL""''': . IILd ",1" 1""", 1". 11,,,, 111""' \1 -"" L,,. Opinion 97 F.

fiQ? Berore the sentence beginning "Invitations. ." insert this sentence: "This sales method was deemphasized and ultimately terminated in the early 70' 507 & 508 39-41 & I Delete this sentence and citations thereto: "While. 1654.3-44). ..

508 18-20 Delete this sentence beginning: Jing Jo Yu closing rooms (Tr. 635a 60).

508 After " 16480" insert from lines 20-22: " ; see testimony of Elsie Colon. ." plus citations thereto 512 5 & 6 Delete "that permeated"

512 Insert " " after "theme 512 Delete "promise" and insert "representation " in lieu thereof 512 Delete "constant"

512 After "Tr. 1918" insert " ; see also Tr. 1922 23" 512 30- Delete these lines 513 I & 2 Delete these lines 515 Change "tract" to "track" 517 Insert " in late 1969" between the words "used" and 518 Chang-e "would" to "could" 521 Insert "in the late 1960's and early 1970' " between presentations" and " used"

523 Delete "numerous" and insert "some " in lieu thereof 524 13 & 14 Delete both of these lines and insert in lieu thereof: One sales representative testified that he was given the following party close for use at the conclusion of the dinner talk:

524 38-0 Delete "These. . investment." and insert " (CX 505- 15)" after "properties " on line 38.

525 Insert "some of' between the words " " and "IIorizoo 525 Delete the words "Land is" and insert in lieu thereof These salesmen 525 Insert " land" between "represented" and " 525 Insert "by them" between "represented" and " 526 Insert " During the late 1960's and early 1970's many before "sales 527 Insert "some" between "which" and "sales 464 Opinion 527 Delete the " on "representatives 527 Delete the last " " in "representatives 527 Delete "Horizon s internal surveys of its sales offices revealed" and add "There were" in lieu thereof 528 Delete the sentences beginning "One sales representative taid prospects. There were no figures. (Tr. 59701."' 528 Add " " to make "value" plural 528 23- Delete "was to raise the inference" and insert in lieu thereof "inferred"

528 Add new sentence: " The Fila charts were deemphasized in 1972 and eliminated in 1974.

528 Delete "Horizon s internal survey of its sales offices revealed" and add "There were" in lieu thereof 529 Delete the word "entire 530 Delete the word "greatly 530 Delete the word "grossly 531 Delete the word "percenta " and insert in lieu thereof range 531 Delete the word "would" and insert in lieu thereof might"

531 Delete "would assure and insert II lieu thereof should lead to 531 20 Insert "some" before the word "sales 531 20 & 21 Insert the word "approximate" between "the" and time 5:n 22- Delete five lines beginning "Bruce representatives:

531 Insert after sentence ending on line 22: "These representatives did not present:

531 Change "The" to the lower case "the 531 Delete "is not presented to the customer 531 Delete "But"

531 Begin sentence: "Rather 531 Delete "it is" and insert "they" in lieu thereof 531 Insert "development" after "with" 531 Delete "assured"

868 FEmcRAL TRADE COMMISSION DECISIONS Opinion 531 Change "the " to "them, add period after "them" and delete "representative (CX 9291'), 531 Add an " " to "reveal" and delete " beyond any doubt" 531 Insert "Some" before "Training 532 Begin paragraph with: "During 1970-1971 such instructions or directions were included in the training manuals. In addition to the written instructions, there were oral restrictions and limitations given to sales representatives. Such instructions did not eliminate the investment misrepresentations.

532 Change "would" to "could" 532 :34 Delete the word "thereafter" and insert "1971" in lieu thereof 534 Correct the misspelling of "antedates 538 23- Delete the whole paragraph and insert in its place: Some sales representatives used the 'Principles' in their presentations. Other representatives did not use them. They often were not read or understood by customers, 540 Delete the word "clearly 540 Insert the word "some" between the words " that" and sales 543 Delete whole paragraph 543 & 544 39- Delete line i 39-41 and 1- 544 Delete the words "very very 544 Delete the words "verv much" 545 33- Delete the line: "Horizon s 'self-evaluative' documents which report on surv€'ys of sales offices which Horizon undertook bqinning in 1973, revealed that" 545 Begin paragraph with "Representations. 545 Delete the word " routinely 545 37 & 38 Delete the sentence: "These representations are set out in detail in findings 91-100, see especially CX 9271. 545 40 & 41 Delete: "These internal survey reports reveal that" 545 37 & 38 Insert and place in parentheses citations after "mentioned", line 37 545 Insert the word "some" before the word "older 546 Delete: "Findings 91- 100; see especially 546 Insert hyphen in "cx 927G- 464 Opinion 516 Add the sentcnce: "Som sales representatives used time periods as shor( as three to five years before the land could be resajd at a profit. The shortest time periods were for lots close to the development areas (CX 927L-M).

546 Delete: "The survey documents reveal that it was routine 546 Insert: "Another before "practice" and was after practice 546 Delete the word "much" 546 Delete "(Findings 91-100; especially 546 Delete the whole paragraph 546 30 & 31 Delete: "Horizon s internal surveys of its sales offces revealed that"

546 Capitalize "The 546 Delete "serious 546 Delete "(Finding 93; see especially 546 34- Delete the whole paragraph 546 Insert the sentence: Some, but not all, of these customers did rccei ve refunds " after "misrepresentations 546 38" Delete lines 38-2 beginning with "On April 12, 1972" 547 Delete these Jines 547 Insert "some" after "that" 548 2:! Change "would" to "could" 548 Insert the sentence: "Other Waterwood customers purchased on the basis of profit and development potential in periods up to ten years (CX 930 C, G 932F):' 549 Change "would" to "could" 549 Delete "and utilities would be provided" 552 30- Delete last full paragraph at bottom of page 554 Delete these lines 555 Add the sentence: "A limited resale program was instituted in Horizon City in 1975 for deeded lots and in Waterwood in 1976 for deeded and undeeded lots, :

Opinion 97 F.

556 Delete " D. Oliver and A.R Oliver were informed by the Horizon sales representative that the Waterwood lots that they purchased would be resold by the sales representative or by Horizon. ('1r. 976-78 , l037- 1090-911."' 557 Add, within the parenthetical citation: "; see also, ex 951G, ll)"

557 Insert after "Tr. 4902" ; see also ex 927N)." 557 Delete these lines 558 Delete text beginning "Mr. Gothard. 559 Delete text beginning "by Bruce Lehmann " to "(Tr. 6100).

560 Delete " 82)" and insert " 86, 16288). 560 Delete this paragraph 560 16-20 Delete these lines, but keep sentence beginning "Evelyn Tracy.

560 Delete: " Horizon s internal surveys of its sales offices found" and insert " " in lieu thereof, before "several" 560 Delete the word "where 560 Deletc the word "outright" 560 Insert "; see also 'fr. 16673, 16691-696 , 16676, 16679" after "950E, G"

560 Add sentence: "Customers believed that Horizon price for its land reflected a fair local real estate market price fof which they might resell their land (eX 946H)."' 562 Add after the last sentence: " Statements approved by the company were not considered a basis for refunds 564 21 & 22 Delete "apparently as late as 1977" and add citations in line 22 to citations in line 21 564 After "Commission " insert " investigation began 564 Delete " complaint herein issued" 567 Insert "some " in lieu of "Horizon s internal surveys of its sales offices found evidence that 567 Add ", CX 951G, H" after "Tr. 16478-()" 567 Insert "some" before "customers 567 Insert "some" before "customers 568 Add the word " not" between the words " that" and aU" and delete the word "not" between "were" and staked.

464 Opinion 568 After the word " , insert the wotd "scheduled" and delete the word "controlled"

568 Add " " to "tour" and delete the word "schedules 573 29- Delete these lines 573 33-35 Delete these Jines 575 13-17 Delete these Jines 575 Insert the sentence: It was the customer s choice to visit by jeep or by airplane" before the sentence beginning "This sale.

577 End paragraph by inserting sentence: "She did not receive a refund because the sales representative did not believe that a misrepresentation had been made. 579 7 & 8 Delete sentence beginning "Horizon headquarters 579 Delete "In April, 1973" 579 Add "During 1973 and 1974" before "Horizon mailed" 579 Delete: "The genera! llractice, t cwever, was not to give custOITlerS the appreeiated value on their trade-ins ('1r. 3941, 4612 13).

580 Insert "some" before the word "sales" and change the upper case "S" to lower case.

580 Delete this line 580 Capitalize the "R" in "reloading; delete "the" after " and insert "some" In lieu thereof. Change the semi-colon after "offices" to a comma; delete "reloading" and insert "where it" in lieu thereof 580 Delete "These surveys showed that" and insert "some in lieu thereof 580 Insert " " between "929" and " 580 31 & 32 Delete: "The surveys also revealed" and insert " some; also delete "where 580 Start sentence with "There were" and delete "The surveys; delete "noted"

580 Insert "Some" before "sales 581 At the end of line 38 , add: "The University later conducted a few classes in the Rio Community shopping center offices.

582 16 & 17 Delete the phrase: ", employed by Horizon from 1968 until 1974 (Tr. 1904) and after "trained" insert " 1968"

582 Insert "Some" before the word "sales 872 ;DERAL TRADE COMMISSION DECISIONS Opinion 97 FTC.

582 Insert "Some" before the word "customers 583 Change "would" to "could" 583 30-1 Delete these lines 584 Delete this line 584 Change "would" to "could" 584 Insert "possible" in front of "three-way 585 33- Delete these lines 585 36-3 Delete these lines 586 12 & 13 Delete: "Horizon s internal surveys of its sales offices reveal extensive" and insert "There was 587 Delete first full paragraph 587 38 & 39 Delete the last sentence: "There is other evidence of pressure on customers to purchase immediately. 589 Delete "each" and insert "one" in lieu thereuf 589 24 & 25 Delete "(Tr. 4946)"

589 26 & 27 Delete these lines and insert ellipsis before "being sold"

589 Insert "4946 " before "4966" 590 Add new paragraph between paragraph ending on line 18 and paragraph beginning on line 19: "N umerous lots were typically available for sale in a particular unit or subdivision. One or more lots in a given unit or subdivision would generally be allocated to a particular salesman or to several salesmen. Allocations of unsold lots were occasionally shifted among salesmen or from one sales office to another. The sales representative called Horizon before finalizing a sale to find out whether a given lot had already been sold and to remove the lot from inventory if it were sold. 590 After " period" insert " in either 1970 or 1971" 590 Add this sentence: "No other witness testified to the use of this preplanned call approach.

591-592 38- Delete paragraph beginning "Joan Wild. 592 31- Delete the first two sentences from this pa agraph 593 16 Insert "There were " in place of "Horizon internal surveys of its sales offices revealed"

595 19- Delete these lines 595 & 596 29-43 & 1- Delete these lines except for citations; insert "; see also Tc. 16430, 16506 2111- 2126 2169 4687 4733-35). after "5053-54" at end of line 18 ; :

HORIZON CORP.

464 Opinion 596 Insert "2011-12; 21l3- 14- after "Tr. 596 29-42 Delete these lines 597 Delete these Jines 603 Insert "many" in place of "almost ali" 604 Insert "some salesmen " in place of "it is 604 Insert "or mainly" after "only 604 Insert "Other sales representatives indicated that the Southeast was one of EI Paso s major growth directions.

611 Delete "sales representatives and" 613 10-16 Delete this paragraph 617 Insert "offered rebuttal evidence" in place of "employees testified"

618 Insert after utr. 915, 1503 618 Last sentence of first full paragraph and rest of page should be deleted 619 Delete these lines 619 3 First full paragraph should start "Many customers testified"

619 Delete "all"

635 Change "Wesley Roark" to "Wayne Roach" 637 Delete "g-rossJy 637 13-14 Delete "to continue" and add comma after "fund" 637 Add the phrase after "fund" unless such fact is disclosed clearly and conspicuously 640 Last paragraph, insert "some" after "that" 641 11- Dclete first sentence 641 22- Delete sentence starting with "Joan Wild", including citations 641 33-43 Delete these lines 642 19- Delete this paragraph 644 Delete this paragraph 644 Insert "all" before " purchasers 644 Insert "all" before "customers 644 Delete "they" and insert "some" before "were 345-5;,4 O-g2- 874 FF:DEHAL TRADE COMMISSION DECISIONS Dpinion - 97- r' 644 Delete words "which can be used" and insert in lieu thereof: "which nas no significant impediments, such as easements, to the use of the entire lot" 645 Delete these lines, starting with "There is 645 Delete: "There is no record evidence that" ; and insert the words "failed to inform some" after "Horizon delete "informed any 645 Customer" should be plural 61i0 19 Add this citation at the end of the first full paragraph: (See also Tr. :3519- , 3729- 1291-93. 650 28-39 Delete these Jines, beginning with "Mr. Rosenthal" 651 Delete heading 651 9-40 Delete these lines 652-B65 Delete these pages 666 Delete these lines 671 19 & 20 Delete sentence starting "He noted" and ending with (Tr. 6690-93)"

673 23- Delete these last eight lines start.ing with "This understanding 673 23 Add the sentences: "The contractual exchange privilege for many lots expired when the lot.s were deeded to the customer. Horizon voluntarily honored some exchange requests after deeding them.

700 Add prefix "dis to "similar 703 5-- Delete the words: "described the Horizon communities as 'bastard' cases because Horizon has shifted the financial burden of its developments to the lot purchasers (Tr. 16032-34). He 706 19 Add: "The evidence on this contention was inconclusive.

719 Delete sentence beginning "However Horizon 721 At the end ufthe paragraph add; "Some customers who forfeited made unsuccessful efforts to obtain refunds (e. John Gothard, Tr. 6097-(100).

723 Delete " Available evidence indicates that Horizon had"; capit.alize " " and after " public" (line- I5) insert were offered into evidence 723 Delete "there were" and insert "he had seen 723 Delete heading 723 38-41 Delete these lines : , , HORIZON CORP. 875 464 Final Qrder 724-725 Delete these pages 726 27 Delete these lines 726 29 Before "Horizon " insert "Many of' 726 29 Delete the word " all" in the first line of finding 136 726 Delete "they" and insert "These lots " in lieu thereof 727 Delete "Leonard Steele testified that" 727 9 Begin the sentence with "Water 727 10 hsert "ground" before ;'water 727 11- Delete the sentence starting with "This will require including citations 727 Add at end of the paragraph the sentences: "Therefore, it was never part of the development plan to use individual wells. Rather, the plan called for the use of company wells for which adequate fresh water existed as of the date ufthe hearing.

727 18-20 Delete the sentence after " , 10M" beginning with This" and ending with "(Finding 85- 86).

728 14 Before "Horizon City" insert the words the most remote 728 35-37 Delete the phrase but no money has been escrowed to assure completion of the roads and"; capitalize "There to begin a new sentence and add this phrase after roads but they have been maintained to date 728 Add this paragraph after "(CX-lok)" "The cost of development and of assessment were not adequately disclosed to some customers (eX 932F; 950JJ, 729 Delete "Average price per acre $53.78" 730 Delete the zero in the third column 730 Delete "$133.45" in the third column 730 29 Delete the phrase "Average price per acre $148.00" FINAL ORDER This ma' ter has been heard by the Commis3ion upon the appeal of counsel for respondents and complaint counsel and upon briefs and oral a' gument in support of and in opposition to the appeals. The Commission, for the reasons stated in the accompanying Opinion, has granted each appeal in part and denied each in part. Therefore It is ordered That the initiai decision of the administrative law Final Order 97 F.

judge be adopted as the Findings of Fact and Conclusions of Law of the Commission except as otherwise inconsistent with the attached opinion (including Appcndix A).

Other Findings of Fact and Conclusions of Law of the Commission are contained in the accompanying Opinion. It is further ordered That the following Order to Cease and Desist be entered:

ORDER PREAMBLE 1. For purposes of this Order the following definitions shall apply:

Horizon Corporation or respondent shall mean the corporate respondent, its successors and assigns, its officers, directors, agents representatives and employees, directly or through any corporate subsidiary, division, or other device.

Purchase price and cash price shall be defined as cash price is defined in the Truth-in-Lending Act's implementing Regulation Z (12 CF.R 226.2(n)).

Lots or land shall include all subdivided parcels of land sold or offered for sale by respondent.

Subdivision shall mean any Jand (Jocated in any state) which is divided or is proposed to be divided into Jots, whether contiguous or not, for the purpose of sale as part of a common promotional plan such as the plan used by respondent in marketing the properties involved in this proceeding. One indicator of a common promotional plan is thc use of standard form contracts in the context of large scalc merchandising of small lots to persons who typically do not see the land at the time of purchase. Provided, however That lots land shall not incl ude: (2) a. The offer or sale of lots in a subdivision containing fewer than twenty-five lots.

b. The offer or sale of any lot upon which a residential or commercial structure is located.

c. The offer or saJe of any lot together with or under a contract with respondent or a builder to constr'Jct a house or other building thereon within twenty-four (24) months.

d. The offer or sale of lots for which the total purchase price in any single transaction is more than $50 000. , or the cumulative size of the lot or lots sold in a single transaction is 100 acres or more. HORIZON CORP. 877 464 Final Qrder e. The offer or sale of any lot or parcel to any person, partnership or corporation not. affiliated with respondent where the land is not acquired forllny personal, family or. household purpose. Personal family or household purpose shall include investments by individual consumers.

2. As used in this Order, a requirement to cease and desist from representing misrepresenting shall include representing or or misrepresenting directly or hy implication, and by any manner or means. (3) 3. Sections IV, V and VI of this Order shall not apply to the sale and offer of sale by respondent of the following types of lots: a. All Jots which at the time of sale are accessible by pave(! road and to which electric, water and sewer Jines have been installed to the lot line.

b, All lots which at the time of sale are accessible by paved road and to which electric and w"ter lines have been installed to the lot Jine, and where a septic tank can be installed at a cost not to exceed the normal installation cost ordinary to the 10caJe. in which the lot is located and where such a septic tank is permitted by laws or ordinances in effect as of the date of sale. c. All lots for which Horizon or any other bona fide entity is obligated by contract, covenant indenture, charter, statute or qrdinanceto provide, or has provided, paved access, and electric water and sewer lines to the Jot line.

d. All lots to which access over maintained roads and electric lines to the lot line are already in place or are the obligation of Horizon or any other entity, and water and sewage disposal are available from a central water System or a well and septic tank at costs not to exceed the norm"l installation costs ordinary to the locale in which the lot is located, (4 )andwhere such well and septic tank are permitted by law Or ordinances in effect as of the date of sale.

e. All Jots which would otherwise qualify under paragraphs a, b , or d, above, except that an electric line is not installed to the lot line and. no bona fide entity is obligated to provide an electric line extension if the lot one acre or . larger ih size and an electric line extension is avaiiabJe from a utility company at a cost disclosed in the Cost Sheet provided pursuant to Section II. A herein. 4. Sections I, II, and II of this Order shall apply only to the sale and offer of sale by respondent of any Jot or land qualifying under subparagraphs a, b, c, d or e above.

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'oO "",. , ,,'" :;'c:; ..,." ,es' . D""e ,,0 b c;00". \e f"t!i\Y ' . "i ,,,,"". "",, f s\lC it!t!eO:i"te ""f " e" t tde t1t!e o ,,,,,,,0'" "',,esp0: ",,\es: set bY \lse ",i\\1'Deocc\rpt\ce \lcd "" ' \\le 0' s e\i 9.1" llurULoUl\j vUnr 164 Final Order it is substantiated by adequate Inarket data on sales and resales (including attempts to resell and listings for resale that are knownshould be known by respondent) of similar land (land in a similar location with the same degree of development); provided, however that if the data upon which the market value is determined does not include resales by individual purchasers, respondent shall clearly and conspicuously disclose both orally and in writing, that the seller s estimate of market value is not based on actual resales by individual purchasers.

8. The purchase of land from respondent is a way to achieve financial security, to deal with inflation, or to make money. . 9. The demand for land offered for sale by respondent has increased, is increasing, or will increase, unless such is a fact and is not misleading.

10. Land being offered for sale by respondent will soon be unavailable because of the pace of sales or dwindling supply, or that the supply of any other land is decreasing, unless such is a fact and is not misleading. (7) 11. Purchasers must purchase immediately in order to insure that a particularly desirable Jocation will be available at the same price in the foreseeable future, unless such representation is true and is not misleading.

12. The signing of a contract does not immediately create a binding legal obligation on the part of the purchaser including, but not limited to, representations that the purchaser is only making a deposit, is only reserving the land, is only taking the first step, or is not making a final decision, or in any manner whatsoever obscuring or misrepresenting the legal or practical significance of signing a contract; provided that respondent may accurately recite the terms and conditions of the contract and of all refund privileges and cancellation rights, if applicable.

13. The federal property report or state property report is in any way an endorsement of or a judgment of the merits or value of the land being offered by any federal or state agency, unit, or official1. 14. Any lot is located within a geographic area designated or described as "community, town city," or by words or terms of similar import, unless respondent discloses in reasonable proximity therewith the approximate population of the community, town or city, its distance from the lot subject to the representation, and an accurate listing of some or all of the facilities located therein; provided, however that such disclosures (8Jneed not be made where such representation is made on-site to a purchaser within the . subdivision in which the Jot is located; and provided, further that B80 FEDERAL TRAm: COMMISSION DECISIONS ..inal Order- lJ7F.

respondent shall not be obligated to rename any currently platted property or to make any such disclosures solely because of the usc of the name of any such currently named property. 15. The purchase of land in general is a good, profitable, safe or sound investment.

Making any false or misleading reference to: 1. The past or future price of land offered by respondent, or the past or future value of land offered by respondent, or the past or future increases in price, including reference by actual dollar amount, percentage increase, or by any other means, as indicative of market value, or of a change of market value. 2. The past or present population, employment or industrial statistics or trends or other statistics or trends in a geographic area. 3. The predicted future population, employment or industrial statistics or trends or other statistics or trends in a geographic area. For such future statistics or trends, such reference shan not be considered false if at the time such reference is made respondent has a reasonable basis for believing it to be an accurate prediction. (9) 4. Thc present, planned, proposed or potential development improvement or facilities of the lot being offered or of the unit subdivision or project in which the lot is located. An accurate statement shall not be considered misleading if it is clearly disclosed to the customer (a) whether the development or improvement will be undertaken by respondent or a third party, (b) when the development or improvement is likely to be undertaken, (c) whether the purchaser has any contractual or other interest in the development or improvement, and (d) any costs which may accrue to the customer other than those normally assessed for the use of a public facility. 5. Investments of any sort, including any reference to insurance stocks, the stock, commodity or options markets, savings accounts or certificates, annuities, or land as an investment. 6. The signing of a contract or any reservation by any individual other than the immediate purchaser, of any land being offered by respondent, including but not limited to, any reference to any other person having a " hold" on a lot; provided, however that respondent may refer to any bona fide sale or option on a lot for which it receives consideration.

7. Respondent's reputation, size, assets or listing on any stock exchange. It shall not be considered false or misleading for respondent to make such references (lucas are required by statute or regulation in the place and manner required by such statute or regulation, or for respondent to provide any purchaser or prospective HORIZON CORP.

464 inal Order purchaser upon request with any document prepared in accordance with the rules of the Securities and Exchange Commission, the Department of Housing and Urban Development, or the Office of Interstate Land Sales Registration.

8. The present, planned, proposed or potential development of any land by anyone other than respondent.

9. The time within which land purchased from respondent can be resold.

C. Engaging in any of the following acts or practices, directly or by implication, through the use of any means: 1. Discouraging purchasers from obtaining the assistance of counselor other professional or personal advice in connection with a purchase decision or the purchase of respondent's land. 2. Failng to provide any required federal or state propcrty report before the customer signs the contract; failing to recommend that the customer read the federal property report; interrupting or distracting any customer from reading a property report. (11) 3. Making any statement or representation concerning the rights or obligations of respondent or the purchaser which differs in any material respect from the rights or obligations of the parties as stated in the contract of sale, or the property report. 4. Including Janguage in any contract permitting the respondent to retain any sums paid by the purchaser in excess of the amount permitted to be retained by respondent under Part II! F of this Order, upon the failure of the purchaser to pay any installment due or upon the failure to perform any other obligation under the contract.

5. Failing to disclose, clearly and conspicuously, to each customer the existence, size, location, and nature of any and all casemcnt8 and other physical features which could significantly affect the full use and enjoyment of the lot being offered for saJe. 6. Misrepresenting the true nature and purpose of any event or activity, including, but not limited to telephone calls, sales calls dinner parties or other similar gatherings, contests, awards of free or reduced price gifts or vacations, and sightseeing tours. (12) It is further ordered That respondent:

A. Provide each prospective purchaser of lots a copy of the "cost sheet" pursuant to regulations of the Office of Interstate Land Sales Final Ordcr Registration in effect as of January 1 , 1981. Such cost sheet shall be properly filled out to disclose the estimated costs for the lot or parcel offered. If such regulations are revised to provide for increased disclosure of development cost information to the prospective purchaser, respondent shall comply with such revised regulations. If such regulations are revised to require less disclosure, respondent shall, notwithstanding such regulations, disclose all development cost information now required, unless such disclosure would violate the revised regulations. If necessary to comply with revised regulations, the format of the disclosure may be revised provided that any revised format must disclose the required information in a clear and conspicuous manner.

Include in all contracts of sale the following provision: The contents of the federal property report are part of this contract. Provided, however That where the property report provides an accurate Clnd not misleading estimate of costs or description of current facilities it shall not be a breach of the contract should such estimate or description become inaccurate after the contract is effective. (13) C. Include in all contracts executed from the date this Ordcr becomes final until the final disbursement of the trust fund established in part VII of this Order the following provision: In the event Horizon is unable to furnish the improvements to the Buyer s lot as described herein within six months of the promised date, unless such failure is caused by acts of God or other causes not under control of Horizon, Horizon shal! , upon reconveyance of the lot in the same form and condition of title as conveyed to Buyer offer the Buyer a choice of an exchange for an alternative lot or a refund of all principal and interest paid under this Contract or the Promissory Note and Deed of Trust, where applicable. If Horizon provides such exchange or fpfund, Horizon shall be released from any and all obligat.ions under this contract &1, law or in equity. Pruvided, however Horizon may use any time period shorter than six months in such contractual clause.

D. Notify each purchaser within 30 days of any failure to provide within six months of the promised date, any improvements to the purchaser s lot as required by the contract. (14) It is further ordered That:

A. Respondent shall include clearly and conspicuously in all contracts, promotional materials and printed advertisements the following statement:

HORIZON CORP. 88.3 464 Final der The seller is not selling the lots in this subdivision as an investment. The future value of this land and your ability to resell it are uncertain. It is suggested that you discuss any possible purchase with a qualified professional. B. Respondent shah include clearly and conspicuously in each contract for the sale of Jand the following statement in 12 point bold face type immediately preceding the space provided for the purchass signature; provided, however that in the event that any state or federal law or regulation requires that another statement immediately precede the space provided for the purchaser s signature, the statement required herein may precede any such statement(s): YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT. WITHOUT ANY PENALTY OR OBLIGATION. AT ANY TIME PRIOR TO MIDNIGHT OF THE TENTH BUSINESS DA Y AFTER THE DATE YOlJ SIGN Tills CONTRACT. IF YOU CANCEL WITHIN THIS TIME, WE WILL PROMPTLY REFUND ANY PAYMENTS MADE BY YOU UNDER THIS CONTRACT r 15) TO CANCEL THIS CONTRACT. YOU MUST NOTIFY US WITIIIN TEN BUSINESS DA YS AFTER YOU SIGN THE CONTRACT. NO SALES REPh",';;:NTATIVE WILL CONTACT YOU DURING THESE TEN BUSINESS DAYS. IF A SALES REPRESENTATIVE CONTACTS YOU AND YOU NOTIFY US OF THE CONTACT WITHIN .30 DAYS OF ITS OCCURRENCE. YOU WILL HAVE UP TO 180 nAYS FROM THE DATE OF PURCHASE TO CANCEL THIS CONTRACT. WE RECOMMEND THAT BEFORE SIGNING YOU CAREFULLY EXAMINE THIS CONTRACT AND THE PROPERTY REPORT AND HAVE THEM REVIEWED BY A QUALIIIED PROFESSIONAL.

During this ten-business-day period after the signing of a land purchase contract, Horizon is forbidden to initiate any sales-related contact with the purchaser. Any such contact shall be grounds for rescission of the purchase contract and recovery of all payments thereunder at purchaser s option, exercisable any time before the expiration of 180 days from the date of purchase, but only if the customer notifies Horizon of the contact within thirty days after its occurrence. Provided, however That it shall not be forbidden for a non-sales employee or representative of Horizon to contact a customer by telephone to ascertain if the propcrty report was delivered, and to chcck the accuracy of thc information on the contract. (16) C. Respondent shall furnish each purchaser, at the time the purchaser signs a contract for the purchase of land, with the Purchaser Cancellation Notice required by regulation of the Office of Interstate Land Sales Registration as of January 1 , 1981. In the event that such regulation is revised to disclose more information to the customer, to extend the Jength of the cancellation period, or 884 FEDERAL TRADF; COMMISSION DECISIONS Final Order 97 F.TC.

otherwise to increase the purchaser s rights, resrlmdent shall comply with such amended regulation. Notwithstanding any revision to such regulation, respondent shall grant to the custom(' ," a: the minimum the rights required by the regulation in effect on January 1, 1981.

D. Respondent shall honor any signed and timely notice of cancellation or its functional equivalent by the purchaser, and promptly after the receipt of such notice, (a) refund ail payments made under the contract (b) cancel any contract or other legal document executed by the purchaser, and (c) provide the purchaser with written notice of such cancellation.

Whenever a timely notice of cancellation or its functional equivalent is received and said notice is not sufficient or proper in any manner, and respondent does not intend to honor the notice respondent shall immediately notify the purchaser by certified mail return receipt requested, enclosing the notice, informing the purchaser (17)of the error and stating clearly and conspicuously that a proper notice signed by the purchaser must be mailed by midnight of the fifth business day following the purchaser s receipt of the mailing, if the purchaser is to obtain a refund. E. Whenever respondent sells property to a purchaser who has never seen the property before executing a contract for the purchase thereof, respondent shall extcnd a refund privilege conditioned upon the purchaser making a personal visit to the property within 180 days after the purchase and notifying respondent within ten business days after inspection that a refund is desired. 1. Respondent shall provide the purchaser with a copy of the following "Inspection and Refund Privilege Notice" at the time the contract is signed. The notice shall be a separate "heet of paper containing no other writing. The notice shall contain such of the bracketed language as is applicable. The notice shall be worded as follows:

INSPECTION AND REFUND PRIVILEGE NOTICE Personal inspection of any land purchased is desirable. We recommend that you visit your property. If you visit your property within 180 days, you can cancel your contract for any reason within 10 days after your visit and get a full refund. If you decide to inspect your land under the terms of the refund privilege, during the visit (18Jthe seller may encourage you to keep your land. The seller may also try to sell you more land, or have you trade I'or' more expensive land. The seller Iwill or will not I reimburse you for your travel expenses I if' you cancel your contractj. You should take time during your inspection to visit the local area and examine the real estate market where the property is located. This inspection and refund provision is in addition to and does not take away your HLJKlz.ur LUK1:. ceo 464 Final Ordcr rights to canccl within ten business day:,! after yyu s.gn .your contract. Scc your contract.

2. Respondent shall provide the purchaser ten business days after making the personal inspection within which to request a refund.

3. Respondent shall include in every contract, in immediate proximity to the provision setting forth the availability of this refund, the following statement:

IF YOU HAVE NOT I'REVIOUSL Y SEEN THE PROPERTY YOU HAVE UNTIL MIDNIGHT OF Tile TENTH RUSINESS DAY AFTER THE CONCLUSION OF YOUR INSPECTION IN WHICH TO NOTIFY THE SELLER OF YOUR DECISION WHETHER TO CANCEL YOUR CONTRACT. NO SALES REPRESENTATIVE SHOULD CONTACT YOU ON BEHALF 119JOF THE SELLER DURING THIS TEN BUSINESS DAY PERIOD. IF A SALES REPRESENTATIVE CONTACTS YOU AND YOU NOTIFY US OF THE CONTACT WITHIN TEN DAYS or' ITS OCCURRENCE YOU WILL HAVE 30 DAYS FROM THE DATE OF YOUR VISIT TO CANCEL THIS CONTRACT.

4. Respondent will insure that every purchaser who seeks to view his or her lot can see and identify the lot specified in the contract; provided, however that so long as the lot can be located by a stake at one corner or other definite land mark, it is not necessary that all four corners be marked.

5. Respondent shall furnish each purchaser at the conclusion of the inspection visit with a dated and completed form, in duplicate captioned "NOTICE OF CANCELLATION AFTER inspection" which shall contain in bold face type of a minimum size of 10 point the following statement:

NOTICE OF CANCELLATION AFTER INSPECTION DATE OF CONCLUSION OF INSPECTION TOUR OF PROP- ERTY, LOT IDENTIFICATION, NAME OF CUSTOMER You may cancel your contract without any penalty or obligation at any time prior to midnight (201of the tenth business day after the above date. No sales representative should contact you on behalf of the seller during this ten business day period. If a sales representative contacts you, and you notify us of the contact within 10 days of its occurrence, you will have 30 days from the date of your visit to cancel this contract. If you cancel, we will promptly send you a full refund. To cancel your contract, mail or deliver a signed copy of this cancellation notice or any other written notice, or send a telegram to (name of respondent), at (address of respondent' s place of business), postmarked not later than midnight 0; Final Order 9T I (we) hereby cancel the above described contract. (Each buyer must sign this notice).

DATE BUYER' S SIGNATURE (2IJ 6. Before furnishing a purchaser copies of the Notice of Cancel lation After Inspection" set forth above, respondent shall complete both copies by entering the name of the respondent and the address of its place of business, the conclusion date of the inspection of the property, the name of the customer, and the date, not earlier than the tenth business day following the conclusion of the inspection, by which the purchaser may cancel the purchase. 7. During the post inspection cancellation period, Horizon is forbidden to initiate any sales related contact with the purchaser. Any such initiation of contact shall be grounds for rescission of the purchase contract and recovery of all payments thereunder at purchaser s option, exercisable any time before the expiration of thirty days from the date of the visit, but only if the customer notifies Horizon of the contact within ten days of its occurrence. 8. Respondent shall investigate any notification received from purchasers of contact violating the provisions of IILE. 7. above. (22) 9. Respondent shall honor any signed and timely Notice of Cancellation After Inspection or its functional equivalent submitted by a purchaser, and promptly after receipt of such notice will (a) refund all payments made under the contract, (b) cancel the contract executed by the purchaser, and (c) send written confirmation of such cancellation to the purchaser.

Provided, however That if the property has been deeded to the purchaser, Horizon may require that the property be reconveyed to Horizon with the same condition of title as was conveyed to the customer.

10. Where a timely Notice of Cancellation After Inspection or its functional equivalent is received purportedly in accordance with the requirements of this section, but where said notice is not sufficient or proper in some manner and respondent does not intend tn_honor the notice, Horizon shall immediately notify the purchaser by certified mail, return receipt requested, enclosing the notice, informing the purchaser of the error and stating clearly and conspicuously that a proper notice signed by the purchaser must be mailed by midnight of the fifth day following the purchaser s receipt of the mailing if the purchaser is to obtain a refund. (23) H..HULJVH '-A.Hu.

464 Final Order F. Include in all contracts for the sale 9f land a provision limiting the amount of principal and interest to be forfeited by the purchas in the event of the purchaser s default to an amount not greater than (1) 44 percent of the cash price of the property plus (2) any amount paid which exceeds the cash price of the property. G. Refund to each person who purchases land after the date this Order becomes final and defaults on his or her contract, all principal and interest paid which exceeds 44 percent of the cash price of the land up to a maximum refund of 56 percent of the cash price of the lot. Such refund shall be made within sixty (60) days after the purchaser is deemed to have defaulted; provided, however that this paragraph shall not preclude respondent from offering a defaulting purchaser additional alternatives which may be selected at the purchaser s option, in lieu of a refund. For purposes of this section of the Order, a purchaser shall be deemed to have defaulted when either of the following occurs: (24) 1. the purchaser notifies respondent of intent to default; or 2. the purchaser fails to make a payment for a period of six months from the due date of a payment; provided, however that this provision shall not prohibit respondent from granting any purchaser an extension of time within which to make payments. H. Respondent shall not misrepresent the right of a purchaser to cancel a transaction or receive a refund under any provision of this Order or any applicable statute or regulation in order to solicit or obtain the purchaser s assent to or otherwise impose any condition waiver or limitation upon such right. (25) It is ordered That respondent in connection with the advertising, offering for saJe and sale of Jots or land other than those lots or land covered by parts I, II and III of this Order, do forthwith cease and desist from:

Representing that:

1. The purchase of land which respondent is offering or has offered for sale, has been, is or will be a good, profitable, safe or sound investment, unless respondent can demonstrate that such is a fact and is not misleading.

2. There is little or no financial risk involved in the purchase of respondent's land, unless respondent can demonstrate that such is a fact and is not misleading.

g., Final Order 97 F.

3. The resale of land purchased from respondent is not, or wil not be diffcult, unless responaent can demonstrate that suchuis a fact and is not misleading.

4. Respondent will repurchase, resell, or assist in the resale of land purchased from respondent, unless such is a fact, and unless the terms, conditions and arrangements for repurchase, resale or assistance are clearly and conspicuously disclosed at the time such representation is made. (26) 5. The value of any land, wherevcr situated, whether or not marketed by respondent has risen, is rising, or will rise, unless respondent can demonstrate that such is a fact and is not misleading. 6. Lots to which respondent has given one designation, such as single-family residential multi-family residential commer- "cial t'acreage" or terms of similar import, have a significantly different present or expected value than lots with any other designation unless (i) such representation is true and is not misleading, (ii) respondent has a reasonable basis at the time making such representation to believe that it is true, and (iii) respondent discloses clearly and conspicuously in immediate conjunction with the use of any such designation: A lot' s designation as (specify designation multi-family) wil have no bearing on whether such use will occur.

7. The price set by respondent for the Jand is cquivalen( to the market value of the land, unless adequate market data on resales (including attempts to resell and listings for resale that arc known or should be known by respondent) of similar land (Jand in a similar location with the same degree of development) by previous purchasers in the possession of respondent at the time of such representation substantiates the representation. (27) 8. The purchase of land from respondent is a way to achieve financial security, to deal with inflation, or to make money. 9. The purchase of land in general is a good, profitable, safe or sound investment.

10. The demand for land offered for sale by respondent has increased, is increasing, or will increase, unless respondent can demonstrate that such is a fact and is not misleading. 11. Land being offered for saJe by respondent will soon be unavailable because of the pace of sales or dwindling supply, or that the supply of any other land is decreasing, unless such is a fact and is not misleading.

12. Purchasers must purchase immediately in order to insure that a particularly desirable location will be available, or that Jots similar to those being offered for sale may not or will not be HORIZON CORP. 889 464 Final Order available at the same price in the foreseeable future, unless such representation is true and is not misleading. (28) Purchasers have been specialJy selected, unless respondent can demonstrate that such is a fact and is not misleading. 14. The signing of a contract does not immediately create a binding legal obligation on the part of the purchaser, including, but not limited to, representations that the purchaser is only making a deposit, is only reserving the land, is only taking the first step, or is not making a final decision, or in any manner whatsoever obscuring or misrepresenting the legal or practical significance of signing a contract; provided that respondent may accurately recite the terms and conditions of the contract and of aJl refund privileges and cancellation rights, if applicable.

15. The federal property report or state property report is in any way an endorsement of or a judgment of the merits or value of the land being offered by any federal or state agency, unit, or official. 16. Any of the lots is located within a geographic area designated or described as a "community, town city," or by words or terms of similar import; provided, however that respondent shall not be obligated to rename any currently platted property. (29) B. Making any reference, directly or by im plication, through the use of any means, to:

1. The past or future price of land offered by respondent, or the past or future value of land offered by respondent, or the past or future increases in price, including reference by actual dollar amount, percentage increase, or by any other means, as indicative of market value, or of a change of market value. 2. The past, present or future population, employment or industrial statistics or trends or other statistics or trends in a geographic area, unless respondent has a reasonable basis at the time of the statement or representation to conclude that such statistical trend either now has or, within the near future, will have a significant effect on respondent' s property or the part thereof, other than those parts of each property which respondent or any other entity has reserved for development, or has developed with roads, and electric water, telephone, and sewer lines, to which such statement or representation refers or relates.

3. The present, planned, proposed or potential development improvement or facilities of the unit, (30 )subdivision or project in which the offered land is located that differs in any material respect from the relevant language of the most current property report or from the "Notice to Buyers" (set forth in Part V of this Order). 345-554 O-S2- Final Order 97 F.T.

4. Investments of any sort, including any reference to insurance stocks, the stock, commodity or options markets, savings accounts or certificates, annuities, or land as an investment. 5. The reservation or consideration by any individual other than the immediate purchaser, of any land being offered by respondent including but not limited to any reference to any other person having a "hold" on a lot; provided, however that resppndent may refer to any bona fide sale or option on a lot for which it receives consideration.

6. Respondent's reputation, size, assets or listing on any stock exchange; provided that respondent may make such references as are required by statute or regulation in the place and manner required by such statutes or regulations; and provided, further that (31)respondent may provide any purchaser or prospective purchaser upon request with any document prepared in accordance with the rules of the Securities and Exchange Commission, the Department of Housing and Urban Development, or the Office of Interstate Land Sales Registration.

7. The present, planned, proposed or potential development of any land by anyone other than respondent.

8. The time within which land purchased from respondent can be resold.

C. Engaging in any of the following acts or practices, directly or by implication, through the use of any means: 1. Discouraging purchasers from obtaining the assistance of counselor other professional or personal advice in connection with a purchase decision or the purchase of respondent's land. 2. Failing to provide any required federal or state property report before the customer signs the contract; failing to recommend that the customer read the federal property report; interrupting or distracting any customer from reading a property report. (32) 3. Fillng out a contract with a purchaser s personal information prior to the purchaser signifying, by affirmative statement, that he or she desires to purchase the land being offered. 4. Subjecting a purchaser who has evidenced a desire not to purchase respondent's Jand to continued sales efforts from any sales representative or other employee other than the original sales person, i.e., any institution of a " " or "takeover" system. 5. Including in any contract or in any other document shown or provided to purchasers, language stating that no express or implied representations have been made in connection with the sale of 464 Final Order respondent' s land, or that any particular representation has not been made in connection then with 6. l\ thing any statemlJnt or rnryr '3entation concerning the rights 01' obligations of respondent or the puff,(laser which differs in any mat0rial fE'sped fn;.Ji the rights or obHgJtions of the parties as stated in the contract of sale, the Notice tz1 Buyers provided for Section V of this Order, or the property report. (33) 7. Including in any contract Janguage permitting the respondent to retain any sums paid by the purchaser in excess of the amount permitted to be retained in Sections VI. H. and I. of this Order upon the failure of the purchaser to pay any installment due or upgn the failure to perform any other obligation under the contract. 8. Failing to disclose, clearly and conspicuously, both orally and in writing, to each customer the existence, size, location, significance and nature of any and all easements and other physical features which could significantly affect the full use and enjoyment of the lot being offered for sale.

9. Misrepresenting the true nature and purpose of any event or activity, including, but not limited to telephone calls, sales calls, dinner parties or other similar gatherings, contests, awards of free or reduced price gifts or vacations and sightseeing tours. (34) It is further ordered That respondent:

Distribute to all prospective purchasers of land covered by this section, a copy of the following "Notice to Buyers" at the commencement of any sales presentation, request that the purchaser read it and not interrupt the reading thereof by any purchaser. ' 'there the sale is conducted entirely through the mail, the n., :oe shall accompany the property report mailed to the purchaser. The Notice shall be on a separate piece of paper and shall contain only the required information and no other writing, unless approved in advance by the Commission.

NOTICE TO BUYERS NAMR OF SUBDIVISION:

NAME 010' SELLER:

EFFECTIVE DATE OF NOTICE:

THE LAND BEING ouered FOR SALE IS IN THE STATE OF MILES FROM THE CITY OF . THE LOT IS r ACRE(S) OR Final Order 97 F.

SQUARE FEET) IN SIZE AND THE COST IS $ . YOU MAY PURCHASE LOTS OTHER THAN This ONE. - THE SELLER IS NOT SELLING THE LOTS IN THIS SUBDIVISION AS AN INVESTMENT. THEREFORE, DO NOT COUNT ON YOUR LOT RISING IN VALUE OR YOUR BEING AELE TO RESELL IT. ( 35) THE FUTURE VALUE OF LAND IS UNCERTAIN AND MAY HAVE NO RELATION TO THE PRICE, WHICH IS SET BY THE SELLER. 'l'f!-E FUTURE POPULATION OF THIS SUBDIVISION AND THE SURROUNDING AREAS CANNOT BE PREDICTED.

(PROVIDE the following development information for the unit(s) being offered:) ROADS (INFORMATION TO BE APPLICABLE TO THE ROADS FRONTING PURCHASER un) State who is currently responsible for construction and maintenance and whether the roads will be maintained by public authority, a property owners' association or some other entity at some time in the future. State the cost to buyer for construction/maintenance, if any, during interim and after turnover.

State whether there is adequate financial assurance in the form of an escrow or trust account, or surety bond, to assure completion of the roads as represented. If not, include the following warning; WARNING: TOO LITTLE MONEY HAS BEEN SET ASIDE '1'0 ASSURE THE COMPLETION OF THE ROADS. THEREFORE, THERE IS NO ASSURANCE THAT THEY WILL BE COMPLETED. (36) Provide the following road information:

Unit Sturtjn Percentage now Estimated Present Final date completed completion surface surface date . IIIIIIj kl,"WIi. in"")'1 !hl' I'oliliwilllj wuruinu: WAHI\' INU THEtm AHE NO PLANS FOR ROADS. .. If lillll/I'-/',1 j.lu'fI (INPA VEl)" und d.'HCI'ib.. n", Hud'aCt' ;:.

HORIZON CORP. 893 464 Final Order WATER If water is to be supplied by an individual private system, state the estimated cost to the buyer of installation, treatment facilities necessary equipment and any other required costs. If individual wells are to be used, state whether or not a refund or exchange wil be issued in the event a productive well cannot be installed. If yes state the terms and conditions thereof. If no, insert the. following warning: WARNING: A SUCCESSI"UL PRODUCING WELL IS NOT GUARANTEED. NO REFUND OR EXCHANGE WILL BE GRANTED IF YOU ARE UNABLE TO DIG A SUCCESSFUL WELL. (37) If the water is to be provided by a central system, state whether the buyer is to pay any construction costs, one-time connection fees availability fees, special assessments or deposits for the central system. If so, state the estimated cost. If the buyer will be responsible for construction costs of the water mains, state the cost to install the mains to the most remote lot covered by the Notice. State whether there is adequate financial assurance in the form of an escrow or trust account, or surety bond, to assure completion of the central system and any future expansion. If not, include the following warning: WARNING: TOO LITTLE MONEY HAS BEEN SET ASIDE TO ASSURE THE COMPLETION OF THE CENTRAL WATER SYSTJ:M. THEREFORE, THERE IS NO ASSURANCE THAT IT WILL HE COMPLETED.

Provide the following water information:

Unit Starting Percentage now Service A vaiJahlc date complete date , If nut knnwn. ins,'rt lhe i"olluwing warn in", WAllr"'NG: Tlh:,n: "lie NO "'. m(" n:NTKA'. WIITE!! Y$n:M. l:J.) SEWER State the method of sewage disposal to be used. If by septic tank or other individual system, state the estimated cost of the system and any necessary tests. State whether a permit is required. If so, and if each and every lot has not been already approved, insert the following warning: WARNING: THERE IS NO ASSURANCE PERMITS CAN BE OBTAINED FOR THE INSTALLATION AND USE OF' SEPTIC TANKS OR OTHER INDIVIDUAL ON-SITE SEW AGE SYSTEMS. State whether or not a refund : . , Final Order 97 F.TC.

or exchange wi1 be issued in the event a permit is denied for the particular lot purchased, and the terms and conditions thereof. If neither will be issued, insert the following warning: WARNING: NO REFUND OR EXCHANGE WILL BE GRANTED IF YOU ARE UNABLE TO INSTALL A SEPTIC TANK OR OTHER ON-SITE SEW AGE SYSTEM. If a central sewage treatment and collection system is being installed, state who is responsible for construction of" the system. State whether buyer will pay any construction costs, special assessments, one-time connection fees, availability fees, use fees or deposits. State the amounts of these charges. If the buyer is to pay the cost of the sewer mains, state the cost of installation of the mains to the most remote lot in this Notice. State whether there is adequate financial assurance (39 Jin the form of an escrow or trust account, or surety bond, to assure completion of the central system and any future expansion. If not, include the following warning: WARNING: TOO LITTLE MONEY HAS BEEN SET ASIDE TO ASSURE THE COMPLETION 01" TI-IE CENTRAL SEWER SYSTEM. THEREFORE, THERE IS NO ASSURANCE THAT IT WILL BE COMPLETED. Provide the following sewer information:

Unit Starting Percentage of Service Availability date completion date . If not known, inosrt the 1i,llowing warning: WllliNING: THER,.: IIIIE NO !' I.IINS F'Ii II Ct:NTIi"1. So;WAGF. SVS-"':M ELECTRIC SERVICE If the primary service lines have not been extended in front of, or adjacent to each lot, state whether the buyer will be responsible for any construction costs. If so, state the utility company s policy and charges for extension of primary lines. Based on that policy, state the cost to the buyer for extending primary service to the most remote lot in this Notice. Provide the following electric service information: Unit Start.ing" Pcrcentug"e of Service Availability date completion date , II "'" krwwJ1 . 1I""'rl If". r"lij1wiug w"I' I1iJ1g: WIlININ';: ' llt:IU: AII "I1I'I.IINS tof( IIN ,:I.:ITIII\ ' Stln' ln:, sl-EM, ! 401 . .

HORIZON CORP. 895 464 Final Order TELEPHONE SERVICE If the service lines have not been extended in front of, or adjacent to each lot, state whether the buyer will be responsible for any construction costs. If so, state the utility company s policy and charges for extension of service lines. Based on that policy, state the cost to the buyer of extending service lines to the most remote lot in this Notice.

Provide the following telephone service information: U nit Starting Percentage of Service Availability dale completion date . If not known. insert the following wilrning, WARNING. THERE ARf; NO PLANS tor A TF.U "HONF. S'rSn:M RECREATIONAL FACILITIES Identify each recreational facility. For each facility, provide the following information:

Facility Percent Date of Date Available Financial Buyer complete start of for use Assurance cost and construc- assessments tion completion Irno"p statt' non,, Jrsuch!'xists st.atelhetypeuud'-J1ouni.f ., Stat!' '-ny construction or use costs to t.he uuyer includin ,my '-ppliGlbl,' property owner s association aSHessmer1t J1uinten,-,,ceaSHCSSmer1torusefep At the conclusion of the Notice, place the following warning set off by a box outline: IMPORTANT: OBTAIN AND READ THOROUGHLY EACH PROPERTY REPORT AND CONTRACT BEFORE SIGNING ANYTHING. THE PROPERTY Import CONTAINS INFORMATION THAT YOU SHOULD KNOW AND UNDERSTAND BEFORE YOU SIGN A CONTRACT TO BUY THIS LAND. IT IS DESIRABLE TO HAVE A LAWYER OR OTHER QUALIFlIm PROFESSIONAL EVALUATE THIS PURCHASE BEI"ORE YOU SIG \f ANYTHING. KEEP THIS NOTICE--STATEMENTS MADE IN IT BECOME A PART OF ANY CONTRACT YOU MAY SIGN WITH THE SELLER. (42) 896 FEDERAL TRADE COMMISSION DJ.CISIONS Final Order 97 F.T.C. It is further ordered That in all sales and offers to seJl after the date this Order becomes final, respondent shall: Include clearly and conspicuously:

In all contracts for the sale of land the following. statement: The seller is not selling the lots in this subdivision as an investment. Therefore, do not count on your lot rising in value or your being able to resell it. The future value of this land is uncertain and tray have no relation to the price, which is set by the seiter. It is suggested that you discuss any possibie purchase with a lawyer or other qualified professional.

2. In all sales presentations, promotional materials and printed advertisements covered by this section the following statement: The future value of land is very uncertain. The value, if any, of this land may have no relation to the price, which is set by the seller. The (4:l)seller is not selling the lots in this subdivision as an investment.

Therefore, do not count on your lot rising in value or you,. being able to resell it. It is suggested that you discuss any possible purchase with a lawyer or other qualified professional.

B. Include clearly and conspicuously in each contract for the sale of land the following statement, in 12 point. bold face type: YOU, Tile BUYER, HAVE TH ; RIGHT TO CANCEL THIS CONTRACT, WITHOUT ANY PENA.ity OR OBLIGATION , AT ANY TIME PRIOR TO MIDNIGHT OF THE TENTH BUSINESS DAY AFTER THE DATE YOU SIGN THIS CONTRACT.

IF YOU CANCEL wrTHIN THIS TIMf;, WE WILL PROMPTLY Rf;FUND ANY PAYME:NTS Mane BY YOU UNDER THIS CONTRACT.

TO CANCEL Tills CONTRACT, YOU MUST NOTI Y US WITHIN TEN BUSINESS DAYS AFTER YOU SIGN THE CONTRACT. NO SAL" SMAN WILL CONTACT YOU DURING THESE TEN DAYS. W A SALES REPRESf:NTATIVE CONTACTS YOU AND YOU NOTH' Y us O . THE CONTACT WfTHIN :m DAYS Ofo' ITS OCCURRENCE, YOU WILL HAV ; UI' TO IRO DAYS FROM THE DATE Of" PURCHASE TO CANCEL Tills CONTRACT. (44) During this ten-business-day period after the signing of a land purchase contract, Horizon is forbidden to initiate any sales-related contact with the purchaser. Any such contact shall be grounds for rescission of the purchase contract and recovery of all payments thereunder at purchaser s option, exercisable any time before the expiration of 180 days from the date of purchase, but only if the customer notifies Horizon of the contact within thirty days after its occurrence. Provided, however That it shall not be forbidden for a non-sales employee or representative of Horizon to contact a customer by telephone to ascertain if the property report was 164 Fina! Order delivered, and to check the accuracy of the information on the contract.

Prouided That where Horizon as a matter of corporate .practice-or pursuant to any legal requirement provides a cancellation period exceeding ten business days, the highest applicable specific number or "tenth"of days greater than ten shall be substituted for "ten" wherever those words appear in the Notice of Cancellation set forth above. This requirement shall apply to Sections VI. C. and VI. D. of this Order as well as to this Section VI. B. (45) C. Print the following in 12 point bold face type as a separate paragraph of the contract immediately preceding the space provided for the purchasers signature:

YOU HAVE TEN BUSINESS DAYS IN WHICH TO RECONSIDER YOUR DECISION ANn TO CANCJoL THIS CONTRACT WITH FULL m l"UND. HOWEVER, WE RI':COMMJo:ND THAT m:FORE SIGNING YOU EXAMINE CAREFULLY THIS CONTRACT AND THE PROPERTY REPORT AND HAVE THEM RlwmWED BY A LAWYF.R OR OTHER QUALIFIED PlmFESSIONAL. Provided, however That in the event that any federal or state Jawor regulation requires that another statement immediately precede the space provided for the purchaser s signature, the above statement may precede such statements(s).

D. Furnish each purchaser, at the time the purchaser signs a contract for the sale of land, with two copies of a form, captioned in 12 point bold face type " NOTICE OF RICHT OF CANCELLATION, " which shall contain in 10 point bold face type the following information and statements: (46) Date of Transaction Lot Identification NOTICI-: OF RIGHT OI-' CANCELLATION You may cancel this transaction without any penalty or obligation at any time prior to midnight of the tenth business day after the date shown on the contract. Use this time to examine with care this contract and property report. We suggest that you also use this time to have this contract and the property report reviewed by a lawyer or other qualified professional.

No sales representative should contact yoll on behalf of the seller during this ten business day period. If a sales representative contacts you, and you notify us of the Final Order 97 F.

contact within 30 days of its occurrence, you will have up to 180 days from the date of purchase to cancel this contract.

If you cancel, any payments made by you under the contract wjll be returned promptly to you.

To cancel this contract, notify us not later than midnight of - that you want to cancel Although you may notify us in any manner you choose, we recommend that you notify us by mailing a signed copy of this notice to (name of respondent) at (address). (47) I (we) hereby cancel this contract. (Each buyer must sign this notice). Date Signature of Buyer Respondent shall, before furnishing copies of this "Notice of Right of Cancellation" to the purchaser, complete both copies by entering the name of res pendent, the address of the respondent's place of business, the date of the transaction, and lot identification(s), and the date, not earlier than the tenth business day following the date of the signing by the purchaser, by which the purchaser may give notice of cancellation.

Respondent shall, where the signature of a purchaser is solicited during the course of a sales presentation, inform each purchaser orally, at the time the purchaser signs the contract, of the right to cancel as stated in this Paragraph ofthis Order. Honor any signed and timely notice of cancellation by the purchaser, or its functional equivalent, and promptly after the receipt of such notice, (a) refund all payments made under the contract and (b) cancel and return any contract or other legal document executed by the purchaser. (48) Whenever a timely notice of cancellation or its functional equivalent is received and said notice is not sufficient or proper in any manner, and respondent does not intend to honor the notice respondent shall immediately notify the purchaser by certified mail return receipt requested, enclosing the notice, informing .the purchaser of the error and stating clearly and conspicuously that a proper notice signed by the purchaser must be mailed by midnight of the fifth business day following the purchaser s receipt of the mailing, if the purchaser is to obtain a refund. F. Whenever respondent extends a privilege or other right HORIZON CORP. 899 464 Final Order whereby the purchaser may exchange undeveloped land for a building lot:

1. Include in all materials, including the contract, which discuss the privilege or right, or if such privilege or right is described orally, include in such oral discussion, and in a concurrently delivered written notice, the following statement: BUILDING EXCHANGE LOTS EQUAL IN SIZE AND COST TO THE LOT YOU ARE PURCHASING A Y BE LOCATED SUBSTANTIAL DISTANCES FROM THE ESTABLISHED DEVELOPED AREAS. THEY MAY HAVE LESS DESIRABLE ROADS, UTILITIES AND APPEARANCE. THEREFORE, VOU MAY WISH TO EXCHANGE FOR OTHER BUILDING LOTS THAN Tile SELLER MAY OFFER. THESE OTHER LOTS MA Y BE SMALLER IN SIZE AND MAY REQUIRE YOU TO PAY MORE MONEY THAN YOU ARE NOW Contracting TO PAY.

2. State the specific financial terms or formula for exchange of the purchaser s equity in the original ( 49)Jot into the building lot, in the same place and manner as the statement in subparagraph 1 above.

3- Include in all contracts for the sale of land a provision extending the contractual rights and privileges of the purchaser to al1 subsequent buyers and assignees of that land. G. Whenever respondent sells property sight unseen it shall extend a refund privilege conditioned upon the purchaser making a personal visit to the property within 180 days after purchase and notifying respondent within ten business days after inspection that a refund is desired. Respondent shall:

1. Provide the purchaser with a copy of the following "INSPECTION AND REFUND PRIVILEGE NOTICE " at the time the contract is signed. The notice shall be on a separate sheet of paper containing no other writing. The notice shall be worded as follows: INSPECTION AND REFUND PRIVILEGE NOTICE Personal inspection of any land purchased is desirable. We recommend that you visit your property. If you visit your property within the next 180 days, you can cancel your contract for any reason within 10 days after your visit and get a full refund. (50) If you decide to inspect your land under the terms of the refund privilege, during the visit the seHer may encourage you to keep your land. The seller may also try to sell you more land, or have you trade for a more expensive lot. You should take time during your inspection to visit the local area and examine the real estate market where the lot is located. If you cancel this purchase, the seller will not reimburse you for your travel expenses.

This inspection and refund privilege is in addition to and does not take away your ..

Final Order 97 F.

right to caneeJ within ten business days after you sign your contract. See your contract.

2. Provide the purchaser ten business days after making the personal inspection within which to request a refund. 3. Include in every contract, in immediate proximity to the provision setting forth the availability of this refund, the following statement: YOU HAVE UNTIL (51)MIDNIGHT OF THE TENTH BUSINESS DAY AFTER THE CONCLUSION OF YOUR IN PERSON INSPECTION IN WHICH TO NOTIFY THE SELLER OF A DECISION TO CANCEL. NO REPRESENTATIVE OF THE SELLER SHOULD CONTACT YOU IN ANY WAY DURING THIS TEN RUSINESS DAY PERIOD. IF A SALES REPRESENTATIVE CONTACTS YOU AND YOU NOTIFY US OF THE CONTACT WITHIN TEN VA VB OF ITS OCCURRENCE YOU WILL HAVE 30 VA VB FROM THE VA TE OF YOUR VISIT TO CANCEL THIS CONTRACT.

4. Insure that every purchaser who seeks to view his or her lot can see and identify the particular lot specified in the contract; provided, however that so long as the lot can be located by a stake at one corner or other definite landmark, it is not necessary that all four corners be marked.

5. Orally inform the purchaser of the post-visit ten-business-day cancellation right (i) at the time the contract is signed, unless the sale is entirely completed through the mail, and (ii) at the conclusion of the inspection visit.

6. Furnish each purchaser at the conclusion of the inspection visit with a dated and completed form, in duplicate, captioned NOTICE OF CANCELLATION AFTER INSPECTION " which shall contain in bold face type of a minimum size of 10 point, the following statement: ( 52) NOTICE O . CANCELLATION ArTEH INSPECTION DATE OF CONCLUSIOr- m' INSPECTION TOUR (W I'HOPEHTY LOT IDENTWICATION, NAME OF ClJSTOMER: - You may cancel your contract without any penalty or obligation at any time prior to midnight of the tenth business day after the above date. No sales representative of the seller should contact you in any way during this ten business day period. If a sales representative contacts you and you notify us of the contact wit.hin 10 days of its occurrence, you will have 30 days from the date of your visit to cancel the contract. If you cancel, we wi!! promptly send you a full refund. To cancel your contract, mail or deliver a signed copy of this cancellation notice or any other written notice, or send a telegram to (name of' respondent), at (address of HORIZON CORP. 901 161 Final Order respondent' place of business), posfmarked - -rlo( later than -midnight- . (53J I (we) hereby cancel the above described contract. (each buyer must sign this notice).

DATE Buyer s signature 7. Before furnishing a purchaser copies of the "Notice of Cancellation After Inspection " set forth in paragraph VI. G. 6. above complete both copies by entering the name of the respondent and the address of its place of business, the conclusion date of the inspection of the property, the name of the customer, and the date, not earlier than the tenth business day following the conclusion of the inspection, by which the purchaser may cancel the purchase. S. During the post-inspection cancellation period, Horizon is forbidden to initiate any sales related contact with the purchaser. Any such initiation of contact shall be grounds for rescission of the purchase contract and recovery of all payments thereunder at purchaser s option, exercisable any time before the expiration of thirty days from the date of the conclusion of the visit, but only if the customer notifies Horizon of the contact within ten days of its occurrence. (54) 9. Investigate any notification received from purchasers of contact violating the provision of Paragraphs VI. G. 8. above, and comply with the requirements of Section X, Paragraphs F and G herein.

10. Honor any signed and timely Notice of Cancellation After Inspection or its functional equipment submitted by a purchaser and promptly after the receipt of such Notice (a) refund all payments made under the contract, and (b) cancel and return any contract or other legal document executed by the purchaser. 11. Where a timely Notice of Cancellation After Inspection or its functional equivalent is received purportedly in accordance with the requirements of this section, but where said notice is not sufficient or proper in some manner and respondent does not intend to honor the notice immediately noti(y the purchaser by certified mail, return receipt requested, enclosing the notice, informing the purchaser of the error and stating clearly and conspicuously that a proper notice signed by the purchaser must be mailed by midnight of the fifth day 902 FEDERAL TRADE COMMISSION m;CISIONS Final Order 97 F.

following the purchaser s receipt of the mailing if the purchaser is to obtain a refund. (55) H. Include in all contracts for the sale of land a provision limiting the amount of moneys to be forefeited by a purchaser in the event of the purchaser s default under the contract to an amount not greater than respondent's actual damages from such forfeiture, such provision to include the definition of "actual damages . set forth in Section VI. I. below.

L Rt,;ulld to ustomel' \vho f.urchase after tle effective date of this order and who are deemed in default, all moneys paid under the contract, including but not limited to principal, interest, taxes, and assessments which in the aggregate exceed respondent's "actual damages, as that term is defined below, within 60 days after the purchaser is deemed to have defaulted; provided that this paragraph shall not preclude respondent from offering a dcfaulting purchaser additional alternatives which may be selected at the purchaser option, in lieu of a refund. For purposes of this section of the Order, a purchaser shall be deemed to have defaulted when either of the following occurs:

1. purchaser notifies respondent of intent to default; or 2. purchaser has failed to make a payment for a period of six months from the due date of such payment. (56) Actual damages" upon a buyer s default shall be limited to respondent' s actual out-of-pocket costs for commissions and overrides paid out to sales personnel and not recovered from them in connection with the cancellation of an account or contract to buy property from respondent as a result of the buyer s default provided that the amount of the actual damages may not exceed 15 percent of the cash price of the property, as "cash price" is defined in the Truth- In-Lendi"g Act's implementing Regulation Z (12 CFR 226.2(n)). J. FOlbear from using or enforcing in any manner, or representing that respondent will rely upon or enforce in any manner, against any purchaser, a contract clause which provides that the respondent may retain all sums previously paid by the p11 rchaser in the event that the purchaser fai to nay any instaJiment due or otherwise to perform any obligation. , Jer the contract. K. Not misrepresent, nor solicit or obtain the purchaser s assent to or otherwise impose any condition, waiver or limitation upon, the right of a purchaser to cancel a transaction or receive a refund under any provision of this Order or any applicable statute or regulation. (57) 464 Fina! Order VII It is further ordered That respondent shall establish the Horizon Corporation Trust Fund for the benefit of past purchasers of lots from respondent on the following basis:

1. The trust fund will be established not later than fifteen (15) days following the date this Order is issued by the Commission in final form.

2. The trustee shall be a national bank mutually agreeable to respondent and the Commission, pursuant to a trust agreement also mutually agreeable to respondent and the Commission. 3. Not later than thirty (30) days following the date this Order is issued in final form respondent shall issue a debenture payable to the Horizon Corporation Trust Fund " and deliver it to the trustee. 4. The debenture will be a six (6) year noninterest bearing debenture in the principal amount of $14.5 milion, payable in six equal installments with the first such installment being due on June , 1982, and subsequent installments being due on each June 1 thereafter to and including June 1, 1987. (58) Payments into the trust fund shall be due and payable on the dates specified in this paragraph. The trustee shall receive each of the payments specified in this Order no later than seven days after it is due and payable. Respondent shall be in violation of the terms of this Order if it fails to make any of the payments specified in this agreement within the period ending seven days after such payment is due and payable. Interest payments required by Paragraph VII (8) of this Order shall continue to apply to any delay in payment beyond the date when it is due and payable. Such interest payments shall be required regardless of any allegation of a violation of this Order as described in this paragraph. (59) 5. The trustee shall maintain the corpus of the trust fund in general obligations of or obligations guaranteed by the United States Government or an agency of the United States Government. All interest earned during the pendency of the trust fund shall be added to the corpus of the trust fund.

6. The trustee shall make the books and records of the trust fund available to the Federal Trade Commission or a representative thereof for inspection and copying during normal business hours at any timers) until sixty (60) days following the final disposal of the trust fund residue. The trustee and respondent shall be given twenty-four (24) hours advance notice of any inspection of the trust fund books and records by the Commission. The trustee shall provide Final Order 97 FTC.

an annual report in the nature of an accounting of the trust fund to the Commission.

7. No costs associated with the establishment, administration or distribution of the trust fund shall be paid out of the principal or interest of the fund, except as provided in paragraph 18 if there is a third distribution of funds. (60) 8. If any of the six annual payments into the trust fund shall not be made on the date any such payment is due, Horizon shall pay interest on the principal amount then due and owing at a rate which is two percent (2%) above the prime interest rate at Citibank, New York, at the close of business on the date the payment is du.e or the first business day thereafter.

9. Within thirty (30) days following the third payment into the trust fund, the trustee shall distribute substantially aJl of the money then in the trust fund to the persons eligible for payments from the fund as determined herein.

10. Within thirty (30) days following the final payment into the trust fund, the trustee shall distribute all of the money in the trust fund to the persons eligible for payments from the fund as determined herein.

11. The persons eligible for payment from the trust fund shall be those who meet the criteria listed on Exhibit A attached hereto- 12. Purchasers eligible for payment from the trust fund shall be mailed a copy of the letter attached hereto as Exhibit B within 180 days from the date this Order is issued in final form by the Commission. (61) 13. Any person eligible for payment from the trust fund who cannot be located by respondent shall forfeit his or her right receive the notification in Exhibit B and the two payments from the trust fund. Respondent shall exercise good faith efforts reasonably calculated to locate all persons eligible for payments from the trust fund. Such efforts shall include:

(a) Mailing the notification to the most current address as disclosed in respondent' s records or on the county tax rolls, if such tax rolls are reasonably available from the county in which the person s land is located.

(b) Confirming addresses with the appropriate improvement association, if any.

(c) If necessary, mailing a second notification letter with an address correction requested from the Post Office. (d) TeJephoning any person whose mailing address cannot be discovered through the above methods. Respondent shall, to the HORIZON CORl' 905 464 Final Order extent necessary, telephone the last kl10wn home and business telephone number of the person, and seek information from directory assistance at the person s last known address. (62) If the above efforts are unavailing, the person shall be removed from the list of eligible persons; provided, however that the person shall be reinsta.ted if respondent or the trustee should be informed of his or her current mailing address not less than thirty (30) days prior to either of the disbursements from the trust fund. If such person is reinstated as eligible for a payment from the trust fund after the initial disbursement from the fund, his or her right to a payment shall be limited to his or her proportionate share of the second distribution.

14. Persons eligible for a payment from the trust fund will be informed in the notification Jetter that they must inform respondent of an address changes until the final distribution of the fund. A form for such notification, attached hereto as Exhibit D, will be provided to each eligible person for this purpose. Respondent wi1 inform the trustee of all such address changes not less than thi rty (30) days prior to each distribution from the trust fund. If any person payment check is returned by the Post Office as being undeliverable because of incorrect address, and if the person failed to inform respondent of a change of address which has occurred, such person wil forfeit any right to a share of the distribution. (63) 15. Respondent may, at its sale discretion, require each eligible person to sign a waiver of claims in the form attached hereto as Exhibit C as a condition precedent to receiving payment from the trust fund.

16. Persons eligible for refunds wil not be required to reconvey property to respondent to qualify for payment from the trust fund. 17. Each eligible person wil receive a pro rata share of the trust fund distribution to which he or she is entitled, to be determined on the basis of the ratio of his or her payments of principal to respondent to the total of all such payments from June 1, 1969 to the date of each distribution by all persons eligible for payments from the trust fund. Payment will be made by check drawn on the trust fund and mailed to eligible persons by first class mail. 18. The trustee wil be instructed to make all reasonable efforts to distribute the entire trust fund. Any residue in the fund resulting from interest earned after checks are mailed to eligible perSODS or from checks not cashed for a period of six (6) months after distribution or other causes will be don'lted in equal shares to the Horizon Communities Improvement Association, (64)Inc., the Horizon Communities Improvement Association of New Mexico, Inc., the Final Order 9'7 F. Tierra Grande Improvement Association, Inc., and the Waterwood Improvement Association, Inc. Provided. however That if the residue exceeds $250 000 the trustee may redistribute the residue to those purchasers who cashed the second distribution check. All expenses of such redistribution shall be paid from the residue of the trust fund and no such distribution shall be made unless the expenses of the distribution are not more than 25 percent of the trust fund residue. Any residue remaining after the third distribution shall be distributed to the improvement associations as provided above. (65) VII It is further ordered That respondent shall assure that it and other entities will spend not Jess than $45 million for improvements in the properties within the twenty years following the date this Order becomes final. Such expenditures may be made for improvements in Rio Communities, Horizon City, Arizona Sunsites, Waterwood, and/or Paradise Hills. The improvements may include roads, utilities, hotels, residential apartments, commercial facilities, recreational facilities, churches, civic buildings, or any other improvements or facilities, except that expenditures for construction of single family residences shall not be jncluded in the computation of the $45 million. To quali(y under this provision, the improvements must be located within the confines of the properties listed above. The only exception to this locational requirement is that expenditures to construct utility plants and transmission or pipe lines predominantly to serve a Horizon property shall be included notwithstanding that the plant and the transmission or pipe Jines may not be located within one of the five properties enumerated above. (66)The expenditure of funds required by this paragraph shall be made according to the following schedule: $11.25 million shall be spent within 7 years of the effective date of this Order; $22.5 million shall be spent within 10 years of the effective date of this Order; $33. 75 million shall be spent within 15 years of the effective date of this Order; $45 million shall be spent within 20 years ofthe effective date of this Order. It is further ordered That not more than one officer or employee of respondent shall at anyone time serve on the boards of directors of each of the following: Horizon Communities Improvement Association, Inc. , the Horizon Communities Improvement Association of 11Urul.lJ1'1 LUrU" ;;ll' 464 Final Order New Mexico, Inc., the Tierra Grande Improvement Association, Ine. . and the Waterwood Improvement Association, Inc. (67) It is further ordered, That respondent, Horizon Corporation shall: A. Deliver, by certified mail or in person, a copy of this Order to all of its present and future sales representatives and other employees, independent brokers, advertising agencies, and others who sell or promote the sale of respondent' s land; B. Provide each person so described in Paragraph A above with a form to be returned to respondent, clearly stating each person intention to conform his or her business practices to the requirements of this Order.

C. Inform each person described in Paragraph A above that respondent shall not use the services of any such person, unless such person agrees to and does file a notice with respondent that he or she will conform his or her business practices to the requirements of this Order;

D. In the event such person will not agree to so file notice with the respondent and to conform his or her business practices to the requirements of this Order, respondent shall not use the services of such person; ( 68) E. Inform the persons described in Paragraph A above that respondent is obligated by this Order to discontinue dealing with those persons who engage on their own in the acts or practices prohibited by this Order or who faiJ to adhere to the affirmative requirements of the Order;

F. Institute a reasonable program of continuing surveillance to reveal whether the sales practices of each of said persons described in Paragraph A above conform to the requirements of this Order and promptly investigate and make good faith efforts to resolve any complaints about such persons received by respondent, and maintain records of any such complaint, investigation and disposition for five years from the date of the disposition of the complaint; G. Discontinue dealing with any person described in Paragraph A above revealed by the aforesaid program of surveilance, who more than once engages on his or her own in the acts or practices prohibited by this Order; provided, however. that in the event remedial action is taken, the sole fact of such dismissal or termination shall not be admissible against respondent in any proceeding brought to recover penalties for alleged violations of any paragraph of this Order. (69) .HAL TKAU CUlVlVl::::lun U Cl::lun::

Exhibit A 97 F.

It is further ordered That respondent notify the Commission at least 30 days prior to any proposed change in the corporate respondent, such as dissolution, assignment, reorganization or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or other change in the corporation which may affect compliance obligations arising out of this Order. (70) XII It is further ordered That respondent shall forthwith distribute a copy of this Order to each of its subsidiaries. (71) XII It is further ordered That respondent shall within sixty (60) days after the service upon it of this Order, and annually thereafter until sixty (60) days after the final disburscment of funds in the trust funds established in part Vll. herein, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this Order. (72 ) XIV The relief set forth in this Order fully satisfies any claim for consumer redress which the Commission may have under Sections 5 and 19 of the Federal Trade Commission Act arising out of the acts and practices allcgcd in the complaint in this matter. EXHIRIT A To be eligible for a partial refund from Horizon Corporation, a person must meet all of the following criteria:

1. The person must have contracted to purchase a lot from Horizon Corporation at any time from June 1 , 1969 to August 31, 1974. 2. The purchaser must either:

(a) have completed paying for the lot; or (b) be current in making payments to Horizon when the trustee distributes the partial refunds; or (c) have defaulted on his or her contract after paying 75% or more of the purchase price.

464 Exhibit B 3. The lot purchaser must not have received prior relief of any of t.he following types from Horizon:

(a) Relief amounting to at least 25% of the cash price of the lot from (i) a refund, (ii) a judgment in a lawsuit, or (iii) a reduction in the price of the Jot; or (b) an exchange of the lot initially purchased for a lot developed with a road and utilities; or (c) an exchange of the original lot for a lot in Paradise Hills pursuant to the filing of a claim in the settlement of the class action entitled Neil v. Horizon Corp. No. Civ. 75- 133 (D. Ariz. 1975).

4. No refunds wil be given for any purchase prior to June 1 , 1969. If as a result of an exchange or a subsequent purchase after ,June 1 , 1969 the purchaser s contract is increased, a refund will be given based only on the increase in t.he contract price. EXHIRIT B IMPORTANT: We owe you a partial refund.

Dear Customer:

We arc sending this letter t.o you under an order issued by the Federal Trade Commission.

In 1975, the Federal Trade Commission filed a complaint. against Horizon Corporation concerning it.s past sales practices. As part. of the resolution of t.his complaint, Horizon will refund to you a portion of the purchase price of the land you purchased from us. Horizon also will spend or cause to be spent $45 milion for development in its properties over the next twenty (20) years, and will refrain from certain sales practices in the future.

The following questions and answers explain how much money you are entitled t.o receive, the options you have, and some important information about your land. Who is entitled to a refund? Refunds wil be made to all customers of Horizon who satisfy the following conditions:

1. You must have purchased a lot from Horizon Corporation at any time from June 1 , 1969 to August 31, 1974. If your purchase during this time period was an exchange of a lot purchased prior to June 1 , 1969, your partial refund will be based only on the increased contract price.

2. You must have completed paying for your lot or be current in your payments to Horizon when the trustee distributes the refunds or have defaulted on your contract after paying 75% or more of the cash price. (The cash price is the price of the lot excluding interest.

3. You will not receive a partial refund if you have already received a reduction in the cash price of your lot of 25% or more, a refund of 25% or more of the cash price of your lot, an exchange for a lot developed with a road and utilities, or an exchange for a lot in Paradise Hills as part of the settlement of the class action suit entitled Neil v. Horizon Corporation.

Our records show that you are entitled to a refund. , xhibit B 17F.

How milch money will be refllnded Horizon will pay 514.5 milion into a trust fund over the next six years. This money, plus the interest earned on it, will be distributed to the eligible customers in two (2) payments. We estimate that each customer will receive about 12% of the cash price of the lot(5) purchased. Of course, your refund may be more or less than that amount depending on such factors as the number of customers seeking refunds. When will I receive my refund? You will receive part of your refund in July 1984. The rest will be paid in July 1987. What do I ha.ve to do to receive my refund! You must sign the attached notice and return it to Horizon in the self-addressed envelope within ninety (90) days. IMPORTANT - by signing this notice you give up any right you may have to sue Horizon for al1 claims of any kind arising from the transaction for your purchase of land, that is, the manner in which the land was marketed, the purchase contract and the circumstances in which the cC'ntract was signed. If you have questions, we suggest you consult a lawyer before you sign this. You must also keep us informed of any changes in youraddres8. This is important. we cannot find you when we mail the refund checks, you will lose your right to a refund. An address change form is enclosed in this letter for your convenience. You doout not have to use this form so long as you tell us either in person or by mail each time you move.

What should I do if I do not receive my checks? If you have not received your first check by August 1 , 1984 or have not received your second check by August 1 , 1987 you should write t.o us as soon as possible. Do I have togiue back my Lund? No. You do not have to give back the land to receive this refund. What are the plans (ordeueloping my lot? The lot you have purchased is completely undeveloped. Unless your lot is located in Waterwood, Horizon has no plans to develop your lot. If your lot is in Waterwood consult your contract. In properties other than Whispering Ranch your lot is or will be accessible by a road, paved in Waterwood and unpaved in the other properties. It may or may not be possible to develop your lot or extend utility lines to it. Your contract may give you the right to exchange your lot for a fully developed lot. An exchange will cost you more money. If you have questions, please refer to your contract or write to Ilorizon Corporation.

What are Horizun plans for devel()pment Horizon will spend, or wiJJ assure that others spend, at least $45 million in development over the next twenty years. This money will be spent for roads, utilities, stores, apartment houses, recreational facilities, civic buildings, or other improvements within the properties. The money will not be used to improve your lot. The improvements mayor may not directly benefit you or your lot. Can I resell my lot There is virtually no resale market at the prescnt time for lots which have not been developed with utilities. It is unlikely that you could resell your lot at the present time. There is no certainty that prospects for resale will improve in the future. The llll\..lia..H "JV.l".l.

464 Exhibit B growth of nearby cities may not make resi;c of YOJ.r Iot any easier. Horizon is not obligated to buy back your lot or help you resell it. What efforts willllorizon make to reduce my proper(r taxes? Horizon does not have direct control over the amount of your property taxes. However, Horizon filed suit in El Paso County to reduce property taxes on land in Horizon City. As a result of this suit, property taxes for rnany lots in Horizon City declined from about $14.00 per year to $8.00 per year. Similar efforts are now underway concerning Rio Communities.

What options do I have? You have three options with respect to your lot. 1. You may accept our refund offer and keep your land. You may also accept our refund offer and exchange your land if your contract p rmjts an exchange. If you have not fully paid for your property, you will have to continue making your payments in order to keep your land or exchange it. See your contract for a full explanation of the exchange privilege that applies to your land. 2. Vou can refuse to make any further payments that are due under your contract.

If you refuse to make further payments after you have already paid 75% or more of the cash price, you wil be eligible for the refund described above. If you stop paying before you have paid 75% of the cash price, you will not be eligible for the refund described above. (Only payments of principal count toward the 75%. In either case, you will lose your land and all the payments you have made. 3. Instead of accepting the refund described above, you may seek redress for any injury you believe Horizon has caused you. If you were a member of the class in the Neil suit or have previously accepted relief from Horizon, you may not be able to choose this option. We recommend that you consult an attorney before you choose this option.

If I have other questions, whom should I contac:? If you have questions about this offer, please write to us at the following address: Refund Offer Horizon Corporation Post Office Box 27324 Tucson, Arizona 85726 We will answer your questions promptly.

We recommend that you keep this letter for future reference. Sincerely, Donald C. White President Horizon Corporation