Estate of William Busch, Deceased, Mary Dana, Executor - Page 6




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          find a match with a developer that understood the politics of               
          Pleasanton and the entitlement process.  He recommended that the            
          offer of Ponderosa Homes (Ponderosa) be accepted.                           
               By a February 25, 1994, letter, Ponderosa presented a letter           
          of intent to option the Busch property for 36 months or 60 months           
          after governmental approval, for an exercise price of $12,275,000           
          or $139,500 per acre (using 88 acres as the base).  Ponderosa               
          offered $5 million down and $7,275,000 due in two equal payments,           
          one due in 18 months and the other due 30 months after escrow.              
          Ponderosa agreed to pay a nonrefundable $10,000 per month for its           
          option until the sale closed, with no crediting of these payments           
          to the final price.                                                         
               Ponderosa, with about 25 years of residential development              
          experience, had 75 employees, 6 to 10 active projects, and began            
          1 to 2 new projects each year.  In its business history,                    
          Ponderosa experienced only a few projects that it was forced to             
          abandon.  As of January 1994, Ponderosa had built about 1,000               
          homes in the Pleasanton area and was familiar with the city’s               
          entitlement process.  Ponderosa was aware of the referendum                 
          against other projects (the Kottinger Hills project and                     
          controversy surrounding the Pleasanton Ridge development), and              
          the political climate in Pleasanton, but Ponderosa believed that            
          the Busch property project could work and bid on it.                        
               In addition to the option agreement by Ponderosa, several              
          other developers made offers as follows:  (a) Mission Peaks Homes           




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