Loren F. Paullus and Donna Paullus - Page 4

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          Ridgemark Estates, a planned development.  An unincorporated                
          association, Ridgemark Homes Association, was formed for the                
          purpose of enforcing and administering covenants and                        
          restrictions, as well as approval for home construction and lot             
          improvements.  Lot owners were eligible to be members of                    
          Ridgemark Homes Association.  Ridgemark Estates was located                 
          adjacent to the golf course.                                                
               Ridgemark constructed the golf course and related                      
          recreational facility.  Upon completion of the Ridgemark Golf and           
          Country Club, Ridgemark sold golf club memberships.  Memberships            
          consisted of annual, renewable licenses to use the facilities               
          with no proprietary rights or privileges.  Golf memberships were            
          sold by Ridgemark, in part, to fund the construction, operation,            
          and expansion of the golf course facility.                                  
               For a few years, Ridgemark sold unimproved and unsubdivided            
          lots.  These sales also provided golf course funding to                     
          Ridgemark.  Ridgemark generally followed the practice of selling            
          improved residential lots to purchasers for cash for the                    
          construction by such purchasers of single family houses.                    
               Ridgemark acquired a real estate brokerage license.                    
          Paullus’ daughter ran the sales department.  On or about April              
          1977, however, Ridgemark’s board of directors terminated its                
          practice of selling improved residential lots.  The board decided           
          that it was desirable to limit Ridgemark’s activities to the sale           

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Last modified: May 25, 2011