- 18 -
Country Club be sold only to owners of lots who resided in
Ridgemark Estates. At the same time, Paullus offered to purchase
the shares of Ridgemark’s shareholders who did not wish to
participate in the development of the Paicines area properties.
On January 23, 1989, the Loan, Option and Purchase Agreement
(Purchase Agreement) was approved by the board of directors. The
Purchase Agreement provided that Ridgemark, as the seller, would
diligently complete, at its expense, all offsite improvements for
unit 10. Ridgemark completed the offsite improvements after the
Purchase Agreement execution at a cost of about $1,600,000. The
Purchase Agreement provided that Ridgemark had the right to
structure a tax-deferred exchange, and Shen was required to
cooperate to effectuate such an exchange. Moreover, Ridgemark
agreed to make golf and country club memberships available to
purchasers of homes in the unit 10 property on the same terms and
conditions as to the preferred members.
The Purchase Agreement also provided that Shen had two
options to purchase, in increments, any remaining developable
land owned by Ridgemark. The first option was exercisable in
1991, and the second in 1993. Each option was worth
approximately $7 million. Neither option was exercised.
Ultimately, the optioned land reverted to Ridgemark.
Shen was expected to complete the purchase of the unit 10
lots by March 27, 1989. If Shen did not complete the purchase of
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011