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which were significantly more limited in scope than those
contained in the November 1995 proposal.
6. The Final Settlement and Share Repurchase
As contemplated by the March 1996 proposal, petitioner and
V. Eihusen entered into an “Agreement for the Purchase and Sale
of Stock and Settlement of Claims” on April 19, 1996 (definitive
agreement). The definitive agreement replaced and superseded all
of the previous agreements and set forth the entire understanding
between the parties with respect to its subject matter.
The terms of the definitive agreement were generally similar
to the terms of the March 1996 proposal. One of the significant
differences between the documents was the form of conveyance of
the Indian Head Golf Club assets. Instead of an outright
transfer of the assets, petitioner and V. Eihusen engaged in an
exchange of stock, with petitioner transferring to V. Eihusen all
of the shares of Indian Head Golf Club, Inc., in exchange for
16,740 unrestricted shares of stock in petitioner, so as to
purportedly qualify that exchange for tax-free treatment under
section 355. The definitive agreement also contained the
obligation of petitioner and R. Eihusen to make a joint tender
offer (tender offer) for all issued and outstanding shares of
common stock in petitioner except for shares owned by V. Eihusen,
2(...continued)
Golf Club and the related property was $1,673,735.
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