Document:

Exhibit 10.10

 

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of May 1, 1998
by and between ED MOUNTFORD (“Executive”) and Hearthside Homes, Inc., a
California corporation (“Employer”), which is an indirect wholly-owned
subsidiary of California Coastal Communities, Inc., a Delaware corporation
(“Parent”).

 

WITNESSETH:

 

WHEREAS, Executive has
served Employer in various executive capacities and Employer desires to obtain
the benefit of continued service by Executive, and Executive desires to render
continued services to Employer;

 

WHEREAS,
Employer has determined that because of Executive’s substantial experience and business
relationships in connection with the business of Employer, it is in the
Employer’s best interest and that of its stockholders to secure services of
Executive and to provide Executive certain additional benefits; and

 

WHEREAS,
Employer and Executive desire to set forth in this Agreement the terms and
conditions of Executive’s employment with Employer.

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties agree as follows:

 

SECTION 1.                                TERM.
Employer agrees to employ Executive and Executive agrees to serve Employer, in
accordance with the terms of this Agreement, for a term of two (2) years, commencing
on the date hereof.

 

SECTION 2.                                SERVICES.
So long as this Agreement shall continue in effect, Executive shall use his
commercially reasonably efforts and abilities to promote Employer’s business,
affairs and interests, and shall perform the services contemplated by this
Agreement in accordance with policies established by the Company.

 

SECTION 3.                                SPECIFIC
POSITION; DUTIES AND RESPONSIBILITIES. Employer and Executive agree that,
subject to the provisions of this Agreement, Employer will employ Executive and
Executive will serve Employer as a senior officer for the duration of this
Agreement. The specific job position in which Executive shall serve shall be Senior
Vice President. Executive agrees to observe and comply with the rules and
regulations of Employer respecting the performance of Executive’s duties and
agrees to carry out and perform directions and policies of Employer as
they may be, from time to time, stated either orally or in writing. Employer
agrees that the duties which may be assigned to Executive shall be usual
and customary duties of the job position set forth in this Section 3, and
shall not be inconsistent with the provisions of the charter documents of
Employer or applicable law. Executive shall have such corporate power and
authority as shall reasonably be required to enable the discharge of duties in
any office that may be held.

 

1

 

SECTION 4.                                COMPENSATION.

 

(a)                                  Base
Salary and Bonus.

 

(i)                                     Base
Salary. During the Term of this Agreement, Employer agrees to pay Executive
a base salary of at least One Hundred Twenty Thousand Dollars ($120,000) per
year in semi-monthly installments on the same dates the other senior officers
of Employer are paid (“Base Salary”).

 

(ii)                                  Bonus.
Employer agrees to provide Executive with an incentive bonus, based upon the bonus
amount and performance targets mutually agreed upon and set forth on Schedule A
attached hereto.

 

(b)                                 Additional
Benefits. Executive shall also be entitled to all rights and benefits under
any bonus plan, incentive, participation or extra compensation plan, pension
plan, profit-sharing plan, life, medical, dental, disability, or insurance plan
or policy or other plan or benefit that Employer or its subsidiaries may provide
for Executive (provided Executive is eligible to participate therein) or
employees of Employer generally as from time to time in effect during the Term
of this Agreement (the “Plans”). In any event, Employer shall provide Executive
with term life insurance, health insurance and long-term disability insurance
provided for Employer’s executive employees generally. Executive shall also be
entitled to fringe benefits in accordance with the plans, practices, programs
and policies as in effect generally with respect to other peer executives of
Employer.

 

(c)                                  Perquisites.

 

(i)                                     Vacation.
Executive shall be entitled to four (4) weeks of paid vacation each
twelve-month period, which shall accrue on a monthly basis. Such vacation shall
be taken at such time or times as shall not unduly disrupt the orderly conduct
of the business of Employer and the duties of Executive. At the time of any
termination of employment, Executive shall be paid for all accrued but unused
vacation..

 

(ii)                                  Auto
Allowance. During the Term of this Agreement, Employer shall provide
Executive a monthly automobile allowance in the amount of $550 plus
reimbursement of operating costs as is currently covered under Employer’s Auto
Allowance Policy.

 

(d)                                 Overall
Qualification. Employer reserves the right to modify, suspend or
discontinue any and all practices, policies and programs generally applicable
to executives and other similarly situated executives at any time (whether
before or after termination of employment) without notice to or recourse by
Executive; however, Employer shall not amend the perquisites provisions set
forth in Section 4(c) to reduce Executive’s benefits thereunder
during the Term of this Agreement.

 

SECTION 5.                                TERMINATION.
The compensation and other benefits provided to Executive pursuant to this
Agreement, and the employment of Executive by Employer, shall be terminated
prior to expiration of the Term of this Agreement only as provided in this Section 5:

 

2

 

(a)                                  Disability.
In the event that Executive shall fail, because of illness, incapacity or
injury which is determined to be total (“Disability”) by a physician selected
by Employer or its insurers and acceptable to Executive or Executive’s legal
representative (such agreement as to acceptability not to be withheld
unreasonably), to render, for three consecutive months or for shorter periods
aggregating ninety (90) or more business days in any twelve (12)-month period,
the services contemplated by this Agreement, Executive’s employment hereunder may be
terminated by sixty (60) days’ prior written notice of termination from
Employer to Executive. Thereafter, Employer shall continue to (i) pay the
Base Salary to Executive for a period of six (6) months after the date of
termination, subject to adjustments referenced in the following paragraph, and (ii) provide
medical insurance as in effect prior to such termination for a period of six (6) months
following the date of termination. Thereafter, no further salary shall be paid
or medical insurance be provided. Executive’s rights under the Plans subsequent
to termination of employment pursuant to this paragraph shall be determined
under the applicable provisions of the respective Plans, unless otherwise
expressly stated herein. This Agreement in all other respects will terminate
upon the termination of employment pursuant to this paragraph.

 

The amount of compensation to be paid to Executive
pursuant to the preceding paragraph shall be adjusted in the event Executive
becomes entitled to and receives disability benefits under any disability
payment plan, including disability insurance. The amount of Executive’s
compensation otherwise payable by Employer pursuant to the preceding paragraph
shall be reduced, on a dollar-for-dollar basis, but not to less than zero, by
the amount of any such disability benefits received by Executive, but only to
the extent such benefits are attributable to payments made by Employer.

 

(b)                                 Death.
In the event of Executive’s death during the Term of this Agreement, Executive’s
Base Salary shall immediately terminate and Employer shall pay to the estate of
Executive the Base Salary accrued to the date of Executive’s death to the
extent not theretofore paid. If Executive’s death occurs while receiving payments
under Section 5(a) above, such payments shall cease. Executive’s
rights under the Plans subsequent to his death shall be determined under the
applicable provisions of the respective Plans; provided that, notwithstanding
any provisions to the contrary therein, Employer shall continue to provide
medical insurance to the dependents of Executive for a period of six (6) months
following the death of Executive. This Agreement in all other respects will
terminate upon the death of Executive.

 

(c)                                  For
Cause. The employment of Executive hereunder shall be terminable by
Employer in the event that Executive (i) is or has been engaging in
willful or grossly negligent conduct which has resulted in a failure to perform Executive’s
duties hereunder or, (ii) has committed an act of dishonesty, gross
negligence or misconduct, which has a direct, substantial and adverse effect on
Employer, its business or reputation.

 

Notwithstanding the foregoing, Executive shall not be
terminated for cause pursuant to the first paragraph of this subsection 5(c) unless
and until Executive has received written notice of a proposed termination for
cause and Executive has had an opportunity to be heard by an officer of the
Company authorized to take such action. Executive shall be deemed to have had
such opportunity if given written or telephonic notice by any officer at least
72 hours in advance of a meeting.

 

3

 

In the event of Executive’s termination pursuant to
this subsection 5(c), Executive’s rights to receive Base Salary shall
immediately terminate and Employer shall pay to Executive his Base Salary and
vacation accrued to the date of such termination to the extent not theretofore
paid. Executive’s rights under the Plans subsequent to termination shall be
determined under the applicable provisions of the respective plans. This
Agreement in all other respects will terminate upon such termination.

 

(d)                                 Without
Cause. Notwithstanding any other provision of this Section 5, the
Board shall have the right to terminate Executive’s employment with Employer
without cause at any time upon at least thirty (30) days’ prior written notice
to Executive. The following conditions shall thereupon become applicable:

 

(i)                                     Severance
Pay. Employer shall continue to pay Executive the Base Salary on a semi-monthly
basis for the remainder of the Term of this Agreement.

 

(ii)                                  Medical
Insurance Continuation. Employer shall continue to provide (under COBRA)
medical insurance as in effect prior to such termination for twelve (12) months
following such termination, and Employer shall bear all costs for such
insurance.

 

(iii)                               Bonus
Payment. If Executive is terminated without cause, Executive shall also be
paid for any potential bonuses under this Agreement (the “Bonus Severance”). The amount of any such Bonus Severance shall
be equal to the full amount of any unpaid target bonus payment(s) set forth on Schedule A.

 

(e)                                  Voluntary
Termination. At any time during the Term of this Agreement, Executive shall
have the right, upon thirty (30) days’ prior written notice to Employer, to
terminate his employment with Employer. Upon termination of Executive’s
employment pursuant to this subsection 5(e), (i) Executive’s right to
receive Base Salary shall immediately terminate and Employer shall pay to
Executive his Base Salary accrued to the date of such termination to the extent
not theretofore paid and (ii) Executive’s rights under the Plans
subsequent to such termination shall be determined under the applicable
provisions of the respective Plans. This Agreement in all other respects will
terminate upon such termination.

 

(f)                                    Termination
by Executive for “Good Reason”. Notwithstanding any other provisions of
this Agreement, Employer shall provide Executive with the payments and benefits
set forth in Section 5(d) in the event Executive terminates
employment for “Good Reason.”  For
purposes of this Agreement, “Good Reason” for Executive to terminate employment
shall mean voluntary termination as a result of (i) the assignment to
Executive of duties inconsistent with the position and status of Executive as
set forth in this Agreement without Executive’s prior written consent, (ii) a
substantial alteration in the nature, status or prestige of Executive’s
responsibilities as set forth in this Agreement or a change in Executive’s
title or reporting level from that set forth in this Agreement, (iii) the
relocation of Employer’s executive offices or principal business location to a
point more than twenty-five (25) miles from the location of such offices or
business as of the date of this Agreement, (iv) reduction by Employer of
Executive’s Base Salary in effect on the date hereof or as the same may be
increased from time to time, (v) any action by Employer (including the
elimination of benefit plans without providing substitutes therefor or the
reduction of Executive’s benefits thereunder) that would substantially diminish
the aggregate

 

4

 

value of Executive’s incentive awards (including any
action taken by Employer, following a Change of Control, that materially
impairs the ability of Executive to achieve the Performance Objectives set
forth on Schedule A attached hereto) and other fringe benefits, or (vi) a
failure by Employer to obtain from any successor, before succession takes
place, an agreement to assume and perform this Agreement.

 

For purposes of the
foregoing paragraph, a “Change of Control” means, and shall be deemed to have
taken place upon, the occurrence of: (i) a transaction requiring stockholder
approval involving the sale of all or substantially all of the assets of Parent
or the merger of Parent with or into another corporation or business entity,
other than a transaction in which stockholders of Parent immediately prior to
the closing of such transaction own a majority of the acquiring corporation or
entity immediately after giving effect to such transaction, or (ii) the acquisition
by any Person as Beneficial Owner (as such terms are defined in the Securities
Exchange Act of 1934, as amended), directly or indirectly, of securities of
Parent representing fifty percent (50%) or more of the total voting power
represented by Parent’s then outstanding voting securities.

 

SECTION 6.                                BUSINESS
EXPENSES. During the Term of this Agreement, Employer shall reimburse
Executive promptly for reasonable business expenditures, including travel,
entertainment, parking, business meetings and professional dues made and
substantiated in accordance with policies, practices and procedures established
from time to time by the Board and incurred in pursuit and furtherance of
Employer’s business and goodwill.

 

SECTION 7.                                MISCELLANEOUS.

 

(a)                                  Succession;
Survival. This Agreement shall inure to the benefit of and shall be binding
upon Employer, its successors and assigns. Absent the prior written consent of
Executive, this Agreement may not be assigned by Employer other than in
connection with a merger or sale of all or substantially all the assets of
Employer or a similar transaction in which the successor or assignee assumes
(whether by operation of law or express assumption) all obligations of Employer
hereunder. The obligations and duties of Executive hereunder are personal and
otherwise not assignable. Executive’s obligations and representations under
this Agreement will survive the termination of Executive’s employment,
regardless of the manner of such termination.

 

(b)                                 Notices.
Any notice or other communication provided for in this Agreement shall be in
writing and sent if to Employer to its office at:

 

Hearthside Homes, Inc.

4343 Von Karman Avenue

Newport Beach, California 92660

Attention: Chief Executive Officer

 

or at such other address as Employer may from
time to time in writing designate, and if to Executive at such address as
Executive may from time to time in writing designate (or Executive’s
business address of record in the absence of such designation). Each such
notice or other communication shall be effective (i) if given by
telecommunication, when transmitted to

 

5

 

the applicable number so specified in (or pursuant to)
this Section 7 and an appropriate answer back is received, (ii) if
given by mail, three days after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (iii) if
given by any other means, when actually delivered at such address.

 

(c)                                  Entire
Agreement; Amendments. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and it supersedes any prior agreements,
undertakings, commitments and practices relating to Executive’s employment by
Employer. No amendment or modification of the terms of this Agreement shall be
valid unless made in writing and signed by Executive and, on behalf of
Employer, by an officer expressly so authorized by its Board of Directors.

 

(d)                                 Waiver.
No failure on the part of any party to exercise or delay in exercising any
right hereunder shall be deemed a waiver thereof or of any other right, nor
shall any single or partial exercise preclude any further or other exercise of
such right or any other right.

 

(e)                                  Choice
of Law. This Agreement, the legal relations between the parties and any
action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, the relationship of the parties or the subject
matter hereof shall be governed by and construed in accordance with the laws of
the State of California, applicable to contracts made and performed in such
State and without regard to conflicts of law doctrines, to the extent permitted
by law.

 

(f)                                    Attorney’s
Fees. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to recover reasonable attorney’s fees, costs and necessary disbursements from
the non-prevailing party in addition to any other relief to which such party may be
entitled.

 

(g)                                 Confidentiality;
Proprietary Information. Executive agrees to not make use of, divulge or
otherwise disclose, directly or indirectly, any trade secret or other
confidential or proprietary information concerning the business (including but
not limited to its products, employees, services, practices or policies) of
Employer or any of its affiliates of which Executive may learn or be aware
as a result of Executive’s employment during the Term of the Agreement or prior
thereto as stockholder, employee, officer or director of, or consultant to,
Employer, except to the extent such use or disclosure is (i) necessary to
the performance of this Agreement and in furtherance of Employer’s best
interests, (ii) required by applicable law, (iii) lawfully obtainable
from other public sources, or (iv) authorized in writing by or pursuant to
a written agreement with Employer. The provisions of this subsection (g) shall
survive the expiration, suspension or termination, for any reason, of this
Agreement.

 

(h)                                 Severability.
If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect,
and if any provision is held invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force and effect
in all other circumstances, to the fullest extent permitted by law.

 

6

 

(i)                                     Withholding;
Deductions. All compensation payable hereunder, including salary and other
benefits, shall be subject to applicable taxes, withholding and other required,
normal or elected employee deductions.

 

(j)                                     Section Headings.
Section and other headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

(k)                                  Counterparts.
This Agreement and any amendment hereto may be executed in one or more
counterparts. All of such counterparts shall constitute one and the same
agreement and shall become effective when a copy signed by each party has been
delivered to the other party.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

 

	
   

  	
  “EMPLOYER”

  
	
   

  	
   

  
	
   

  	
  HEARTHSIDE HOMES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  :   /s/ Raymond J. Pacini

  	
   

  
	
   

  	
   

  	
   Raymond J. Pacini

  
	
   

  	
   

  	
   Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Ed
  Mountford

  	
   

  
	
   

  	
  ED MOUNTFORD

  
					

 

7Exhibit
10.10(a)

 

MODIFICATION

OF

EMPLOYMENT AGREEMENT

 

THIS MODIFICATION OF
EMPLOYMENT AGREEMENT (the “Extension”) is entered into as of November 12, 2003
by and between Hearthside Homes, Inc., a California corporation (“Employer”),
which is an indirect wholly-owned subsidiary of California Coastal Communities,
Inc., a Delaware corporation (“Parent”), and ED MOUNTFORD (“Executive”).

 

W  I
T  N  E  S  S  E  T  H:

 

WHEREAS, Executive and
Employer have entered into an Employment Agreement dated as of May 1,
1998, an Extension and Modification of Employment Agreement dated
December 7, 1999, a Second Extension and Modification of Employment
Agreement dated April 30, 2001 and a Third Extension and Modification of
Employment Agreement dated March 18, 2003 (collectively, the “Employment
Agreement”) through which Executive has provided various executive capacities
to Employer and Employer has obtained various executive services by Executive;

 

NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises and covenants
herein contained, the parties agree as follows:

 

SECTION 1.           CONTINUING
EFFECTIVENESS OF EMPLOYMENT AGREEMENT. 
Except to the extent of any modification made pursuant to the terms of
this Extension, the Employment Agreement shall continue to remain in full force
and effect following the date hereof.

 

SECTION 2.           BONUS.  From the date hereof and until the expiration
of the term set forth in the Third Extension (April 30, 2005), Employer agrees
to provide Executive with the opportunity to earn incentive bonuses based upon
the formula set forth on Schedules A, B and C attached hereto.  Included in Schedule C is
a spreadsheet which details the mechanics for determining the amount, if any,
of a bonus payment that may be earned by Executive in connection with the North
Ormond Beach, LLC development project in Oxnard, California (the “Oxnard
Project”), which bonus (the “Oxnard Project Bonus”) shall only be payable to
the extent that certain profit levels on the Oxnard Project are realized in
cash (“Profits”) as calculated on Schedule C.  In order to receive the allocable amount of
the Oxnard Project Bonus set forth on Schedule C, Executive must remain
in the employ of Employer at the time the requisite Profits have been realized
unless:

 

(i)                                     Executive
has been terminated “without cause”;

 

(ii)                                  The
Agreement is not further extended after the expiration of the Term as set forth
herein;

 

 

(iii)                               Executive has terminated
his employment for “Good Reason”, as such terms are defined in the Agreement;

 

(iv)                              The
ability to calculate Profits has been delayed by virtue of Employer having
entered into a subsequent agreement to develop and sell residential units at
the Oxnard Project, provided that Executive was not terminated “for cause” or
did not voluntarily terminate his employment with Employer prior to the date of
any such subsequent agreement; or

 

(v)                                 Parent
or an affiliate has caused the sale or merger of the business and operations of
Employer to a third party and the employ of Executive has not been continued by
the successor to Employer under substantially the same terms and conditions set
forth in the Agreement and as extended and modified herein.

 

In the event of the
occurrence of any of the events set forth in clauses (i) through (iv) above,
Executive shall be paid his allocable share of the Oxnard Project Bonus at such
time, if any, following the termination of his employment that Employer has
realized the requisite level of Profits. 
In the case of clause (v) above, the portion of the sales price of
Employer that has been allocated to the Oxnard Project shall be used to
determine whether the requisite level of Profits has been realized and
Executive shall be paid accordingly out of the proceeds received by Parent or
any of its affiliates in connection with any such sale or merger of Employer.

 

IN
WITNESS WHEREOF, the parties have executed this Extension as of the date first
above written.

 

	
   

  	
  “EMPLOYER”

  
	
   

  	
   

  
	
   

  	
  HEARTHSIDE HOMES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Raymond J. Pacini

  	
   

  
	
   

  	
   

  	
  Raymond J. Pacini

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
    /s/
  Edward G. Mountford

  	
   

  
	
   

  	
  Ed Mountford

  

 

2

 

11/12/2003

Schedule C

 

($ in thousands)

 

	
   

  	
   

  	
   

  	
   

  	
  Equity

  	
   

  	
   

  	
   

  	
  Original Pro Forma

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Required

  	
   

  	
   

  	
   

  	
  Net

  	
   

  	
   

  	
   

  	
  Hearthside

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  per Original

  	
   

  	
   

  	
   

  	
  Cash

  	
   

  	
   

  	
   

  	
  Profit Spilt

  	
   

  	
   

  	
   

  	
   

  
	
  Oxnard

  	
   

  	
   

  	
   

  	
  Pro Forma

  	
   

  	
   

  	
   

  	
  Flow

  	
   

  	
  IRR

  	
   

  	
  Company

  	
   

  	
  Employees

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  first $5,500 (base case):

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  base case (entitle by March 2005):

  	
   

  	
  IHP

  	
   

  	
  $

  	
  4,000

  	
   

  	
  80%

  	
   

  	
  $

  	
  9,500

  	
   

  	
  91.4

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  *

  
	
   

  	
  - no inflation in land / home prices

  	
   

  	
  Co.

  	
   

  	
  1,000

  	
   

  	
  20%

  	
   

  	
  5,500

  	
   

  	
  123.0

  	
  %

  	
  85%

  	
   

  	
  15%

  	
  =

  	
   

  	
  $

  	
  825

  	
   

  
	
   

  	
  - total lot sale revenue:

  	
   

  	
   

  	
   

  	
  $

  	
  5,000

  	
   

  	
   

  	
   

  	
  $

  	
  15,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  63,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  company

  	
   

  	
  $

  	
  4,675

  	
   

  	
   

  	
   

  	
  Mike /Ed

  	
  40%

  	
   

  	
  $

  	
  330

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  85.0

  	
  %

  	
   

  	
   

  	
  John

  	
  20%

  	
   

  	
  $

  	
  165

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2a.

  	
  total profit if 7% annual inflation for next 2 yrs.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  IHP

  	
   

  	
  $

  	
  14,000

  	
   

  	
   

  	
   

  	
  co. profits > $5,500

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (on land sales revenue of $62.9 million)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Co.

  	
   

  	
  10,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (7% inflation = $9,000)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  24,000

  	
   

  	
   

  	
   

  	
  80%

  	
   

  	
  20%

  	
  =

  	
   

  	
  $

  	
  1,725

  	
   

  
	
   

  	
  - total lot sale revenue:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  company

  	
   

  	
  $

  	
  8,275

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  72,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  82.8

  	
  %

  	
   

  	
   

  	
  Mike /Ed

  	
  40%

  	
   

  	
  $

  	
  690

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  John

  	
  20%

  	
   

  	
  $

  	
  345

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2b.

  	
  total profit if 10% annual inflation for next 2 yrs.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  IHP

  	
   

  	
  $

  	
  16,000

  	
   

  	
   

  	
   

  	
  co. profits > $5,500

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (on land sales revenue of $62.9 million)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Co.

  	
   

  	
  12,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (10% inflation = $13,000)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  28,000

  	
   

  	
   

  	
   

  	
  80%

  	
   

  	
  20%

  	
  =

  	
   

  	
  $

  	
  2,125

  	
   

  
	
   

  	
  - total lot sale revenue:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  company

  	
   

  	
  $

  	
  9,875

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  76,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  82.3

  	
  %

  	
   

  	
   

  	
  Mike /Ed

  	
  40%

  	
   

  	
  $

  	
  850

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  John

  	
  20%

  	
   

  	
  $

  	
  425

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2c.

  	
  total profit if 13% annual inflation for next 2 yrs.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  IHP

  	
   

  	
  $

  	
  18,583

  	
   

  	
   

  	
   

  	
  co. profits > $5,500

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (on land sales revenue of $62.9 million)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Co.

  	
   

  	
  14,583

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (13% inflation = $18,160)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  33,165

  	
   

  	
   

  	
   

  	
  80%

  	
   

  	
  20%

  	
  =

  	
   

  	
  $

  	
  2,642

  	
   

  
	
   

  	
  - total lot sale revenue:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  company

  	
   

  	
  $

  	
  11,941

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  81,160

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  81.9

  	
  %

  	
   

  	
   

  	
  Mike /Ed

  	
  40%

  	
   

  	
  $

  	
  1,057

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  John

  	
  20%

  	
   

  	
  $

  	
  528

  	
   

  
																												

 

*  before adjustment for preferred return @ 15%
on Company’s investment

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]