Woody F. Lemons - Page 14

                                       - 14 -                                         
             during the year, the 36 class A memberships account for                  
             2,160 of the available days on which the complex could be                
             used during the year (i.e., 36 memberships x 60 days).  The              
             30 remaining available days were allocated to the class C                
             memberships.  Under the Articles and Bylaws, the total                   
             number of class C memberships is three, and each class C                 
             membership entitled its holder to use a villa for 10 days                
             per year.                                                                
                  The consideration specified in the Restated Articles                
             and First Amended Bylaws for each class A membership is                  
             $155,000 (i.e., "membership fee" of $15,000 and "initiation              
             fee" of $140,000).  Typically, a prospective member paid                 
             the membership fee in cash and issued a promissory note,                 
             payable to the club, for the initiation fee.  Thus, the                  
             total consideration that the club would receive from the                 
             sale of 36 class A memberships is $5,580,000.  The                       
             consideration specified in the Restated Articles and First               
             Amended Bylaws for each class C membership is $2,500 (i.e.,              
             "membership fee" of $2,500 and no "initiation fee").  Thus,              
             the total consideration that the club would receive from                 
             the sale of three class C memberships is $7,500.  The                    
             maximum amount of money that the club could realize from                 
             the sale of 36 class A memberships and three class C                     
             memberships was $5,587,500 (i.e., $5,580,000 plus $7,500).               






Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011