Oakcross Vineyards, LTD., Dennis D. Groth, Tax Matters Partner - Page 5

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               During relevant periods, Mr. Groth was president and                   
          secretary of Winery, and Mrs. Groth was vice president and chief            
          financial officer of Winery.  The Groths had overall                        
          responsibility for all Winery operations.  Mr. Groth represents             
          to customers that he controls the production process from the               
          growing of the grape until the cork is put in the bottle.  During           
          1985, the Groths had taken over full-time management of Winery;             
          prior to that time, Mr. Groth had been, successively, a partner             
          of the accounting firm of Arthur Young and Company, the chief               
          financial officer of Atari, Inc., and president of Atari's                  
          international division.                                                     
               Winery was initially financed by the Groths' personal                  
          resources.  By the end of 1983, their investment in Winery's                
          stock was $900,000, and their loans to Winery totaled $365,390.             
               Since it was established in 1982, Winery sought to build a             
          physical plant in which to make, store, and bottle its wines.               
          During 1982, Winery undertook to construct a winery plant,                  
          investing $220,000, but the project was deferred when financing             
          could not be obtained.  During 1982, Winery contracted with                 
          another winery to crush and ferment its grapes pursuant to a                
          custom crush contract.  During 1983, Winery constructed an open             
          pad in the Oakcross Vineyard for crushing and fermenting grapes,            
          investing $375,000.  Winery also relied on the facilities of                
          other wineries during that year for the custom crushing of grapes           
          and the bottling, aging, and storing of its wines.                          

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Last modified: May 25, 2011