Oakcross Vineyards, LTD., Dennis D. Groth, Tax Matters Partner - Page 7

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          1986, Bank of America offered to renew Winery's line of credit in           
          the amount of $1,100,000, subject to continued subordination of             
          Vineyards' claims against Winery to those of the bank and other             
          restrictions on payments by Winery to Vineyards further described           
          below.  The terms imposed in connection with the renewal of the             
          line of credit continued until Winery ceased dealing with Bank of           
          America, which occurred during 1988.                                        
               During November 1988, Winery negotiated a $1,500,000 line of           
          credit from Napa National Bank, which also agreed to provide a              
          construction loan of $2,200,000 to build Winery's plant and an              
          equipment loan of $550,000.  The bank required the same                     
          subordination of Winery's debts to Vineyards to Winery's                    
          obligations to the bank, the same cross-collateralization by                
          Vineyards, and the same payment schedule as Bank of America had             
          required.  During 1990, Winery's plant, which had the capacity to           
          produce 40,000 cases of wine, was completed and occupied.  Also             
          during 1990, Winery began using the term "estate bottled" to                
          describe its wines, meaning, inter alia, that Winery controlled             
          the viticultural practices of the vineyards in which the grapes             
          from which the wines had been made were grown.                              
               The following table summarizes Winery's wine sales through             
                         Year                Sales                                    
                         1982                $0                                       
                         1983                28,402                                   
                         1984           384,921                                       

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