Oakcross Vineyards, LTD., Dennis D. Groth, Tax Matters Partner - Page 8

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                         1985           656,293                                       
                         1986           1,128,384                                     
                         1987           1,332,803                                     
                         1988           1,955,474                                     
                         1989           1,909,743                                     
                         1990           2,382,294                                     

          Activities of Vineyards and Winery                                          
               Dealings between Vineyards and Unrelated Buyers                        
               From 1981 through 1990, Vineyards sold grapes to unrelated             
          buyers, and the sales were made at market value.  During 1981,              
          Vineyards sold all of its grapes to unrelated buyers.  During               
          certain of the years from 1981 through 1990, long-term agreements           
          with certain buyers for Vineyards' grapes that had been made by             
          the previous owners of its vineyards were continued and new                 
          agreements were made.  Certain written agreements for the sale of           
          grapes, whether long term or otherwise, were on the purchaser's             
          letterhead, while others were on Winery's letterhead.  The                  
          agreements on Winery's letterhead generally called for payment of           
          one half of the amount due 30 days after delivery and the balance           
          on January 10 of the year following the year of delivery.  The              
          contracts written on purchasers' letterheads provided similar               
          payment terms.  Vineyards sent invoices to buyers on Winery                 
          letterhead.  Mr. Venge executed some of Vineyards' grape purchase           
          agreements on behalf of Mr. Groth.                                          
               Vineyards charged and collected interest on the unpaid                 
          balances due from unrelated purchasers.  Those buyers generally             
          paid Vineyards for grapes within 6 months of harvest, which                 

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Last modified: May 25, 2011