William P. Short, Jr. and Mary E. Short - Page 5

                                         -5-                                          
          The 1988 Deed                                                               
               On December 29, 1988, petitioners executed and recorded in the         
          Office of the Recorder of Deeds for Sussex County a special                 
          warranty deed (the 1988 deed), which purportedly transferred the            
          1988 gift land to the State of Delaware. (At this time, the State           
          court action was in the discovery phase, and settlement discussions         
          had not begun.)  Petitioners did not submit the 1988 deed to any            
          State of Delaware official in 1988, other than to the Sussex County         
          Recorder of Deeds, who did not have discretion to reject or not             
          record the deed.  Between 1988 and November 1991, the State neither         
          knew of nor accepted any gift from petitioners.                             
               On November 11, 1991, petitioners' attorney, Mark D. Olson,            
          submitted a letter to Edwin H. Clark II, Secretary of the Delaware          
          Department of Natural Resources, transmitting a copy of the 1988            
          deed.  This was the first time the "gift" was officially brought to         
          the State's attention. However, the State rejected the attempted            
          gift in accordance with its position in the State court action.             
          1992 Settlement Agreement and Dismissal of the State Court Action           
               Following lengthy settlement negotiations, the State court             
          action was resolved pursuant to an April 15, 1992, Settlement               
          Agreement (the agreement).  Pursuant to the agreement, petitioners          
          conveyed to the Nature Conservancy,2 which immediately conveyed to          


               2    The Nature Conservancy was a nonprofit environmental              
          preservation organization with its principal office in Arlington,           
          Virginia.                                                                   




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