David C. Hutchinson, et al. - Page 5

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          golf course maintenance facilities, men’s and women’s locker                
          rooms, an outdoor swimming pool, and four tennis courts.                    
          Hereinafter, we refer to these depreciable improvements that VRI            
          was obligated to construct on the Property as “the Clubhouse”.              
               Under the Contract between VRI and VCI, ownership of the               
          completed Golf Course and the Clubhouse was to be transferred to            
          VCI, and VCI was to establish and operate a golf membership club            
          (the Club) which would sell memberships in the Club to homeowners           
          within the Golf Course community and to members of the public.              
               Under the Contract, in consideration for the transfer to VCI           
          of VRI’s ownership interest in the Golf Course and in the                   
          Clubhouse that were to be constructed by VRI, VCI, among other              
          things, was obligated to pay to VRI the total fees that would be            
          received by VCI upon the sale by VCI of memberships in the Club.            
               In order to secure the respective rights and obligations of            
          VRI and VCI under the Contract, during construction of the Golf             
          Course and the Clubhouse, the deed executed by VRI transferring             
          the Golf Course and the Clubhouse to VCI was to be transferred              
          into escrow, and the membership fees, upon receipt by VCI, were             
          to be transferred by VCI into an escrow account.                            
               The deed to the Golf Course and the Clubhouse was to be                
          transferred out of escrow to VCI on the earlier of December 31,             
          2000, or when at least 25 charter memberships, 375 golf                     
          memberships, and 100 golf social memberships in the Club were               

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