SECOND AMENDMENT TO COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS

Exhibit 3.5(b)

SECOND AMENDMENT TO
COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS

THIS SECOND AMENDMENT TO COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS is entered into as of this 5th day of August, 2005, by and among LEGAV Corporation, a California corporation (“LEGAV Golf’), GCL Corporation, a California corporation (“GCL”), LEGAV COMMERCIAL PROPERTY CORPORATION, a California corporation (“LEGAV Commercial”), and Emerald Development Group, LLC, a California limited liability company (“Emerald”).

WHEREAS, the parties hereto are parties to that certain Combined Amendment to Joint Venture Agreements dated as of January 1, 2004, as amended by the First Amendment to Combined Amendment to Joint Venture dated March 26, 2004 (the “Agreement”);

WHEREAS, the parties desire to amend the Agreement in certain respects.

NOW, THEREFORE, BE IT AGREED, as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined are defined in the Agreement. In the event of any conflict between a definition in the Agreement and this Second Amendment, the meaning in this Second Amendment shall apply.

2. Miscellaneous Changes to the Agreement.

a) Section 6(e) is hereby amended by adding the following at the end thereof: In the event the Xxxx Release Agreement is included as an exhibit(s) to a purchase and sale agreement with Xxxx executed by the Joint Ventures (the “PSA Agreement”), then for the purposes of this Section 6(e), the three percent (3%) shall be deemed earned on the date the Deposit becomes “nonrefundable to the purchaser (and such nonrefundability is not being contested by Xxxx)” as provided in the PSA Agreement. The Xxxx Incentive Payment shall not be deemed earned nor the preferred return of 8% per annum on the Xxxx Incentive Payment commence until the Xxxx Recordation Date or Xxxx Option Recordation Date as provided in Section 7(b).

b) Section 7(b) of the Agreement is hereby amended by adding the following at the end thereof: “For purposes of this Section 7(b) the Xxxx Release Agreement shall be deemed to have been executed on (i) the (x) closing of the PSA Agreement and the execution and delivery to the Joint Ventures of the Exhibits attached to the PSA which release the Xxxx Restrictions or (y) closing, execution and delivery to the Joint Ventures of another agreement with Xxxx, subject to the approval by the Ventures in accordance with the terms

of this Agreement, which releases the Xxxx Restrictions before July 1, 2007 (which date can be extended up to 12 months as provided in Section 13.6 of the Development Agreement, as amended) (collectively, the “Xxxx Recordation Date”), or (ii) if CCA Venturers, in its sole and absolute discretion, with no obligation, elects to exercise the option to purchase the Xxxx Release pursuant to the terms of the PSA Agreement (the “Option”), closes the Option and receives the executed documents by Xxxx to release the Xxxx Restrictions (the “Xxxx Option Recordation Date”). Notwithstanding anything to the contrary, in no event will the preferred return of 8% per annum (not compounded) on the Xxxx Incentive Payment under Section 8(b), accrue or be payable for the period after May 1, 2006, the termination date of the PSA Agreement or such later termination date as agreed to in writing by Xxxx and the Joint Ventures.

c) Section 7(c) of the Agreement is hereby amended to read in its entirety as follows: “The City has approved the issuance of CFD Bonds in the gross amount of $37,500,000. The projected net proceeds from the CFD Bonds are $29,150,000. Emerald shall be entitled to a special profits interest in the Joint Ventures (the “CFD Incentive Payment”) as follows:

(1) If the Development Property is sold to Xxxx pursuant to the PSA Agreement, then the CFD Incentive Payment will equal (i) $7,516,250, which represents 35% of the projected net CFD Bond (i.e., $29,150,000) proceeds in excess of $7,675,000, plus (ii) 8% per annum (not compounded) of the amount set forth in clause (i) from April 20, 2005;

(2) if the purchaser of the Development Property is not Xxxx, but the price is derived in a manner that takes into account the availability to the purchaser of the net proceeds of the CFD Bonds (analogous to how those proceeds were taken into account in the letter of intent with Xxxx with the same effect to increase the purchase price, then the CFD Incentive Payment will equal (i) $7,516,250, plus (ii) 8% per annum (not compounded) of the amount set forth in clause (i) from April 20, 2005 (the date of the City’s adoption of Notice of Formation of the CFD).

(3) In the event that the Development Property is sold in a manner that results in the benefit to the Joint Ventures from the CFD Bond proceeds being received in stages rather than all at once, the CFD Incentive Payment will be paid on a pro rata basis (based on the ratio of the gross acreage of the portion of the Development Property sold to the total

Development Property, in each case excluding the portion of the Development Property transferred to the City for purposes of a community center) as each portion of the Development Property (other than the community center) is sold. The amount to be paid shall be based on the portion of the Development Property sold at each closing. In the event a portion of the Development Property has been sold prior to the time the CFD Incentive Payment becomes due, the pro rata amounts that would have been due in connection with the sale of that portion shall be paid at the time of the sale of the next portion of the Development Property.”

d) Exhibit E to the Development Agreement and the Agreement is hereby amended to read as set forth on Exhibit E hereto. The distributions reflected on Exhibit E under the heading “Exhibit E-4 Distribution Summary and Exhibit E-5 Profit Distributions and Allocations” will be adjusted only to the extent that the assumptions and calculations set forth thereon relating to actual costs, dates, selling price and terms of sale are different from those reflected on Exhibits E-4 and E-5, and the closing of the sale occurs. The parties agree not to renegotiate the process for determining the distributions to the parties set forth on Exhibits E-4 and E-5; any adjustments shall be subject only to the matters set forth in the sentence above. The parties agree that the Advance Payments (defined below), closing costs associated with the sale of the Development Property, the asset management fee in Section 8(g)(4), legal fees incurred by CCA Venturers or Emerald on the Project (excluding any fees incurred to negotiate the agreement between the parties or from any disputes concerning the Agreement), and the Administrative Fee are Project Expenses.

e) A new Section 8(i) is hereby added to the Agreement to read in its entirety as follows: “Section 8(g)(3) provides that Emerald’s share of the Net Proceeds for Distribution will include a preferred return at the rate of 8% per annum (not compounded) from the date its percentage interest is earned until paid. In the event that the Development Property is sold with a portion of the price being deferred, so Emerald does not, as part of the initial distribution of Available Funds, receive all Net Proceeds for Distribution to which it would be entitled as part of the initial distribution of Available Funds at closing, then Emerald’s share of any remaining Net Proceeds for Distribution will cease to earn the 8% (not compounded), but will continue to accrue a preferred return at the rate of 5% per annum (not compounded), until such time as there are sufficient Available Funds to distribute to Emerald its remaining Percentage Interest of Net Proceeds for Distribution. The payment of the 5% preferred return

on Emerald’s Percentage Interest shall be disbursed first to Emerald on the next distribution prior to the determination of Net Proceeds for Distribution.

3. Changes to Section 9 of the Agreement.

Section 9 of the Agreement, which was previously deleted, is hereby added back, to the Agreement and shall read in its entirety as follows:

9. Miscellaneous Allocations and Distributions.

a) Concurrently with the execution of the Second Amendment to this Agreement, the CCA Venturers will advance to the Joint Ventures the amount necessary to pay an advance cash payment of the CFD Incentive Fee to Emerald of $500,000, which $500,000 advance cash payment is nonrefundable, and will set aside in an escrow account with a title company reasonably acceptable to both parties an additional $2,000,000 (the “$2,000,000 and $500,000 are collectively the “Advance Payments”). The additional $2,000,000 will be distributed to Emerald at the date the Deposit becomes “nonrefundable to the purchaser (and such nonrefundability is not being contested by Xxxx)” as provided in the PSA Agreement. The Advance Payments received by Emerald under this section shall be treated as an advance payment of the CFD Incentive Payment otherwise payable under Section 7(c), Section 8(c), and Section 12. Emerald shall not be entitled to the 8% preferred return on the portion of the CFD Incentive Fee paid by the Advance Payments from the date the respective Advance Payments are paid to Emerald. In the event (i) there are not sufficient Available Funds by July 1, 2007 (which date can be extended up to 12 months as provided in Section 13.6 of the Development Agreement, as amended), after payment of the distributions in Section 8(b), to pay the CFD Incentive Payment, then to the extent of the deficiency, or (ii) to the extent of any unearned or overpaid CFD Incentive Payment, up to $2,000,000 of the Advance Payment, shall be refunded by Emerald to the Joint Ventures on or before fifteen (15) days following such date and disbursed directly to the CCA Venturers. If not refunded by Emerald, CCA Venturers may in addition to any other remedy, credit the amount not refunded against any sum due Emerald, pursuant to this Agreement or the Development Agreement.

b) In the event that the Joint Ventures enter into an agreement that provides the Joint Ventures with certain rights to purchase model homes, Emerald, at its expense, will be entitled to purchase one-third of such homes (rounded up if not a whole number, but in no event more than 2) and will be entitled to the first selection of which homes

it wishes to purchase. For example, with regard to the anticipated sale to Xxxx, Emerald will have the first option to purchase any one of the three model homes in PA 5 and any one of the three model homes in PA 6 on the terms available to the Joint Ventures. In the event that Emerald chooses not to purchase one or both of such model homes, then the CCA Venturers may do so and Emerald will have no interest in those homes. In the event the CCA Venturers elect in writing to not purchase any portion of their share of the model homes, then Emerald may acquire the portion waived and the two (2) rights limitation above shall not be applicable and the CCA Venturers will have no interest in the homes.

c) On or before the first day of operation of the permanent golf clubhouse, Xxxxx Xxxxx, the principal of Emerald, will receive one golf membership on the same terms as the Xxxx Memberships described in Section 18 of the Xxxx XXX. Specifically, the initiation deposit as well as twenty (20) years of monthly membership dues shall be waived, however Xxxxx shall be responsible for all charges incurred under the membership. This membership shall be non-assignable.

d) In the event that following the sale of the Development Property, the Joint Ventures are required to pay liquidated damages to the purchaser due to the failure of the Joint Ventures to perform their Post Closing Construction Obligations, as defined in the Amendment to Development Agreement, such damages will be borne solely by CCA Venturers and no such amounts shall be charged in any respect to Emerald.

4. Mutual Release.

a) Each party hereto, for itself, its members, partners, joint venturers, employees, directors, partners, shareholders, successors, assigns, and all other persons claiming through such party (collectively, the “Releasors”), does hereby release, waive, and forever discharge the other parties hereto, its members, partners, joint venturers, employees, directors, partners, shareholders, successors, assigns, and all other persons claiming through such party (collectively, the “Releasees”) from, and does fully waive any obligations of any of the Releasees to the Releasors for, any and all liability, actions, charges, causes of action, demands, damages, or claims for relief, remuneration, sums of money, accounts or expenses (including attorneys’ fees and costs) of any kind whatsoever (each a “Claim”), whether known or unknown or contingent or absolute, which heretofore has been or which hereafter may be suffered or sustained, directly or indirectly, by Releasors for or by reason of any

cause, matter or thing whatsoever relating to or in any way arising out of the transactions relating to this Agreement. This release and waiver does not apply to: (i) any agreement entered into after the date hereof; or (ii) any actions or omissions of Releasees after the date hereof.

b) Each party hereto agrees not to take any step or initiate any proceeding against any person who might be entitled to claim contribution, indemnity or other relief over against the Releasees with respect to any of the matters hereby released by it, and warrants that it has not assigned to any person any right in respect of any of the matters hereby released by it. As used herein, the term “person” shall be broadly interpreted and includes an individual, body corporate, partnership, joint venture, trust, association, unincorporated organization, any governmental or regulatory agency or any entity recognized by law.

c) Each party hereto represents and warrants that such party has not filed any complaint, charge, or lawsuit against the Releasees with any government agency or any court.

ALL PARTIES ACKNOWLEDGE THAT THEY ARE FAMILIAR WITH AND VOLUNTARILY WAIVE ANY RIGHT OR BENEFIT ARISING FROM SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

ALL PARTIES WAIVE AND RELINQUISH ANY RIGHT OR BENEFIT THEY HAVE OR MAY HAVE UNDER ANY SIMILAR PROVISION OF THE STATUTORY OR NON-STATUTORY LAW OF ANY JURISDICTION.

Emerald:	The Joint Ventures:

EMERALD DEVELOPMENT GROUP, LLC, a California limited liability co.	ALISO VIEJO GOLF CLUB JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner

By:	/s/ Xxxxx X. Xxxxx	By:	/s/ Xxxxxxx X. Xxxx
	Xxxxx X. Xxxxx, President		Xxxxxxx X. Xxxx, President


		ALISO VIEJO COMMERCIAL PROPERTY JOINT VENTURE, California joint venture

		By:	GCL CORPORATION, general partner

		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, President

		GCL CORPORATION


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


		LEGAV CORPORATION


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


		LEGAV COMMERCIAL PROPERTY CORPORATION


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President

5. Full Force and Effect. In all other respects, the Agreement shall remain in full force and effect.

6. Counterparts. This document may be executed in multiple counterparts each of which when taken together shall constitute the whole of this document.

[Signatures on Following Page]

Executed by the parties as of the date first written above.

Emerald:

EMERALD DEVELOPMENT GROUP, LLC, a California limited liability company


By:	/s/ Xxxxx X. Xxxxx
	Xxxxx X. Xxxxx, President


The Joint Ventures:

ALISO VIEJO GOLF CLUB JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


ALISO VIEJO COMMERCIAL PROPERTY JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President

GCL CORPORATION


By:	/s/ Xxxxxxx X. Xxxx
	Xxxxxxx X. Xxxx, Vice President

			LEGAV CORPORATION


			By:	/s/ Xxxxxxx X. Xxxx
				Xxxxxxx X. Xxxx, Vice President

			LEGAV COMMERCIAL PROPERTY CORPORATION


			By:	/s/ Xxxxxxx X. Xxxx
				Xxxxxxx X. Xxxx, Vice President

EXHIBIT E-1 — BUDGET

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit	Project Start Date	Jan-04
Product	502 Paper Lots	Project Duration	36
File Name	EDG CCA - AVGC 502
Date	Updated 8/3/2005

FINISHED LOT VALUE	175,453,926
GROSS FINISHED LOT SALES PROCEEDS	175,453,926
Site Development Costs	(58,252,508	)
CFD Credit	29,150,000
Lot Finishing Costs (Builder Direct Costs that Xxxx allocates to Site Development)	(9,348,887	)
PAPER LOT VALUE	137,002,531
Current Asset Value (Negotiated value for previous entitlements)	61,777,209
Value Enhancement (Residual minus Current Asset Value)	75,225,322
Discount to Xxxx (Equals 25% of value enhancement; Equals 11% of Paper Lot Value)	(18,806,331	)
Land Price to Xxxx (Calculated)	118,196,201
Net Lot Revenues	118,500,000
Interest Income (One Year Note secured by Property for 50% of Land Price @ 5%)	2,962,500
SALE PRICE (Net Lot Revenues plus Interest Income)	121,462,500		0	1
Close of Escrow Payment	59,250,000		24	1
Promissory Note Payment (Due 12 months after Close of Escrow)	62,212,500		36	1
ACTUAL SALES PROCEEDS	121,462,500

Closing Costs (estimated)	0	%	0	100	%	0					500,000	24	1
ENTITLEMENTS	0	%
Engineering & Consulting	0	%	0	100	%	0					1,400,000	12	12
Entitlement Contingency	0	%	0	100	%	0					750,000	12	12
	0	%	0	100	%	0					0	1	24
							Total Entitlements				2,800,000
INDIRECT CONSTRUCTION	0	%
CFD Expenses	0	%	0	100	%	0					750,000	6	18
Inspect, Audit, Acctg, Legal, Insurance	0	%	0	100	%	0					500,000	1	23
Development Agreement Costs	0	%	0	100	%	0					475,000	1	12
Indirect Cost Contingency	0	%	0	100	%	0					250,000	18	6
							Total Indirect Construction				1,975,000
ADMIN FEES & INCENTIVE PYMT	0	%
Cash Payment - Phase 1a	0	%	0	100	%	0		0.00	%		125,000	1	1
Cash Payment - Phase 1b	0	%	0	100	%	0		0.00	%		125,000	5	1
Cash Payment - Phase 2	0	%	0	100	%	0		0.00	%		125,000	12	1
Cash Payment - Phase 3	0	%	0	100	%	0		0.00	%		125,000	23	1
Cash Payment - Phase 4	0	%	0	100	%	0		0.00	%		250,000	16	1
Cash Payment - Phase 5	0	%	0	100	%	0		0.00	%		250,000	23	1
Asset Management to Owner (accrued to Closing)	0	%	0	100	%	0		0.00	%		156,000	24	1
Asset Mngt (monthly through payment of note)	0	%	0	100	%	0		0.00	%		78,000	25	12
Due Diligence	0	%	0	100	%	0		0.00	%	per year	75,000	1	1
General & Administrative(1)	0	%	0	100	%	0		2.00	%	Of Lot Sales	1,778,020	1	36
G&A Equalizing Fee(1)	0	%	0	100	%	0		0.00	%		591,980	36	1
Advance Dist. #1 - CFD Incentive (2)	0	%	0	100	%	0		0.00	%		500,000	20	1
Advance Dist. #2- CFD Incentive (3)	0	%	0	100	%	0		0.00	%		2,000,000	21	1
							Total Admin Payments				6,179,000
JOINT VENTURE OBLIGATIONS POST CLOSING:	0	%
Golf Course Improvements(4)	0	%	0	100	%	0		2,988		per lot	1,500,000	24	1
Glenwood Memberships for Xxxx	0	%	0	100	%	0		996		per lot	500,000	24	1
							Total Post Closing Expense				2,000,000

(1) The G&A Equalizing Fee is calculated pursuant to Section 2.1 in the Development Agreement as follows: Net Lot Revenues * 2% G&A Fee, less $1,778,020 (originally projected G&A fee based on 36 month schedule and originally projected Net Lot Revenues)

(2) Advance Distribution #1 - Advance distribution of Emerald’s CFD Incentive Fee - advanced August 2005.

(3) Advance Distribution #2 - Second advance distribution of Emerald’s CFD Incentive Fee - advanced when Xxxx deposit becomes non-refundable.

(4) Projected partnership expense to reconstruct three golf holes.

This note applies to all components of Exhibit E, including but not limited to Exhibts E-1 through E-7:

Project Expenses as shown are based on estimates of the final values for same and will be adjusted to reflect the actual amounts at the conclusion of the Project and are subject to final reconciliation and audit.

Preferred Returns as shown are based on anticipated accrual dates (some of which are reflected in the Pro Forma Assumptions) and will be adjusted to reflect the actual accrual dates (i.e. the actual dates of expenditures for Project Expenses and the actual satisfaction of the “execution” of the Xxxx Release Agreement as provided in Section 6(e) of the Combined Amendment to Joint Venture Agreements, as subsequently amended.

EXHIBIT E-2 — TOTAL PROJECT CASH FLOW

Name		Aliso Emerald - Developer Partnership
Alternate		Sell at Final Map & Grading Permit
Product		502 Paper Lots
File Name		EDG CCA - AVGC 502
Date		Updated 8/3/2005

	PROJECT TOTAL		Jan-2004		Jan-2004		Mar-2004		Apr-2004		May-2004		Jun-2004		Jul-2004		Aug-2004		Sep-2004		Oct-2004		Nov-2004		Dec-2004
			1		2		3		4		5		6		7		8		9		10		11		12
Revenue
SALE PRICE (Net Lot Revenues plus Interest Inco	0		0		0		0		0		0		0		0		0		0		0		0		0
	59,250,000		0		0		0		0		0		0		0		0		0		0		0		0
	62,212,500		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
Sales Commission & Closing	0		0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs	0		0		0		0		0		0		0		0		0		0		0		0		0
Municipal Fees	0		0		0		0		0		0		0		0		0		0		0		0		0
TOTAL REVENUE	121,462,500		0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs (estimated)	500,000		0		0		0		0		0		0		0		0		0		0		0		0
ENTITLEMENTS	0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement	650,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		0		0
Engineering & Consulting	1,400,000		0		0		0		0		0		0		0		0		0		0		0		116,667
Entitlement Contingency	750,000		0		0		0		0		0		0		0		0		0		0		0		62,500
*	0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION	0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses	750,000		0		0		0		0		0		41,667		41,667		41,667		41,667		41,667		41,667		41,667
Inspect, Audit, Acctg, Legal, Insurance	600,000		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739
Development Agreement Costs	475,000		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583
Indirect Cost Contingency	250,000		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT	0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1a	125,000		125,000		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b	125,000		0		0		0		0		125,000		0		0		0		0		0		0		0
Cash Payment - Phase 2	125,000		0		0		0		0		0		0		0		0		0		0		0		125,000
Cash Payment - Phase 3	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 4	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 5	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Management to Owner (accrued to Closing)	166,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Mngt (monthly through payment of note)	78,000		0		0		0		0		0		0		0		0		0		0		0		0
Due Diligence	75,000		75,000		0		0		0		0		0		0		0		0		0		0		0
General & Administrative Expenses	1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
G&A Equalizing Fee	591,980		0		0		0		0		0		0		0		0		0		0		0		0
Advance Dist #1 - CFD Incentive (2)	500,000		0		0		0		0		0		0		0		0		0		0		0		0
Advance Dist #2- CFD Incentive (3)	2,000,000		0		0		0		0		0		0		0		0		0		0		0		0
JOINT VENTURE OBLIGATIONS POST CLOSING:	0		0		0		0		0		0		0		0		0		0		0		0		0
Golf Course Improvements	1,500,000		0		0		0		0		0		0		0		0		0		0		0		0
Glenwood Memberships for Xxxx	500,000		0		0		0		0		0		0		0		0		0		0		0		0
TOTAL PROJECT COSTS	13,454,000		375,712		175,712		175,712		175,712		300,712		217,379		217,379		217,379		217,379		217,379		152,379		456,545
NET PROJECT CASH FLOW	108,008,500		(375,712	)	(175,712	)	(175,712	)	(175,712	)	(300,712	)	(217,379	)	(217,379	)	(217,379	)	(217,379	)	(217,379	)	(152,379	)	(456,545	)
CUMULATIVE CASH REQUIREMENTS			375,712		551,424		727,136		902,848		1,203,560		1,420,938		1,638,317		1,855,695		2,073,074		2,290,452		2,442,831		2,899,376
EQUITY CONTRIBUTION	10,100,741		375,712		175,712		175,712		175,712		300,712		217,379		217,379		217,379		217,379		217,379		152,379		456,545
EQUITY DISTRIBUTION	(118,109,241	)	0		0		0		0		0		0		0		0		0		0		0		0
NET EQUITY BALANCE			375,712		551,424		727,136		902,848		1,203,560		1,420,938		1,638,317		1,855,695		2,073,074		2,290,452		2,442,831		2,899,376

EXHIBIT E-2 — TOTAL PROJECT CASH FLOW

Name		Aliso Emerald - Developer Partnership
Alternate		Sell at Final Map & Grading Permit
Product		502 Paper Lots
File Name		EDG CCA - AVGC 502
Date		Updated 8/3/2005

	PROJECT TOTAL		Jan-2005		Feb-2005		Mar-2005		Apr-2005		May-2005		Jun-2005		Jul-2005		Aug-2005		Sep-2005		Oct-2005		Nov-2005		Dec-2005
			13		14		15		16		17		18		19		20		21		22		23		24
Revenue
SALE PRICE (Net Lot Revenues plus Interest Inco	0		0		0		0		0		0		0		0		0		0		0		0		0
	59,250,000		0		0		0		0		0		0		0		0		0		0		0		59,250,000
	62,212,500		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0

Sales Commission & Closing	0		0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs	0		0		0		0		0		0		0		0		0		0		0		0		0
Municipal Fees	0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL REVENUE	121,462,500		0		0		0		0		0		0		0		0		0		0		0		59,250,000

Closing Costs (estimated)	500,000		0		0		0		0		0		0		0		0		0		0		0		500,000

ENTITLEMENTS	0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement	650,000		0		0		0		0		0		0		0		0		0		0		0		0
Engineering & Consulting	1,400,000		116,667		116,667		116,667		116,667		116,667		116,667		116,667		116,667		116,667		116,667		116,667		0
Entitlement Contingency	750,000		62,500		62,500		62,500		62,500		62,500		62,500		62,500		62,500		62,500		62,500		62,500		0
*	0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION	0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses	750,000		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		0
Inspect, Audit, Acctg, Legal, Insurance	500,000		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		21,739		0
Development Agreement Costs	475,000		0		0		0		0		0		0		0		0		0		0		0		0
Indirect Cost Contingency	250,000		0		0		0		0		0		41,667		41,667		41,667		41,667		41,667		41,667		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT	0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1a	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 2	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 3	125,000		0		0		0		0		0		0		0		0		0		0		125,000		0
Cash Payment - Phase 4	250,000		0		0		0		250,000		0		0		0		0		0		0		0		0
Cash Payment - Phase 5	250,000		0		0		0		0		0		0		0		0		0		0		250,000		0
Asset Management to Owner (accrued to Closing)	156,000		0		0		0		0		0		0		0		0		0		0		0		156,000
Asset Mngt (monthly through payment of note)	78,000		0		0		0		0		0		0		0		0		0		0		0		0
Due Diligence	75,000		0		0		0		0		0		0		0		0		0		0		0		0
General & Administrative Expenses	1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
G&A Equalizing Fee	591,980		0		0		0		0		0		0		0		0		0		0		0		0
Advance Dist. #1 - CFD Incentive (2)	500,000		0		0		0		0		0		0		0		500,000		0		0		0		0
Advance Dist. #2- CFD Incentive (3)	2,000,000		0		0		0		0		0		0		0		0		2,000,000		0		0		0

JOINT VENTURE OBLIGATIONS POST CLOSING:	0		0		0		0		0		0		0		0		0		0		0		0		0
Golf Course Improvements	1,500,000		0		0		0		0		0		0		0		0		0		0		0		1,500,000
Glenwood Memberships for Xxxx	500,000		0		0		0		0		0		0		0		0		0		0		0		500,000

TOTAL PROJECT COSTS	13,454,000		291,962		291,962		291,962		541,962		291,962		333,629		333,629		833,629		2,333,629		333,629		708,629		2,705,389

NET PROJECT CASH FLOW	108,008,500		(291,962	)	(291,962	)	(291,962	)	(541,962	)	(291,962	)	(333,629	)	(333,629	)	(833,629	)	(2,333,629	)	(333,629	)	(708,629	)	56,544,611
CUMULATIVE CASH REQUIREMENTS			3,191,338		3,483,300		3,775,262		4,317,224		4,609,186		4,942,814		5,276,443		6,110,071		8,443,700		8,777,329		9,485,957		(47,058,653	)

EQUITY CONTRIBUTION	10,100,741		291,962		291,962		291,962		541,962		291,962		333,629		333,629		833,629		2,333,629		333,629		708,629		0
EQUITY DISTRIBUTION	(118,109,241	)	0		0		0		0		0		0		0		0		0		0		0		(56,544,611	)
NET EQUITY BALANCE			3,191,338		3,483,300		3,775,262		4,317,224		4,609,186		4,942,814		5,276,443		6,110,071		8,443,700		8,777,329		9,485,957		(47,058,653	)

EXHIBIT E-2 — T0TAL PROJECT CASH FLOW

Name		Aliso Emerald - Developer Partnership
Alternate		Sell at Final Map & Grading Permit
Product		502 Paper Lots
File Name		EDG CCA - AVGC 502
Date		Updated 8/3/2005

	PROJECT TOTAL		Jan-2006		Feb-2006		Mar-2006		Apr-2006		May-2006		Jun-2006		Jul-2006		Aug-2006		Sep-2006		Oct-2006		Nov-2006		Dec-2006
			25		26		27		28		29		30		31		32		33		34		35		36
Revenue
SALE PRICE (Net Lot Revenues plus Interest Inco	0		0		0		0		0		0		0		0		0		0		0		0		0
	59,250,000		0		0		0		0		0		0		0		0		0		0		0		0
	62,212,500		0		0		0		0		0		0		0		0		0		0		0		62,212,500
	0		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0

Sales Commission & Closing	0		0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs	0		0		0		0		0		0		0		0		0		0		0		0		0
Municipal Fees	0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL REVENUE	121,462,500		0		0		0		0		0		0		0		0		0		0		0		62,212,500

Closing Costs (estimated)	500,000		0		0		0		0		0		0		0		0		0		0		0		0

ENTITLEMENTS	0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement	650,000		0		0		0		0		0		0		0		0		0		0		0		0
Engineering & Consulting	1,400,000		0		0		0		0		0		0		0		0		0		0		0		0
Entitlement Contingency	750,000		0		0		0		0		0		0		0		0		0		0		0		0
*	0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION	0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses	750,000		0		0		0		0		0		0		0		0		0		0		0		0
Inspect, Audit, Acctg, Legal, Insurance	500,000		0		0		0		0		0		0		0		0		0		0		0		0
Development Agreement Costs	475,000		0		0		0		0		0		0		0		0		0		0		0		0
Indirect Cost Contingency	250,000		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT	0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1a	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b	125,000		0		0		. 0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 2	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 3	125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 4	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 5	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Management to Owner (accrued to Closing)	156,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Mngt (monthly through payment of note)	78,000		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500
Due Diligence	75,000		0		0		0		0		0		0		0		0		0		0		0		0
General & Administrative Expenses	1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
G&A Equalizing Fee	591,980		0		0		0		0		0		0		0		0		0		0		0		591,980
Advance Dist. #1 - CFD Incentive (2)	500,000		0		0		0		0		0		0		0		0		0		0		0		0
Advance Dist. #2- CFD Incentive (3)	2,000,000		0		0		0		0		0		0		0		0		0		0		0		0

JOINT VENTURE OBLIGATIONS POST CLOSING:	0		0		0		0		0		0		0		0		0		0		0		0		0
Golf Course Improvements	1,500,000		0		0		0		0		0		0		0		0		0		0		0		0
Glenwood Memberships for Xxxx	500,000		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL PROJECT COSTS	13,454,000		55,889		55,889		55,889		55,889		55,889		55,889		55,889		55,889		55,889		55,889		55,889		647,869

NET PROJECT CASH FLOW	108,008,500		(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	(55,889	)	61,564,631
CUMULATIVE CASH REQUIREMENTS			(47,002,764	)	(46,946,874	)	(46,890,985	)	(46,835,096	)	(46,779,206	)	(46,723,317	)	(46,667,427	)	(46,611,538	)	(46,555,648	)	(46,499,759	)	(46,443,869	)	(108,008,500	)

EQUITY CONTRIBUTION	10,100,741		55,889		55,889		55,889		55,889		55,889		55,869		55,889		55,889		55,889		55,889		55,889		0
EQUITY DISTRIBUTION	(118,109,241	)	0		0		0		0		0		0		0		0		0		0		0		(61,564,631	)
NET EQUITY BALANCE			(47,002,764	)	(46,946,874	)	(46,890,985	)	(46,835,096	)	(46,779,206	)	(46,723,317	)	(46,667,427	)	(46,611,538	)	(46,555,648	)	(46,499,759	)	(46,443,869	)	(108,008,500	)

EXHIBIT E-3 — PREFERRED RETURN CALCULATIONS

Name	Aliso Emerald - Developer Partnership		Investor	INVESTOR		CLUBCORP		EMERALD		TOTAL
Alternate	Sell at Final Map & Grading Permit		% Investment Capital	100	%	0.00	%	0	%	100	%
Product	502 Paper Lots		Total Investment	10,100,741		0		467,000		10,567,741
File Name	EDG CCA - AVGC 502		Preferred Return	8.00	%	8.00	%	8.00	%
Date	Updated 8/3/2005									0.00	%
		614,784	Actual Percentage Interest	36.50	%	50.00	%	13.50	%	100.00	%
			Max Investment Balance	9,485,957		13,200,000		467,000		23,152,957

EQUITY, PREFERRED RETURN, PROFIT DISTRIBUTIONS			PROJECT TOTAL	Jan-2004	Jan-2004	Mar-2004	Apr-2004	May-2004	Jun-2004	Jul-2004	Aug-2004	Sep-2004	Oct-2004	Nov-2004	Dec-2004
				1	2	3	4	5	6	7	8	9	10	11	12
Investor Equity Contributed			10,100,741	375,712	175,712	175,712	175,712	300,712	217,379	217,379	217,379	217,379	217,379	152,379	456,545
Emerald Earned Equity Amounts	8,713,062		0	954,229					954,229					2,033,458
Emerald Prior Investment Balance Input				467,000
Xxxx Incentive Payment			13,378,342
CFD Incentive Payment			7,518,250
Principal Payments			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance			30,074,654	1,421,229	0	0	0	0	954,229	0	0	0	0	2,033,458	0
Total Repayments Available			118,109,241	0	0	0	0	0	0	0	0	0	0	0	0

AVAILABLE FUNDS			118,109,241	0	0	0	0	0	0	0	0	0	0	0	0

ClubCorp Project Expenses			10,100,741	375,712	175,712	175,712	175,712	300,712	217,379	217,379	217,379	217,379	217,379	152,379	456,545
Clubcorp Project Expense Repayments			10,100,741	0	0	0	0	0	0	0	0	0	0	0	0
Clubcorp Project Expense Balance				375,712	551,424	727,136	902,848	1,203,560	1,420,938	1,638,317	1,855,695	2,073,074	2,290,452	2,442,831	2,899,376
Clubcorp Preferred Return - EARNED			563,218		2,505	3,676	4,848	6,019	8,024	9,473	10,922	12,371	13,820	15,270	16,286
Clubcorp Preferred Return - PAID			563,218	0	0	0	0	0	0	0	0	0	0	0	0
Clubcorp Preferred Return Balance				0	2,505	6,181	11,028	17,047	25,071	34,544	45,466	57,838	71,658	86,928	103,213

ClubCorp Land Contribution			13,200,000	13,200,000	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Land Repayments			13,200,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Land Balance				13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000
ClubCorp Preferred Return - EARNED			2,112,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000
ClubCorp Preferred Return - PAID			2,112,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Preferred Return Balance				88,000	176,000	264,000	352,000	440,000	528,000	616,000	704,000	792,000	880,000	968,000	1,056,000

Emerald Earned Equity (For Interest Calculation Only)			8,713,062	954,229	0	0	0	0	954,229	0	0	0	0	2,033,458	0
Emerald Earned Equity Repayment			8,713,062	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Earned Equity Balance				954,229	954,229	954,229	954,229	954,229	1,908,458	1,908,458	1,908,458	1,908,458	1,908,458	3,941,917	3,941,917
Emerald Preferred Return - EARNED			492,338		6,362	6,362	6,362	6,362	6,362	12,723	12,723	12,723	12,723	12,723	26,279
Emerald Preferred Return - PAID			492,338	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	6,362	12,723	19,085	25,446	31,808	44,531	57,254	69,977	82,700	95,423	121,702

Emerald Prior Investment Balance Input			467,000	467,000	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance Repayment			467,000	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance				467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000
Emerald Preferred Return - EARNED			74,720	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113
Emerald Preferred Return - PAID			74,720	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				3,113	6,227	9,340	12,453	15,567	18,680	21,793	24,907	28,020	31,133	34,247	37,360

Emerald Xxxx Incentive Balance Input			13,378,342	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Xxxx Incentive Payment			13,378,342	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Xxxx Incentive Balance				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			0		0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald CFD Incentive Balance Input			7,516,250	0	0	0	0	0	0	0	0	0	0	0	0
Emerald CFD Incentive Payment			7,516,250	0	0	0	0	0	0	0	0	0	0	0	0
Emerald CFD Incentive Balance(1)				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			347,533	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			347,533	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald Preferred Return @ 5% on Balance Outstanding(4)			408,488
NET PROCEEDS FOR DISTRIBUTION			71,948,611	0	0	0	0	0	0	0	0	0	0	0	0

Total ClubCorp Percentage Interest	86.5	%	63,588,891	0	0	0	0	0	0	0	0	0	0	0	0
				0	0	0	0	0	0	0	0	0	0	0	0
Total Emerald Percentage Interest (2)	13.5	%	8,713,062	0	0	0	0	0	0	0	0	0	0	0	0

(1) Emerald CFD Incentive Balance reduced by $500,000 advance distribution in August 2005 and $2,000,000 advance deposit in September 2005 with preferred return reduced proportionally.

(2) Emerald Percentage Interest equals 13.5% of Net Proceeds for Distributions less $1,000,000 in prior Milestone payments.

(3) Cells highlighted in yellow signify hardcoded formulas to account for advance distributions of CFD Incentive.

(4) Emerald Preferred Return on Percentage Interest proceeds not paid at Close of Escrow accrue 5% interest until payment of Promissory Note estimated 12/06.

Name

Aliso Emerald - Developer Partnership

Alternate

Sell at Final Map & Grading Permit

Product

502 Paper Lots

File Name

EDG CCA-AVGC 502

Date

Updated 8/3/2005

614,784

EQUITY, PREFERRED RETURN, PROFIT DISTRIBUTIONS			PROJECT TOTAL	Jan-2005	Feb-2005	Mar-2005	Apr-2005	May-2005	Jun-2005	Jul-2005	Aug-2005	Sep-2005	Oct-2005	Nov-2005	Dec-2005
				13	14	15	16	17	18	19	20	21	22	23	24
Investor Equity Contributed			10,100,741	291,962	291,962	291,962	541,962	291,962	333,629	333,629	833,629	2,333,629	333,629	708,629	0
Emerald Earned Equity Amounts	8,713,062		0			829,229								829,229	3,112,687
Emerald Prior Investment Balance Input
Xxxx Incentive Payment			13,378,342												13,378,342
CFD Incentive Payment			7,516,250				7,516,250
Principal Payments			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance			30,074,654	0	0	829,229	7,516,250	0	0	0	0	0	0	829,229	16,491,029
Total Repayments Available			118,109,241	0	0	0	0	0	0	0	0	0	0	0	56,544,611

AVAILABLE FUNDS			118,109,241	0	0	0	0	0	0	0	0	0	0	0	56,544,611

ClubCorp Project Expenses			10,100,741	291,962	291,962	291,962	541,962	291,962	333,629	333,629	833,629	2,333,629	333,629	708,629	0
Clubcorp Project Expense Repayments			10,100,741	0	0	0	0	0	0	0	0	0	0	0	9,485,957
Clubcorp Project Expense Balance				3,191,338	3,483,300	3,775,262	4,317,224	4,609,186	4,942,814	5,276,443	6,110,071	8,443,700	8,777,329	9,485,957	0
Clubcorp Preferred Return - EARNED			563,218	19,329	21,276	23,222	25,168	28,781	30,728	32,952	35,176	40,734	56,291	56,516	63,240
Clubcorp Preferred Return - PAID			563,218	0	0	0	0	0	0	0	0	0	0	0	538,627
Clubcorp Preferred Return Balance				122,542	143,818	167,040	192,208	220,990	251,718	284,670	319,846	360,580	416,871	475,387	0

ClubCorp Land Contribution			13,200,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Land Repayments			13,200,000	0	0	0	0	0	0	0	0	0	0	0	13,200,000
ClubCorp Land Balance				13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	13,200,000	0
ClubCorp Preferred Return - EARNED			2,112,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000	88,000
ClubCorp Preferred Return - PAID			2,112,000	0	0	0	0	0	0	0	0	0	0	0	2,112,000
ClubCorp Preferred Return Balance				1,144,000	1,232,000	1,320,000	1,408,000	1,496,000	1,584,000	1,672,000	1,760,000	1,848,000	1,936,000	2,024,000	0

Emerald Earned Equity (For Interest Calculation Only)			8,713,062	0	0	829,229	0	0	0	0	0	0	0	829,229	3,112,687
Emerald Earned Equity Repayment			8,713,062	0	0	0	0	0	0	0	0	0	0	0	8,713,062
Emerald Earned Equity Balance				3,941,917	3,941,917	4,771,146	4,771,146	4,771,146	4,771,146	4,771,146	4,771,146	4,771,146	4,771,146	5,600,375	0
Emerald Preferred Return - EARNED			492,338	26,279	26,279	26,279	31,808	31,808	31,808	31,808	31,808	31,808	31,808	31,808	37,336
Emerald Preferred Return - PAID			492,338	0	0	0	0	0	0	0	0	0	0	0	492,338
Emerald Preferred Return Balance				147,982	174,261	200,541	232,348	264,156	295,964	327,771	359,579	391,387	423,194	455,002	0

Emerald Prior Investment Balance Input			467,000	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance Repayment			467,000	0	0	0	0	0	0	0	0	0	0	0	467,000
Emerald Prior Investment Balance				467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	467,000	0
Emerald Preferred Return - EARNED			74,720	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113	3,113
Emerald Preferred Return - PAID			74,720	0	0	0	0	0	0	0	0	0	0	0	74,720
Emerald Preferred Return Balance				40,473	43,587	46,700	49,813	52,927	56,040	59,153	62,267	65,380	68,493	71,607	0

Emerald Xxxx Incentive Balance Input			13,378,342	0	0	0	0	0	0	0	0	0	0	0	13,378,342
Emerald Xxxx Incentive Payment			13,378,342	0	0	0	0	0	0	0	0	0	0	0	13,378,342
Emerald Xxxx Incentive Balance				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald CFD Incentive Balance Input			7,516,250	0	0	0	7,516,250	0	0	0	0	0	0	0	0
Emerald CFD Incentive Payment			7,516,250	0	0	0	0	0	0	0	500,000	2,000,000	0	0	5,016,250
Emerald CFD Incentive Balance (1)				0	0	0	7,516,250	7,516,250	7,516,250	7,516,250	7,016,250	5,016,250	5,016,250	5,016,250	0
Emerald Preferred Return - EARNED			347,533	0	0	0	0	50,108	50,108	50,108	50,108	46,775	33,442	33,442	33,442
Emerald Preferred Return - PAID			347,533	0	0	0	0	0	0	0	0	0	0	0	347,533
Emerald Preferred Return Balance				0	0	0	0	50,108	100,217	150,325	200,433	247,208	280,650	314,092	0

Emerald Preferred Return @ 5% on Balance Outstanding (4)			408,488
NET PROCEEDS FOR DISTRIBUTION			71,948,611	0	0	0	0	0	0	0	0	0	0	0	11,431,844

Total ClubCorp Percentage Interest	86.5	%	63,588,891	0	0	0	0	0	0	0	0	0	0	0	9,888,545
				0	0	0	0	0	0	0	0	0	0	0	0
Total Emerald Percentage Interest (2)	13.5	%	8,713,062	0	0	0	0	0	0	0	0	0	0	0	1,543,299

(1) Emerald CFD Incentive Balance reduced by $500,000 advance distribution in August [Illegible]

(2) Emerald Percentage Interest equals 13.5% of Net Proceeds for Distributions less $1 [Illegible]

(3) Cells highlighted in yellow signify hardcoded formulas to account for advance distributed [Illegible]

(4) Emerald Preferred Return on Percentage Interest proceeds not paid at Close of Esc [Illegible]

EXHIBIT E-3 – PREFERRED RETURN CALCULATIONS

		EXHIE

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit
Product	502 Paper Lots
File Name	EDG CCA-AVGC 502
Date	Updated 8/3/2005
		614,784

EQUITY, PREFERRED RETURN, PROFIT DISTRIBUTIONS			PROJECT TOTAL	Jan-2006	Feb-2006	Mar-2006	Apr-2006	May-2006	Jun-2006	Jul-2006	Aug-2006	Sep-2006	Oct-2006	Nov-2006	Dec-2006
				25	26	27	28	29	30	31	32	33	34	35	36
Investor Equity Contributed			10,100,741	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	0
Emerald Earned Equity Amounts	8,713,062		0
Emerald Prior Investment Balance Input
Xxxx Incentive Payment			13,378,342
CFD Incentive Payment			7,516,250
Principal Payments			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance			30,074,654	0	0	0	0	0	0	0	0	0	0	0	0
Total Repayments Available			118,109,241	0	0	0	0	0	0	0	0	0	0	0	61,584,631

AVAILABLE FUNDS			118,109,241	0	0	0	0	0	0	0	0	0	0	0	61,564,631

ClubCorp Project Expenses			10,100,741	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	55,889	0
Clubcorp Project Expense Repayments			10,100,741	0	0	0	0	0	0	0	0	0	0	0	614,784
Clubcorp Project Expense Balance				55,889	111,779	167,668	223,558	279,447	335,337	391,226	447,116	503,005	558,894	614,784	0
Clubcorp Preferred Return - EARNED			583,218	0	373	745	1,118	1,490	1,863	2,236	2,608	2,981	3,353	3,726	4,099
Clubcorp Preferred Return - PAID			583,218	0	0	0	0	0	0	0	0	0	0	0	24,591
Clubcorp Preferred Return Balance				0	373	1,118	2,236	3,726	5,589	7,825	10,433	13,413	16,767	20,493	0

ClubCorp Land Contribution			13,200,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Land Repayments			13,200,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Land Balance				0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Preferred Return - EARNED			2,112,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Preferred Return - PAID			2,112,000	0	0	0	0	0	0	0	0	0	0	0	0
ClubCorp Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald Earned Equity (For Interest Calculation Only)			8,713,062	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Earned Equity Repayment			8,713,082	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Earned Equity Balance				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			492,338	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			492,338	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald Prior Investment Balance Input			467,000	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance Repayment			467,000	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Prior Investment Balance				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			74,720	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			74,720	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald Shee Incentive Balance Input			13,378,342	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Xxxx Incentive Payment			13,378,342	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Xxxx Incentive Balance				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			0	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald CFD Incentive Balance Input			7,516,250	0	0	0	0	0	0	0	0	0	0	0	0
Emerald CFD Incentive Payment			7,516,250	0	0	0	0	0	0	0	0	0	0	0	0
Emerald CFD Incentive Balance(1)				0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - EARNED			347,533	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return - PAID			347,533	0	0	0	0	0	0	0	0	0	0	0	0
Emerald Preferred Return Balance				0	0	0	0	0	0	0	0	0	0	0	0

Emerald Preferred Return @ 5% on Balance Outstanding(4)			408,488
NET PROCEEDS FOR DISTRIBUTION			71,948,611	0	0	0	0	0	0	0	0	0	0	0	60,925,255

Total ClubCorp Percentage Interest	86.5	%	63,588,891	0	0	0	0	0	0	0	0	0	0	0	52,700,346
				0	0	0	0	0	0	0	0	0	0	0	0
Total Emerald Percentage Interest(2)	13.5	%	8,713,062	0	0	0	0	0	0	0	0	0	0	0	8,224,809

(1) Emerald CFD Incentive Balance reduced by $500,000 advance distribution in August [Illegible]

(2) Emerald Percentage Interest equals 13.5% of Net Proceeds for Distributions less $1 [Illegible]

(3) Cells highlighted in yellow signify hardcoded formulas to account for advance distributed [Illegible]

(4) Emerald Preferred Return on Percentage Interest proceeds not paid at Close of Esc [Illegible]

EXHIBIT E-4 - DISTRIBUTION SUMMARY
Calculations based on JV & Development Agreement Amendments dated August 2005

Incentive Payment Calculations

CFD Incentive

Xxxx Incentive

Total Bond Proceeds	29,150,000		Tentative Net Proceeds for Distribution	85,326,953
Incentive Hurdle	(7,675,000	)	Incentive Hurdle	(40,732,480	)
Proceeds in excess of Hurdle	21,475,000		Proceeds in excess of Hurdle	44,594,473
Percentage to Emerald	35	%	Percentage to Emerald	30	%
CFD Incentive Payment	7,516,250		Xxxx Incentive Payment	13,378,342

Profit Distributions

			Emerald		CCA
Advance Distribution on CFD Incentive to Emerald funded by CC, [Illegible]	2,500,000		2,500,000		(2,500,000	)
AVAILABLE FUNDS	118,109,241
Clubcorp Project Expense Repayments	10,100,741				10,100,741
Clubcorp Preferred Return - PAID	563,218				563,218
ClubCorp Stipulated Land Payment	13,200,000				13,200,000
ClubCorp Preferred Return - PAID	2,112,000				2,112,000
Emerald Prior Investment Balance Repayment	467,000		467,000
Emerald Preferred Return - PAID	74,720		74,720
Emerald Preferred Return on Balance Outstanding(3)	900,826		900,826
Estimated Available Funds After Return of Capital	90,690,736
Less: CFD Payment (less advance distribution of $2.5M)	5,016,250		5,016,250
Less: CFD Preferred Return	347,533		347,533
Tentative Net Proceeds for Distribution	85,326,953
Less: Xxxx Incentive Payment	13,378,342		13,378,342
Less: Xxxx Incentive Preferred Return	—		—
Net Proceeds for Distribution	71,948,611
Emerald’s Share (Less $1M in Milestone Payments)	8,713,062		8,713,062
ClubCorp’s Share	63,235,549	63,235,549			63,235,549
Total Distribution			31,397,734		86,711,508
Percentage Distribution v. Net Proceeds for Distribution			30.27	%	69.73	%

(1) Project Expenses shall include entitlement costs, transaction closing costs, remaining Milestone Payments, remaining G&A Payments and post closing obligations.

(2) Assumes Emerald receives two advance distributions on the CFD Incentive Fee totaling $2,500,000 pursuant to Section 9.a of the Second Amendment to the JV Agreement.

(3) Emerald’s balance of Percentage Interest distributions accrue 8% preferred return prior to close of escrow and then
a 5% preferred return until Note is paid 12 months after close.

Preferred Returns as shown are based on anticipated accrual dates (some of which are reflected in the Pro Form Assumptions) and will be adjusted to reflect the actual accrual dates (i.e. the actual dates of expenditures for Project Expenses and the actual satisfaction of the “execution” of the Xxxx Release Agreement as provided in Section 6(e) of the Combined Amendment to Joint Venture Agreements, as subsequently amended).

Exhibit E-5 – Profit Distributions and Allocations

Aliso Viejo

Legav/Emerald Development

Xxxx Transaction Projected Proceeds Allocation, Assuming Close of Escrow on 12/31/05

8/9/2005

CFD Incentive Payment (Excl Preferred Return calc)			Xxxx Incentive Payment (Excl Preferred Return calc)

Total Bond Proceeds	29,150,000		Tentative Net Proceeds Avail for Distribution		85,326,953
Incentive Hurdle	(7,675,000	)	Incentive Hurdle		(40,732,480	)
Proceeds in excess of Hurdle	21,475,000		Proceeds in excess of Hurdle		44,594,473
Percentage to Emerald	35	%	Percentage to Emerald		30	%
CFD Incentive Payment	7,516,250		Xxxx Incentive Payment		13,378,342
“Tentative Net Proceeds Available for Distribution”			85,326,953	—

Total Proceeds less Joint Venture Costs, including Project Expenses, less Return of Capital less Balance Due on CFD Payment to Emerald

Xxxx Incentive Payment Calculation: (Tentative Net Proceeds Available for Distribution less $40,732,480) x 30%

Cash Receipts	12/31/2005	12/31/2006	Total
Xxxx Xxxxxxx Money	1,000,000		1,000,000
Xxxx Note Payments	58,250,000	59,250,000	117,500,000
Gross Sales Proceeds	59,250,000	59,250,000	118,500,000
Xxxx Interest @ 5%		2,962,500	2,962,500
Total Proceeds Including Interest	59,250,000	62,212,500	121,462,500

*Less Joint Venture Costs Paid from Proceeds:*
Accrued Project Expenses (2)	205,389		205,389
Accured Project Expenses (3)		647,869	647,869
Transaction Closing Costs (Estimate)	500,000		500,000
Golf Course Improvements	1,500,000		1,500,000
Xxxx Memberships	500,000		500,000
Total Joint Venture Costs	2,705,389	647,869	3,353,259

Available Funds	56,544,611	61,564,631	118,109,241

*Distribution Priority per Section 8 to Joint Venture Agreement, as amended:*
*Return of Capital*
Legav Project Expense Repayment	9,485,957	614,784	10,100,741
Legav Project Expense Preferred Return @ 8%	538,627	24,591	563,218
Legav Stipulated Land Payment	13,200,000		13,200,000
Legav Preferred Return Payment @ 8%	2,112,000		2,112,000
Emerald Prior Investment Balance	467,000		467,000
Emerald Preferred Return Payment @ 8% (Prior)	74,720		74,720
Emerald Preferred Return Payment @ 8%/5% (Unearned)	492,338	408,488	900,826
Total Return of Capital	26,370,641	1,047,863	27,418,505

*Less:*
Xxxx Incentive Payment to Emerald	13,378,342	0	13,378,342
Xxxx Incentive Preferred Return	—	0	—

CFD Incentive Payment to Emerald - Balance Due	5,016,250		5,016,250
CFD Incentive Preferred Return @ 8%	347,533		347,533
Net Proceeds for Distribution	11,431,844	60,516,767	71,948,611

Distribution to Emerald (Net of Equity Pre-Payments)	543,299	8,169,764	8,713,062	12.1	%
Distribution to Legav	10,888,545	52,347,004	63,235,549	87.9	%

(1) Project Expenses as shown are based on estimates of the final values for same and will be adjusted ro reflect the actual amounts at the conclusion of the Project and are subject to final reconciliation and audit.

Preferred Returns as shown are based on anticipated accrual dates (some of which are reflected in the Pro Forma Assumptions) and will be adjusted to reflect the actual accrual dates (I.e. the actual dates of expenditures for Project Expenses and the actual satisfaction of the “execution” of the Xxxx Release Agreement as provided in Section 6(e) of the Combined Amendment to Joint Venture Agreements, as subsequently amended).

(2) Includes payment of Asset Management fee to Owner accrued from start of project to Close of Escrow and Administrative Fee payable to Developer for the month of December 2005

(3) Includes payment of G&A Reconciliation Fee payable to Developer and Administrative Fee payable to Developer for the month of December 2006

(4) Payments to Developer below do not include any Administrative Fees or Cash Payments previously funded by Legav, unless noted.

Summary of Transaction(4)
Total Payments to Emerald - Xxxx Close of Escrow & Note Pmt	20,319,482	8,578,252	28,897,734	23.3	%
Total Payments to Emerald - Advance Payments Funded by Legav	2,500,000	—	2,500,000	2.0	%
Total JV Costs Paid from Proceeds	2,705,389	647,869	3,353,259
Total Payments to Legav	36,225,129	52,986,379	89,211,508	72.0	%
Total	61,750,000	62,212,500	123,962,500
Less:
Variance - Advance Payments Funded by Legav	2,500,000	—	2,500,000
Total Proceeds Including Interest from Sale to Xxxx	59,250,000	62,212,500	121,462,500

	2004		2005		2006
*Legav Project Funding*
Beginning Balance	0		2,899,376		—
Additions During Period	2,899,376		6,586,581		614,784
Repayments During Period	—		9,485,957		614,784
Ending Balance	2,899,376		—		—

*Legav Preferred Return*
Beginning Balance	0		103,213		—
Additions During Period	103,213		435,413		24,591
Repayments During Period	—		538,627		24,591
Ending Balance	103,213		—		—

Estimated Net Proceeds Avail. For Dist.	71,948,611		71,948,611		71,948,611

*Emerald Equity*
Emerald Equity Prepayments	375,000		625,000		—
Cumulative Emerald Equity Prepayments	375,000		1,000,000		1,000,000

Equity %ages Earned	6.0	%	7.5	%	0.0	%	13.5	%
Cumulative Equity %ages Earned	6.0	%	13.5	%	13.5	%	13.5	%
Estimated Equity %age Paid	0.5	%	1.4	%	1.4	%	3.3	%
Equity %age Accrued	5.5	%	12.1	%	n/a
Emerald’s Profit Distribution Reduction	375,000		1,000,000		1,000,000

Equity Accrued During Period	3,941,917		8,713,062
Equity Distributions at Close of Escrow			543,299
Ending Equity			8,169,764
Preferred Return on Accrued Equity	121,702		370,635		408,488
Preferred Return Rate on Accrued Equity	8	%	8	%	5	%

Preferred Returns as shown are based on anticipated accrual dates (some of which are reflected in the Pro Forma Assumptions) and will be adjusted to reflect the actual accrual dates (I.e. the actual dates of expenditures for Project Expenses and the actual satisfaction of the “execution” of the Xxxx Release Agreement as provided in Section 6(e) of the Combined Amendment to Joint Venture Agreements, as subsequently amended).

(2) Includes payment of Asset Management fee to Owner accrued from start of project to Close of Escrow and Administrative Fee payable to Developer for the month of December 2005

(3) Includes payment of G&A Reconciliation Fee payable to Developer and Administrative Fee payable to Developer for the month of Dec. 2006.

(4) Payments to Developer below do not include any Administrative Fees or Cash Payments previously funded by Legav unless noted.

(5) Circular reference errors in the electronic version of this Exhibits can be rectified by going to Tools/Options/Calculations and setting Iterations at 250.

EXHIBIT E-6

PROFIT DISTRIBUTIONS & PRIORITY OF ALLOCATIONS WORKSHEET(1)

Purchase Price	118,500,000
% at Close of Escrow	50	%
Cash at Close of Escrow	59,250,000
Interest Income	2,962,500
Cash at Payment of Promissory Note (1 year after XXX)	62,212,500

			Check Math E-4 v. E-5
			Exhibit E-5	Variance to E-4
Distributions from Close of Escrow Funds (assumes 12/05 Closing)
Proceeds at Close of Escrow	59,250,000
Joint Venture Costs paid from Proceeds	2,705,389
CCA Capital Repayment including Stipulated Land Payment	25,336,584		25,336,584	0
Emerald Prior Investment Balance	541,720
Emerald Preferred Return @ 8% on Balance Outstanding	492,338
Available Funds After Return of Capital	30,173,969
CFD Incentive and Xxxx Incentive (less $2.5M advance distribution)	18,742,125
Net Proceeds for Distribution	11,431,844		11,431,844	0
Emerald Percentage Interest	13.5	%
Percentage Interest Payment to Emerald (less $1M in milestone payments)	543,299		543,299	0
Balance of Available Funds to ClubCorp	10,888,545		10,888,545	0
Total Close of Escrow Funds to Emerald	20,319,482		20,319,482	0
Total Close of Escrow Funds to ClubCorp	36,225,129		36,225,129	0

Distributions from Promissory Note Funds (assumes Note pay-off 12/06)
Proceeds at Payment of Promissory Note (1 year after XXX)	62,212,500		62,212,500	0
Joint Venture Costs paid from Proceeds	647,869		647,869	0
CCA Capital Repayment including Stipulated Land Payment	1,047,863
Net Proceeds for Distribution	60,516,767		60,516,767	0
Emerald Percentage Interest	13.5	%		(0	)
Percentage Interest Payment - Initial Balance	8,169,764		8,169,764	0
Preferred Return @ 5%	408,488		408,488	0
Percentage Interest Payment to Emerald (less previous payment plus pref @ 5%)	8,578,252		8,578,252	0
Balance of Available Funds to ClubCorp	51,938,515		51,938,515	0
	8,578,252
	52,986,379		52,986,379	0

Total Distribution of Proceeds
Total Distributions to Emerald Including CFD Prepayment	31,397,734		31,397,734	0
Total Distributions to ClubCorp	86,711,508		86,711,508	0
Total Joint Venture Costs paid from Proceeds	3,353,259

Total Project Distributions	121,462,500		121,462,500	0

			31,397,734	0
			86,711,508	0

(1) Payments shown in descending order of priority pursuant to Amended JV Agreements dated August, 2005.

(2) Project Expenses and Preferred Returns are based on estimates.

Final reconciliation at close of escrow will analyze actual timing and amount of Expenses.

EXHIBIT E-7 - Developer Percentage Interest Calculations

Emerald Percentage Interest & Prior Investment Balance Assumptions

Projected Net Distributable Profits

71,948,611

Phase	Trigger Event for Percentage Interest Earned by Developer	Percentage		Percentage Interest Earned	Cash Payment	Credit to Prior Investment Balance	Estimated Completion Dates (1)	Percent of Cash Payment v. Interest Earned
	Pre-agreement Investment Credit					467,000	January-04

Phase 1.a	General Plan Presentation	1.5	%	1,079,229	125,000	954,229	January-04	12	%
Phase 1.b	General Plan Certification	1.5	%	1,079,229	125,000	954,229	June-04	12	%
Phase 2	Development Agreement Approval	3.0	%	2,158,458	125,000	2,033,458	November-04	6	%
Phase 3	Xxxx Deed Restriction Release	3.0	%	2,158,458	125,000	2,033,458	November-05	6	%
Phase 4	Tentative Tract Map Approval	1.5	%	1,079,229	250,000	829,229	March-05	23	%
Phase 5	Final tract Map Approval	1.5	%	1,079,229	250,000	829,229	November-05	23	%
Phase 6	Closing	1.5	%	1,079,229	0	1,079,229	December-05	0	%
TOTAL Phases 1 - 6 (excludes Pre-agreement Investment)		13.5	%		1,000,000	8,713,062
Total Percentage Interest Payment		9,713,062

1) Dates in Bold are completed milestones as of 7-15-05.

Total Distributions & Fees to Emerald
Developer’s Percentage Interest	9,713,062
8% Return on Prior Investment Balance	567,058		0	347,533
Preferred return @ 5% on Percentage Interest Balance (12 months)				408,488
Pre-agreement investment	467,000
Administrative Fee		2,370,000
Xxxx Incentive (insert as appropriate here and at Exhibit E-5 in correct month in Row 19)			13,378,342
CFD Incentive (insert as appropriate here and at Exhibit E-5 in correct month in Row 20)				5,016,250
CFD Incentive Advance distribution				2,500,000
Total Including Percentage Interest, Incentives, Milestones & G&A	10,747,120	13,117,120	26,495,462	34,767,734

FIRST AMENDMENT TO
COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS

THIS FIRST AMENDMENT TO COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS is entered into as of this 26 day of March, 2004, by and among LEGAV Corporation, a California corporation (“LEGAV Golf’), GCL Corporation, a California corporation (“GCL”), LEGAV COMMERCIAL PROPERTY CORPORATION, a California corporation (“LEGAV Commercial”), and Emerald Development Group, LLC, a California limited liability company (“Emerald”).

WHEREAS, the parties hereto are parties to that certain Combined Amendment to Joint Venture Agreements dated as of January 1, 2004 (the “Agreement”);

WHEREAS, the parties desire to amend the Agreement in certain respects.

NOW, THEREFORE, BE IT AGREED, as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined are defined in the Agreement. In the event of any conflict between a definition in the Agreement and this First Amendment, the meaning in this First Amendment shall apply.

2. Miscellaneous Changes to the Agreement.

a) Section 5(a) of the Agreement is hereby amended by adding the following sentence at the end: “The vote of two members of the Management Committee shall be required to approve all matters involving the Project.”

b) Section 7(b) of the Agreement is hereby amended to read as follows: “In the event the aggregate Tentative Net Proceeds for Distribution are more than $40,732,480, Emerald shall be entitled to a special profits interest in the Joint Ventures equal to (i) 30% of the difference between the aggregate Tentative Net Proceeds for Distribution and $40,732,480 and (ii)) 8% per annum (not compounded) of the amount set forth in clause (i) from the date the Xxxx Release Agreement is executed by the parties (the “Xxxx Incentive Payment”).”

c) Section 7(c) of the Agreement is hereby amended to read as follows: “In the event the proceeds from the CFD Bond proceeds are in excess of $7,675,000.00, then Emerald shall be entitled to a special profits interest in the Joint Ventures equal to (i) 50% of the CFD Bond proceeds in excess of $7,675,000.00, plus (ii) 8% per annum (not compounded) of the amount set forth in clause (i) from the date of the City’s adoption of Notice of Formation of the CFD (the “CFD Incentive Payment”). Emerald shall use commercially reasonable efforts to maximize lot values and to minimize infrastructure costs with the final infrastructure costs not to exceed $27,400,000.00 subject to the CCA Venturers’ approval. In the event that the CFD Incentive Payment is due, but the Development Property is sold in stages, the CFD Incentive Payment will be paid on a pro rata basis (based

on the ratio of the gross acreage of the portion of the Development Property sold to the total Development Property, in each case excluding the portion of the Development Property transferred to the City for purposes of a community center) as each portion of the Development Property (other than the community center) is sold. The amount to be paid shall be based on the portion of the Development Property sold at each closing. In the event a portion of the Development Property has been sold prior to the time the CFD Incentive Payment becomes due, the pro rata amounts that would have been due in connection with the sale of that portion shall be paid at the time of the sale of the next portion of the Development Property.”

d) Section 9 of the Agreement is hereby deleted. The section numbers of the sections following section 9 shall not be changed.

e) Section 12(b) of the Agreement is hereby amended by adding the following phrase after the word “Emerald” in the third line thereof: “or as a result of a termination under Section 13.6 of the Development Agreement”.

f) Section 12(d) of the Agreement is hereby amended by adding the following phrase after the phrase “Development Agreement” in the third line thereof: “or the Development Agreement is terminated pursuant to Section 13.6 thereof and the Development Property is sold in connection with the Project on or before the expiration of one year from the date of termination.”

g) The following sentence is hereby added at the end of each of Section 12(b) and 12(c) of the Agreement: “The payments to Emerald pursuant to this subsection are in lieu of and not in addition to the amounts that Emerald is entitled to receive hereunder.”

h) A new Section 12(f) is added to the Agreement to read in its entirety as follows: “Except as provided in Section 12(d), in the event that the Development Agreement is terminated pursuant to Section 13.6 thereof, Emerald is not entitled to any further distributions under this Agreement.”

i) To avoid any confusion, the parties agree that any costs associated with the golf course clubhouse are not “Project Expenses”.

j) The amounts due to Emerald under Sections 12(b) or (c) shall be reduced by any Cash Payments actually received by Emerald pursuant to the Development Agreement.

3. Changes to Section 8 of the Agreement.

To avoid confusion that has arisen from the original wording, Section 8 of the Agreement is hereby amended to read in its entirety as follows:

8. Allocations and Distributions.

a) This Section describes how income will be allocated, and distributions will be made, to Emerald and the CCA Venturers.

b) Out of the first Available Funds, the Joint Ventures shall first distribute the following funds: (i) to the CCA Venturers, all Project Expenses funded by the CCA Venturers plus an 8% per annum simple interest return accruing from the date of funding, (ii) to the CCA Venturers, a Stipulated Land Value of $13,200,000 with an annualized appreciation rate of 8% simple, interest from the date hereof, (iii) to Emerald, its Prior Investment Balance, and (iv) to any other person that has paid any Project Expenses, any amounts paid by such person for the Project Expenses plus the return on such investment (to the extent such substitute investment source and the return on its investment was mutually agreed to by the parties in accordance with Section 3.6 of the Development Agreement or is Emerald or a New Investor pursuant to the terms of Section 11 of this Agreement). The distributions just described comprise the Return of Capital. In the event that the funds available are insufficient for this purpose, then, except as provided in Section 11, the available funds shall be distributed among the Venturers in proportion to the amounts to which they would have been entitled under this Section 8(b). All amounts described in this Section 8(b) shall be calculated as of the date of distribution.

c) After the distributions required by Section 8(b) have been made, out of any remaining Available Funds, the Joint Ventures shall next distribute to Emerald the Xxxx Incentive Payment then due, if any, and the CFD Incentive Payment then due, if any.

d) After the other distributions required by Sections 8(b) and 8(c) have been made, out of the remaining Available Funds, if any, the Joint Ventures shall next distribute to Emerald an amount (not less than zero) equal to (i) the remaining Available Funds multiplied by Emerald’s Percentage Interest at that time, less (ii) the amount determined from the applicable line on the following chart:

If Emerald’s Percentage Interest is:		Emerald Section 8(d) Distribution to be reduced by:
1.5	%	$	125,000
3	%	$	250,000
6	%	$	375,000
9	%	$	500,000
10.5	%	$	750,000
12	%	$	1,000,000
13.5	%	$	1,000,000

All remaining Available Funds held by each Joint Venture shall be distributed to the CCA Venturers as set forth in the respective Joint Venture Agreements.

For example, assume that Emerald’s Percentage Interest is 13.5% and the initial amount of Available Funds for distribution under this Section 8(d) equals $5,000,000. In that event, Emerald would have been entitled to a distribution equal to 13.5% of $5,000,000, or $675,000. Because that amount is less than

$1,000,000, no portion of those Available Funds will be distributed to Emerald; all will be distributed to the CCA Venturers. Now assume that the Joint Ventures receive another $5,000,000 of Available Funds. In that event, Emerald’s share of the total Available Funds, taking into account the first distribution as well, would be $1,350,000, less $1,000,000, or $350,000. The remaining Available Funds would be distributed to the CCA Venturers. Thereafter, Emerald would be entitled to 13.5% of any distributions made under this Section 8(d).

e) For tax purposes, the Joint Ventures shall allocate to Emerald, prior to any other allocation of income, an amount of long term capital gain equal to the amount actually distributed to Emerald under any section of this Agreement less $467,000 (the “Emerald Income Amount”). In the event the Joint Ventures do not have sufficient long term capital gain to allocate against the Emerald Income Amount, then income shall be allocated to Emerald in the following order of priority until the total allocation equals the Emerald Income Amount: (i) all of the Joint Ventures’ long term capital gain; (ii) short term capital gain; (iii) ordinary income. Such allocation shall have substantial economic effect because it will only occur based on an increase in the value of the Development Property. Notwithstanding the foregoing, in the event that the CCA Venturers (or their affiliates) have capital losses that can be used to offset an allocation of capital gain from the Joint Ventures, any capital gain of the Joint Ventures shall be allocated to the Venturers in accordance with their percentage interests in the Net Proceeds for Distributions, but in no event will more than $3 million of capital gain in the aggregate for all years be allocated to the CCA Venturers under this sentence. In no event shall any special allocations be made td the extent that such allocations are not permitted by law.

f) Notwithstanding Section 3(b), in the event the Actual Sales Proceeds received by the Joint Ventures are in a different proportion than that set forth in Section 3(b), then in that event the distributions and allocations, as between the two Joint Ventures, shall be made in proportion to the amounts received by each Joint Venture in such sale.

g) For purposes of this Agreement, the following terms shall have the following meanings:

(1) The term “Actual Sales Proceeds” shall mean the actual sales proceeds after taking into account all credits and deducts from the sale of the Development Property.

(2) The term “Net Proceeds for Distribution” shall mean the funds available for distribution pursuant to Section 8(d).

is 13.5% and its share in the Net Proceeds for Distribution equals $10,000,000. In that event, 1.5/13.5 (roughly 11.1%) was earned on January 7, 2004, so $1,111,111 began to accrue an 8% return on January 7, 2004. The parties acknowledge that the calculation of the Prior Investment Balance depends on the Net Proceeds for Distribution, which in turn depends on the Prior Investment Balance but further acknowledge that this circular calculation can readily be resolved using the spreadsheet used to produce Exhibit E.

(4) The term “Return of Capital” shall mean the total of (i) all Project Expenses funded by the CCA Venturers plus an 8% per annum simple interest return on each amount funded accruing from each date of funding, (ii) a Stipulated Land Value of $13,200,000 with an annualized appreciation rate of 8% simple interest from January 1, 2004, (iii) the Prior Investment Balance, and (iv) any amounts paid by a substitute investment source for the Project Expenses plus the return on such investment (to the extent such substitute investment source and the return on its investment was mutually agreed to by the parties in accordance with Section 3.6 of the Development Agreement or is Emerald or a New Investor pursuant to the terms of Section 11 of this Agreement). For purposes of computing Project Expenses and consequently the Net Proceeds for Distribution, the Joint Ventures shall be deemed to have paid, commencing January 2004, a management fee of $6,500 per month to their affiliates for management services associated with the Project in lieu of any management fees actually paid and whether or not any management fees are actually paid, but not in excess of $234,000. Until the entire Return of Capital has been paid as of any date, there will be no Net Proceeds for Distribution.

(5) “Available Funds” means funds available to the Joint Ventures from the sale or other disposition of the Development Property (or funds received from the ultimate disposition of any noncash property received for the Development Property), after payment of any costs associated with such disposition. For example, if the Joint Ventures dispose of a portion of the Development Property in exchange for an interest in another entity, there will be no Available Funds as a result of such disposition until cash is received from that entity or in exchange for the Joint Ventures’ interest in such entity.

(6) “Tentative Net Proceeds for Distribution” means the Available Funds less the amounts described in Section 8(b) and the CFD Incentive Payment.

h) Exhibit E to the Development Agreement and this Agreement reflects an example of the distributions to be made hereunder and under the Development Agreement under the assumptions used to prepare that exhibit.

4. In all other respects, the Agreement shall remain in full force and effect.

Executed by the parties as of the date first written above.

Emerald:

EMERALD DEVELOPMENT GROUP, LLC, a California limited liability company


By:	/s/ Xxxxx X. Xxxxx
	Xxxxx X. Xxxxx, President



The Joint Ventures:

ALISO VIEJO GOLF CLUB JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


ALISO VIEJO COMMERCIAL PROPERTY JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


GCL CORPORATION


By:	/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, Vice President

LEGAV CORPORATION


By:	/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, Vice President

	LEGAV COMMERCIAL PROPERTY CORPORATION


	By:	/s/ Xxxxxxx X. Xxxx
	Xxxxxxx X. Xxxx, Vice President

COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS

THIS COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS is entered into as of this 1st day of January, 2004, by and among LEGAV Corporation, a California corporation (“LEGAV Golf”), GCL Corporation, a California corporation (“GCL”), LEGAV COMMERCIAL PROPERTY CORPORATION, a California corporation (“LEGAV Commercial”), and Emerald Development Group, LLC, a California limited liability company (“Emerald”).

WHEREAS, LEGAV Golf and GCL are parties to that certain Joint Venture Agreement relating to Aliso Viejo Golf Club dated June 16, 1997, and amended on five previous occasions, with the last amendment dated April , 1999 (the “Golf JV Agreement”) pursuant to which Aliso Viejo Golf Joint Venture (“AV Golf’) was formed;

WHEREAS, LEGAV Commercial and GCL are parties to that certain Commercial Property Joint Venture Agreement dated November 20, 1997, and amended on April , 1999 (the “Commercial JV Agreement”) pursuant to which Aliso Viejo Commercial Property Joint Venture (“AV Commercial”) was formed;

WHEREAS, Emerald is a party to that certain Development Agreement dated December 22, 2003 with AV Golf and AV Commercial (the “Original Development Agreement”); which contemplates that Emerald will be admitted as a partner in AV Golf and AV Commercial (collectively, the “Joint Ventures”);

WHEREAS, this Agreement is designed to implement the provisions of the Original Development Agreement relating to admitting Emerald as a partner in the Joint Ventures, with certain revisions as agreed by the parties;

WHEREAS, Emerald and the Joint Ventures have entered into that certain Amended and Restated Development Agreement dated as of January 1, 2004 (the “Development Agreement”);

WHEREAS, LEGAV Golf, LEGAV Commercial and GCL (collectively the “CCA Venturers”) desire to amend the Golf JV Agreement and the Commercial JV Agreement to admit Emerald as a Venturer in each of AV Golf and AV Commercial.

NOW, THEREFORE, BE IT AGREED, as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined are defined in the Development Agreement. Other capitalized terms are defined, to the extent they relate to the Golf JV, in the Golf JV Agreement or to the extent they relate to the Commercial JV, in the Commercial JV Agreement. In the event of any conflict between a definition in a JV Agreement and the Development Agreement, the meaning in the Development Agreement shall apply.

2. Admission to and Interest in Joint Ventures.

a) Emerald is hereby admitted to each of the Joint Ventures as a Venturer and shall have the rights and obligations set forth herein and therein. This Agreement and the rights and obligations of Emerald as a Venturer relate solely to the development, use for purposes other than a golf course, and disposition of the Development Property. In all other respects, the JV

Agreements shall remain in full force and effect and Emerald shall have no rights or obligations with respect to any of the other assets, liabilities or operations of the Joint Ventures. For tax purposes, none of the liabilities of the Joint Ventures shall be allocated to Emerald.

b) Emerald’s interest in the income and distributions of the Joint Ventures shall be determined as set forth in this Agreement. Except for income allocated to Emerald and distributions made to Emerald as set forth herein, all other income, losses, credits and other items shall be allocated, and all other distributions shall be made, to the CCA Venturers in the manner set forth in the JV Agreements without regard to this Agreement.

3. Allocation Between Joint Ventures.

a) The Development Property belongs partly to the Golf JV and partly to the Commercial JV. The Project relates to all of the Development Property and will benefit both Joint Ventures.

b) In order to simplify matters, unless a contribution, allocation, distribution or other item is allocated specifically to one Joint Venture or the other, all such items shall be allocated between the Joint Ventures in the following proportions: Golf JV — [75]%; Commercial JV — [25]%, which percentages represent the proportions of the Development Property owned by each of the Joint Ventures. For example, the capital contribution by Emerald set forth in Section 4 shall be allocated in such proportions.

4. Capital Contribution. Emerald hereby contributes to the capital of the Joint Ventures all of its plans, ideas, documents, proposals, approvals and all other matters of any nature whatsoever associated with the Development Property. In exchange for such contribution, Emerald shall have an initial Capital Account in the Joint Ventures equal to $467,000, which amount represents the amount previously invested by Emerald in the Project. Except to the extent income of the Joint Ventures is allocated to Emerald as set forth herein and not yet distributed to Emerald, Emerald will have no other interest in the capital of the Joint Ventures.

5. Obligations of the Venturers.

a) Emerald, subject to the terms in the Joint Venture Agreements and Major Decisions, as defined below, shall have responsibility and authority as Development Partner of each Joint Venture to develop and implement entitlement and development strategies and to manage day-to-day operations of the Project. Emerald shall be entitled to one representative on the Management Committee of each Joint Venture. Such representative shall be Xxxxx Xxxxx unless the CCA Venturers consent to the appointment of a different representative. Emerald’s representative on the Management Committee shall participate in discussions only involving matters that could impact the Project and shall have no say in any other matters involving the Joint Ventures.

b) Emerald shall provide monthly Project status reports and monthly financial reconciliation reports related to the Project to the CCA Venturers’

appointed Representatives in a form reasonably requested by the CCA Venturers. The CCA Venturers’ initial Representatives are designated as Xxxx Xxxx and Xxxx Xxxxx and may be substituted as determined by the Venturers. The CCA Venturers’ Representatives shall seek timely approval from the their Investment Committees on matters defined as Major Decisions. All Major Decisions shall require the consent of the CCA Venturers, which consent shall not be unreasonably withheld except for Major Decisions described in clauses (vi)-(ix) of subsection(c),consent to which may be withheld in the sole discretion of the CCA Venturers if such Major Decisions are not contemplated by the Development Agreement.

c) Major Decisions shall be defined as (i) execution of any agreements binding the Joint Ventures or the Development Property, including any agreements with the City, (ii) the CFD formation, (iii) the Budgets for the Project infrastructure, (iv) major adjustments to the entitlement budget for the Project, (v) any agreements related to the modification/removal of the Xxxx Restrictions, (vi) the refinancing of the Golf Property or Commercial Property debt, (vii) sale of the Development Property, (viii) any matters relating to assets of the Joint Ventures not associated with the Project and (ix) any other Major Policy Decisions set forth in the Joint Venture Agreements.

d) The CCA Venturers shall cause the Joint Ventures to comply with the Development Agreement.

6. Emerald’s Percentage Interest.

a) Emerald’s entitlement to allocations of income and distributions of cash shall be determined based in large part on its Percentage Interest in certain profits of the Joint Ventures, as determined below. Emerald is to perform certain services for the Joint Ventures. Upon completion of such services, or under certain other circumstances, Emerald will be entitled to an increase in its Percentage Interest.

b) Emerald’s shall be entitled to a Percentage Interest of 1.5% upon presentation of the Development Plan to the City Council of Aliso Viejo on or about January 7, 2004 for review so that the Joint Ventures may receive City Council’s recommendation.

c) Emerald’s shall be entitled to an additional Percentage Interest of 1.5% upon certification of the City’s General Plan by the City Council.

d) Emerald’s shall be entitled to an additional Percentage Interest of 3% upon the City and the Joint Ventures executing a Development Agreement acceptable to the Joint Ventures for the Residential Development and the uses for the Retained Property.

e) Emerald’s shall be entitled to an additional Percentage Interest of 3% upon receipt of the Xxxx Release Agreement executed by Xxxx.

f) Emerald’s shall be entitled to an additional Percentage Interest of 1.5% upon the approval by the City (and all other applicable governmental authorities) of the Tentative Tract Map.

g) Emerald’s shall be entitled to an additional Percentage Interest of 1.5% upon the approval of the Final Tract Map by the City (and all other applicable governmental authorities).

h) Emerald’s shall be entitled to an additional Percentage Interest of 1.5% upon the closing and funding of the sale of all of the Residential Development to a third party(ies) and reconciliation of expenses for the Project.

i) In the event the Development Property is sold prior to the completion of all Phases and prior to or in connection with termination of the Development Agreement by Owner, Emerald’s Percentage Interest will be a total of 13.5%. In such event, then Emerald’s Profits Distribution, as determined using the chart in Section 8(b)(1), shall not be reduced by more than the amount it would have been reduced prior to the increase in the Percentage Interest pursuant to this subsection.

j) Sections 11 and 12, below, describes certain other circumstances under which Emerald’s Percentage Interest will be increased, Except as provided in Section 11 (relating to a substitute investor), in no event will Emerald’s Percentage Interest exceed 13.5%.

7. Emerald’s Additional Profits Interests.

a) Emerald’s shall also be entitled to allocations of income and distributions of cash determined based on the Xxxx Incentive Payment and the CFD Payment, as determined below.

b) In the event the Net Lot Revenues are more than $88,900,000, Emerald shall be entitled to a special profits interest in the Joint Ventures equal to (i) 30% of the difference between the Net Lot Revenues and $88,900,000, plus (ii) the amount set forth in clause (i) increased at the rate of 8% per annum (not compounded) from the date the Xxxx Release Agreement is executed by the parties (the “Xxxx Incentive Payment”).

c) In the event the proceeds from the CFD Bond proceeds are in excess of $7,675,000.00, then Emerald shall be entitled to a special profits interest in the Joint Ventures equal to (i) 50% of the CFD Bond proceeds in excess of $7,675,000.00, plus (ii) the amount set forth in clause (i) increased at the rate of 8% per annum (not compounded) from the date of the City’s adoption of Notice of Formation of the CFD (the “CFD Incentive Payment”). Emerald shall use commercially reasonable efforts to maximize lot values and to minimize infrastructure costs with the final infrastructure costs not to exceed $27,400,000.00 subject to the CCA Venturers’ approval.

8. Allocations and Distributions to Emerald — Single Cash Closing.

a) This Section describes how income will be allocated, and distributions will be made, to Emerald in the event that all of the Development Property is sold by the Joint Ventures for cash in a single transaction. The next section describes the allocations and distributions to Emerald in the event the Development Property is disposed of in a different manner.

b) At the Closing, the Joint Ventures shall distribute to Emerald the sum of the following amounts (the “Emerald Profit Distribution”):

(1) an amount (not less than zero) equal to (i) the Net Proceeds for Distribution multiplied by Emerald’s Percentage Interest at that time, less (ii) the amount determined from the applicable line on the following chart:

If Emerald’s Percentage Interest is:		Emerald Section 8(d) Distribution to be reduced by:
1.5	%	$	125,000
3	%	$	250,000
6	%	$	375,000
9	%	$	500,000
10.5	%	$	750,000
12	%	$	1,000,000
13.5	%	$	1,000,000

(2) The Xxxx Incentive Payment, if any.

(3) The CFD Incentive Payment, if any.

c) In addition to the distributions, if any required by subsection (b), the Joint Ventures shall distribute to Emerald an amount equal to Emerald’s Prior Investment Balance prior to the distribution of any Net Proceeds for Distribution.

d) For tax purposes, the Joint Ventures shall allocate to Emerald, prior to any other allocation of income, an amount of long term capital gain equal to the Emerald Profits Distribution plus the Prior Investment Balance less $467,000 (the “Emerald Income Amount”). In the event the Joint Ventures do not have sufficient long term capital gain to allocate against the Emerald Income Amount, then income shall be allocated to Emerald in the following order of priority until the total allocation equals the Emerald Income Amount (i) all of the Joint Ventures’ long term capital gain; (ii) short term capital gain; (iii) ordinary income. Such allocation shall have substantial economic effect because it will only occur based on an increase in the value of the Development Property. Notwithstanding the foregoing, in the event that the CCA Venturers (or their affiliates) have capital losses that can be used to offset an allocation of capital gain from the Joint Ventures, any capital gain of the Joint Ventures shall be allocated to the Venturers in

accordance with their percentage interests, but in no event will more than $3 million of capital gain in the aggregate for all years be allocated to the CCA Venturers under this sentence. In no event shall any special allocations be made to the extent that such allocations are not permitted by law.

e) Notwithstanding Section 3(b), in the event the Actual Sales Proceeds received by the Joint Ventures are in a different proportion than that set forth in Section 3(b), then in that event the distributions and allocations, as between the two Joint Ventures, shall be made in proportion to the amounts received by each Joint Venture in such sale.

f) For purposes of this Agreement, the following terms shall have the following meanings:

(1) The term “Actual Sales Proceeds” shall mean the actual sales proceeds after taking into account all credits and deducts from the sale of the Development Property.

(2) The term “Net Proceeds for Distribution” shall mean (i) Actual Sales Proceeds, less (ii) the Project Expenses to the extent such are not included in the Return of Capital, (iii) the Return of Capital, as defined below, (iv) the Xxxx Incentive Payment, if any, and (v) the CFD Incentive Payment, if any.

(3) The term “Prior Investment Balance” shall mean the sum of (i) Emerald’s initial Capital Account balance of $467,000 increased at the rate of 8% per annum (not compounded) from December 22, 2003 plus (ii) 8% per annum (not compounded) accrued on Emerald’s share of the Net Proceeds for Distribution accrued from the dates its Percentage Interest was earned in accordance with Section 6. For example, assume that Emerald’s Percentage Interest is 13.5% and its share in the Net Proceeds for Distribution equals $10,000,000. In that event, 1.5/13.5 (roughly 11.1%) was earned on January 7, 2004, so $1,111,111 began to accrue an 8% return on January 7, 2004.

(4) The term “Return of Capital” shall mean the total of (i) all Project Expenses funded by the Joint Ventures plus an 8% per annum simple interest return accruing from the date of funding, (ii) a Stipulated Land Value of $13,200,000 with an annualized appreciation rate of 8% simple interest from the date hereof, (iii) the Prior Investment Balance, and (iv) any amounts paid by a substitute investment source for the Project Expenses plus the return on such investment (to the extent such substitute investment source and the return on its investment was mutually agreed to by the parties in accordance with Section 3.6 of the Development Agreement or is Emerald or a New Investor pursuant to the terms of Section 11 of this Agreement). For purposes of computing Project Expenses and consequently the Net Proceeds for Distribution, the Joint Ventures shall be deemed to have paid,

commencing January 2004, a management fee of $6,500 per month to their affiliates for management services associated with the Project in lieu of any management fees actually paid and whether or not any management fees are actually paid, but not in excess of $234,000. Until the entire Return of Capital has been paid as of any date, there will be no Net Proceeds for Distribution.

g) Exhibit E to the Development Agreement reflects an example of the distributions to be made hereunder and under the Development Agreement under the assumptions used to prepare that exhibit.

9. Allocations and Distributions to Emerald — Other than Single Cash Closing.

a) This Section describes how income will be allocated and distributions will be made to Emerald in the event that part or all of the Development Property is sold by the Joint Ventures other than a sale of all of the Development Property for cash in a single transaction.

b) The Venturers acknowledge that the precise means by which the Development Property will be disposed of by the Joint Ventures cannot be known at this time. For example, and without limitation, it is possible that it will be sold in an installment sale, or traded for other property, or contributed to another entity in exchange for interests in that entity or sold in smaller parcels at multiple closings. It is also possible, albeit not expected, that the interests of the Venturers in the Joint Ventures themselves will be sold rather than the Development Property.

c) In any such event, Emerald will be entitled to distributions on the terms set forth in Section 8 based on the cash amounts actually ultimately received by the Joint Ventures or the Venturers from time to time, whether directly or indirectly. For example, assume that Emerald’s Percentage Interest is 13.5% and the initial Net Proceeds for Distribution available to the Joint Ventures equal $5,000,000. In that event, Emerald would have been entitled to a distribution equal to 13.5% of $5,000,000, or $675,000. Because that amount is less than $1,000,000, no portion of those Net Proceeds will be distributed to Emerald. (Of course, because Net Proceeds for Distribution are calculated after subtracting the Return of Capital, Emerald would have been entitled to a prior distribution representing its share of the Return of Capital.) Now assume that the Joint Ventures receive another $5,000,000 of Net Proceeds for Distribution. In that event, Emerald’s share of the total Net Proceeds for Distribution would be $1,350,000, less $1,000,000, or $350,000. Thereafter, Emerald would be entitled to 13.5% of any Net Proceeds for Distribution received by the Joint Ventures.

d) In the event the Xxxx Incentive Payment and/or the CFD Incentive Payment have not yet been earned as of the initial receipt of Net Proceeds for Distribution by the Joint Ventures, but are earned thereafter, the amounts due with respect thereto shall be distributed by the Joint Ventures to Emerald prior to any other distribution by the Joint Ventures.

e) For tax purposes, the Joint Ventures shall allocate to Emerald, prior to any other allocation of income, an amount of long term capital gain equal to any distributions made to Emerald pursuant to subsections (c) or (d). In the event the Joint Ventures do not have sufficient long term capital gain to allocate against such distributions, then income shall be allocated to Emerald in the following order of priority until the total allocation equals the total amount of such distributions: (i) all of the Joint Ventures’ long term capital gain; (ii) short term capital gain; (iii) ordinary income. Such allocation shall have substantial economic effect because it will only occur based on an increase in the value of the Development Property. Notwithstanding the foregoing, in the event that the CCA Venturers (or their affiliates) have capital losses that can be used to offset an allocation of capital gain from the Joint Ventures, any capital gain of the Joint Ventures shall be allocated to the Venturers in accordance with their percentage interests, but in no event will more than $3 million of capital gain in the aggregate for all years be allocated to the CCA Venturers under this sentence. In no event shall any special allocations be made to the extent that such allocations are not permitted by law.

f) Notwithstanding Section 3(b), because this Section 9 contemplates a possible sale of less than all of the Development Property, in such event the distributions and allocations, as between the two Joint Ventures, shall be made in proportion to the amounts received by each Joint Venture in such sale or if the sale proceeds are not specifically allocated between the Joint Ventures as part of such transaction, then such proportion shall be based on the relative gross acreages of each included in such transaction. The Joint Ventures at any time may agree upon a different method of allocation between them.

10. Effective Date.

a) Provided the condition set forth in subsection (b) is ultimately fulfilled, this Agreement shall take effect as of January 1, 2004.

b) The admission of Emerald as a Venturer in the Golf JV and the amendment of the Golf JV Agreement requires the consent of Textron Financial Corporation (“Textron”). Accordingly, without such consent, Emerald shall not be admitted as a partner in the Golf JV. In all events, the amounts due to Emerald hereunder shall be subordinate to the payment in full of all amounts due by the Golf JV to Textron.

c) LEGAV Golf and GCL shall use commercially reasonable efforts to obtain the consent of Textron to the admission of Emerald to the Golf JV. In the event that Textron refuses to grant such consent, the parties shall take such other steps, not requiring Textron’s consent, to amend this Agreement and the Original Development Agreement (which shall remain in effect if Textron’s consent is not received) to achieve to the greatest extent possible the same economic and tax results contemplated by this Agreement.

11. Substitute Investor. In the event the Joint Ventures elect not to continue to provide funding pursuant to Section 8.1 of the Development Agreement, Emerald

may fund the capital required for the Project Expenses from its own sources or obtain a substitute New Investor. The resulting new funding structure shall not adversely affect the Venturers’ rights herein except that the CCA Venturers’ share of the Net Proceeds for Distribution shall be 50% of the Net Proceeds for Distribution and the remaining fifty percent 50% shall be divided between Emerald and New Investor as agreed to by those parties. The CCA Venturers will maintain their Return of Capital, which will continue to accrue at the simple interest rate of 8% per annum. At Closing, if no Net Proceeds for Distribution are available, the funds available will be distributed in the following order of priority: (i) the CCA Venturers will receive payment of the Stipulated Land Value of $13,200,000, (ii) all other portions of the Return of Capital will be paid other than amounts due to the CCA Venturers, (iii) the Xxxx Incentive Payment and the CFD Incentive, if any shall be paid, and (iv) the CCA Venturers will be entitled to the remainder of their Return of Capital. If Emerald does not choose to exercise the right to continue to fund the Project Expenses provided herein, then the Termination Notice by the Joint Ventures will be treated as a termination without cause and Section 12 hereof shall apply.

12. Termination of Emerald’s Joint Venture Interest.

a) If the Joint Ventures terminate the Development Agreement for any reason, then the Joint Ventures shall purchase, and Emerald shall sell, its interest in the Joint Ventures on the terms set forth in this Section.

b) Except as provided in subsection (d), below, the amount to be paid to Emerald for its interest in the Joint Ventures if the Development Agreement is not terminated as a result of an Event of Default by Emerald (the Termination Price”) shall be the sum of the following items: (i) Emerald’s share of the Prior Investment Balance, (ii) the Xxxx Incentive Payment, if any, (iii) the CFD Incentive Payment, if any, and (iv) an amount equal to (a) $44,000,000 multiplied by (b) the sum of (x) the accumulated Percentage Interests earned by Emerald pursuant to Section 6 through the date of termination, plus (y) 50% of the remaining unearned Percentage Interest (i.e., if 6% is earned, 50% x 7.5% unearned (13.5-6) = 3.75% for a total of 9.75%). If final values for the Xxxx Incentive Payment and/or CFD Incentive Payment have not been determined at the time when the Termination Price is due, the portion of the Termination Price relative to the Xxxx Incentive Payment, if any and the CFD Incentive Payment, if any, shall be paid promptly after such amounts are determined, and the balance of the Termination Price will be paid immediately.

c) Upon proper termination of the Development Agreement as a result of an Event of Default by Emerald, the Joint Ventures shall pay to Emerald at the Closing (a) the amount that would be due to Emerald pursuant to Section 8(b)(1) based on Emerald’s Percentage Interest as of the date of termination, (b) the Xxxx Incentive Payment, if any, provided that the Xxxx Release Agreement has been executed by Xxxx as of the date of termination of the Development Agreement, (c) the CFD Incentive Payment, if any, provided that the City has adopted the Notice of Formation for the CFD as of the date of termination of the Development Agreement and (d) Emerald’s share of the Prior Investment Balance. If Section 9 would

have applied if this Agreement had not been terminated, then payments shall be made as set forth in that section based on Emerald’s Percentage Interest as of the date of termination. Notwithstanding the above, any amount payable to Emerald upon a termination under this Section 12(c) shall be subject to an offset for any of the Joint Ventures’ damages, including all attorneys’ fees and costs, arising out of or resulting from Emerald’s Event of Default under the Development Agreement.

d) If the Development Agreement is terminated as a result of a sale of the Development Property that is not described in the first sentence of Section 8.2 of the Development Agreement, then Emerald shall be entitled to the benefits set forth in this Agreement other than this Section 12 if, as and when it would have been entitled to such benefits had the Development Agreement not been terminated.

e) Upon distribution to Emerald of all amounts due to it under this Agreement, the Joint Ventures may repurchase Emerald’s interest in each of them for one dollar.

13. Conflict with Joint Venture Agreements.

a) This Agreement amends each of the Joint Venture Agreements. In the event of a conflict between the terms hereof and a Joint Venture Agreement, this Agreement shall be controlling. In all other respects, the Joint Venture Agreements shall remain in full force and effect.

b) Sections 15.1.1 and 15.1.2 of the Golf JV Agreement and Sections 14.1.1 and 14.1.2 of the Commercial JV Agreement (each of which relates to restrictions on transfers) shall apply to Emerald in the same manner as if “Xxxxx X. Xxxxx” were substituted for “Xxxx X. Xxxxxxxx” and if “Emerald” were substituted for “AVG” or “AVC” each place they appear.

c) Section 16 of the Golf JV Agreement and Section 15 of the Commercial JV Agreement (each of which relates to a put or right of first refusal) shall not apply to Emerald and Emerald shall have no rights under such sections.

d) The CCA Venturers shall continue to have all other authority as set forth in the Joint Venture Agreements.. Except as expressly set forth herein or for actions which are in conflict with the terms of the Development Agreement, the CCA Venturers shall have full authority to manage the Joint Ventures and take any action, including, without limitation Major Policy Decision matters and the prohibited transactions and self-dealing matters described in Article 11 of the Joint Venture Agreements, without Emerald’s consent.

e) Emerald acknowledges that the Joint Venture Agreements contain various provisions related to a prior development plan for the Joint Ventures’ assets and that Emerald shall not have any right to enforce any such provisions, it being understood that the only future plan for the Joint

Ventures’ assets in which Emerald has an interest or rights is the development of the Project.

14. Litigation. In the event of any litigation under or respecting this Agreement, the prevailing party shall be entitled to attorneys’ fees and court costs through all pretrial, trial, appellate, administrative, and post-judgment proceedings.

15. Payment of Sums Owed. Upon termination, all sums owed by any party to another shall be paid within 30 days of the effective date of such termination.

16. Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and (i) hand delivered, including delivery by courier service, (ii) sent by facsimile, or (iii) sent by certified mail, return receipt requested, postage prepaid, addressed as shown below, or to such other address as the party concerned may substitute by written notice to the other. If the notice is sent by facsimile, it must be properly addressed, reflecting the facsimile phone number of the addressee(s), and must be transmitted by a facsimile which produces a dated message completed confirmation. All notices hand delivered shall be deemed received on the date of delivery. All notices forwarded by mail shall be deemed received on a date three days (excluding Sundays and legal holidays when the U.S. mail is not delivered) immediately following date of deposit in the U.S. mail. Provided, however, the return receipt indicating the date upon which all notices were received shall be prima facie evidence that such notices were received on the date on the return receipt.

If to Emerald:		EMERALD DEVELOPMENT GROUP, LLC
		0000 Xxxxxx xxx Xxx Xxxxx, Xxxxx 000
		Xxx Xxxxx, Xxxxxxxxxx 00000
		Attention: Mr. Xxx Xxxxx
		Facsimile: (000) 000-0000

With a copy to:		XXXXX XXXX & XXXXXXXXX, LLP
		000 Xxxxx Xxxxxx, 00xx Xxxxx
		Xxxxxxxxxx, XX 00000-0000
		Attention: Xxxx X. Xxxxxx, Esq.
		Facsimile: (000) 000-0000

If to the Joint Ventures:
Or any CCA Venturer		ALISO VIEJO GOLF CLUB JOINT VENTURE and ALISO VIEJO COMMERCIAL PROPERTY JOINT VENTURE.
		0000 XXX Xxxxxxx, Xxxxx 000
		Xxxxxx, Xxxxx 00000
		Attention: Xxxx Xxxx
		Facsimile: (000) 000-0000

With a copy to:		LEGAL DEPARTMENT
		0000 XXX Xxxxxxx, Xxxxx 000
		Xxxxxx, Xxxxx 00000
		Attention: Xxxxxx X. Xxxxxxx
		Facsimile: (000) 000-0000

The addresses and addressees may be changed by giving notice of such change in the manner provided herein for giving notice. Unless and until such written notice is received, the last address and addressee given shall be deemed to continue in effect for all purposes. No notice to either the Joint Ventures or Emerald shall be deemed given or received unless the entity noted “With a copy to” is simultaneously delivered notice in the same manner as any notice given to either Emerald or the Joint Ventures, as the case may be.

17. Assignment; Encumbrance. Except as expressly provided herein, this Agreement and any documents executed in connection therewith and the Percentage Interest earned by Emerald shall not be assigned in any manner by Emerald without the prior written consent of the Joint Ventures (which consent may be withheld in the Joint Ventures’ sole discretion), and any assignment without such prior written consent shall be null and void.

18. Confidentiality. The terms and conditions of this Agreement shall be kept strictly confidential, and any confidential information of a disclosing party shall be kept strictly confidential by the receiving party and shall not be disclosed to any third party without first receiving the disclosing party’s prior written consent to such disclosure. The parties may disclose that they are Venturers in the Joint Ventures and the identities of the other Venturers and such other information as may be needed in order to implement the Project.

19. Entire Agreement. This Agreement embodies the entire agreement and understanding of any party relating to the subject matter hereof and supersedes all prior representations, agreements and understanding, oral or written, relating to such subject matter. Neither this Agreement nor any provision hereof may be amended, enlarged, modified, waived, discharged or terminated except as expressly provided herein or by an instrument signed by all parties or their respective successors. Provided that such amendment does not impact Emerald or the Project, the Joint Venture Agreements may be otherwise amended without the consent of Emerald.

20. State Law. This Agreement has been executed and delivered in the State of California and shall be construed in accordance with the laws of the State of California. Any action brought to enforce or interpret this Agreement shall be brought in the court of appropriate jurisdiction in Orange County, California. Should any provision of this Agreement require judicial interpretation, it is agreed that the court interpreting or considering same shall not apply the presumption that the terms hereof shall be more strictly construed against a party by reason of the rule or conclusion that a document should be construed more strictly against the party who itself or through its agent prepared the same; it being agreed that all parties hereto have participated in the preparation of this Agreement and that legal counsel was consulted by each responsible party before the execution of this Agreement.

21. Time. Time is of the essence in this Agreement and each and all of its provisions. Any extension of time granted for the performance of any duty under this Agreement shall not be considered an extension of time for the performance of any other obligation under this Agreement.

22. Exhibits. All Exhibits attached hereto are incorporated herein by this reference as if fully set forth herein; provided, however, in the event that at the time of the execution of this Agreement any of the Exhibits to be attached are incomplete, the parties shall use their best efforts to complete such Exhibits at the earliest possible date, but in any event such Exhibits shall be completed and attached to this Agreement prior to the expiration of 10 days from the date hereof. If any Exhibits are subsequently changed by the mutual written agreement of the parties, the Exhibits shall be modified to reflect such change or changes and initialed by the parties

23. Captions. Captions, titles to sections and paragraph headings used herein are for convenience or reference and shall not be deemed to limit or alter any provision hereof.

Executed by the parties as of the date first written above.

Emerald:

EMERALD DEVELOPMENT GROUP, LLC, a California limited liability company


By:	/s/ Xxxxx X. Xxxxx
	Xxxxx X. Xxxxx, President


The Joint Ventures:

ALISO VIEJO GOLF CLUB JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President


ALISO VIEJO COMMERCIAL PROPERTY JOINT VENTURE, a California joint venture

	By:	GCL CORPORATION, general partner


		By:	/s/ Xxxxxxx X. Xxxx
			Xxxxxxx X. Xxxx, Vice President

	GCL CORPORATION


	By:	/s/ Xxxxxxx X. Xxxx
	Xxxxxxx X. Xxxx, Vice President

	LEGAV CORPORATION


	By:	/s/ Xxxxxxx X. Xxxx
	Xxxxxxx X. Xxxx, Vice President

	LEGAV COMMERCIAL PROPERTY CORPORATION


	By:	/s/ Xxxxxxx X. Xxxx
	Xxxxxxx X. Xxxx, Vice President

EXHIBIT A

GOLF PROPERTY

Xxxx 0, 0 xxx 0 xx XX00-000 recorded as Document Number 20020400665 on May 14, 2002 in the real property records for the County of Orange, California.

EXHIBIT B

COMMERCIAL PROPERTY

Xxxx 0, 0 xxx 0 xx XX00-000 recorded as Document Number 20020400665 on May 14, 2002 in the real property records for the County of Orange, California.

[Map]

EXHIBIT X

XXXX RESTRICTIONS

1. Terms and conditions contained in Corporation Grant Deed from Xxxx Homes Limited Partnership (“Xxxx”) to Aliso Viejo Commercial Property Joint Venture (“AV Commercial”), recorded as Document Number 19970601048 on November 21, 1997 in the real property records of the County of Orange, California, as amended by that certain Modification of Covenants, Conditions and Restrictions and Consent to LL98-031 among Shea, AV Commercial and Aliso Viejo Golf Club Joint Venture (“AV Golf”), dated December 20, 2002 and recorded as Document Number 2003000359203 on April 1, 2003 in the real property records of the County of Orange, California (the “Modification”).

2. Terms and conditions contained in Corporation Grant Deed from Mission Viejo Company (“MV”) to Aliso Viejo Golf, L.P. (“AV LP”), recorded as Document Number 00-0000000 on August 31, 1995 in the real property records of the County of Orange, California, as amended by (i) that certain Amendment of Use Restrictions between Xxxx and AV LP, recorded as Document Number 19970575600 on November 12, 1997 in the real property records of the County of Orange, California, (ii) that certain Amendment of Use Restrictions between Xxxx and AV LP, recorded as Document Number 19970601046 on November 21, 1997 in the real property records of the County of Orange, California and (iii) the Modification.

3. Declaration of Covenants, Conditions and Restrictions for Aliso Viejo Community Association date April 1, 1982 and recorded as Document Number 82-118353 in the real property records of the County of Orange, California.

4. Notice of Annexation and Supplemental Declaration of Covenants, Conditions and Restrictions for Xxxx 0, 0 xxx 0 xx Xxxxx Xxx Xx. 00000 (Delegate District No. 25) of Aliso Viejo Community Association recorded as Document Number 19970601047 on November 21, 1997 in the real property records of the County of Orange, California, as amended by that certain Supplemental Declaration of Covenants, Conditions and Restrictions for Xxxx 0, 0 xxx 0 xx Xxxxx Xxx 00000 (Delegate District No. 25) of Aliso Viejo Community Association recorded as Document Number 2003000359204 on April 1, 2003 in the real property records for the County of Orange, California..

5. Notice of Annexation and Supplemental Declaration of Covenants, Conditions and Restrictions for Xxxx 0 xxx 0 xx Xxxxx Xxx Xx. 00000 (Delegate District No. 25) of Aliso Viejo Community Association recorded as Document Number 00-0000000 on August 31, 1995 in the real property records of the County of Orange, California, as amended by that certain Supplemental Declaration of Covenants, Conditions and Restrictions for Xxxx 0 xxx 0 xx Xxxxx Xxx 00000 (Xxxxxxxx Xxxxxxxx Xx. 00) of Aliso Viejo Community Association recorded as Document Number 2003000359205 on April 1, 2003 in the real property records for the County of Orange, California.

EXHIBIT E-1
FINANCIAL PROJECTIONS - ALISO EMERALD - 36 MONTHS TO FINAL MAP

		MAJOR ASSUMPTIONS
Name	Aliso Emerald - Developer Partnership	See “Exhibit B - Budget” for proforma assumptions.
Alternate	Sell at Final Map & Grading Permit	Execute LOI & Development Agreement in December 2003.
Product	400 SFR Lots	Costs include those incurred by Emerald starting November 2003.
File Name	AEP CCA-AVGC 400
Date	1-Jan-2004

— LOT DESCRIPTION AND PRICING —

PRODUCT	# OF LOTS	ACRES	AVERAGE FINISHED LOT PRICE	TOTAL LOT SALES
RESIDENTIAL
3200 sf lots	140	80	195,500	27,370,000
4000 sf lots	130	0	278,375	36,188,750
5000 sf lots	130	0	335,750	43,647,500
Average Lot Premium	0	0	9,800	3,920,000
Discount to Xxxx	0	0	0	(22,225,250	)
TOTAL RESIDENTIAL LOTS	400	80.0	272,400	88,901,000

— FINANCIAL SUMMARY —

DESCRIPTION	TOTAL		% OF SALES
Base Lot Sales	88,901,000		100.00	%
Entitlement Costs	7,862,020		8.84	%
Credit on Performance Incent	(1,000,000	)
Development Costs	19,565,000
Closing Costs	2,000,273
Project Profit	60,473,708		91.16	%

— DISTRIBUTIONS —	TOTAL	CLUBCORP	EMERALD
Preferred Return	5,074,228	4,258,152	816,076
Net Proceeds @ Close	40,732,480	36,233,595	4,498,885
Performance Incentives	1,000,000		1,000,000
Land Contribution	13,200,000	13,200,000	—
Prior Investment Balance	467,000		467,000
Xxxx Incentive	—		0
CFD Incentive	—		0
Total Proceeds	60,473,708	53,691,747	6,781,960

	TOTAL		CLUBCORP		EMERALD
Peak Investment Balance ($)	21,473,131		21,006,131		467,000
Peak Investment Balance (%)	100.00	%	97.83	%	2.17	%
Peak Investment Balance In Months	35

This proforma is a confidential and proprietary draft, for discussion purposes only. Emerald does not warrant or represent that the this proforma is or shall be an accurate projection of the actual performance or financial results of this project. This proforma is not for reliance or inducement and is distributed conditioned on this disclaimer.

— COST SUMMARY —

DESCRIPTION	TOTAL COSTS			PER LOT
COMMISSION & CLOSING COSTS:
SALES COMMISSION	$	1,778,020		$	4,445
CLOSING COST	$	222,253		$	556
ENTITLEMENTS
Planning & Entitlement	$	850,000		$	1,625
Engineering & Consulting	$	1,400,000		$	3,500
Entitlement Contingency	$	750,000		$	1,875
INDIRECT CONSTRUCTION
CFD Expenses	$	750,000		$	1,875
Inspect, Audit, Acctg, Legal, Insurance	$	500,000		$	1,250
Development Agreement Costs	$	475,000		$	1,188
Indirect Cost Contingency	$	250,000		$	625
ADMIN FEES & INCENTIVE PYMT:
Cash Payment - Phase 1a	$	125,000		$	313
Cash Payment - Phase 1b	$	125,000		$	313
Cash Payment - Phase 2	$	125,000		$	313
Cash Payment - Phase 3	$	125,000		$	313
Cash Payment - Phase 4	$	250,000		$	625
Cash Payment - Phase 5	$	250,000		$	625
Asset Management Fee to Owner	$	234,000		$	585
Due Diligence	$	75,000		$	188
General & Administrative	$	1,778,020		$	4,445
DIRECT CONSTRUCTION:
On-slte Construction (In-tracts)	$	10,200,000		$	25,500
CFD Reimbursement - Infrastructure	$	(6,175,000	)	$	(15,438	)
Golf Course Improvements	$	500,000		$	1,250
Community Amenities / Parking Structure	$	3,000,000		$	7,500
CFD Reimbursement - Community Amenities	$	(1,500,000	)	$	(3,750	)
Roc / Amenities / Common Areas	$	1,000,000		$	2,500
Affordable Housing Fee (In lieu)	$	1,000,000		$	2,500
Fees: Off-sites, Spine Road Upgrades	$	9,500,000		$	23,750
Contingency	$	2,040,000		$	5,100
TOTAL DEVELOPMENT COSTS	29,427,293			73,568
PREFERRED RETURN	5,074,228			$	12,686
TOTAL COSTS, INCL PREFERRED RTN	34,501,520			86,254

EXHIBIT E-2 —BUDGET

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit	Project Start Date	Jan-04
Product	400 SFR Lots	Project Duration	36
File Name:	AEP CCA - AVGC 400
Date	1/1/2004

PRODUCT	Projected Home Price		# OF D/U’S	ACRES	PRE- DISCOUNT LOT COST		ESTIMATED LOT SALES				Month to start	# of Months
3200 sf lots	460,000		140	80	195,500		27,370,000				36	1
4000 sf lots	655,000		130		278,375		36,188,750				36	1
5000 sf lots	790,000		130		335,750		43,647,500				36	1
Average Lot Premium					9,800		3,920,000				36	1
					—						36	1
TOTAL GROSS REVENUES			400	80	272,400		111,126,250
Discount to Xxxx	20	%					(22,225,250	)	1,778,020
NET LOT REVENUES							88,901,000		222,253

FINISHED LOT SALES:
R. E. Brokerage Commission					(4,445	)	2.00	%	(1,778,020	)	36	1
Closing Costs					(556	)	0.25	%	(222,253	)	36	1
Municipal Fees	Accounted for in Home Costs				—		—		0		36	1

TOTAL NET REVENUES (Market value less Xxxx discount and closing costs)							86,900,728

	Other %		Other $’s	Res %		Residential $’s	Per Month	Total Project Cost	Month to start	# of Months

ENTITLEMENTS	0	%
Planning & Entitlement	0	%	0	100	%			650,000	1	10
Engineering & Consulting	0	%	0	100	%	0		1,400,000	7	11
Entitlement Contingency	0	%	0	100	%	0		750,000	12	23
							Total Entitlements	2,800,000
INDIRECT CONSTRUCTION	0	%
CFD Expenses	0	%	0	100	%	0		750,000	3	18
Inspect, Audit, Acctg, Legal, Insurance	0	%	0	100	%	0		500,000	1	35
Development Agreement Costs	0	%	0	100	%	0		475,000	1	12
Indirect Cost Contingency	0	%	0	100	%	0		250,000	12	23
							Total Indirect Construction	1,975,000

ADMIN FEES & INCENTIVE PYMT:	0	%
Cash Payment - Phase 1a	0	%	0	100	%	0	0.00	%		125,000		1	1
Cash Payment - Phase 1b	0	%	0	100	%	0	0.00	%		125,000		6	1
Cash Payment - Phase 2	0	%	0	100	%	0	0.00	%		125,000		8	1
Cash Payment - Phase 3	0	%	0	100	%	0	0.00	%		125,000		12	1
Cash Payment - Phase 4	0	%	0	100	%	0	0.00	%		250,000		24	1
Cash Payment - Phase 5	0	%	0	100	%	0	0.00	%		250,000		35	1
Asset Management Fee to Owner	0	%	0	100	%	0	0.00	%		234,000		1	36
Due Diligence	0	%	0	100	%	0	0.00	%	per year	75,000		1	1
General & Administrative	0	%	0	100	%	0	2.00	%	Of Lot Sales	1,778,020		1	36
	0	%	0	100	%	0				0		1	36
							Total Admin Payments			3,087,020
DIRECT CONSTRUCTION:	0	%
On-site Construction (In-tracts)	0	%	0	100	%	0	25,500		per lot	10,200,000		36	1
CFD Reimbursement - Infrastructure	0	%	0	100	%	0	(15,438	)	per lot	(6,175,000	)	36	1
Golf Course Improvements	0	%	0	100	%	0	1,250		per lot	500,000		36	1
Community Amenities / Parking Structure	0	%	0	100	%	0	7,500		per lot	3,000,000		36	1
CFD Reimbursement - Community Amenities	0	%	0	100	%	0	(3,750	)	per lot	(1,500,000	)	36	1
Rec / Amenities / Common Areas	0	%	0	100	%	0	2,500		per lot	1,000,000		36	1
Affordable Housing Fee (In lieu)	0	%	0	100	%	0	2,500		per lot	1,000,000		36	1
Fees. Off-sites, Spine Road Upgrades	0	%	0	100	%	0	23,750		per lot	9,500,000		36	1
Contingency	0	%	0	100	%	0	5,100		per lot	2,040,000		36	1
	0	%	0	100	%	0	—		per lot	0		1	36

						Total Estimated Direct Construction				27,240,000
						Total Estimated CFD Reimbursement				(7,675,000	)
						Net Estimated Direct Construction				19,565,000

Notes on following page.

Notes:

Revenue Assumptions

400 single family residential lots, delivered in “final tract map and grading permit condition.”

Assumes bulk sales to Xxxx Homes at a discount from market rate.

Discount is in consideration for Xxxx’x lifting of deed restrictions on the re-zone area. Projection of a 20% discount of projected gross sales price of $111M is believed to be conservative. A more optimistic discount rate of 10%, which is used in the accompanying Homebuilder Proforma, would yield Xxxx a builder profit of 16.9% and an IRR of 34.5%, both of which are higher than returns typically achieved by homebuilders in this market. Partners will strive to minimize the ultimate discount to Xxxx. However, Investor should review the project based on a 20% discount, which may need to be paid during the entitlement phase. In this occurs, peak equity requirement could increase by as much as 300%.

Transaction Costs

Commissions and closing costs totaling 2.25% at sale of property.

Municipal Fees - Factored in Homebuilder Costs (see Homebuilder Proforma - Govt. Fees)

Acquisition

Land Value of $13,200,000 will accrue appreciation rate of 8% per annum simple interest. Paid from proceeds at close. See Exhibit E-5 Distributions for calculation of appreciation rate.

Pre-agreement project expenses pf $476,000 credited to Developers Prior Investment Balance. See Exhibit E-5 Distributions for calculation of interest at 8%.

Indirect Construction

CFD Expenses - Bond Counsel, prepaid underwriter fees, credit enhancement costs, other formation costs.

Development Agreement - Legal costs, consultants, fiscal analysis, etc.

Administrative

General & Administrative - Paid to EDG in monthly installments up to 36 months. Based on 2% of projected revenues.

Due Diligence - Formation, legal and initial due diligence costs of Emerald and Investment Partner, reimbursed from initial funding.

Asset Management - Paid to Owner at $6500/month for up to 36 months

Direct Construction Assumptions (for calculating finished lot value versus paper lot value)

Includes development construction costs for 400 finished “bluetop” lots, and an 18 hole golf course. Cost of permanent clubhouse not included.

In-Tracts - Preliminary estimate based on Xxxxxx Xxxxxxxx, Inc., with an additional budgeted Contingency of 20% (see separate line item).

CFD Reimbursement Infrastructure - public bond funds to partially reimburse homebuilder for infrastructure expenses.

Golf Course Improvements - $500,000 for rerouting one hole. Actual cost of permanent clubhouse paid by ClubCorp from land sale proceeds.

Community Amenities - budget for additional recreational amenities and a parking structure as incentive to City for project approvals.

CFD Reimbursement Community Amenities - public bond funds to partially reimburse homebuilder for additional amenities at project.

Rec / Amenities / Common Areas - Enhancement to budgeted parks, trail system, entry features, monumentation, gates, etc.

In Lieu Fees - in the event City requires contribution from project for future affordable housing requirements that may be required of the City.

Additional Fees, Spine Road Upgrades, Off-site Improvements - additional expenses that may be required as condition of development agreement w/ City.

Contingency - 20% of In-tract costs.

Aliso Viejo Golf Course Community
HOMEBUILDER CASHFLOW PROJECTION

PROJECT:

Aliso Vlejo Golf Course

PREPARED:

11/25/03

Aliso Emerald Partners LLC

REVENUE	Total	Average	Plan 1 3200 sf lot	Plan 2 4000 sf lot	Plan 3 5000 sf lot	Plan 4	Plan 5	Plan 6	Plan 7	Plan 8
Number of Units	400		140	130	130	0	0	0	0	0
Square Footage	1,099,500	2,749	2,050	2,900	3,350	0	0	0	0	0
Base Price	264,150,000	660,375	480,000	685,000	830,000	0	0	0	0	0
Base Price per S.F.		240,25	234.15	236.21	247.76	0.00	0.00	0.00	0.00	0.00
Lot Premiums	8,000,000	20,000
Buyer Options	13,207,500	33,019
Sales Revenue	285,357,500	713,394
Inflated Sales Revenue	285,357,500	713,394

EXPENSES	Total	Per Unit	Per S.F.	% of Sales

Land Acquisition	100,013,760	250,034	90.96	35.05	%
Land Closing Costs	0	0	0.00	0.00	%
Site Improvements 1	11,890,000	29,725	10.81	4.17	%
Site Improvements 2	8,920,000	22,300	8.11	3.13	%
Finished Lot Cost	120,823,760	302,059	109.89	42.34	%

Indirect: Construction	4,562,925	11,407	4.15	1.60	%
Direct Construction	65,970,000	164,925	60.00	23.12	%
Options Cost	10,159,615	25,399	9.24	3.66	%
Finance Cost	12,597,993	31,495	11.46	4.41	%
Property Taxes	2,662,176	6,655	2.42	0.93	%
Capitalized Marketing	1,025,000	2,563	0.93	0.36	%
HOA & Legal	132,520	331	0.12	0.05	%
Insurance Cost	2,961,575	7,404	2.69	1.04	%
Overhead and G&A	8,560,725	21,402	7.79	3.00	%
Sales Expense	4,823,526	12,059	4.39	1.69	%
Warranty Reserve	2,853,575	7,134	2.60	1.00	%

Total Expenses	237,133,391	592,833	215.67	83.10	%
Inflated: Total Expenses	237,133,391	592,833	215.67	83.10	%

PROFIT	Total	Per Unit	Per S.F.	% of Sales

Gross Profit	65,594,935	163,987	59.66	22.99	%
Operating Profit	59,746,409	149,366	54.34	20.94	%
Net Profit	48,224,109	120,560	43.86	16.90	%

RETURN

Internal Rate of Return		34.50	%
Peak Capital Requirement		68,895,644

ASSUMPTIONS

Cashflow Start Date	10/01/06		Number of Models	3
			Cost per Model	400,000
Month Models are Started	1		Other Initial Marketing Costs	425,000
Month Production is Started	2		Model Recovery Rate	50.00	%
Project Term in Months	39
			Monthly XXX Xxxx per Unit	120
Average Lot Premium	20,000		HOA Legal Cost	100,000
Premiums as % of Base Price	3.03	%
			Course of Const. Insurance	270
Options as % of Base Price	5.00	%	General Liability Insurance	1.00	%
Options Xxxx-Up	30.00	%
			Division Overhead per Xxxx	0
Xxxx Xxxx Acquisition per Lot	277,816		Corporate Overhead as %	3.00	%
Deed Release Discount	-10	%
Total Land Closing Costs	0.00	%
			Monthly Advertising	20,000
#1-Infrastructure w/ CRD credit	29,725		Monthly Model and Office Carry	9,200
#2-Govt. Fees	22,300		Sales & Closing Costs per Unit	9,631
			Master Marketing Fee as %	0.00	%
Indirect Construction per S.F.	4.15
Direct Construction per S.F.	60.00		Warranty Reserve as %	1.00	%

Builder Cost of Capital	5.75	%	Annual Revenue Inflation	0.00	%
			Annual Expense Inflation	0.00	%
Base Property Tax Rate	1.35	%
Other Annual Property Tax	0		Average Monthly Sales Rate	12.5
80.00 acres	1,250,172		price per acre	5.0 du/ac

NOTES

EXHIBIT E-4 —TOTAL PROJECT CASH FLOW

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit
Product	400 SFR Lots
File Name	AEP CCA-AVGC 400
Date	1-Jan-2004

	PROJECT TOTAL		Jan-2004		Feb-2004		Mar-2004		Apr-2004		May-2004		Jun-2004		Jul-2004		Aug-2004		Sep-2004		Oct-2004		Nov-2004		Dec-2004
			1		2		3		4		5		6		7		8		9		10		11		12
Revenue:
3200 sf lots	27,370,000		0		0		0		0		0		0		0		0		0		0		0		0
4000 sf lots	36,188,750		0		0		0		0		0		0		0		0		0		0		0		0
5000 sf lots	43,647,500		0		0		0		0		0		0		0		0		0		0		0		0
Average Lot Premium	3,920,000		0		0		0		0		0		0		0		0		0		0		0		0
0	(22,225,250	)	0		0		0		0		0		0		0		0		0		0		0		0

Sales Commission & Closing	(1,778,020	)	0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs	(222,233	)	0		0		0		0		0		0		0		0		0		0		0		0
Municipal Fees	0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL REVENUE	86,900,728		0		0		0		0		0		0		0		0		0		0		0		0

ENTITLEMENTS	0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement	650,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		65,000		0		0
Engineering & Consulting	1,400,000		0		0		0		0		0		0		127,273		127,273		127,273		127,273		127,273		127,273
Entitlement Contingency	750,000		0		0		0		0		0		0		0		0		0		0		0		32,609
	0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION	0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses	750,000		0		0		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41.667
Inspect, Audit, Acctg, Legal, Insurance	500,000		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286
Development Agreement Costs	475,000		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583		39,583
Indirect Cost Contingency	250,000		0		0		0		0		0		0		0		0		0		0		0		10,870
	0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT:	0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1a	125,000		125,000		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b	125,000		0		0		0		0		0		125,000		0		0		0		0		0		0
Cash Payment - Phase 2	125,000		0		0		0		0		0		0		0		125,000		0		0		0		0
Cash Payment - Phase 3	125,000		0		0		0		0		0		0		0		0		0		0		0		125,000
Cash Payment - Phase 4	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 5	250,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Management Fee to Owner	234,000		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500
Due Diligence	75,000		75,000		0		0		0		0		0		0		0		0		0		0		0
General & Administrative	1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
	0		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0
DIRECT CONSTRUCTION:	0		0		0		0		0		0		0		0		0		0		0		0		0
On-site Construction (in-tracts)	10,200,000		0		0		0		0		0		0		0		0		0		0		0		0
CFD Reimbursement - Infrastructure	(6,175,000	)	0		0		0		0		0		0		0		0		0		0		0		0
Golf Course Improvements	500,000		0		0		0		0		0		0		0		. 0		0		0		0		0
Community Amenities / Parking Structure	3,000,000		0		0		0		0		0		0		0		0		0		0		0		0
CFD Reimbursement-Community Amenities	(1,500,000	)	0		0		0		0		0		0		0		0		0		0		0		0
Rec / Amenities / Common Areas	1,000,000		0		0		0		0		0		0		0		0		0		0		0		0
Affordable Housing Fee (in lieu)	1,000,000		0		0		0		0		0		0		0		0		0		0		0		0
Fees Off-sites, Spine Road Upgrades	9,500,000		0		0		0		0		0		0		0		0		0		0		0		0
Contingency	2,040,000		0		0		0		0		0		0		0		0		0		0		0		0
	0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL PROJECT COSTS	27,427,020		374,756		174,758		216,425		216,425		216,425		341,425		343,698		468,698		343,698		343,698		278,698		447,176

NET PROJECT CASH FLOW	59,473,708		(374,758	)	(174,758	)	(216,425	)	(216,425	)	(216,425	)	(341,425	)	(343,698	)	(468,698	)	(343,698	)	(343,698	)	(278,698	)	(447,176	)
CUMULATIVE CASH REQUIREMENTS			374,758		549,517		765,942		982,367		1,198,792		1,540,218		1,883,916		2,352,613		2,696,311		3,040,009		3,318,707		3,765,883

EQUITY CONTRIBUTION	7,806,131		374,758		174,758		216,425		216,425		216,425		341,425		343,698		468,698		343,698		343,698		278,698		447,176
EQUITY DISTRIBUTION	(67,279,838	)	0		0		0		0		0		0		0		0		0		0		0		0
NET EQUITY BALANCE			374,758		549,517		765,942		982,367		1,198,792		1,540,218		1,883,916		2,352,613		2,696,311		3,040,009		3,318,707		3,765,883

EXHIBIT E-4 — TOTAL PROJECT CASH FLOW

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit
Product	400 SFR Lots
File Name	AEP CCA - AVGC 400
Date	1-Jan-2004

		PROJECT TOTAL		Jan-2005		Feb-2005		Mar-2005		Apr-2005		May-2005		Jun-2005		Jul-2005		Aug-2005		Sep-2005		Oct-2005		Nov-2005		Dec-2005
				13		14		15		16		17		18		19		20		21		22		23		24
Revenue:
3200 of lots		27,370,000		0		0		0		0		0		0		0		0		0		0		0		0
4000 sf lots		36,188,750		0		0		0		0		0		0		0		0		0		0		0		0
5000 sf lots		43,647,500		0		0		0		0		0		0		0		0		0		0		0		0
Average Lot Premium		3,920,000		0		0		0		0		0		0		0		0		0		0		0		0
0		(22,225,250	)	0		0		0		0		0		0		0		0		0		0		0		0
Sales Commission & Closing		(1,778,020	)	0		0		0		0		0		0		0		0		0		0		0		0
Closing Costs		(222,253	)	0		0		0		0		0		0		0		0		0		0		0		0
Municipal Fees		0		0		0		0		0		0		0		0		0		0		0		0		0
TOTAL REVENUE		86,900,728		0		0		0		0		0		0		0		0		0		0		0		0

ENTITLEMENTS		0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement		650,000		0		0		0		0		0		0		0		0		0		0		0		0
Engineering & Consulting		1,400,000		127,273		127,273		127,273		127,273		127,273		0		0		0		0		0		0		0
Entitlement Contingency		750,000		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609
		0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION		0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses		750,000		41,667		41,667		41,667		41,667		41,667		41,667		41,667		41,667		0		0		0		0
Inspect, Audit, Acctg, Legal, Insurance		500,000		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286
Development Agreement Costs		475,000		0		0		0		0		0		0		0		0		0		0		0		0
Indirect Cost Contingency		250,000		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870
		0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT:		0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment- Phase 1a		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 2		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment- Phase 3		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 4		250,000		0		0		0		0		0		0		0		0		0		0		0		250,000
Cash Payment - Phase 5		250,000		0		0		0		0		0		0		0		0		0		0		0		0
Asset Management Fee to Owner		234,000		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500
Due Diligence		75,000		0		0		0		0		0		0		0		0		0		0		0		0
General & Administrative		1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
		0		0		0		0		0		0		0		0		0		0		0		0		0
		0		0		0		0		0		0		0		0		0		0		0		0		0
DIRECT CONSTRUCTION:		0		0		0		0		0		0		0		0		0		0		0		0		0
On-site Construction (In-tracts)		10,200,000		0		0		0		0		0		0		0		0		0		0		0		0
CFD Reimbursement- Infrastructure		(6,175,000	)	0		0		0		0		0		0		0		0		0		0		0		0
Golf Course Improvements		500,000		0		0		0		0		0		0		0		0		0		0		0		0
Community Amenities / Parking Structure		3,000,000		0		0		0		0		0		0		0		0		0		0		0		0
CFD Reimbursement - Community Amenities		(1,500,000	)	0		0		0		0		0		0		0		0		0		0		0		0
Rec / Amenities / Common Areas		1,000,000		0		0		0		0		0		0		0		0		0		0		0		0
Affordable Housing Fee (In lieu)		1,000,000		0		0		0		0		0		0		0		0		0		0		0		0
Fees, Off-sites, Spine Road Upgrades		9,500,000		0		0		0		0		0		0		0		0		0		0		0		0
Contingency		2,040,000		0		0		0		0		0		0		0		0		0		0		0		0
		0		0		0		0		0		0		0		0		0		0		0		0		0
TOTAL PROJECT COSTS		27,427,020		282,593		282,593		282,593		282,593		282,593		155,320		155,320		155,320		113,653		113,653		113,653		363,653

NET PROJECT CASH FLOW		59,473,708		(282,593	)	(282,593	)	(282,593	)	(282,593	)	(282,593	)	(155,320	)	(155,320	)	(155,320	)	(113,653	)	(113,653	)	(113,653	)	(363,653	)
CUMULATIVE CASH REQUIREMENTS				4,048,476		4,331,069		4,613,662		4,896,254		5,178,847		5,334,167		5,489,487		5,644,808		5,758,461		5,872,114		5,985,768		6,349,421

EQUITY CONTRIBUTION		7,806,131		282,593		282,593		282,593		282,593		282,593		155,320		155,320		155,320		113,653		113,653		113,653		363,653
EQUITY DISTRIBUTION		(67,279,838	)	0		0		0		0		0		0		0		0		0		0		0		0
NET EQUITY BALANCE				4,048,476		4,331,069		4,613,662		4,896,254		5,178,847		5,334,167		5,489,487		5,644,808		5,758,461		5,872,114		5,985,768		6,349,421

EXHIBIT E-4 — TOTAL PROJECT CASH FLOW

Name	Aliso Emerald - Developer Partnership
Alternate	Sell at Final Map & Grading Permit
Product	400 SFR Lots
File Name	AEP CCA - AVGC 400
Date	1-Jan-2004

		PROJECT TOTAL		Jan-2006		Feb-2006		Mar-2006		Apr-2006		May-2006		Jun-2006		Jul-2006		Aug-2006		Sep-2006		Oct-2006		Nov-2006		Dec-2006
				25		26		27		28		29		30		31		32		33		34		35		36
Revenue:
3200 sf lots		27,370,000		0		0		0		0		0		0		0		0		0		0		0		27,370,000
4000 sf lots		36,188,750		0		0		0		0		0		0		0		0		0		0		0		36,188,750
5000 sf lots		43,647,500		0		0		0		0		0		0		0		0		0		0		0		43,647,500
Average Lot Premium		3,920,000		0		0		0		0		0		0		0		0		0		0		0		3,920,000
0		(22,225,250	)	0		0		0		0		0		0		0		0		0		0		0		##########

Sales Commission & Closing		(1,778,020	)	0		0		0		0		0		0		0		0		0		0		0		(1,778,020	)
Closing Costs		(222,253	)	0		0		0		0		0		0		0		0		0		0		0		(222,253	)
Municipal Fees		0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL REVENUE		86,900,728		0		0		0		0		0		0		0		0		0		0		0		86,900,728

ENTITLEMENTS		0		0		0		0		0		0		0		0		0		0		0		0		0
Planning & Entitlement		650,000		0		0		0		0		0		0		0		0		0		0		0		0
Engineering & Consulting		1,400,000		0		0		0		0		0		0		0		0		0		0		0		0
Entitlement Contingency		750,000		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		32,609		0		0
*		0		0		0		0		0		0		0		0		0		0		0		0		0
INDIRECT CONSTRUCTION		0		0		0		0		0		0		0		0		0		0		0		0		0
CFD Expenses		750,000		0		0		0		0		0		0		0		0		0		0		0		0
Inspect, Audit, Acctg, Legal, Insurance		500,000		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		14,286		0
Development Agreement Costs		475,000		0		0		0		0		0		0		0		0		0		0		0		0
Indirect Cost Contingency		250,000		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		10,870		0		0
		0		0		0		0		0		0		0		0		0		0		0		0		0
ADMIN FEES & INCENTIVE PYMT:		0		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1a		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 1b		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 2		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 3		125,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 4		250,000		0		0		0		0		0		0		0		0		0		0		0		0
Cash Payment - Phase 5		250,000		0		0		0		0		0		0		0		0		0		0		250,000		0
Asset Management Fee to Owner		234,000		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500		6,500
Due Diligence		75,000		0		0		0		0		0		0		0		0		0		0		0		0
General & Administrative		1,778,020		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389		49,389
-		0		0		0		0		0		0		0		0		0		0		0		0		0
		0		0		0		0		0		0		0		0		0		0		0		0		0
DIRECT CONSTRUCTION:		0		0		0		0		0		0		0		0		0		0		0		0		0
On-site Construction (In-tracts)		10,200,000		0		0		0		0		0		0		0		0		0		0		0		10,200,000
CFD Reimbursement - Infrastructure		(6,175,000	)	0		0		0		0		0		0		0		0		0		0		0		(6,175,000	)
Golf Course Improvements		500,000		0		0		0		0		0		0		0		0		0		0		0		500,000
Community Amenities / Parking Structure		3,000,000		0		0		0		0		0		0		0		0		0		0		0		3,000,000
CFD Reimbursement - Community Amenities		(1,500,000	)	0		0		0		0		0		0		0		0		0		0		0		(1,500,000	)
Rec / Amenities / Common Areas		1,000,000		0		0		0		0		0		0		0		0		0		0		0		1,000,000
Affordable Housing Fee (In lieu)		1,000,000		0		0		0		0		0		0		0		0		0		0		0		1,000,000
Fees, Off-sites, Spine Road Upgrades		9,500,000		0		0		0		0		0		0		0		0		0		0		0		9,500,000
Contingency		2,040,000		0		0		0		0		0		0		0		0		0		0		0		2,040,000
*		0		0		0		0		0		0		0		0		0		0		0		0		0

TOTAL PROJECT COSTS		27,427,020		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		320,175		19,620,889

NET PROJECT CASH FLOW		59,473,708		(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(113,653	)	(320,175	)	67,279,838
CUMULATIVE CASH REQUIREMENTS				6,463,075		6,576,728		6,690,381		6,804,035		6,917,688		7,031,342		7,144,995		7,258,649		7,372,302		7,485,955		7,806,131		##########

EQUITY CONTRIBUTION		7,806,131		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		113,653		320,175		0
EQUITY DISTRIBUTION		(67,279,838	)	0		0		0		0		0		0		0		0		0		0		0		##########
NET EQUITY BALANCE				6,463,075		6,576,728		6,690,381		6,804,035		6,917,688		7,031,342		7,144,995		7,258,649		7,372,302		7,485,955		7,806,131		##########

EXHIBIT E-5 — EQUITY, PREFERRED RETURN, PROFIT DISTRIBUTIONS

Name	Aliso Emerald - Developer Partnership					Investor				INVESTOR					CLUBCORP			EMERALD				TOTAL
Alternate	Sell at Final Map & Grading Permit					% Investment Capital				100			%		0.00		%	0			%	100		%
Product	400 SFR Lots					Total Investment				7,806,131					0			467,000				8,273,131
File Name	AEP CCA - AVGC 400					Preferred Return				8.00			%		8.00		%	8.00			%
Date	1-Jan-2004																					0.00		%
					0	Actual Percentage Interest				36.50			%		50.00		%	13.50			%	100.00		%
						Max Investment Balance				7,806,131					13,200,000			467,000				21,473,131

EQUITY, PREFERRED RETURN, PROFIT DISTRIBUTIONS		PROJECT TOTAL	Jan-2004	Jan-2004			Mar-2004	Apr-2004	May-2004		Jun-2004	Jul-2004		Aug-2004		Sep-2004			Oct-2004	Nov-2004			Dec-2004
			1	2			3	4	5		6	7		8		9			10	11			12
Investor Equity Contributed		7,806,131	374,758	174,758			216,425	216,425	216,425		341,425	343,698		468,698		343,698			343,698	278,698			447,176
Emerald Earned Equity Amounts		4,498,885	485,987								485,987			1,096,974

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SECOND AMENDMENT TO COMBINED AMENDMENT TO JOINT VENTURE AGREEMENTS

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