Foretravel, Inc. - Page 16

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            informed petitioner about Ratliff's note.  In January 1989,                                    
            Nicholson surrendered ownership of his stock in Northwest to                                   
            petitioner.                                                                                    
                  On January 8, 1989, Nicholson and petitioner amended the                                 
            repurchase agreement.  The amendment provided that petitioner                                  
            owned 100 percent of Northwest's stock, and that Nicholson would                               
            regain the 49-percent interest in Northwest when Northwest repaid                              
            petitioner's accounts receivables due from Northwest and repaid                                
            the advances made to Northwest during 1988.  On January 9, 1989,                               
            petitioner agreed to advance Northwest $50,000, and Moore, acting                              
            as vice president of Northwest, delivered a 1-year, interest-                                  
            bearing promissory note to petitioner in that amount.  Northwest                               
            repaid petitioner $50,000 on February 22, 1989, but no interest                                
            was paid for the time the note was outstanding.                                                
                  In April 1989, Tracy Golden (Golden), a partner from the                                 
            accounting firm of Axley & Rode, who had been working on the                                   
            Foretravel account since 1983, was performing routine interim                                  
            audit work on petitioner's financial statements when he became                                 
            concerned that the receivables from Northwest might affect his                                 
            ability to express a "clean" opinion on petitioner's financial                                 
            statements.  Golden wanted to observe firsthand the situation at                               
            Northwest.  He discussed the matter with Weaver, and they decided                              
            to inspect Northwest and assess the situation.                                                 
                  On May 23, 1989, petitioner settled a note given to                                      
            Fishfader by Northwest.  Petitioner paid Chrysler First                                        




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