William L. McCurley and Victoria J. McCurley, et al. - Page 6

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          total advances to the shareholder exceeded 75 percent of his                
          redemption account, the board of directors would demand repayment           
          to the extent of the excess.  The board demanded repayment of two           
          of the more than 70 advances to shareholders.  In each case,                
          repayment was demanded because, after a decline in the value of             
          the shareholder's redemption account, advances to the shareholder           
          exceeded 75 percent of the account.                                         
               All advances were recorded on SDI's certified financial                
          statements as loans receivable.  To obtain an advance, a                    
          shareholder was required to execute an application.  The                    
          applications generally stated the amount of the advance requested           
          and provided that:  (1) No interest would accrue; (2) the board             
          would demand repayment if the shareholder's total advances                  
          exceeded 75 percent of that shareholder's redemption account; and           
          (3) the shareholder's redemption account could be used to satisfy           
          any outstanding advances.  These applications were routinely                
          approved by SDI's board of directors.  SDI denied only two                  
          applications.  These applications were denied because the future            
          profitability of the respective applicant's redemption account              
          was questionable.                                                           
               SDI advanced funds to Messrs. McCurley and Hall.  Each time            
          Messrs. McCurley and Hall requested funds, they executed an                 
          application and submitted it to SDI's board of directors.  The              
          board approved, by resolution, each advance.  Messrs. McCurley              
          and Hall each tendered noninterest-bearing demand notes in the              




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