Robert S. McDaniel, Jr. and W. Jane McDaniel - Page 13




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          Martens, on behalf of NationsBank/Amresco, sent a letter to Mr.             
          Palermo (April 21, 1994 letter) demanding payment of the Second             
          Street loan.  The April 21, 1994 letter notified Mr. Palermo that           
          the 1989 note was in immediate default, that the Bank was giving            
          Second Street 14 days within which to cure the default, and that            
          if the obligations under that note were not fully satisfied by              
          May 5, 1994, the Bank intended to accelerate all sums due there-            
          under and to commence collection activity.                                  
               After having received the April 21, 1994 letter, Mr. Palermo           
          gave it to Mr. McDaniel and asked him to respond to it.  By                 
          letter dated April 26, 1994, Mr. McDaniel informed Mr. Martens              
          that Mr. Palermo had arranged for alternative financing that was            
          expected to close no later than June 15, 1994, and requested that           
          no action be taken by NationsBank/Amresco until that date.                  
               In order to refinance the Second Street debt to the Bank,              
          around August 1994 Mr. Palermo asked Northern Trust Bank of                 
          Florida, N.A. (Northern Trust) to approve a $590,000 loan to                
          Second Street, whose general partners since March 1, 1994, were             
          Mr. Palermo and George Palermo Architect, Inc.  During the                  
          negotiations in 1994 with Northern Trust, Northern Trust did not            
          solicit any financial information or personal guaranties or other           
          agreements from Mr. McDaniel or from Mr. Parker.  The collateral            
          for the loan by Northern Trust to the partnership was to be the             
          Second Street real property, Mr. Palermo's unconditional guaranty           





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