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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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