Richard J. and Melodie D. McKeever - Page 5




                                                - 5 -                                                  
            Petitioners’ Advisers                                                                      
                  In 1988, petitioners used Mr. Minter as a breeding and sales                         
            consultant and horse trainer.  Petitioners did not pay Mr. Minter                          
            for his advice.  Petitioners initially approached Mr. Minter for                           
            advice on breeding and showing Chispa Nuac, the mare they had                              
            purchased from Ms. Sarnecky.  Mr. Minter has served on the board                           
            of directors and several committees, including the ethics                                  
            committee, of the Paso Fino Horse Association.  His ranch, Rancho                          
            Paso Bravo, has approximately 125 paso finos.                                              
                  From 1988 through 1992, petitioners purchased at least 10                            
            horses from or through Mr. Minter.  All the horses were mares,                             
            except for one gelding included in a six-horse dispersal sale.                             
            Several of the horses purchased in that sale were untrained.                               
            Other horses purchased from or through Mr. Minter during the                               
            years 1988-92 had health problems which made them unsuitable for                           
            riding or showing.3                                                                        
                  At some point during 1991, petitioners began consulting with                         
            other paso fino breeding and training experts.  They did so after                          
            talking with successful owners and trainers at horse shows.  As a                          




                  3For example, in June 1988, petitioners purchased Adelita                            
            LaCe.  Adelita LaCe had a “hitching” gait condition in her rear                            
            left leg.  Mrs. McKeever had the mare examined by a veterinarian,                          
            who stated that she had severe osteoarthritis due to an injury.                            
            However, Mrs. McKeever expected that Adelita LaCe would still be                           
            adequate for breeding purposes.                                                            





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