Larry D. Johnson - Page 4




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               In 1987, West Mill entered into a $52,500,000 construction             
          loan agreement with Westinghouse Credit Corp. (Westinghouse).               
          Under the agreement, petitioner and JCC each guaranteed 50                  
          percent of the Westinghouse loan, and petitioner was required to            
          execute all documents individually and in his capacity as a                 
          corporate representative of JCC (shareholder/president).                    
          During 1991, West Mill defaulted on the loan, and the payment               
          obligations of West Mill were accelerated.  On October 4, 1991,             
          petitioner spoke with a representative of Westinghouse regarding            
          a proposed settlement to resolve the default situation.  A letter           
          confirming petitioner’s conversation contained the following                
          proposals:                                                                  
               (i) West Mill will provide [Westinghouse] with a deed to               
                    Towne Lake in lieu of foreclosure;                                
               (ii) Johnson Consolidated Companies (guarantor of the Towne            
                    Lake loan and controlling stockholder of both West Mill           
                    venturers) will enter into a consulting agreement with            
                    [Westinghouse] and provide consulting services related            
                    to the operation and development of Towne Lake in                 
                    exchange for consulting fees approximating One Million            
                    Fifty Thousand Dollars ($1,050,000) on terms to be                
                    mutually agreed upon.                                             
               On December 5, 1991, a settlement agreement regarding the              
          Westinghouse loan was entered into between Westinghouse, West               
          Mill, petitioner, JCC, LDJ Development Co., and LDJ Construction            
          Co.  Throughout the settlement negotiations petitioner acted in a           
          dual capacity on his own behalf as a guarantor of the                       
          Westinghouse loan and as a representative of the West Mill                  






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