Wayne A. McFadden - Page 7




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          price of $449,500.  The asking price remained $449,500 for                  
          approximately 3 months, but failed to generate any offers.                  
          Stephanie and David reduced the price to $379,500 in                        
          approximately July 1991.  Despite the reduction, the Atascadero             
          property still failed to generate any offers.  Stephanie and                
          David’s real estate agent attributed the lack of interest to a              
          “soft” market and was of the opinion that a further reduction, to           
          $350,000, would be necessary to generate any offers.  Stephanie             
          and David were unwilling to reduce the price further and took the           
          property off the market in August 1991 with the hope that market            
          conditions would improve.                                                   
               On August 30, 1991, Stephanie and David consolidated the 33            
          loans (hereinafter the Atascadero loan) by executing a “Note                
          Secured By Second Deed Of Trust” in favor of petitioner’s profit-           
          sharing plan.  The note states that Stephanie and David are                 
          individually, jointly, and severally liable for the outstanding             
          balance of $166,029 plus 12-1/2 percent interest from August 30,            
          1991, until paid, compounded annually.  The note was due 24                 
          months after the date of the note (August 30, 1991), or upon the            
          sale, transfer, conveyance, or encumbering of the property.  The            
          note recites that the holder may proceed against the makers                 
          independently.  The note is secured by a second deed of trust and           
          assignment of rents to the Atascadero property.                             








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