Estate of Howard Gilman, Deceased, Bernard D. Bergreen and Natalie Moody, Executors - Page 9

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               3.   The Notes                                                         
               As part of the restructuring, the estate received $143                 
          million in notes (subordinated to the $250 million line of                  
          credit) from subsidiaries of Gilman Building Products and from              
          Gilman Paper Co.’s railroad.  All of the notes were due to be               
          paid in full on January 31, 2004.4                                          
               Interest but not principal was payable annually beginning              
          January 31, 2000.  However, on January 28, 2000, the executors              
          and obligors of the $143 million in notes agreed that interest on           
          the notes could be deferred at the option of the obligors.  The             
          total amount of interest to be paid by 2004 was about $46.5                 
          million.  The executors expected to use the interest and                    
          principal payments on the notes to pay estate expenses including            
          Federal and New York State estate taxes.                                    
               After the restructuring, the estate held $183 million in               
          assets, including the notes in the amount of $143 million, and              
          apartments and cash.                                                        
               4.   Election To Defer Tax Payments                                    
               On April 1, 1999, the executors elected under section 6166             
          to pay Federal estate tax in 10 annual installments, beginning on           

               4 As part of the sale of Gilman Paper Co. in Dec. 1999, a              
          debt of $5 million (part of the $143 million in notes) was                  

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