Richard E. and Mary Ann Hurst - Page 6

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          receive $2.5 million payable over fifteen years.  HMI, Inc. would           
          continue to lease the Safety Drive property from the Hursts.  The           
          proceeds from the sale of the corporations and the rent from the            
          lease would support the Hursts during their retirement.  Mrs.               
          Hurst would continue to work at HMI as an employee, joining the             
          firm’s health plan to get coverage for herself and her husband.             
          Tuori, Dixon, and Todd Hurst would own the company, getting the             
          job security they would have lacked had HMI been sold.                      
               Everything came together on July 1, 1997:  HMI bought 90               
          percent of its 1000 outstanding shares from Mr. Hurst for a $2              
          million note.  Richard Hurst sold the remaining 100 shares in HMI           
          to Todd Hurst (51 shares), Dixon (35 shares), and Tuori (14                 
          shares).  The new owners each paid $2500 a share, also secured by           
          promissory notes.  HMI bought RHI from the Hursts for a $250,000            
          note.2  (All these notes, from both HMI and the new owner, had an           
          interest rate of eight percent and were payable in 60 quarterly             
          installments.)  HMI also signed a new 15-year lease for the                 
          Safety Drive property, with a rent of $8,500 a month, adjusted              
          for inflation.  The lease gave HMI an option to buy the building            
          from the Hursts, and this became a point of some contention--               
          described below--after the sale.  And, finally, HMI also signed a           

               2 Trial testimony amply demonstrated that an extra $25,000             
          loan repayment was mistakenly included in the sale price of RHI,            
          and the Commissioner now agrees that RHI’s price was $250,000.              

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