Timothy J. and Joan M. Miller - Page 12

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               Petitioner agreed to certain covenants with respect to the             
          Miller/Huntington Loan, including covenants that, other than the            
          extension of credit by petitioner to MMS under the MMS/Miller               
          Loan line of credit, petitioner would not, and would cause MMS              
          not to, lend or incur indebtedness (except indebtedness for the             
          purchase of property equal to the purchase price).  Petitioner              
          was also required under the Miller/Huntington Loan to submit                
          MMS's financial statements and a report of MMS's accounts                   
          receivable to Huntington on a monthly basis, and to submit his              
          personal financial statements as Huntington might from time to              
          time require.  No covenants had been required of petitioner as              
          guarantor of the MMS/Huntington Loan.  The Miller/Huntington Loan           
          further provided that an event of default would exist if either             
          petitioner or MMS became insolvent, or if MMS failed to comply              
          with any provision of the MMS/Miller Loan.                                  
               On its Federal income tax return and financial statement for           
          the 1992 calendar year, MMS reported a $750,000 loan from a                 
          shareholder as of yearend.                                                  
          Modifications to the Restructured Loan                                      
               On February 15, 1993, the lines of credit under the                    
          Miller/Huntington Loan and MMS/Miller Loan were both increased by           
          $250,000.  These changes were effected through loan modification            


               7(...continued)                                                        
               the Bank * * * .                                                       




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