Timothy J. and Joan M. Miller - Page 15

                                        - 15 -                                        
          on their personal residence as additional security for the                  
          Miller/Huntington Loan.  Second, the loan agreement for the                 
          Miller/Huntington Loan was amended to require that the market               
          value of the collateral securing the loan be maintained in                  
          amounts at least one-third greater than the authorized credit               
          line; if not, Huntington could require Miller or the Rapp Group             
          to provide additional security.                                             
               The newly increased Miller/Huntington Loan line of credit              
          was drawn down to its full $1,500,000 authorized amount by April            
          8, 1994.  Required monthly payments of interest were made to                
          Huntington, along with periodic principal payments and draws, so            
          that the outstanding balance on the Miller/Huntington Loan was              
          $1,375,000 as of December 28, 1994.  On its Federal income tax              
          return for 1994, MMS reported $1,374,930 in loans from                      
          shareholders as of yearend.9                                                
               On June 30, 1994, the security provided for the                        
          Miller/Huntington Loan was again modified.  The loan agreement              
          was amended to require the Rapp Group to pledge collateral in the           
          form of public securities (rather than Danek stock) with                    
          aggregate base and call values of $2,009,450.94 and of                      
          $1,785,385.42, respectively.                                                


               9 The $70 discrepancy between the stipulated 1994 yearend              
          balance of the Miller/Huntington Loan and the figure reported by            
          MMS as the outstanding amount of loans from shareholders is not             
          material, in our view.  Cf. supra note 8.                                   




Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011