Barry B. Bealor and Nancy L. Bealor, et al. - Page 100

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          similar notes totaling, in the aggregate, $265,000.  Fred's and             
          Bruce's notes, however, were made out to Machise, and not to                
          Qulart, apparently because of an error.  The total of the                   
          investor notes was therefore $2,888,666, an amount equal to ten-            
          elevenths of MIT 83's capital.                                              
               On July 1, 1983, Qulart issued to Machise a 12-percent                 
          promissory note in the amount of $2,888,666, whose provisions               
          tracked the provisions of the partners' notes to Qulart.                    
               Machise then lent $2,888,666 to Qulart by means of a demand            
          note, providing for no interest.  Qulart then lent $2,888,666 to            
          the 25 investors in MIT 83, including Fred and Bruce.  Instead of           
          taking the proceeds from Qulart, however, the MIT 83 partners               
          purportedly directed Qulart to provide directly to MIT 83 the               
          $2,888,666 that the partners had borrowed from Qulart.  Qulart              
          therefore endorsed to MIT 83 the $2,888,666 demand note that                
          Qulart had received from Machise.                                           
               In addition to their notes, the investors were required to             
          put up, in the aggregate, $288,866 in cash as the other one-                
          eleventh of their capital investment in MIT 83.  Seventeen of the           
          25 investors in MIT 83 paid their share of the required cash in             
          full in 1983, in the amount of $118,868, plus $13,902 in                    
          interest.                                                                   
               BBPA issued a note receivable to MIT 83 representing payment           
          in respect of the cash required of the other eight investors in             
          MIT 83, who issued short-term promissory notes to MIT 83.  The              




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