- 58 -
7. In addition to long-term notes, during 1982, partners
invest cash of $118,868, and pay $13,902 interest, plus
$168,000 in short-term notes.
8. BBPA retains $46,500 from the partner cash account
pursuant to a line-of-credit note with MIT 83, plus
$13,699 as professional fees and $5,330 as an "exchange
account".
9. Machise receives $69,800 of partner cash for which it
becomes obligated to BBPA under its line-of-credit
note.
10. BBPA becomes obligated to MIT 83 for "receivable"
account of $284,300.
B. Payroll Phase
11. During 1983, Machise makes weekly transfers totaling
$3,061,723 to the MIT 83 payroll account.
12. Employees and independent contractors are paid by MIT
83 from the amounts transferred to the MIT 83 payroll
account by Machise.
D. Repayment Phase
13. In 1984, repayment begins with Machise notes of
$519,960 to MIT 83 as compensation fee and late
charges.
14. Notes for $519,960 pass through MIT 83 to its partners.
15. Partners transfer the notes for $519,960 to Qulart as
payments on the partners' 12-percent notes. At the end
of 1987, the BBPA line-of-credit note with a balance of
$284,300 is also assigned to Qulart to be applied as
payment on the MIT 83 partners' notes to Qulart.
16. The notes for $519,960 then exit to Machise as payments
on Qulart's 12-percent note to Machise.
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