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Mr. Boccardo executed an unsecured promissory note (1988
note) dated November 1, 1988, in the amount of $2,087,500 that
bore interest at the rate of 9 percent per annum, payable semi-
annually, and that provided for a balloon payment of the
principal on or before April 1, 1990. Sainte Claire's board met
on April 1, 1990, and voted to renew the 1988 note for 1 year.
Mr. Boccardo executed a promissory note (1990 note) dated April
1, 1990, that was due on or before April 1, 1991, but that
otherwise was made on the same terms as the 1988 note. On April
1, 1991, Sainte Claire's board met and voted to extend the due
date of Mr. Boccardo's note to April 1, 1994. Mr. Boccardo
executed a promissory note (1991 note) dated April 1, 1991, that
was due on or before April 1, 1994, but that otherwise was made
on the same terms as the 1990 note.
During 1993, Mr. Boccardo paid Sainte Claire $2,159,562.20,
representing payment of the principal of the 1991 note in the
amount of $2,087,0004 and interest in the amount of $72,562.20.
Also during that year, Sainte Claire distributed the principal
payment of $2,087,000 to its shareholders. Sainte Claire
reported gain on the sale of the Arboga and Gridley ranches in
4 The parties do not attempt to explain the $500 discrepancy
between the principal amount of the 1991 note, which was
$2,087,500, and the amount of principal paid by Mr. Boccardo,
which was $2,087,000. The parties, however, stipulated that Mr.
Boccardo paid the principal amount owed Sainte Claire during
1993.
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