Custom Chrome, Inc. and Subsidiaries - Page 12

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          expenditures, $692,347 constituted finance charges relating to              
          the financing provided by FNBB and Mezzanine Capital.  The                  
          remaining $650,000 constituted legal and professional fees.                 
               On October 16, 1989, for $1,000, FNBB assigned the options             
          that it held in the stock of CC Holdings to Bank of Boston                  
          Capital (Bank of Boston), a wholly owned subsidiary of FNBB.                
          Subsequently, on September 12, 1990, Bank of Boston assigned to             
          Security Pacific National Bank (SPNB) for an unspecified                    
          consideration a portion of the options representing 5 percent of            
          the equity in CC Holdings, and Bank of Boston retained the                  
          options with respect to the remaining 7.5 percent of the equity             
          in CC Holdings.                                                             
               On November 5, 1991, CC Holdings was merged into petitioner,           
          and petitioner’s stock was offered to the public in an initial              
          public offering (IPO) at $10 per share.  Most of petitioner's               
          debts were paid off using the $25 million in proceeds realized              
          from the IPO.                                                               
               On November 5, 1991, simultaneously with the IPO, the                  
          options held by Bank of Boston and SPNB in CC Holdings’ stock               
          were exercised, and the banks received a total of 313,125 shares            
          of stock in petitioner with a combined total value of $3,131,250.           
          The combined net value of the stock in petitioner that the banks            
          realized in exercising the options equaled $3,068,750 ($3,131,250           
          less the $62,500 exercise price for the options).                           

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