Charles F. Sutter and Cheryl Sutter - Page 6

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               The fair market value of the insurance coverage that Charles           
          Sutter received pursuant to the Royal policy was equal to the               
          first-year premium.                                                         
               Knowing that the Royal policy would lapse, one of the                  
          Schwabs recommended that Charles Sutter purchase another life               
          insurance policy in 1992.  This time the policy involved was                
          offered by the Columbus Life Insurance Co. (Columbus).  During              
          1992, Charles Sutter was employed by Aviat, Inc., and Dory                  
          Logging, Inc.  His wages for that year totaled $20,410.43.  Upon            
          the recommendation of one of the Schwabs, Charles Sutter                    
          purchased a universal life insurance policy from Columbus that              
          provided death benefits in the amount of $270,000.  The first-              
          year premium on this policy was $6,705.60.  The sale of this                
          policy was an even better deal for the Schwabs than the sale of             
          the policies described above that were offered by Royal.                    
          Columbus paid the selling agent a commission (including bonus and           
          other incentives) in excess of 190 percent of the first-year                
          premium on this type of life insurance policy.  Consequently,               
          Vance Schwab, who was listed as the selling agent on the Columbus           
          policy, was paid a commission of $12,791.48 by Columbus on the              
          sale of the Columbus policy to Charles Sutter in 1992.                      
               In 1992 the Schwabs sold a life insurance policy to Cheryl             
          Sutter as well.  At the time she was employed as a cook for the             
          local school district and by Marc Barrus.  Her wages for that               





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