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Upon HPPW’s acquisition of the stock in Peoplefeeders, HPPW
became the parent corporation of Peoplefeeders, and HPPW changed
its name to Peoplefeeders. The former Peoplefeeders corporate
entity changed its name to Square Pan Pizza Co. of California,
Inc. (Square Pan), and remained parent to other subsidiary
corporations that owned and operated restaurants. Hereinafter,
references to Peoplefeeders and to Square Pan are to those parent
and subsidiary corporate entities as they existed and operated
after the July 1987 acquisition and name change of the
corporations.
On August 11, 1987, Peoplefeeders obtained a $1.7 million
loan from California Commerce Bank (Commerce Bank), reflected by
a promissory note in favor of Commerce Bank payable in 53 monthly
installments of $32,075 with interest at 2-1/2 percent over prime
and due in full on June 5, 1992.
On March 31, 1988, using proceeds from the $1.7 million
Commerce Bank loan, Peoplefeeders paid Motsenbocker the $1.5
million due on that date relating to HPPW's acquisition of
Motsenbocker's stock interest in Peoplefeeders.
With regard both to the $1.5 million debt obligation owed to
Motsenbocker and the $1.7 million loan obtained from Commerce
Bank, the board of directors of Peoplefeeders formally acted on
and approved such debt obligations. Promissory notes were issued
(...continued)
note increased to 4-1/4 percent over the prime rate.
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