Peoplefeeders, Inc. and Subsidiaries - Page 5




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          by Peoplefeeders in favor of Motsenbocker and Commerce Bank                 
          relating thereto, and the debt obligations were secured by                  
          personal guarantees of Partrick, by corporate guarantees of                 
          Square Pan and the other subsidiaries, and by collateralization             
          of the operating assets of Square Pan and the other subsidiaries.           
               As of early fall of 1987, Square Pan and the other                     
          subsidiaries owned and operated 25 restaurants and other                    
          businesses (namely, a wholesale food supplier and a food                    
          concession).  At that time, Peoplefeeders did not separately own            
          or operate any restaurants, and Peoplefeeders had no source of              
          income from any business other than Square Pan.                             
               In the fall of 1987, Peoplefeeders purchased and began                 
          operating one Arby's restaurant.  In 1988, Peoplefeeders opened a           
          pizza restaurant, but it was unsuccessful and closed within                 
          a year.  In 1990, Peoplefeeders opened another pizza restaurant,            
          but this restaurant also was unsuccessful and closed within                 
          a year.                                                                     

          Intercompany Bank Account                                                   
               Each of the restaurants owned and operated by Peoplefeeders,           
          by Square Pan, and by the other related subsidiaries maintained             
          separate bank accounts at different banks, and cash receipts from           
          operations of each restaurant were deposited daily into the                 
          separate bank accounts maintained by each restaurant.  Three                
          times a week, the total cash receipts from all of the restaurants           





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Last modified: May 25, 2011