J. Michael Shedd and Marita Shedd - Page 4




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          personally guarantee performance of the contract and of all of              
          J&J’s financial obligations to SEKO.                                        
               J&J became indebted to SEKO in its first year of business.             
          In May 1989, J&J executed a promissory note to SEKO for an amount           
          in excess of $155,000.  The borrowed funds were used to pay J&J’s           
          operating expenses.  The promissory note reflected an unsecured             
          loan without interest and with payments scheduled to end on June            
          1, 1993, or upon termination of the independent contractor                  
          agreement between J&J and SEKO.  The payments were made from the            
          periodic settlement of commissions owed by SEKO to J&J.  SEKO               
          would reduce the commission to J&J by an amount equal to 10                 
          percent of the commission.  Under this payment schedule, J&J paid           
          its indebtedness to SEKO in approximately 1 year.                           
               TLC was also incorporated in 1988 but did not begin                    
          operations until 1992 when it received its Ohio business                    
          certificate.  Mr. Shedd was the president and treasurer, and Mrs.           
          Shedd was secretary of TLC.  TLC also contracted with SEKO and              
          established a customer base due to the SEKO affiliation.                    
               TLC was incorporated with $500 paid in capital, and no                 
          additional capital was contributed by the Shedds.  Advances in              
          the total amount of $119,700 were made by J&J to TLC from                   
          February 1992 through October 1995 for operating expenses                   
          evidenced by unsecured demand notes bearing 7-percent interest              
          and signed by Mrs. Shedd, as TLC’s secretary, as follows:                   






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