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Debenture Percent of
Debenture Holders Funds Total Debenture Funds
Lothar Schweigert $ 687,000 51.35
Robert TeSelle 149,000 11.14
Jan Strand 90,500 6.77
William Maffit 90,500 6.77
Chris Rakhshan 90,500 6.77
Paul Stevenson 115,000 8.60
Bernard Kliska* 115,000 8.60
$1,337,500 100.00
* Bernard Kliska is the father of Daniel Kliska, a shareholder of
petitioner.
The written debenture notes, executed on August 1, 1993,
provided a 10-year schedule over which petitioner was to repay
the debenture holders the debenture funds and over which
petitioner was to pay the debenture holders amounts designated as
interest on the debenture funds, with the final payment due and
payable on June 15, 2003. For the first 5 years of the debenture
notes, designated interest only was due and payable at the end of
the second, third, fourth, and fifth years at a stated interest
rate of 6 percent per year.1 For the second 5 years of the
debenture notes, principal and designated interest payments were
due and payable in equal monthly installments with a stated
interest rate of 1 percent above the prime rate of interest as
reported by the Wall Street Journal.
Payments due on the debenture notes were not dependent upon
the profits or losses of petitioner. Priority of payment on the
1 The debenture notes executed in favor of Schweigert,
TeSelle, Stevenson, and Kliska provided for a partial repayment
of principal at the end of the fifth year.
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Last modified: May 25, 2011