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Also on December 31, 1986, PK Ventures executed documents
entitled “Subordinated Note” in favor of the TPTC sellers in
exchange for the stock of TPTC. The Subordinated Notes were
issued in the following amounts and were, in the aggregate, equal
to the base purchase price for the stock of TPTC:
TPTC Seller Subordinated Note Amount
Joyce Western $780,000
Kathleen Biondo 130,000
Christine Joyce 130,000
Helma Joyce 130,000
James Joyce 130,000
The terms of the Subordinated Notes required that the principal
balances bear interest at a rate of 7.6923 percent, that payments
of accrued interest be made monthly beginning on February 1,
1987, and that the principal balances become due and payable on
January 1, 1992. The Subordinated Notes were subordinate to the
indebtedness incurred by PK Ventures, SLPC, TBPC, TPC, and TPTC
to Norstar in connection with PK Ventures’ acquisition of SLPC,
TBPC, TPC, and TPTC.
On or about February 3, 1987, SLPC, TBPC, and TPTC executed
documents entitled “Promissory Note” in favor of Norstar in which
they promised to pay to Norstar the principal amounts of
$1.1 million, $6.5 million, and $4 million, respectively. The
terms of SLPC’s Promissory Note to Norstar required that the
outstanding principal balance bear interest at a rate of
10.25 percent, that the interest on the outstanding principal
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