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advances made by Norstar to PK Ventures under the $2.5 million
revolving line of credit. The terms of this Master Note required
that all outstanding principal amounts bear interest at a rate
equal to three-fourths of 1 percent above Norstar’s stated prime
rate, that the interest on the outstanding principal amounts be
calculated on the basis of a 360-day year, that PK Ventures make
payments of all accrued interest on the outstanding principal
amounts on a monthly basis, and that the line of credit expire on
January 1, 1992, with all amounts thereunder becoming immediately
due and payable.
On February 9, 1987, Norstar sent a letter to Rose to inform
him that it had transferred a total of $12.5 million in loan
proceeds to PK Ventures’ Norstar account. This letter indicated
that, effective February 3, 1987, Norstar had advanced the
following loans:
Borrower Loan Amount
SLPC $1,100,000
TBPC 6,500,000
TPTC 4,000,000
PK Ventures 900,000
Norstar made the $900,000 advance to PK Ventures under the
$2.5 million revolving line of credit. In addition, the letter
indicated that Norstar had “closed-out” previously outstanding
notes of SLPC, TBPC, TPC, and TPTC totaling $12,493,009.
Pursuant to Rose’s instructions, Norstar debited PK Ventures’
account for this amount.
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