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agreement extended over the same time period as the agreement
with Natwest. In connection with the loan agreement, WMG
executed a note in favor of petitioner.
The loan agreement between petitioner and Natwest and the
loan agreement between petitioner and WMG provided for the same
interest rates.9 The loan agreement with Natwest provided that
petitioner would pay Natwest a “commitment fee” as defined in the
agreement10 and a facility fee of 1 percent. The agreement with
WMG, meanwhile, provided that WMG would pay petitioner a
nonrefundable commitment fee of 10 percent ($300,000). WMG’s
obligation to petitioner was the subject of a security agreement,
which petitioner perfected by filing a financing statement with
the Secretary of State’s office for the State of California. The
security agreement provided petitioner a security interest in all
the assets of WMG, including its corporate office, AM and FM
transmitters, studios, and call letters. In accordance with his
loan agreement with Natwest, petitioner executed an assignment
9WMG’s note provided that the interest rate on the loan from
petitioner to WMG was “equal to the rate set forth in the Loan
Agreement payable by Scallen to National Westminster Bank USA”.
10The loan agreement provided for a commitment fee on a
quarterly basis in arrears equal to one-half of 1 percent per
annum of the daily average amount of the unused loan commitment
from Apr. 19, 1989, until the Natwest commitment was terminated
or the “Commitment Termination Date”, as defined in the
agreement.
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