Thomas K. and Billie J. Scallen - Page 15




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               Accordingly, I will be receiving interest at the                       
               contract rate during the term of the loan and the                      
               purpose for the commitment fee has been mitigated.                     
               In addition, I agreed to extend the term of the loan to                
               July 31, 1990 or upon the successful completion of the                 
               current public offering, whichever is first.                           
               On January 21, 1991, an unrelated party later incorporated             
          as the Joaquin Financial Group, Inc. (Joaquin), made an offer to            
          purchase the KXDC-AM and KXDC-FM radio stations from WMG for $1.1           
          million.  On July 31, 1991, WMG and Joaquin closed on the                   
          purchase.  Joaquin paid WMG $239,514 cash for part of the                   
          purchase price and issued a promissory note of $860,486 for the             
          remainder.  WMG assigned the Joaquin note to petitioner in 1991.            
          Petitioner applied the Joaquin note to reduce the principal                 
          balance which WMG owed him.  Joaquin defaulted on its obligation,           
          and on November 6, 1992, petitioner sent a notice of default to             
          Joaquin.  In 1995, petitioner received a final receivership                 
          distribution of $549,764.18 with respect to Joaquin’s note.                 
               In addition to the promissory note executed by WMG for up to           
          $3 million, WMG executed other promissory notes in favor of                 
          petitioner:                                                                 
               Date        Amount       Interest rate       Due                       
          04/21/89        $200,000              12%              Demand               
          04/28/89          20,000              12               Demand               
          05/23/89          20,000              13.5             Demand               
          06/09/89          35,000              13               Demand               
          06/19/89          75,000              13               Demand               
          07/07/89          45,000              13               Demand               
          07/11/90          27,000              11               Demand               
          07/19/90          73,000              11               Demand               
          08/15/90          20,000              11               Demand               






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