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to pay to James Joyce or Joyce Western a total of $600,000 in two
installments--$400,000 was due to be paid at the closing of the
loan, and the balance was due to be paid at the earlier of the
closing of the permanent financing or February 1, 1987.
The ILA also set forth the details of the permanent
financing arrangement that was being negotiated between
PK Ventures and Norstar. As set forth in the ILA, Norstar had
agreed to make one term loan to SLPC in the amount of
$1.1 million and one or more term loans to TBPC, TPC, and/or TPTC
in the total amount of $10.5 million. The purpose of these term
loans was, inter alia, to refinance the indebtedness that SLPC,
TBPC, TPC, and TPTC owed to Norstar. In addition to these term
loans, Norstar agreed to establish a 5-year revolving line of
credit in the maximum principal amount of $2.5 million for
PK Ventures ($2.5 million revolving line of credit). Under the
terms of the permanent financing arrangement, the term loans to
SLPC, TBPC, TPC, and TPTC and the first $1.3 million of
outstanding principal on the $2.5 million revolving line of
credit were to be secured by a pledge of all of the stock of
SLPC, TBPC, TPC, and TPTC as well as a first mortgage on and
security interest in all of the assets of those corporations.
On December 31, 1986, PK Ventures closed on the purchase of
the stock of SLPC, TBPC, and TPC from Joyce Western. On that
date, PK Ventures executed documents entitled “Non-Negotiable
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