The opinion of the court was delivered by: Sweet, District Judge.
The defendants The Toronto-Dominion Bank ("TD Bank"),
Provident National Bank ("Provident"), The Prudential
Insurance Company of America ("Prudential") and The
Toronto-Dominion Bank Trust Company ("TD Trust") have moved
under Rule 56, Fed.R.Civ.P. for summary judgment dismissing
the complaint of plaintiff New Bank of New England, N.A.
("NBNE"), one of four institutional lenders under a syndicated
loan agreement (the "Credit Agreement"). For the reasons set
forth below the motion is granted, and the complaint is
The complaint in this action was filed by NBNE on February
6, 1991, and the instant motion was heard and submitted on
March 26, 1991.
The facts as found here are, except as otherwise noted,
undisputed by the parties.
NBNE is a bridge bank chartered by the Office of the
Comptroller of the Currency under 12 U.S.C. § 1821(n) with its
principal place of business in Boston, Massachusetts. NBNE is
the successor of Bank of New England, N.A. ("BNE"), which has
been placed in receivership by the Comptroller of the Currency.
On August 25, 1988, Noble Broadcast Group, Inc. ("Noble"),
the borrower, entered into the Credit Agreement with the four
institutional lenders, BNE, TD Bank, Provident and Prudential
The Credit Agreement states that neither that Agreement, any
Note, or any terms of the Agreement or Note may be amended,
supplemented or modified "without the written consent of all
the lenders" if "such amendment, supplement or modification
shall (a) extend the maturity of any Note or any installment
thereof, or reduce the rate or extend the time of payment of
interest thereon. . . ." (Section 13.1).
The Credit Agreement defines certain occurrences as
constituting an "Event of Default." One such occurrence,
defined in § 11.1(a), is that Noble:
shall fail to pay any interest or principal
payment on any Note when due in accordance with
the terms thereof or hereof; or [Noble] shall
fail to pay any other amount required to be paid
hereunder within five Business Days after any
such amount becomes due in accordance with the
In the event of such a default, the Majority Lenders, by
notice of default to Noble, "may" declare all amounts owing
under the Credit Agreement and Notes immediately due and
payable and, upon such acceleration, "may" enforce payment and
exercise all their other rights and remedies (§ 11.1).
The term "Majority Lenders" is defined as "Lenders holding
more than 50% of the aggregate unpaid principal amount of the
Notes. . . ." (§ 1 at p. 9).
The Credit Agreement also provides for the Lenders to waive
an Event of Default, but specifically states at § 11.2 that
"the consent of all Lenders shall be required to waive an Event
of Default under Section 11.1(a). . . ."
Section 13.10 of the Credit Agreement specifies that
California law shall govern all disputes arising under the
At the same time that it signed the Credit Agreement, Noble
pledged its stock in its subsidiaries as collateral to secure
its indebtedness, by means of a Security and Pledge Agreement
(the "Pledge Agreement"). In addition, one of Noble's
subsidiaries pledged its rights under a sales agency agreement
as collateral to secure its guaranty of a portion of Noble's
indebtedness, by means of a Security Agreement (the
Also at that same time, on August 25, 1988, the Lenders
along with two other creditors of Noble (collectively, the
"Creditors") and TD Trust as agent for all of the Creditors
entered into an Intercreditor Agreement in connection with the
Credit Agreement. Among other things, the Intercreditor
Agreement contained § 9(d), ...