EXHIBIT 10.26
AMENDMENT NUMBER FIFTEEN TO CONSOLIDATED, AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER FIFTEEN TO CONSOLIDATED, AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this "Amendment"), is entered into as of September 7, 2001,
between FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"),
with a place of business located at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000, MALIBU ENTERTAINMENT WORLDWIDE, INC., a Georgia
corporation ("MEWI"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MALIBU MANAGEMENT COMPANY, a Georgia
corporation ("MMC"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MALIBU GRAND PRIX CORPORATION, a
Delaware corporation ("MGPC") with its chief executive office located at 000
Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, TUCSON MGPC, INC., an Arizona
corporation ("Tucson"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, XXXXXX HILLS MGPC, INC., a California
corporation with its chief executive office located at 000 Xxxxx Xxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, REDONDO BEACH CASTLE MGPC, INC., a California
corporation ("RBC"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, REDWOOD CITY CASTLE MGPC, INC., a
California corporation ("RCC"), with its chief executive office located at 000
Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, SAN DIEGO MGPC, INC., a
California corporation ("San Diego"), with its chief executive office located at
000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, PORTLAND MGPC, INC., an
Oregon corporation ("Portland"), with its chief executive office located at 000
Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, DALLAS CASTLE MGPC, INC., a
Texas corporation ("DC"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, SAN XXXXXXX XXXXXX MGPC, INC., a Texas
corporation ("SAC"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, SAN ANTONIO MGPC, INC., a Texas
corporation ("San Antonio"), with its chief executive office located at 000
Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MOUNTASIA DEVELOPMENT COMPANY, a
Georgia corporation ("MDC), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MALIBU GRAND PRIX DESIGN &
MANUFACTURING, INC., a California corporation ("MGPDMI"), with its chief
executive office located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
MALIBU GRAND PRIX FINANCIAL SERVICES, INC., a California corporation ("MGPFSI"),
with its chief executive office located at 000 Xxxxx Xxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000, OFF TRACK MANAGEMENT, INC., a California corporation ("Off
Track"), with its chief executive office located at 000 Xxxxx Xxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, MGP SPECIAL, INC., a California corporation
("Special"), with its chief executive office located at 000 Xxxxx Xxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, AMUSEMENT MANAGEMENT FLORIDA, INC., a Florida
corporation ("Amusement"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MALIBU GRAND PRIX CONSULTING, INC., a
California corporation ("Consulting"), with its chief executive office located
at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MOUNTASIA - MEI
INTERNATIONAL, INC., a Georgia corporation ("MMEII"), with its chief executive
office located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MOUNTASIA
- MEI LIMITED COMPANY, INC., a California corporation ("MMEILC"), with its chief
executive office located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
MOUNTASIA - MEI CALIFORNIA, INC., a California corporation ("MCNC"), with its
chief executive office located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, MOUNTASIA - MEI CALIFORNIA LIMITED PARTNERSHIP, a California limited
partnership ("MMEICLP"), with its chief executive office located at 000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, MOUNTASIA FAMILY ENTERTAINMENT
CENTERS, INC., a Texas corporation ("MFEC"), with its chief executive office
located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, and MALIBU
CENTERS, INC., a Delaware corporation ("MCI"), with its chief executive office
located at 000 Xxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000.
RECITALS:
A. Borrower and Foothill are parties to the Consolidated, Amended, and
Restated Loan and Security Agreement, entered into as of August 22, 1996
(as amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement").
B. Foothill and Old Hill Partners Inc., a Delaware corporation ("Old Hill")
have entered into that certain Loan Purchase Contract dated as of the date
hereof (the "Loan Purchase Contract"), pursuant to which Purchaser is
acquiring all of Foothill's rights, and is assuming all of Foothill's
obligations, under the Loan Documents.
C. Borrower has requested that Foothill amend the Loan Agreement to: (i)
extend the Maturity Date and (ii) otherwise amend the Loan Agreement as
more particularly described hereinbelow.
D. Borrower and Foothill desire to amend the Loan Agreement as more
particularly described hereinbelow.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the sufficiency and adequacy of which is hereby acknowledged and confessed,
Foothill and Borrower hereby agree as follows:
1. Definitions. All capitalized terms used herein and not defined
herein shall have the meaning ascribed to them in the Loan Agreement.
2. Amendments to the Loan Agreement.
a. Section 1.1 of the Loan Agreement hereby is amended by adding or
amending and restating, as applicable, each of the following
definitions in alphabetical order.
"Eligible Assignee" means any person which has been approved by Borrower,
which approval shall not be unreasonably withheld, and which either (a) is
organized under the laws of the United States, one of its fifty (50) states or
the District of Columbia, or (b) is organized under the laws of a jurisdiction
outside of the United States, its territories or possessions and which has
certified that (x) it does not directly or constructively own ten percent (10%)
or more of the total combined voting power of all classes of voting stock of
Borrower (i.e., such person is not a "10 percent shareholder" within the meaning
of section 871(h)(3)(B) of the Internal Revenue Code of 1986, as amended, (the
"Code")), (y) it is not a related person within the meaning of section 864(d)(4)
of the Code, and (z) is not a "bank" within the definition of section 581 of the
Code.
"Fifteenth Amendment" means that certain Amendment Number Fifteen to
Consolidated, Amended, and Restated Loan and Security Agreement, dated as of
September 7, 2001.
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"Fifteenth Amendment Closing Date" means the date on which each of the
conditions precedent set forth in Section 3 of the Fifteenth Amendment are
satisfied in full.
"Fifteenth Amendment Fee" shall have the meaning ascribed to such term in
Section 2.10.
"Maturity Date" means August 21, 2003; provided, however, that Borrower may
extend the Maturity Date for one (1) additional year to August 21, 2004 upon (i)
delivery of written notice of such extension to Foothill on or before June 21,
2003, and (ii) payment to Foothill of a one percent (1%) extension fee on the
then current outstanding principal balance on the loan as of the effective date
of such extension notice (described in the immediately preceding clause (i)),
which extension fee shall be added to the Loan Account in lieu of payment on
such date.
"Non-Default Rate" means a per annum rate of interest equal to a fixed
interest rate of fourteen percent (14%).
"Note" means that certain Promissory Note dated as of the Fifteenth
Amendment Closing Date in substantially the form attached hereto as Exhibit A,
made by Borrower in favor of Foothill, executed by Borrower, and payable by
Borrower to Foothill as specified therein, in the original principal sum of
$12,700,000 as the same may be increased, amended, restated, replaced,
supplemented or otherwise modified from time to time, and all notes issued upon
transfer, division or combination or, or in substitution for, the Note.
"Park(s)" means any existing or future Malibu SpeedZone(R) amusement
park(s) owned or operated by Borrower and/or its Subsidiaries. The acquisition
and/or development of a new Park shall be a Permitted Acquisition.
"Participant" means any Person (including any Eligible Assignee) to which
Foothill has sold a participation or other interest in its rights under the Loan
Documents.
"Permitted Liens" means (a) Liens held by Foothill, (b) Liens for unpaid
taxes that are not yet due and payable or that are being contested as provided
in Section 6.9, (c) Liens set forth on Schedule P-1 attached hereto, (d) the
interests of lessors arising after the Closing Date under operating leases, (e)
Liens securing Permitted Purchase Money Indebtedness so long as the Lien only
attaches to the asset or property developed, purchased, or acquired, (f) Liens
arising by operation of law in favor of warehouseman, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary courses
of business of Borrower and not in connection with the borrowing of money, for
sums not yet delinquent or that are being contested in good faith and by proper
proceedings diligently pursued, provided that a reserve or other appropriate
provision, if any, required by GAAP shall have been made therefor on the
applicable financial statements of Borrower, (g) Liens arising from deposits
made in connection with obtaining worker's compensation or other unemployment
insurance, (h) Liens or deposits to secure performance of bids, tenders, or
leases (to the extent permitted under this Agreement), incurred in the ordinary
course of business of Borrower and not in connection with the borrowing of
money, (i) Liens arising by reason of security for surety or appeal bonds in the
ordinary course of business of Borrower,(j) Liens of or resulting from any
judgment or award that do not give rise to an Event of Default under Section
8.9, (k) Liens with respect to the Real Property Collateral that are exceptions
to the commitments for title insurance issued in connection with the Mortgages,
as accepted by Foothill, (l) with respect to any Real Property that is not part
of the Real Property Collateral, easements, rights of way, zoning and similar
covenants and restrictions, and similar encumbrances that customarily exist on
properties of Persons engaged
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in similar activities and similarly situated and that in any event do not
materially interfere with or impair the use or operation of the Collateral by
Borrower or the value of Foothill's Lien thereon or therein, or materially
interfere with the ordinary conduct of the business of Borrower, (m) Liens
securing Permitted Unrestricted Subsidiary Indebtedness so long as the Lien only
attaches to the assets and properties of such Unrestricted Subsidiary, (n) Liens
relating to and securing any future financing from a third party lender relating
to any new Park or Parks, and (o) Liens relating to any Indebtedness permitted
under Section 7.1.
"Permitted Transactions" means (a) the NEF Acquisition, (b) the Willowbrook
Acquisition, (c) the Nine Percent Debenture Amendments, (d) the Nine Percent
Debenture Conversion, (e) the NEF Debenture Conversion, (f) the Ten Percent
Debenture Conversion, (g) Permitted Subordinated Debt Payments, (h) Permitted
Special Distributions, (i) Permitted Unrestricted Subsidiary Investments, (j)
Permitted Unrestricted Subsidiary Transactions, (k) Permitted Hampstead
Transactions, (l) any transaction or transactions entered into by or on behalf
of MEWI or any of its Affiliates and resulting in the acquisition or repurchase
of any equity interest or capital stock of MEWI (including but not limited to
Series BB Preferred Stock and Common Stock) held by Partnership Acquisition
Trust V, a Delaware business trust, or any of its Affiliates (including but not
limited to Nomura Asset Capital Corporation, (m) any transaction or transactions
as contemplated by Section 7.20, (n) the delivery by MEWI to Old Hill Partners
Inc., a Delaware corporation, of warrants to purchase Series CC Preferred Stock
of MEWI that, as converted and on a fully-diluted basis, will constitute a seven
and one-half percent (7.5%) ownership interest in of the then-outstanding Series
CC Preferred Stock of MEWI as of the Fifteenth Amendment Closing Date, (o) the
future acquisition, construction or operation of any Park or Parks, including
the incurring of any Indebtedness relating thereto and permitted under Section
7.1 and (p) the guarantee by Borrower or any of its Subsidiaries of any
Indebtedness permitted under Section 7.1.
"Permitted Uses" means the use of the proceeds of Advances and the Term
Loans to (a) fund the acquisition and development of FunCenters and Parks, and
(b) fund Borrower's working capital and general corporate purposes (including
Capital Expenditures).
"Release Condition" means (a) with respect to any Permitted Disposition
(other than an Ordinary Course Disposition) that (i) no Default or Event of
Default has occurred and is continuing or would result therefrom; (ii) the terms
and conditions of each such Permitted Disposition (including, without
limitation, the sale price thereof) are reasonably acceptable (from the
perspective of secured asset based lender) to Foothill; and (iii) Borrower shall
have caused the purchaser of such Equipment or Real Property to wire transfer to
Foothill in immediately available funds an amount equal to the Required Amount
(if any), and (b) with respect to any Ordinary Course Disposition that (i)
Borrower is receiving fair value for the Equipment that is the subject of such
sale, exchange, or other disposition.
"Release Transactions" means the following transactions: (a) the sale of
the Real Property located at 3005 Xxxxxx Xxxxxx Parkway, Xxxx County, Xxxxxxxx,
Xxxxxxx 00000, (b) the sale and leaseback of the Real Property located at 14320
North Nebraska, Hillsborough County, Xxxxx, Xxxxxxx 00000, and (c) the sale of
Borrower's interest in the Real Property consisting of vacant land only (the
"Willowbrook Land") located at 00000 Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000. Each Release Transaction is a Permitted Disposition.
"Required Amount" means, except as provided in Section 2.12 hereof, the
amount determined as set forth on Schedule A attached hereto and incorporated
herein by this
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reference with respect to the Real Properties. Each sale, disposition or other
transfer of a Real Property described on Schedule A is a Permitted Disposition.
"Restructuring Fee" shall have the meaning ascribed to such term in Section
2.21 hereof.
"XX Xxxx" means "Top Eliminator" Lane.
b. Sections 2.5(a) and 2.5(b) of the Loan Agreement are hereby
amended and restated in their entirety as follows:
"2.5 INTEREST: RATES, PAYMENTS, AND CALCULATIONS.
(a) Interest Rate. Except as provided in clause (b) below, all Obligations
shall bear interest at a per annum rate equal to the Non-Default Rate.
(b) Default Rate. From and after an Event of Default and only during the
continuation thereof, all Obligations shall bear interest at a per annum rate
equal to three (3) percentage points above the Non-Default Rate."
c. Section 2.10 of the Loan Agreement hereby is amended and restated
in its entirety as follows:
"2.10 FEE. In connection with the execution and delivery of the Fifteenth
Amendment, Borrower shall pay to Foothill a fee equal to $127,000 (the
"Fifteenth Amendment Fee") which shall be fully earned and nonrefundable as of
the Fifteenth Amendment Closing Date and shall be payable in cash on or before
5:00 p.m. Eastern Time on the second Business Day following the Fifteenth
Amendment Closing Date. Borrower shall not be required to make payment of the
Fifteenth Amendment Fee directly to Foothill, but rather Foothill shall deduct
and retain the amount of the Fifteenth Amendment Fee from the Restructuring Fee
to be paid by Foothill to Borrower in cash as provided in Section 2.21."
d. Section 2.12 of the Loan Agreement hereby is amended and restated
in its entirety as follows:
"2.12 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
(a) Notwithstanding anything to the contrary provided herein, Borrower
shall be entitled to take possession of six (6) TE Lanes (the "Six TE Lanes")
from any source for installation by Borrower in one or more new Parks, and
Foothill shall release such Six TE Lanes from all liens in favor of Foothill
without requiring Borrower to make any mandatory prepayment to reduce the
outstanding principal balance of the Loan Account and the Obligations under the
Loan Agreement, or to make a payment of any other fee or expense to Foothill.
Thereafter, if Borrower desires to install one or more additional TE Lanes (the
"Additional TE Lanes") in one or more Parks, Borrower may obtain a release of
the lien held by Foothill on such Additional TE Lanes by making a mandatory
prepayment of $100,000 to Foothill with respect to each Additional XX Xxxx to be
released. Notwithstanding anything to the contrary provided herein, upon the
sale of any XX Xxxx by Borrower to any third party, Borrower shall make a
mandatory prepayment in the Required Amount, if any, set forth in Schedule A,
and Foothill shall upon receipt of such mandatory prepayment release its lien on
such XX Xxxx.
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(b) Notwithstanding anything to the contrary provided herein, upon the
consummation of a Release Transaction, no mandatory payment to Foothill or other
payment to reduce the outstanding principal balance on the Obligations or the
Loan Account shall be required hereunder, and provided no Event of Default shall
then exist, Foothill shall release its liens on the Real Property that is the
subject of the Release Transaction within five (5) Business Days after receipt
of Borrower's request for such release. Borrower shall be entitled to one
hundred percent (100%) of the Net Cash Proceeds from the Release Transactions.
(c) Intentionally Omitted.
(d) Immediately upon the consummation of any Permitted Disposition (other
than an Ordinary Course Disposition), Borrower shall (except as otherwise
provided in Subsections 2.12(a) and (b) hereof):
(i) repay Term Loan A in an amount equal to the Required Amount
applicable to such Permitted Disposition, and the amount so prepaid shall
permanently reduce Term Loan A on a dollar-for-dollar basis; and
(ii) if Term Loan A has been repaid or prepaid in full pursuant to
clause (i) above, prepay the Advances made by Foothill to Borrower under
Section 2.1 in an amount equal to the Required Amount applicable to such
Permitted Disposition (or the balance remaining after the prepayment of
Term Loan A pursuant to clause (i) above), and the amount so prepaid shall
permanently reduce the Maximum Revolving Amount automatically, on a
dollar-for-dollar basis.
(e) [Intentionally Omitted].
(f) [Intentionally Omitted]"
e. The following new Section 2.13, Section 2.14, Section 2.15,
Section 2.16, Section 2.17, Section 2.18, Section 2.19 and
Section 2.20 are hereby added to the Loan Agreement as follows:
"2.13 GROSS UP FOR TAXES. Any and all payments by Borrower hereunder shall
be made free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding any taxes imposed by the United
States, or any state or political subdivision thereof (each, a "Governmental
Authority"), on Foothill (or any Eligible Assignee) as a result of a present,
former or future connection between the United States or any state or political
subdivision thereof imposing such tax on Foothill (or such Eligible
Assignee)(other than a connection resulting from or attributable to Foothill's
(or such Eligible Assignee's) consummating or participating in the transactions
contemplated by this Agreement or any other Loan Document)(all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities,
collectively or individually, "Taxes"). If Borrower shall be required to deduct
any Taxes from or in respect of any sum payable hereunder to Foothill (or any
Eligible Assignee), (l) the sum payable shall be increased by the amount (an
"Additional Amount") necessary so that after making all required deductions
(including deductions applicable to Additional Amounts payable under this
Section 2.13) Foothill (or the Eligible Assignee) shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions and (iii) Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
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2.14 OTHER TAXES. Borrower agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (collectively or individually, the "Other Taxes") that arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement.
2.15 TAX INDEMNITY. Borrower will indemnify for the full amount of
Taxes and Other Taxes paid by Foothill (or an Eligible Assignee) and any
liability (including penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with respect thereto (except
in the case of gross negligence or wilful misconduct of Foothill (or the
Eligible Assignee)), provided that if such Taxes or Other Taxes were not
correctly and legally asserted by the relevant Governmental Authority, the
provision of Section 2.16 with respect to refunds shall be applicable. A
certificate as to the amount of such payment or liability prepared by Foothill,
(or the Eligible Assignee), absent manifest error, shall be final, conclusive
and binding for all purposes. Such indemnification shall be made within thirty
(30) days after the date Foothill (or the Eligible Assignee) makes written
demand therefor.
2.16 CONTESTS AND TAX REFUNDS. If Borrower determines in good faith
that a reasonable basis exists for contesting any of the Taxes or the Other
Taxes, Foothill (or the Eligible Assignee) shall use commercially reasonable
efforts to cooperate with Borrower in challenging such Taxes or Other Taxes at
Borrower's expense if requested by Borrower. If Foothill (or the Eligible
Assignee) shall become aware that it is entitled to claim a refund from a
Governmental Authority in respect of Taxes or Other Taxes which have been paid
by Borrower, or which have been indemnified by Borrower pursuant to Section
2.15, or with respect to which Borrower has paid Additional Amounts pursuant to
Section 2.13, it shall promptly notify Borrower of the availability of such
refund claim and shall, within thirty (30) days after receipt of a request by
Borrower, make a claim to such Governmental Authority for such refund at
Borrower's expense. If Foothill (or an Eligible Assignee) receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes which have been paid or
indemnified by Borrower or with respect to which a Borrower has paid Additional
Amounts pursuant to Section 2.13, or Section 2.15, above, it shall within thirty
(30) days from the date of such receipt pay over such refund to Borrower (but
only to the extent of indemnity payments made, or Additional Amounts paid, by
Borrower with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of Foothill (or the Eligible Assignee) and
without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund, which shall be paid to Borrower);
provided, however, that Borrower, upon the request of Foothill (or the Eligible
Assignee), agrees to repay the amount paid over to Borrower (plus penalties,
interest and other charges and any reasonable costs and expenses paid or payable
by Foothill (or the Eligible Assignee) is required to repay such refund to such
Governmental Authority.
2.17 PROOF OF PAYMENT OF TAXES. As soon as practicable after the date
of any payment of Taxes or Other Taxes by Borrower to the relevant Governmental
Authority, Borrower will deliver to Foothill (or the Eligible Assignee) the
original or certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
2.18 TAX FORMS. To the extent relevant, Foothill or any Eligible
Assignee shall deliver to Borrower two (2) copies of a properly completed and
executed United States Internal Revenue Form W8-BEN and a certificate
representing that it (w) is not a "bank" within the meaning of Section 581 of
the Code, (x) does not currently own, or own unrestricted options to purchase,
ten percent (10%) or more of the total combined voting power of all classes of
stock of Borrower, and
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(y) is not a controlled foreign corporation related to Borrower (within the
meaning of Section 864(d)(4) of the Code). Such form shall be delivered to
Borrower on or before the Fifteenth Amendment Closing Date or the effective
date of any assignment to an Eligible Assignee. In addition, Foothill, or any
Eligible Assignee, upon the written request of a Borrower, shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by Foothill or any Eligible Assignee. Notwithstanding any other
provision of this Agreement, Foothill (or an Eligible Assignee) shall not be
required to deliver any form or other document pursuant to this Section 2.18
that Foothill (or the Eligible Assignee) is not legally able to deliver.
2.19 LIMITATION ON BORROWER'S INDEMNITY OBLIGATIONS. Borrower shall not be
required to indemnify Foothill (or any Eligible Assignee) or to pay any
Additional Amounts to Foothill (or any Eligible Assignee) pursuant to Section
2.13 and/or Section 2.15 to the extent such obligation would not have arisen
but for a failure by Foothill (or the Eligible Assignee) to timely provide the
documentation described in Section 2.18. If Foothill (or any Eligible Assignee)
makes a claim for payment under Section 2.13 or Section 2.15 of the Agreement,
Foothill (or any Eligible Assignee) shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file an appropriate certificate or
document reasonably requested in writing by Borrower if the making of such a
filing would avoid the need for or reduce the amount of any such obligation and
which would not, in the sole determination of Foothill (or the Eligible
Assignee), be otherwise disadvantageous to Foothill (or the Eligible Assignee).
Any provision in this Agreement to the contrary notwithstanding, it is
expressly understood and agreed that the Borrower's payment and indemnity
obligations as set forth in Section 2.13 and 2.15 of this Agreement shall in all
respects be limited to Foothill and to any Eligible Assignee, and that Borrower
shall have no such indemnity obligations in the event that this Agreement or
any of the Loan Documents or Obligations are transferred or assigned to any
Person who is not an Eligible Assignee. It is further expressly understood and
agreed that nothing contained in this Agreement shall permit the transfer or
assignment of the rights of Foothill in the Loan Account, the Obligations, this
Agreement or any other Loan Documents to any person that is not an Eligible
Assignee. Neither Foothill nor any Eligible Assignee to whom Foothill may
transfer or assign the Loan Account, the Obligations, this Agreement or any
other Loan Documents shall transfer or assign the Loan Account, the
Obligations, this Agreement or any other Loan Documents to any Person who is
not an Eligible Assignee.
SECTION 2.20 TRANSFER AND MAINTENANCE OF REGISTER. Upon receipt of
instruments evidencing the transfer to an Eligible Assignee of the Obligations
or any rights to the principal of and interest on, the Advances and Term Loans
made by Foothill to Borrower as reflected in the Loan Account, Borrower shall
record such transfer in a register to be maintained by Borrower, and such
transfer shall be effective only upon recordation. Failure to make any such
recordation, or any error in such recordation shall not affect Borrower's
obligations in respect of the Obligations or the Advances and Term Loans. Any
attempt to transfer the rights of Foothill in and to the Obligations or under
this Agreement or any other Loan Documents in contravention of Section 2.19 or
this Section 2.20 shall be null and void, ab initio. If Foothill or an Eligible
Assignee sells participations in the Advances or the Term Loans as reflected in
the Loan Account or in any of the other Obligations, it shall maintain a
register with respect to such participations and shall permit the transfer of
such participations only if and when the transfer is recorded in the register.
No participant who would not have been an Eligible Assignee if the loan were
assigned shall be entitled to the gross-up rights and/or the indemnity
contained in Section 2.13, Section 2.14 and Section 2.15. Foothill will permit
Borrower to review such register maintained by Foothill (or the relevant
Eligible Assignee) as reasonably needed for Borrower to comply with its
obligations under this Agreement or under any applicable law or governmental
regulation or procedure. Nothing contained in this Section 2.20 shall in any way
affect the
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obligations of Foothill under Section 2.9 with respect to the Loan Account to be
maintained by Foothill."
f. The following new Section 2.21 is hereby added to the Loan
Agreement as follows:
"2.21 RESTRUCTURING FEE. On or before the second Business Day after the
Fifteenth Amendment Closing Date, Foothill shall pay to Borrower in cash a fee
("Restructuring Fee") in the amount of $950,000, less the amount of the
Fifteenth Amendment Fee to be deducted and retained by Foothill. In addition
to payment of the Fifteenth Amendment Fee, Borrower may utilize the
Restructuring Fee for any other general corporate purposes, including but not
limited to Borrower's closing costs related to this Fifteenth Amendment or the
Loan Purchase Contract, any transaction or transactions entered into by or on
behalf of MEWI or any of its Affiliates and resulting in the acquisition or
repurchase of any equity interest or capital stock of MEWI (including but not
limited to Series BB Preferred Stock and Common Stock) held by Partnership
Acquisition Trust V, a Delaware business trust (the "Trust"), or any of the
Trust's Affiliates (including but not limited to Nomura Asset Capital
Corporation), and for any one or more Permitted Uses."
g. The following new Section 3.17 is hereby added to the Loan
Agreement as follows:
"3.17 ADDITIONAL LEASEHOLD MORTGAGES. Borrower shall execute and deliver
to Foothill a mortgage (the "Leasehold Mortgage") which shall grant to Foothill
a lien on and security interest with respect to Borrower's leasehold interest
in each of the real properties (the "Leasehold Mortgage Properties") more
particularly described in Exhibit B attached hereto and incorporated herein by
reference, subject, however, to the following terms and conditions:
A. Form of Mortgage. Within ten (10) Business Days following the
Fifteenth Amendment Closing Date, Foothill and Borrower shall negotiate and
agree on the basic form of Leasehold Mortgage to be used to encumber the
Leasehold Mortgage Properties, with such basic form of Leasehold Mortgage to be
modified as necessary to comply with the respective laws of the states in
which such Leasehold Mortgage Properties are located.
B. Consents. Foothill and Borrower acknowledge, understand and agree
(a) that with respect to all of the Leasehold Mortgaged Properties, no Leasehold
Mortgage may be placed on a Leasehold Mortgaged Property without the prior
written consent of the lessor of the Leasehold Mortgaged Property (the
"Lessor"). With respect to each of the Leasehold Mortgage Properties, Borrower
shall exert reasonable commercial efforts, or shall cause Borrower's Subsidiary
to exert reasonable commercial efforts, (i) to obtain the written consent of the
Lessor, and (ii) to deliver to Lender a duly executed Leasehold Mortgage in
recordable form, within ninety (90) days following the Fifteenth Amendment
Closing Date.
C. No Liability if Consents Cannot Be Obtained. In the event that
Borrower or Borrower's Subsidiary, as the case may be, exerts reasonable
commercial efforts to obtain the Lessor consents as contemplated by Section
3.17(B) but is unable to obtain one or more of such Lessor consents, it is
expressly understood and agreed that the failure to obtain a Lessor consent
shall not under any circumstances constitute a Default or an Event of Default
under this Agreement, nor shall Borrower be deemed to be in breach of this
Agreement as a result thereof. In the event that the required Lessor consent
cannot be obtained by Borrower or Borrower's
9
Subsidiary, as the case may be, with respect to a Leasehold Mortgaged Property,
then no Leasehold Mortgage shall be placed on such Leasehold Mortgaged Property.
D. Further Assurances. In the event that a Leasehold Mortgage is placed
on a Leasehold Mortgaged Property, Borrower or Borrower's Subsidiary, as the
case may be, shall execute any and all additional instruments, documents,
certificates, financing statements or other agreements as Foothill shall
reasonably request and that shall be necessary or appropriate to evidence,
perfect or maintain the lien and/or security interest of Foothill with respect
to such Leasehold Mortgaged Property."
h. The following is hereby added to the end of Section 6.3 of the
Loan Agreement as follows:
"Notwithstanding anything to the contrary provided herein, provided an
Event of Default has not occurred and is not continuing and provided
that Borrower is continuing to obtain at least annually (or more
frequently, if required by any federal or state securities laws or any
rules or regulations promulgated thereunder) an audit of Borrower by
an independent certified public accounting firm approved by Foothill
(which approval shall not be unreasonably withheld), Foothill hereby
waives any and all procedures and requirements hereunder that allow
Foothill to perform any audit of Borrower's financial statements and
other similar reports, etc. in accordance with this Loan Agreement,
and Foothill will solely rely on the financial statements, etc.
prepared and delivered by Borrower's independent auditors. Borrower
shall not change its independent certified public accounting firm
without the prior written consent of Foothill (which consent shall not
be unreasonably withheld). Borrower is, as of the Fifteenth Amendment
Closing Date, preparing unaudited monthly financial statements, and
Borrower hereby agrees that as long as any Obligations remain
outstanding under this Agreement, Borrower shall continue to prepare
monthly financial statements and shall provide copies to Foothill."
i. Section 6.16 of the Loan Agreement is hereby deleted, and is
amended and restated in its entirety as follows:
"6.16 [Intentionally Omitted.]"
j. Section 7.1 of the Loan Agreement is hereby amended by (i)
deleting the period after subsection (g) of said Section, and
(ii) inserting the following:
", (h) upon approval by Foothill (which approval shall not be
unreasonably withheld), future indebtedness relating to any
financing for a new Park or Parks, and any refinancings, renewals
or extensions thereof."
k. Section 7.6 of the Loan Agreement is hereby amended and restated
in its entirety as follows:
"SECTION 7.6 GUARANTEE. Except for (a) guarantees existing on the Closing
Date and described on Schedule 7.1 and (b) any Permitted Transactions,
guarantee or otherwise become in any way liable with respect to the obligations
of any third Person except by endorsement of instruments or items of payment
for deposit to the account of Borrower or which are transmitted or turned over
to Foothill."
10
l. Section 7.9 of the Loan Agreement is hereby amended and restated
in its entirety as follows:
"SECTION 7.9. CHANGE OF CONTROL. Except for any Permitted Transaction,
cause, permit, or suffer, directly or indirectly, any Change of Control."
m. Section 7.19 of the Loan Agreement is hereby deleted, and is
amended and restated in its entirety as follows:
"[Intentionally Omitted.]"
n. The following new Section 7.20 is hereby added to the Loan
Agreement as follows:
"7.20. IDENTIFICATION OF POTENTIAL COST-SAVING TRANSACTIONS. Within a
reasonable time following the Fifteenth Amendment Closing Date and in any event
within 180 days after such date, Borrower shall (a) use commercially reasonable
efforts to identify ways to reduce Borrower's operating expenses (including,
without limitation, accounting, legal costs and other costs associated with
being a reporting company under the Securities Exchange Act of 1934, as
amended), and (b) determine whether it would be in the best interests of MEWI
and the other Borrowers to pursue any such action or transaction and report
such determination to Foothill."
o. Section 8 of the Loan Agreement is hereby amended by (i) deleting
the period after Section 8.12 thereof, and inserting the
following:
"8.13. If any default under any note, loan agreement, indenture
or similar agreement that evidences a principal amount of debt in
excess of $500,000 continues to exist beyond any applicable cure
period contained in such note, loan agreement, indenture, or
similar agreement, which default shall have resulted in such debt
becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without
such debt having been discharged, or such acceleration having
been rescinded or annulled, within a period of ten (10) Business
Days after notice shall have been given to MEWI by Old Hill
specifying such default and requiring MEWI to cause debt to be
discharged or cause such acceleration to be rescinded or
annulled;
8.14. If within forty-five (45) days following the Fifteenth
Amendment Closing Date there has not been completed a transaction
or series of transactions entered into by or on behalf of MEWI or
any of its Affiliates and resulting in the acquisition or
repurchase of all the MEWI Series BB Preferred Stock owned and
held by Partnership Acquisition Trust V, a Delaware business
trust, or any of its Affiliates (including but not limited to
Nomura Asset Capital Corporation)."
p. Section 13 of the Loan Agreement is hereby deleted, and is
amended and restated in its entirety as follows:
11
"13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW CASTLE,
STATE OF DELAWARE. EACH OF BORROWER AND FOOTHILL WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OR FORUM NON CONVENIENS OR TO OBJECT TO VENUE
TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 13. BORROWER AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH OF BORROWER AND FOOTHILL REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT."
3. Conditions Precedent to the Effectiveness of this Amendment. The
effectiveness of this Amendment is subject to the fulfillment, to the
satisfaction of Foothill in its discretion, of each of the following
conditions precedent:
a. This Amendment shall have been duly executed and delivered to
Foothill, in form and substance satisfactory to Foothill, and
shall be in full force and effect;
b. The Loan Purchase Contract shall have been executed and delivered
by Old Hill to Foothill.
c. Each of the conditions to the effectiveness of the provisions of
the Loan Purchase Contract required to be satisfied on or prior
to the closing of the Loan Purchase Contract shall have been
satisfied or waived in their entirety.
d. The representations and warranties in this Amendment, the Loan
Agreement as amended by this Amendment, and the other Loan
12
Documents shall be true and correct in all material respects on and as
of the date hereof as though made on such date (except to the extent
that such representations and warranties relate solely to an earlier
date);
e. After giving effect hereto, no Default or Event of Default shall have
occurred and be continuing on the date hereof, nor shall result from
the consummation of the transactions contemplated herein; and
f. No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the
transactions contemplated hereby shall have been issued and remain in
force by any governmental authority against Borrower, Foothill, or any
of their respective Affiliates.
4. Conditions Subsequent to the Effectiveness of this Amendment. The
effectiveness of this Amendment is subject to the fulfillment, on or
before the respective dates applicable thereto, of the following conditions
subsequent:
(a) Within one (1) Business Day following the Fifteenth Amendment Closing
Date, Old Hill shall have purchased the Obligations and the Loan
Documents from Foothill in accordance with the terms and conditions
set forth in the Loan Purchase Contract.
(b) Within one (1) Business Day following the Fifteenth Amendment Closing
Date and concurrently with the purchase by Old Hill of the Obligations
and the Loan Documents from Foothill as set forth in Section 4(a)
above, Borrower shall have executed and delivered the Note to
Old Hill.
(c) Within thirty (30) days following the Fifteenth Amendment Closing
Date, MEWI shall have delivered to Old Hill warrants to purchase the
number of shares of MEWI's Series CC Preferred Stock that will, when
issued and on a fully-diluted basis, constitute seven and one-half
percent (7.5%) of the then-outstanding Series CC Preferred Stock of
MEWI as of the Fifteenth Amendment Closing Date, subject to the prior
rights and interests of the holders of MEWI Series AA Preferred Stock
and the current holders of the MEWI Series CC Preferred Stock.
5. Consent by Foothill. Subject to the satisfaction of each of the conditions
to this Amendment, and effective as of the second Business Day after the
Fifteenth Amendment Closing Date, Foothill hereby consents to (a) the
Release Transactions, and (b) the sale of any Real Properties and "Top
Eliminator" lanes owned by Borrower and its Affiliates, in accordance with
the terms and provisions of the Loan Agreement, as amended herein. Any
provision or agreement to the contrary notwithstanding contained in the
Loan Agreement as amended herein or in any other document or agreement to
which Borrower and Foothill are parties, neither Borrower nor any of its
Affiliates shall have any obligation to market any of the Real Property or
other property owned by Borrower or any of its Affiliates.
6. Representations and Warranties. Borrower hereby represents and warrants to
Foothill that (a) the execution, delivery, and performance of this
Amendment are within its corporate powers, have been duly authorized by all
necessary
13
corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award
of any arbitrator, court, or governmental authority, or of the terms
of its charter or bylaws, or of any contract or undertaking to which
it is a party or by which any of its properties may be bound or
affected, (b) the Loan Agreement, as amended by this Amendment,
constitutes Borrower's legal, valid, and binding obligation,
enforceable against Borrower in accordance with its terms, and (c)
this Amendment has been duly executed and delivered.
7. Further Assurances. Borrower shall execute and deliver all financing
statements, agreements, documents, and instruments, in form and
substance satisfactory to Foothill, and take all actions as Foothill
may reasonably request from time to time, to perfect and maintain the
perfection and priority of Foothill's security interests in the
Collateral, and to fully consummate the transactions contemplated
under the Loan Agreement and this Amendment.
8. Effect on Loan Documents. The Loan Agreement, as amended hereby, and
the other Loan Documents shall be and remain in full force and effect
in accordance with their respective terms and each hereby is ratified
and confirmed in all respects. Except as expressly set forth herein,
the execution, delivery, and performance of this Amendment shall not
operate as a waiver of or as an amendment of any right, power, or
remedy of Foothill under the Loan Agreement, as in effect prior to the
date hereof.
9. Miscellaneous.
a. Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof", or words of like import referring to the Loan Agreement
shall mean and refer to the Loan Agreement as amended by the
First Amendment, the Second Amendment, the Third Amendment, the
Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the
Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the
Tenth Amendment, the Eleventh Amendment, the Twelfth Amendment,
the Thirteenth Amendment, the Fourteenth Amendment and this
Amendment.
b. Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement", "thereunder", "therein",
"thereof" or words of like import referring to the Loan
Agreement shall mean and refer to the Loan Agreement as amended
by the First Amendment, the Second Amendment,the Third Amendment,
the Fourth Amendment, the Fifth Amendment, the Sixth Amendment,
the Seventh Amendment, the Eighth Amendment, the Ninth Amendment,
the Tenth Amendment, the Eleventh Amendment, the Twelfth
Amendment, the Thirteenth Amendment, the Fourteenth Amendment
and this Amendment.
c. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware.
d. This Amendment may be executed in any number of counterparts and
by different parties in separate counterparts, each of which,
when executed
14
and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and same
Amendment. Delivery of an executed counterpart of this Amendment
by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party
delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver an original executed counterpart
of this Amendment but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
e. Borrower and Foothill hereby acknowledge and agree that: (i) no
Default or Event of Default exists under or pursuant to the Loan
Agreement and the Loan Documents, and (ii) no event, act or
omission has occurred that would be a Default or Event of Default
with the passage of time and/or notice under the Loan Documents.
f. Subject to the satisfaction of each of the conditions to this
Amendment, and effective as of the second Business Day after the
Fifteenth Amendment Closing Date, Foothill hereby waives (i) the
Exit Fee, the Early Termination Premium, and any and all
outstanding "amendment", "exit" and "early termination" fees
under the Loan Documents (whether or not earned or due and
payable) including, without limitation, the Fourteenth Amendment
Fee, the Twelfth Amendment Fee, and the Ninth Amendment Fee, and
(ii) any and all accrued interest due and payable through and
including the effective date of this Amendment.
g. Within seven (7) Business Days following the Fifteenth Amendment
Closing Date, Borrower shall provide to Old Hill an opinion of
counsel for Borrower that shall address the following:
(i) The organization, existence and good standing of each Borrower;
(ii) the power and authority of each Borrower to enter into this
Amendment;
(iii)with respect to each Borrower, the validity and enforceability of
this Amendment upon its being duly-executed by Borrower;
(iv) whether the execution and performance of this Amendment by any
Borrower and the consummation of the transactions constitutes a
material breach of default under any agreement to which such
Borrower is a party; and
(v) to the extent not covered by title insurance on real estate, the
validity and priority of the liens and security interests
transferred to Old Hill by Foothill under the terms and
conditions of the Loan Purchase Contract (and in that connection,
it is understood and agreed that the opinion of counsel for
Borrower as to such validity and priority will be satisfactory to
Old Hill if Borrower's counsel states that it agrees with the
conclusions set forth in that certain opinion letter from the law
firm of Xxxxxx and Xxxxxx dated on or about August 22, 1996, or
if Borrower obtains agreement from Xxxxxx
15
and Xxxxxx that Old Hill may rely on such opinion letter from
Xxxxxx and Xxxxxx.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
16
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the date first written above.
MALIBU ENTERTAINMENT WORLDWIDE, INC., a Georgia Corporation
MOUNTASIA FAMILY ENTERTAINMENT CENTERS, INC., a Texas corporation
MALIBU MANAGEMENT COMPANY, a Georgia corporation
MALIBU GRAND PRIX CORPORATION, a Delaware corporation
TUCSON MGPC, INC., an Arizona corporation
XXXXXX HILLS MGPC,INC., a California corporation
XXXXXX HILLS SHOWBOAT MGPC, INC., a California corporation
REDONDO BEACH CASTLE MGPC, INC., a California corporation
REDWOOD CITY CASTLE MGPC, INC., a California corporation
SAN DIEGO MGPC, INC., a California corporation
PORTLAND MGPC, INC., an Oregon corporation
DALLAS CASTLE MGPC, INC., a Texas corporation
SAN XXXXXXX XXXXXX MGPC, INC., a Texas corporation
SAN ANTONIO MGPC, INC., a Texas corporation
MOUNTASIA DEVELOPMENT COMPANY, a Georgia corporation
MALIBU GRAND PRIX DESIGN & MANUFACTURING, INC., a California
corporation
MALIBU GRAND PRIX FINANCIAL SERVICES, INC., a California
corporation
OFF TRACK MANAGEMENT, INC., a California corporation
MGP SPECIAL, INC., a California corporation
AMUSEMENT MANAGEMENT FLORIDA, INC., a Florida corporation
MALIBU GRAND PRIX CONSULTING, INC., a California corporation
MOUNTASIA - MEI INTERNATIONAL, INC., a Georgia corporation
MOUNTASIA - MEI LIMITED COMPANY, INC., a California corporation
MOUNTASIA - MEI CALIFORNIA, INC., a California corporation
MOUNTASIA - MEI INTERNATIONAL, INC., a Georgia corporation, in
its capacity as general partner of MOUNTASIA - MEI CALIFORNIA
LIMITED PARTNERSHIP, a California limited partnership
MALIBU CENTERS, INC., a Delaware corporation
By: /s/ R. XXXXX XXXXXXX
--------------------------
Name: R. Xxxxx Xxxxxxx
Title: Responsible officer for each of the above
referenced Persons composing Borrower
17
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxx Xxxxxx
__________________________
Name: Xxxx Xxxxxx
Title: Vice President
18
SCHEDULE A
Schedule of Required Amounts
For TE Lanes the Real Properties
On and after the second Business Day following the Fifteenth Amendment
Closing Date (the "Determination Date"), any sale or disposition of any XX Xxxx
or any Real Property listed in this Schedule A that Borrower reasonably
anticipates will generate Net Cash Proceeds equal to or greater than eighty five
percent (85%) of the Target Price for such XX Xxxx or such Real Property shall
be a Permitted Disposition. Notwithstanding anything to the contrary provided in
this Agreement, upon the sale or disposition of any XX Xxxx or any such Real
Property occurring on or after the Determination Date and in accordance with
this Schedule A, there shall be no Required Amount, and no mandatory payment to
Foothill or other payment to reduce the outstanding principal balance on the
Obligations or the Loan Account shall be required hereunder, until the aggregate
amount of Net Cash Proceeds received by Borrower from all sales or dispositions
of TE Lanes and/or such Real Properties occurring on or after the Determination
Date shall equal $2,000,000 (exclusive of the aggregate amount of Net Cash
Proceeds received by Borrower from the Release Transactions). Thereafter, upon
any sale or disposition of any TE Lanes and/or Real Property in accordance with
this Schedule A, the Required Amount with respect to such sale or disposition
shall be fifty percent (50%) of the Net Cash Proceeds received by Borrower in
connection with such sale or disposition of such XX Xxxx or such Real Property
until such time as the aggregate amount of Net Cash Proceeds received by
Borrower from all sales or dispositions of TE Lanes and/or Real Properties
occurring on or after the Determination Date shall equal $4,000,000 (exclusive
of the aggregate amount of Net Cash Proceeds received by Borrower from the
Release Transactions). Thereafter, upon any sale or disposition of any such XX
Xxxx and/or such Real Property in accordance with this Schedule A, the Required
Amount with respect to such sale or disposition shall be seventy five percent
(75%) of the Net Cash Proceeds received by Borrower in connection with such sale
or disposition.
The Target Price for the sale or disposition of TE Lanes shall be $150,000
per XX Xxxx.
The Target Price for the sale or disposition of each Real Property is as
set forth hereinafter.
Real Property Target Price
------------- ------------
Portland MGP
0000 XX Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000 $ 200,000
Austin MGP
0000 X-00 Xxxxx
Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000 $ 300,000
Mountasia of Kingwood
0000 Xxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000 $1,000,000
Mountasia of North Xxxx
175 Xxxxxx Xxxxxxx Parkway
Xxxx County
Xxxxxxxx, Xxxxxxx 00000 $1,200,000
Mountasia of Willowbrook
00000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000 $1,400,000
Redondo Beach Castle MGP
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 $1,500,000
Tampa MGP (as the same shall exist after the
sale and leaseback contemplated by and
permitted in the definition of "Release
Transactions")
14230 North Nebraska
Hillsborough County
Xxxxx, Xxxxxxx 00000 $1,500,000
Redwood City MGP
000 Xxxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000 $2,000,000
Gwinnett MGP
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000 $2,000,000
San Xxxxxxx Xxxxxx MGP
0000 Xxxxxx Xxxxx Xxxx
Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000 $2,500,000
Dallas SpeedZone
00000 Xxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000 $8,000,000
Xxxxxx Hills SpeedZone
17871 Castleton
Los Angeles Xxxxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000 $12,000,000
New SpeedZone (To be acquired and
20
developed) $18,000,000
There are no Target Prices for either of the following two Real Properties,
which may be sold or disposed of for such prices as Borrower shall in its
discretion determine. Any such sale or disposition shall be a Permitted
Disposition. The Net Cash Proceeds from the sale or disposition of such two
Real Properties shall be subject to the provisions of this Schedule A.
Mountasia of Henderson Houston Castle MGP
0000 Xxxxxxx Xxxxxx 0000 Xxxx Xxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000 Xxxxxxx, Xxxxx 00000
21
EXHIBIT A
Promissory Note
(Attached Hereto)
22
PROMISSORY NOTE
$12,700,000
September 7, 2001
Recitals:
1. The undersigned (collectively, "Maker") and Foothill Capital
Corporation, a California corporation ("Foothill"), are parties to that certain
Consolidated, Amended, and Restated Loan Agreement entered into as of August
22, 1996, as amended by the First, Second, Third, Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth and
Fifteenth Amendments (as amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement").
2. Maker hereby acknowledges that although as of the date of this
Promissory Note (this "Note"), Maker is obligated under the terms and
conditions of the Loan Agreement in the principal amount of $12,700,000,
together with all accrued and unpaid interest thereon (collectively, the
"Loan"), there exists no promissory note evidencing the Loan and the
Indebtedness of Maker under the Loan Agreement.
3. Under the terms and conditions of Amendment Number Fifteen to the Loan
Agreement and in connection with the purchase of the Loan from Foothill by Old
Hill Partners Inc., a Delaware corporation ("Old Hill"), Maker has agreed to
execute and deliver this Note to Old Hill.
4. This Note is evidence of the Loan made originally by Foothill to Maker
and acquired from Foothill by Old Hill, and is executed pursuant to, and is
subject to the terms and conditions of, the Loan Agreement. This Note is being
issued in replacement of and in substitution for any and all promissory notes
or other negotiable Instruments contemplated by the Loan Agreement. All
capitalized or defined terms used herein without a definition shall have the
meanings ascribed to such terms as set forth in the Loan Agreement. This Note
is executed to be effective as of the date first set forth above (the
"Effective Date").
FOR VALUE RECEIVED. Maker promises to pay to the order of Old Hill
(together with any subsequent holder of this Note, "Holder"), at its offices
located at 00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000, or at such other
address or to such account as Holder may from time to time designate in writing,
the principal amount of TWELVE MILLION SEVEN HUNDRED THOUSAND AND NO/100 UNITED
STATES DOLLARS ($12,700,000.00), together with interest thereon, from the date
thereof on the unpaid principal balance at the rate and as otherwise herein
provided. Unless otherwise specified by Holder in writing, all payments on this
Note shall be made in lawful money of the United States of America and in
immediately available funds.
Interest shall accrue on the unpaid principal balance of this Note at the
rate of fourteen percent (14%) per annum. Interest on the unpaid principal
balance of this Note shall be computed on the actual number of days elapsed,
based on a year of 360 days.
The unpaid principal amount of this Note and all accrued and unpaid
interest thereon shall become due and payable as follows:
23
a. On the first day of the calendar month immediately following the
calendar month in which the Effective Date of this Note occurs,
Maker shall pay all interest accrued on this Note since the
Effective Date.
b. Thereafter, on the first day of each succeeding calendar month
(each, an "INTEREST PAYMENT DATE"), Maker shall pay all
then-accrued and unpaid interest on this Note on such Interest
Payment Date.
c. Maker shall repay the entire outstanding principal amount of this
Note in full on August 21, 2003 (the "Maturity Date"), together
with all accrued and unpaid interest thereon up to (but
excluding) the date of repayment; provided, however, that maker
may extend the Maturity Date for one additional year to August
21, 2004 upon (i) delivery of written notice of such extension to
Holder on or before June 21, 2003 (the "Extension Notice"), and
(ii) payment to Holder of an extension fee (the "Extension Fee")
equal to one percent (1%) of the then-current outstanding
principal balance of this Note as of the date of such Extension
Notice (described in the immediately preceding clause (i)), which
Extension Fee may be added to the principal balance of this Note
in lieu of payment on such date upon the election of Maker in its
sole discretion.
During the twelve (12) month period following the Effective Date, Maker
shall not be entitled to make any prepayment with respect to this Note.
Thereafter, Maker may at its option; at any time, and upon sixty (60) days'
prior written notice to Holder, prepay in whole or in part the outstanding
principal balance of this Note without premium or penalty.
Holder shall maintain a register in which the ownership of this Note is
recorded, including the amount of principal and interest payable and paid to
Holder from time to time hereunder. Upon receipt of instruments evidencing the
transfer of this Note, Holder shall record such transfer in such register, and
such transfer shall be effective only upon recordation. Failure of Holder to
maintain such register or any error therein shall not in any manner affect the
obligation of Maker in respect of this Note.
From and after and during the continuation of an Event of Default, all
principal, accrued and unpaid interest and any other amount due hereunder
shall bear interest at a per annum rate (the "Default Rate") equal to 3.0
percentage points above the Non-Default Rate. Maker shall also pay to Holder,
in addition to the amount due, all reasonable costs and expenses incurred by
Holder in collecting or enforcing, or attempting to collect or enforce, this
Note, including without limitation court costs and reasonable attorneys' fees
and expenses (including reasonable attorneys' fees and expenses on any appeal
by either Maker or Holder and in any bankruptcy proceeding).
With respect to the amounts due pursuant to this Note, Maker waives
demand, presentment for payment, protest, notice of dishonor, notice of
nonpayment, notice of acceleration, notice of intent to accelerate, protest and
demand, notice of protest, protest suit against any party, diligence in
collection of this Note, and all other requirements necessary to enforce this
Note.
In no event shall any payment or amount deemed to constitute interest due
or payable hereunder ever exceed the maximum rate of interest permitted by
applicable law (the "Maximum Amount"), and in the event such payment is
inadvertently made by Maker or inadvertently
24
received by Holder, then such sum shall be credited as a payment of principal
or other amounts (other than interest) outstanding hereunder, and, if in excess
of the outstanding amount of principal or other amounts outstanding hereunder,
shall be immediately returned to Maker upon such determination. It is the
express intent hereof that Maker not pay and Holder not receive, directly or
indirectly, interest in excess of the Maximum Amount.
Holder shall not by any act, delay, omission, or otherwise be deemed to
have modified, amended, waived, extended, discharged or terminated any of its
rights or remedies, and no modification, amendment, waiver, extension,
discharge, or termination of any kind shall be valid unless in writing and
signed by Holder. All rights and remedies of Holder under the terms of this Note
and applicable statutes or rules of law shall be cumulative, and may be
exercised successively or concurrently. Maker agrees that there are no defenses,
equities, or setoffs with respect to the obligations set forth herein, and to
the extent any such defenses, equities, or setoffs may exist, the same are
hereby expressly released, forgiven, waived and forever discharged. The
obligations of Maker hereunder shall be binding upon and enforceable against
Maker and its successors and assigns and shall inure to the benefit of Holder
and its successors and assignees.
Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note is prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note.
This Note was negotiated in Delaware, and made by Maker and accepted by
Holder in the State of Delaware, which State the parties agree has a
substantial relationship to the parties and to the underlying transaction
embodied hereby. In all respects, including without limitation matters of
construction, validity, and performance, this Note and the obligations arising
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Delaware and any applicable law of the United States of America.
To the fullest extent permitted by law, Maker hereby unconditionally and
irrevocably waives any claim to assert that the laws of any other jurisdiction
govern this Note.
MAKER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING, INCLUDING WITHOUT LIMITATION ANY TORT ACTION,
BROUGHT WITH RESPECT TO THIS NOTE. HOLDER MAY FILE A COPY OF THIS WAIVER WITH
ANY COURT AS WRITTEN EVIDENCE OF MAKER'S KNOWING, VOLUNTARY, AND BARGAINED-FOR
AGREEMENT TO IRREVOCABLY WAIVE ITS RIGHTS TO TRIAL BY JURY, AND ITS AGREMENT
THAT, TO THE FULLEST EXTENT LAWFULLY PERMISSIBLE, AND DISPUTE OR CONTROVERSY
WHATSOEVER BETWEEN MAKER AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
Maker may not assign this Note or any of its rights or obligations
hereunder, nor delegate the same, without the prior written consent of Holder
(which consent may be given or withheld in the sole discretion of Holder).
Holder may assign this Note or any of its rights or obligations hereunder in
whole or in part, and/or delegate the same, without prior consent of or notice
to Maker.
This Note is being issued in replacement of and in substitution for any
and all promissory notes or other negotiable instruments contemplated by the
Loan Agreement.
25
THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE MAKER AND THE HOLDER, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
26
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed on its
behalf as of the day and year first above written.
MALIBU ENTERTAINMENT WORLDWIDE, INC., a Georgia corporation
MOUNTASIA FAMILY ENTERTAINMENT CENTERS, INC., a Texas corporation
MALIBU MANAGEMENT COMPANY, a Georgia corporation
MALIBU GRAND PRIX CORPORATION, a Delaware corporation
TUCSON MGPC, INC., an Arizona corporation
XXXXXX HILLS MGPC, INC., a California corporation
XXXXXX HILLS SHOWBOAT MGPC, INC., a California corporation
REDONDO BEACH CASTLE MGPC, INC., a California corporation
REDWOOD CITY CASTLE MGPC, INC., a California corporation
SAN DIEGO MGPC, INC., a California corporation
PORTLAND MGPC, INC., an Oregon corporation
DALLAS CASTLE MGPC, INC., a Texas corporation
SAN XXXXXXX XXXXXX MGPC, INC., a Texas corporation
SAN ANTONIO MGPC, INC., a Texas corporation
MOUNTASIA DEVELOPMENT COMPANY, a Georgia corporation
MALIBU GRAND PRIX DESIGN & MANUFACTURING, INC.,
a California corporation
MALIBU GRAND PRIX FINANCIAL SERVICES, INC., a California corporation
OFF TRACK MANAGEMENT, INC., a California corporation
MGP SPECIAL, INC., a California corporation
AMUSEMENT MANAGEMENT FLORIDA, INC., a Florida corporation
MALIBU GRAND PRIX CONSULTING, INC., a California corporation
MOUNTASIA - MEI INTERNATIONAL, INC., a Georgia corporation
MOUNTASIA - MEI LIMITED COMPANY, INC., a California corporation
MOUNTASIA - MEI CALIFORNIA, INC., a California corporation
MOUNTASIA - MEI INTERNATIONAL, INC., a Georgia corporation, in its
capacity as general partner of MOUNTASIA - MEI CALIFORNIA LIMITED
PARTNERSHIP, a California limited partnership
MALIBU CENTERS, INC., a Delaware corporation
By: ____________________________________________
Name: R. Xxxxx Xxxxxxx
Title: Responsible officer for each of the above
referenced Persons composing Borrower
27
EXHIBIT B
Leasehold Mortgage Properties
Austin MGP
0000 X-00 Xxxxx
Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Columbus MGP
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Gwinnett MGP
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Houston Castle MGP
0000 Xxxx Xxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Mountasia of North Xxxx
175 Xxxxxx Xxxxxxx Parkway
Xxxx County
Xxxxxxxx, Xxxxxxx 00000
Mountasia of Plano
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Mountasia of Willowbrook
00000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxxx Hills SpeedZone
17871 Castleton
Los Angeles Xxxxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000
28
