Exhibit 4.64
Rancho Cucomonga, CA (Store No. 362)
Discovery Zone, Inc. Secured Rent Deferral Note
(the "Secured Rent Deferral Note")
$45,508.72 (Initial Face Amount) July 29, 1997
(the "Effective Date")
FOR VALUE RECEIVED, the undersigned, Discovery Zone, Inc., a
Delaware corporation ("MAKER"), promises to pay to the order of XxXxxxxx'x
Corporation, a Delaware corporation, its successors and assigns ("HOLDER"),
on or before the stated Maturity Date at such place as Holder may from time
to time designate in writing, the principal sum of (i) FORTY-FIVE THOUSAND
FIVE HUNDRED AND EIGHT AND SEVENTY-TWO ONE HUNDREDTHS DOLLARS ($45,508.72)
(such sum, the "Original Principal Amount") plus (ii) effective as of the
first day of each month occurring after the date hereof through the Maturity
Date (as hereinafter defined), an amount equal to FIVE THOUSAND FIVE HUNDRED
AND SIXTY-THREE AND FIFTY-NINE ONE HUNDREDTHS DOLLARS ($5,563.59) (such
amount, cumulatively for each month elapsed after the Effective Date through
the Maturity Date, the "Additional Principal Amount")plus (iii) effective as
of each anniversary of the Effective Date occurring after the date hereof
until the Maturity Date, an amount equal to the amount of then unpaid and
accrued interest (such amount, the "Capitalized Interest Amount" and,
collectively with the Original Principal Xxxxxx and the Additional Principal
Xxxxxx, the "Principal Amount"), in lawful money of the United States of
America, together with interest accrued thereon, to be computed and paid as
specified in Section 1 below.
1. Payment of Principal and Interest.
The Principal Amount of the Secured Rent Deferral Note
together with all interest accrued thereon shall be due and payable on the
earlier of (i) the last day of the term of the lease relating to the premises
now known as location no. 362 in Rancho Cucomonga, California (the "Lease")
and (ii) the date to which the obligations under this Secured Rent Deferral
Note become due and payable in accordance with Section 3 below (the "Maturity
Date"). On the Maturity Date, Maker shall pay the Principal Amount then
outstanding plus all unpaid and uncapitalized interest accrued thereon to but
not including the Maturity Date in full.
The Maker may at any time and from time to time prepay the
Principal Amount then outstanding, in whole or in part, without premium or
penalty, upon at least one business day's prior written notice to Holder,
specifying the date and the amount of the prepayment. If any such notice is
given, the amount set forth in the notice shall be due and payable on the
date set forth in the notice, without any accrued interest to such date on
the amount to be prepaid. Amounts prepaid shall be in an aggregate principal
amount of at least $25,000 or a whole multiple of $10,000 in excess thereof.
Within five Business Days following the consummation of the
sale of any of the Collateral (as hereinafter defined), the Maker shall apply
the Net Proceeds first, to the prepayment of the Secured Rejection Note
issued by the Maker to the Holder as of the Effective
Date in the manner provided therein, second, to the prepayment of this
Secured Rent Deferral Note and any other notes secured by the Collateral
(including the other Secured Rent Deferral Notes issued by the Maker to the
Holder) then outstanding, pro rata based on the then outstanding principal
amounts of any such notes, and the balance, if any, as provided in Section
6(b) of the Mortgages. "Collateral" shall mean the Mortgaged Property or
Trust Property, as the case may be, as such terms are defined in the
Mortgages and Assignments of Rents, Deeds of Trust and/or similar security
instruments granted by Maker in favor of Holder of even date herewith with
respect to the fourteen properties listed on Exhibit A hereto (the
"Mortgages"). "Net Proceeds" shall mean the sales price for any item of the
Collateral after deducting any brokerage fees and commissions, transfer taxes
and other customary closing costs payable by Maker in connection with such
sale.
The Principal Amount outstanding from time to time shall bear
interest at a rate per annum equal to 11% (the "Base Rate"). Interest on the
Principal Amount shall be due and payable on the Maturity Date. If all or
any portion of (i) any Principal Amount, (ii) any interest payable thereon or
(iii) any other amount payable hereunder shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), the delinquent amount
shall bear interest at a rate per annum which is equal to the Base Rate plus
2% (the "Default Rate") for each day elapsed from the date of such nonpayment
until such amount is paid in full (as well as after as before judgment).
2. Security for the Loan.
This Secured Rent Deferral Note is secured by the Mortgages.
3. Events of Default.
If any of the following events shall occur and be continuing:
(a) Maker shall fail to pay any Principal Amount when such
Principal Amount becomes due in accordance with the terms hereof within ten
days after receipt of written notice from the Holder of Maker's failure to
pay such Principal Amount or Maker shall fail to pay any interest on the
Principal Amount such interest becomes due in accordance with the terms
hereof within ten days after receipt of written notice from the Holder of
Maker's failure to pay such interest on the Principal Amount;
(b) Maker or any of its subsidiaries (i) shall default in any
payment of principal of or interest of any indebtedness (other than this and
the other Secured Rent Deferral Notes and the Secured Rejection Note) beyond
the period of grace, if any, provided in the instrument or agreement under
which such indebtedness was created in an aggregate amount equal to or
greater than $2.5 million or (ii) shall default in the observance or
performance of any other agreement or condition relating to any such
indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto (beyond the expiration of any cure period), or any other
event shall occur or condition exist, the effect of which default or event or
condition is
2
to cause, or to permit the holder or holders of such indebtedness to cause,
with the giving of notice if required, such indebtedness to become due prior
to its stated maturity;
(c) Maker or any of its subsidiaries shall default in the
observance or performance of any payment or other obligation under two or
more any of the lease agreement under which Maker or such affiliate leases
real property from XxXxxxxx'x Corporation and, as a result of such defaults,
McDonald's Corporation terminates two or more of such leases in accordance
with their respective terms;
(d) Maker or any of its subsidiaries shall default in the
observance or performance of any agreement or condition contained in this
Secured Rent Deferral Note (other than any agreement relating to the payment
of the Principal Amount and/or any interest thereon) or in any of the
Mortgages and such default shall continued unremedied for a period of thirty
(30) days; provided that if such default is not readily susceptible of cure
in such thirty (30) day period, and provided that Maker proceeds in a
diligent manner to cure such default, Maker shall have such additional time
to effect such cure as shall be reasonably necessary to effect such cure;
(e) Excepting only those continuing proceedings relating to
the bankruptcy cases of Maker's debtor predecessors in interest captioned In
re Discovery Zone, Inc., et al., Case No. 96-411 (HSB) (Jointly
Administered), before the United States Bankruptcy Court for the District of
Delaware, Maker or any of its subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankruptcy or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Maker or any of its subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Maker or any of its subsidiaries any case proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order fro relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Maker or any of its subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Maker or any of its subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set froth in clause (i), (ii) or (iii) above; or (v) the Maker or any of its
subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due;
(f) One or more judgments or decrees shall be entered against
the Maker or any of its subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance, subject to a commercially reasonable
deductible) of $2.5 million or more and all such
3
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from he entry thereof; or
(g) Any of the Mortgages shall cease, for any reason, to be
in full force and effect, or Maker or any of its subsidiaries shall so assert
or the liens created by any of the Mortgages shall cease to be enforceable
and of the same effect and priority purported to be created thereby;
then, (A) if such event is an event specified in clause (i), (ii) or (iv) of
subparagraph (e) above, automatically this Secured Rent Deferral Note and all
amounts owing hereunder shall immediately become due and payable and all rent
deferrals in respect of the Lease shall cease, and (B) if such event is any
other event specified in this Section 3, Holder may, by notice to Maker,
declare the Secured Rent Deferral Note and all amounts owing hereunder to be
immediately due and payable, whereupon the same shall immediately become due
and payable and all rent deferrals in respect of the Lease shall cease.
Except as expressly provided in this paragraph, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
4. Payment of Expenses and Taxes.
Maker agrees (i) to pay or reimburse Holder for all its costs
and expenses incurred in connection with the enforcement or preservation of
any rights under this Secured Rent Deferral Note and the Mortgages, including
without limitation the reasonable fees and disbursements of counsel to Holder
and (ii) to pay, indemnify, and hold Holder harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp and other similar taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Secured Rent
Deferral Note and the Mortgages and (iii) to pay, indemnify and hold Holder
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Secured Rent
Deferral Note and the Mortgages, including without limitation any of the
foregoing relating to the violation of, noncompliance with or liability under
environmental law applicable to the operations of Maker or any of its
subsidiaries on the Collateral; provided that Maker shall have no obligation
hereunder to Holder with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Holder or any environmental
activities or contamination occurring on any Collateral after Maker transfers
or conveys such Collateral to Holder or any other person following a
foreclosure on such Collateral or deed-in-lieu thereof. The agreements in
this Section 4 shall survive repayment of the Secured Rent Deferral Note and
all other amounts payable hereunder.
4
5. Authority.
Maker represents that it has full power authority and legal
right to execute and deliver this Secured Rent Deferral Note and the
Mortgages and to perform its obligations hereunder and thereunder, and that
this Secured Rent Deferral Note and the Mortgages constitute the valid and
binding obligation of Maker, enforceable against Maker in accordance with its
terms, except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity, regardless of whether considered in proceedings at law or in equity.
6. Notices.
All notices, requests and demands to or upon Maker or Holder
to be effective shall be in writing (including by facsimile transmission),
and, unless otherwise expressly provided therein, shall be deemed to have
been duly given or made (a) in the case of delivery by hand, when delivered,
(b) in the case of delivery by mail, three days after being deposited in the
mails, postage prepaid, or (c) in the case of delivery by facsimile
transmission, when sent and receipt has been confirmed, addressed as follows,
or to such other address as may be hereafter notified by the respective
parities hereto:
Maker: Discovery Zone, Inc.
000 Xxxx Xxxxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Holder: XxXxxxxx'x Corporation
Xxx XxXxxxxx'x Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
7. Consent to Jurisdiction; Governing Law.
(a) THIS SECURED RENT DEFERRAL NOTE WAS NEGOTIATED IN THE
STATE OF NEW YORK, AND MADE BY MAKER AND ACCEPTED BY HOLDER IN THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL
RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
SECURED RENT DEFERRAL NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
5
STATE OF NEW YORK APPLICABLE TO NOTES MADE AND PERFORMED IN SUCH STATE AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. IT IS BEING UNDERSTOOD
THAT THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE
ENFORCEABILITY OF THIS SECURED RENT DEFERRAL NOTE AND ALL OF THE INDEBTEDNESS
OR OBLIGATIONS ARISING HEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW,
MAKER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS SECURED RENT DEFERRAL NOTE,
AND THIS SECURED RENT DEFERRAL NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MAKER OR
HOLDER ARISING OUT OF OR RELATING TO THIS SECURED RENT DEFERRAL NOTE SHALL BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND MAKER
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND MAKER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. MAKER DOES HEREBY DESIGNATE AND APPOINT XXXXXXXX & STERLING, 000
XXXXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000-6069 (ATTN: XXXXXXX X. XXXXXXX,
ESQ.), AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF
SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES
THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF
SAID SERVICE OF MAKER MAILED OR DELIVERED TO MAKER IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
MAKER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
MAKER (I) SHALL GIVE PROMPT NOTICE TO HOLDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND
(III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
8. Miscellaneous
(a) This Secured Rent Deferral Note may be modified, amended,
waived, extended, changed, discharged or terminated only by an agreement in
writing signed by the party against whom enforcement of any such
modification, amendment, waiver, extension, change, discharge or termination
is sought.
6
(b) No failure to exercise and no delay in exercising any
right, remedy, power or privilege hereunder or under the Mortgages shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder or under the Mortgages preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges
herein and under the Mortgages are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
(c) This Secured Rent Deferral Note shall be binding upon and
inure to the benefit of Maker and Holder and their respective successors and
assign, except that Maker may not assign or transfer any of its rights or
obligations under this Secured Rent Deferral Note without the prior written
consent of Holder. Holder may sell, transfer or assign the Secured Rent
Deferral Note (or any of its rights hereunder) to any person upon prior
written notice of such sale, transfer or assignment to Maker. Upon any such
sale, transfer or assignment, the assignee shall have all the rights,
remedies, powers and privileges of Holder hereunder.
IN WITNESS WHEREOF, Maker has duly executed or has caused its
respective duly authorized officers to execute this Secured Rent Deferral
Note on its behalf, as of the day and year first above written.
DISCOVERY ZONE, INC.
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
7
EXHIBIT A
Location Location Number
Indianapolis, Indiana (307)
Kennesaw, Georgia (334)
Xxxxxxxxxx, Illinois (335)
Xxxxxxx County (Littleton), Colorado (338)
Columbus, Ohio (339)
Blaine (Xxxx Rapids), Minnesota (340)
Forest Park, Ohio (343)
Xxxx Valley, Texas (344)
Arlington, Texas (347)
San Antonio, Texas (348)
Sterling Heights, Michigan (349)
Philadelphia (Xxxxxxxx Xxxxx), Pennsylvania (352)
Aurora, Colorado (353)
Vancouver, Washington (357)
