EXHIBIT 99.3
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT, dated as of June 5, 1997, by and among MEI
Holdings, L.P., a Delaware limited partnership ("MEI"), Malibu Entertainment
Worldwide, Inc., a Georgia Corporation (the "Borrower"), and Foothill Capital
Corporation, a California corporation ("Foothill").
The parties hereto hereby agree as follows:
1. Definitions. (a) Unless otherwise defined herein, terms defined in the
Senior Credit Agreement (defined below) and used herein shall have the meanings
given to them in the Senior Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Subordination Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Blockage Notice": a written notice from the Senior Lender to the Borrower
given as provided in the Senior Credit Agreement that (a) a Non-Payment Event of
Default has occurred and is continuing or (b) an Event of Default would occur if
a scheduled interest or principal payment were made under the Subordinated Note
in accordance with the terms thereof, which written notice identifies itself as
a Blockage Notice or refers to this Subordination Agreement.
"Blockage Period": any period commencing on the date a Blockage Notice is
given and ending on the earlier to occur of:
(a) the date when (1) the Event of Default that was the basis for such
notice has been cured or waived or (2) the conditions shall have ceased to exist
which would cause an Event of Default to occur if a scheduled interest or
principal payment were made under the Subordinated Note in accordance with the
terms thereof; and
(b) 180 days after the date such Blockage Notice is given.
"Enforcement Action": with respect to any Subordinated Obligation or any
part thereof, any action by any Subordinated Lender, acting as a creditor of the
Borrower, to: accelerate the maturity thereof; give notice of the acceleration
of the maturity thereof; demand payment thereof from the Borrower; commence or
prosecute a legal action or proceeding to enforce same or obtain a judgment with
respect thereto; compel, commence, or prosecute arbitration or other alternative
dispute resolution proceedings with respect thereto for the purpose of obtaining
or attempting to obtain payment or recovery thereof; enforce any writ or
judgment with respect thereto; obtain any injunction or restraining order with
respect thereto; seize, attach, garnish, foreclose upon, levy upon, or obtain a
lien or security interest
upon any property or asset of the Borrower with respect thereto; or join in,
commence, or prosecute any involuntary bankruptcy or insolvency proceeding
against the Borrower.
"Insolvency Event": (a) The Borrower or any of its Subsidiaries commencing
any case, proceeding or other action (1) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts or (2) 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 Borrower or any of its Subsidiaries making a general assignment
for the benefit of its creditors; or (b) there being commenced against the
Borrower or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (a) above which (1) results in the entry of an
order for relief or any such adjudication or appointment or (2) remains
undismissed, undischarged or unbonded for a period of 60 days; or (c) the
Borrower or any of its Subsidiaries taking any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (a) or (b) above; or (d) the Borrower or any of its Subsidiaries
generally not paying, or being generally unable to pay, or admitting in writing
its general inability to pay, its debts as they become due.
"Non-Payment Event of Default": any event (other than a Payment Event of
Default) the occurrence of which entitles the Senior Lender to accelerate the
maturity of any of the Senior Obligations.
"Payment Event of Default": any default in the payment of the Senior
Obligations (whether upon maturity, mandatory prepayment, acceleration or
otherwise) beyond any applicable grace period with respect thereto.
"Senior Credit Agreement": the Consolidated, Amended, and Restated Loan
and Security Agreement, dated as of August 22, 1996, by and among the Borrower,
Forty-Five of Its Direct and Indirect Subsidiaries Identified therein, and
Foothill, as such agreement may be amended, supplemented or otherwise modified
from time to time, including, without limitation, amendments, modifications,
supplements and restatements thereof giving effect to increases, renewals,
extensions, refundings, deferrals, restructurings, replacements or refinancings
of, or additions to, the arrangements provided in such agreement (whether
provided by Foothill or a successor lender or lenders).
"Senior Lender": Foothill or any other holder from time to time of Senior
Obligations.
"Senior Loan Documents": the collective reference to the Senior Credit
Agreement, the Senior Notes, the Senior Security Documents and all other
documents that from time to time evidence the Senior Obligations or secure or
support payment or performance thereof.
2
"Senior Loans": the loans made by the Senior Lender to the Borrower or any
Subsidiary of the Borrower pursuant to the Senior Credit Agreement.
"Senior Notes": the promissory note or notes of the Borrower outstanding
from time to time under the Senior Credit Agreement.
"Senior Obligations": the collective reference to the unpaid principal of
and interest on the Senior Notes and all other obligations and liabilities of
the Borrower to the Senior Lender (including, without limitation, interest
accruing at the then applicable rate provided in the Senior Credit Agreement
after the maturity of the Senior Loans and interest accruing at the then
applicable rate provided in the Senior Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Senior Credit Agreement, the Senior Notes, this Agreement, the other
Senior Loan Documents or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Senior Lender that are required to be paid by the Borrower pursuant to the terms
of the Senior Credit Agreement or this Agreement or any other Senior Loan
Document).
"Senior Security Documents": the collective reference to all documents and
instruments, now existing or hereafter arising, which create or purport to
create a lien or security interest in property to secure payment or performance
of the Senior Obligations.
"Subordinated Lender": MEI or any other holder from time to time of the
Subordinated Obligations.
"Subordinated Loan Documents": the collective reference to the
Subordinated Note and any other documents or instruments that from time to time
evidence the Subordinated Obligations or secure or support payment or
performance thereof.
"Subordinated Loans": the loans made by the Subordinated Lender to the
Borrower evidenced by the Subordinated Note.
"Subordinated Note": the Subordinated Promissory Note of the Borrower to
MEI, dated June __, 1997, as the same may be amended, supplemented or otherwise
modified from time to time.
"Subordinated Obligations": the collective reference to the unpaid
principal of and interest on the Subordinated Note and all other obligations and
liabilities of the Borrower to the Subordinated Lender (including, without
limitation, interest accruing at the then applicable rate provided in the
Subordinated Note after the maturity of the Subordinated Loans and interest
accruing at the then applicable rate provided in the Subordinated Note
3
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to-the the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Subordinated Note, this Agreement, or any other
Subordinated Loan Document, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Subordinated Lender that are required to be paid by the Borrower pursuant
to the terms of this Agreement or any other Subordinated Loan Document).
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
2. Subordination. (a) Each of the Borrower and the Subordinated Lender
agrees, for itself and each future holder of the Subordinated Obligations, that
the Subordinated Obligations are expressly "subordinate and junior in right of
payment" (as that phrase is defined in paragraph 2(b)) to all Senior
Obligations.
(b) "Subordinate and junior in right of payment" means that:
(1) no part of the Subordinated Obligations shall have any
claim to the assets of the Borrower on a parity with or prior to the claim
of the Senior Obligations; and
(2) unless and until the Senior Obligations have been paid in
full and any commitment to make Advances under the Senior Credit Agreement
has been terminated, without the express prior written consent of the
Senior Lender, (A) the Subordinated Lender will not take, demand or
receive from the Borrower, and the Borrower will not make, give or permit,
directly or indirectly, by set-off, redemption, purchase or in any other
manner, any payment of or security for the whole or any part of the
Subordinated Obligations, including, without limitation, any letter of
credit or similar credit support facility to support payment of the
Subordinated Obligations; provided, however, that (x) at any time, except
during a Blockage Period or when a Payment Event of Default has occurred
and is continuing, the Borrower may make, and the Subordinated Lender may
receive, scheduled payments on account of principal and interest on the
Subordinated Note in accordance with the terms thereof and (y) at any
time, the Borrower may make, and the Subordinated Lender may receive,
payments on account of the principal and interest on the Subordinated Note
in accordance with the terms thereof to the extent that such payments are
made with the proceeds of new equity capital obtained by the Borrower; and
(B) no acceleration of
4
the maturity of the Subordinated Note will be effective until the earlier
to occur of (i) five days following notice by the Subordinated Lender to
the Senior Lender of such acceleration and (ii) the occurrence of an
Insolvency Event.
(c) Upon the termination of any Blockage Period or if any Payment Event of
Default has been cured or waived or shall have ceased to exist, the Subordinated
Lender's right to receive payments as provided in clause 2(b)(2)(A) shall be
reinstated, and the Borrower may resume making such payments to the Subordinated
Lender.
(d) No Event of Default which existed on the date any Blockage Notice was
given shall be the basis for giving any subsequent Blockage Notice, unless such
Event of Default shall have been cured or waived or otherwise ceased to exist
for a period of not less than 90 consecutive days after the date such Blockage
Notice was given.
(e) No more than one Blockage Notice may be given within any consecutive
360- day period.
(f) The expressions "prior payment in full," "payment in full," "paid in
full" and any other similar terms or phrases when used herein with respect to
the Senior Obligations shall mean the payment in full, in immediately available
funds, of all of the Senior Obligations.
(g) No Subordinated Lender shall take any Enforcement Action against the
Borrower or any property or asset of the Borrower at any time that such
Subordinated Lender is prohibited under Section 2(b)(2) above from taking,
demanding, or receiving payment of the Subordinated Obligations, except that the
provisions of this paragraph shall not be applicable for more than 180 days
(which need not be consecutive) during any 360- day period, and provided that
this paragraph shall not limit the operation of any other provision hereof (for
example, without limitation of the foregoing, if any Subordinated Lender should,
as a result of any Enforcement Action not prohibited by this paragraph, receive
a payment with respect to the Subordinated Obligations that it was prohibited
from receiving or retaining under another provision of this Subordination
Agreement, or that it was required to turn over to the Senior Lender under
another provision of this Subordination Agreement, nothing in this paragraph
shall limit the operation of such other provision hereof).
3. Additional Provisions Concerning Subordination. (a) The Subordinated
Lender and the Borrower agree that upon the occurrence of any Insolvency Event:
(1) all Senior Obligations shall be paid in full before any
payment or distribution is made with respect to the Subordinated
Obligations; and
(2) any payment or distribution of assets of the Borrower,
whether in cash, property or securities, to which the Subordinated Lender
would be entitled except for the provisions hereof, shall be paid or
delivered by the Borrower, or any receiver, trustee in bankruptcy,
liquidating trustee, disbursing agent or other Person
5
making such payment or distribution, directly to the Senior Lender, for
the account of the Senior Lender, to the extent necessary to pay in full
all Senior Obligations, before any payment or distribution shall be made
to the Subordinated Lender.
(b) Upon the occurrence of any event or proceeding described in clause (a)
of the definition of "Insolvency Event" commenced by or against the Borrower:
(1) the Subordinated Lender irrevocably authorizes and
empowers the Senior Lender (A) to demand, xxx for, collect and receive
every payment or distribution on account of the Subordinated Obligations
payable or deliverable in connection with such event or proceeding and
give acquittance therefor, and (B) to file claims and proofs of claim in
any statutory or non-statutory proceeding and take such other actions, in
its own name as Senior Lender or in the name of the Subordinated Lender or
otherwise, as the Senior Lender may deem necessary or advisable for the
enforcement of the provisions of this Agreement; provided, however, that
the foregoing authorization and empowerment imposes no obligation on the
Senior Lender to take any such action;
(2) the Subordinated Lender shall take such action, duly and
promptly, as the Senior Lender may request from time to time (A) to
collect the Subordinated Obligations for the account of the Senior Lender
and (B) to file appropriate proofs of claim in respect of the Subordinated
Obligations; and
(3) the Subordinated Lender shall execute and deliver such
powers of attorney, assignments or proofs of claim or other instruments as
the Senior Lender may request to enable the Senior Lender to enforce any
and all claims in respect of the Subordinated Obligations and to collect
and receive any and all payments and distributions which may be payable or
deliverable at any time upon or in respect of the Subordinated
Obligations.
(c) If any payment or distribution, whether consisting of money, property
or securities, be collected or received by the Subordinated Lender in respect of
the Subordinated Obligations, except payments permitted to be made at the time
of payment as provided in paragraph 2(b), the Subordinated Lender forthwith
shall deliver the same to the Senior Lender for the account of the Senior
Lender, in the form received, duly indorsed to the Senior Lender, if required,
to be applied to the payment or prepayment of the Senior Obligations until the
Senior Obligations are paid in full. Until so delivered, such payment or
distribution shall be held in trust by the Subordinated Lender as the property
of the Senior Lender, segregated from other funds and property held by the
Subordinated Lender.
4. Subrogation. Subject to the payment in full of the Senior Obligations,
the Subordinated Lender shall be subrogated to the rights of the Senior Lender
to receive payments or distributions of assets of the Borrower in respect of the
Senior Obligations until the Senior Obligations shall be paid in full. For the
purposes of such subrogation, payments or distributions to the Senior Lender,
for the account of the Senior Lender, of any money, property or securities to
which the Subordinated Lender would be entitled except for the
6
provisions of this Agreement shall be deemed, as between the Borrower and its
creditors other than the Senior Lender and the Subordinated Lender, to be a
payment by the Borrower to or on account of Subordinated Obligations, it being
understood that the provisions of this Agreement are, and are intended solely,
for the purpose of defining the relative rights of the Subordinated Lender, on
the one hand, and the Senior Lender, on the other hand.
5. Consent of Subordinated Lenders. (a) The Subordinated Lender consents
that, without the necessity of any reservation of rights against the
Subordinated Lender, and without notice to or further assent by the Subordinated
Lender:
(1) any demand for payment of any Senior Obligations made by
the Senior Lender may be rescinded in whole or in part by the Senior
Lender, and any Senior Obligation may be continued, and the Senior
Obligations, or the liability of the Borrower or any guarantor or any
other party upon or for any part thereof, or any collateral security or
guarantee thereof or right of offset with respect thereto, or any
obligation or liability of the Borrower or any other party under the
Senior Credit Agreement or any other agreement, may, from time to time, in
whole or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Senior Lender; and
(2) the Senior Credit Agreement, the Senior Notes and any
other Senior Loan Document may be amended, modified, supplemented or
terminated, in whole or in part, as the Senior Lender may deem advisable
from time to time, and any collateral security at any time held by the
Senior Lender for the payment of any of the Senior Obligations may be
sold, exchanged, waived, surrendered or released,
in each case all without notice to or further assent by the Subordinated Lender,
which will remain bound under this Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for herein.
(b) The Subordinated Lender waives any and all notice of the creation,
renewal, extension or accrual of any of the Senior Obligations and notice of or
proof of reliance by the Senior Lender upon this Agreement. The Senior
Obligations, and any of them, shall be deemed conclusively to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings between
the Borrower and the Senior Lender shall be deemed to have been consummated in
reliance upon this Agreement. The Subordinated Lender acknowledges and agrees
that the Senior Lender has relied upon the subordination provided for herein in
connection with the Senior Credit Agreement and in continuing to make funds
available to the Borrower thereunder. The Subordinated Lender waives notice of
or proof of reliance on this Agreement and protest, demand for payment and
notice of default.
6. Negative Covenants of the Subordinated Lender. So long as any of the
Senior Obligations shall remain outstanding, the Subordinated Lender shall not,
without the prior written consent of the Senior Lender:
7
(a) sell, assign, or otherwise transfer, in whole or in part, the
Subordinated Obligations or any interest therein to any other Person (a
"Transferee") or create, incur or suffer to exist any security interest, lien,
charge or other encumbrance whatsoever upon the Subordinated Obligations in
favor of any Transferee unless (1) such action is made expressly subject to this
Agreement and (2) the Transferee expressly acknowledges to the Senior Lender, by
a writing in form and substance satisfactory to the Senior Lender, the
subordination provided for herein and agrees to be bound by all of the terms
hereof; or
(b) permit any of the Subordinated Loan Documents to be amended, modified
or otherwise supplemented.
7. Senior Obligations Unconditional. All rights and interests of the
Senior Lender hereunder, and all agreements and obligations of the Subordinated
Lender and the Borrower hereunder, shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any Senior Loan Documents;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Senior Obligations, or any amendment or waiver or
other modification, whether by course of conduct or otherwise, of the terms of
the Senior Credit Agreement or any other Senior Loan Document;
(c) any exchange, release or nonperfection of any security interest in any
Collateral, or any release, amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior
Obligations or any guarantee thereof; or
(d) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, the Borrower in respect of the Senior
Obligations, or of either the Subordinated Lender or the Borrower in respect of
this Agreement.
8. Representations and Warranties. The Subordinated Lender represents and
warrants to the Senior Lender that:
(a) its Subordinated Note (1) has been issued to it for good and valuable
consideration, (2) is owned by the Subordinated Lender free and clear of any
security interests, liens, charges or encumbrances whatsoever arising from,
through or under such Subordinated Lender, other than the interest of the Senior
Lender under this Agreement, (3) is payable solely and exclusively to such
Subordinated Lender and to no other Person and (4) constitutes the only evidence
of the obligations evidenced thereby;
(b) the Subordinated Lender has the limited partnership power and
authority and the legal right to execute and deliver and to perform its
obligations under this Agreement and has taken all necessary limited partnership
action to authorize its execution, delivery and performance of this Agreement;
and
8
(c) this Agreement constitutes a legal, valid and binding obligation of
the Subordinated Lender.
9. No Representation by Senior Lender. The Senior Lender has made no
representations or warranties, express, or implied, nor does the Senior Lender
assume any liability to the Subordinated Lender with respect to: (a) the
financial or other condition of obligors under any instruments of guarantee with
respect to the Senior Obligations, (b) the enforceability, validity, value or
collectibility of the Senior Obligations or the Subordinated Obligations, any
collateral therefor, or any guarantee or security which may have been granted in
connection with any of the Senior Obligations or the Subordinated Obligations or
(c) the Borrower's title or right to transfer any collateral or security.
10. Provisions Applicable After Bankruptcy; No Turnover.
(a) The provisions of this Agreement shall continue in full force
and effect notwithstanding the occurrence of any event contemplated under clause
(a) of the definition of "Insolvency Event."
(b) To the extent that the Subordinated Lender has or acquires any
rights under Section 363 or Section 364 of the Bankruptcy Code with respect to
the Collateral, such Subordinated Lender hereby agrees not to assert such rights
without the prior written consent of the Senior Lender; provided that, if
requested by the Senior Lender, the Subordinated Lender shall seek to exercise
such rights in the manner requested by the Senior Lender, including the rights
in payments in respect of such rights.
11. Further Assurances. The Subordinated Lender and the Borrower, at
their own expense and at any time from time to time, upon the written request of
the Senior Lender will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Senior Lender
reasonably may request for the purposes of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted.
12. Expenses. (a) The Borrower will pay or reimburse the Senior
Lender, upon demand, for all its costs and expenses in connection with the
enforcement or preservation of any rights under this Agreement, including,
without limitation, fees and disbursements of counsel to the Senior Lender.
(b) The Borrower will pay, indemnify, and hold the Senior Lender
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions (whether sounding in contract, tort or on any other
ground), judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of, or in any other way arising out of or
relating to this Agreement or any action taken or omitted to be taken by the
Senior Lender with respect to any of the foregoing, except for any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or
9
disbursements that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of the Senior Lender.
13. Provisions Define Relative Rights. This Agreement is intended solely
for the purpose of defining the relative rights of the Senior Lender on the one
hand and the Subordinated Lender on the other, and no other Person shall have
any right, benefit or other interest under this Agreement.
14. Legend. The Subordinated Lender and the Borrower will cause the
Subordinated Note to bear upon its face the following legend:
ALL INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED PROMISSORY NOTE IS
SUBORDINATED TO OTHER INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED
IN, AND IS OTHERWISE SUBJECT TO THE TERMS OF, THE SUBORDINATION AGREEMENT,
DATED AS OF JUNE ___, 1997, AS THE SAME MAY BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME, BY AND AMONG MALIBU ENTERTAINMENT
WORLDWIDE, INC., AS BORROWER, MEI HOLDINGS, L.P., AS SUBORDINATED LENDER,
AND FOOTHILL CAPITAL CORPORATION, AS SENIOR LENDER.
15. Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full and any commitment to
make Advances under the Senior Credit Agreement has been terminated.
16. Notices. All notices, requests and demands to or upon the Senior
Lender or the Borrower or the Subordinated Lender to be effective shall be in
writing (or by fax or similar electronic transfer confirmed in writing) and
shall be deemed to have been duly given or made (1) when delivered by hand or
(2) if given by mail, three days following deposit in the mails by certified
mail, return receipt requested, or (3) if by fax or similar electronic transfer,
when transmission has been electronically confirmed, or (4) if given by
overnight courier, on the business day following delivery to such courier, in
each case addressed as follows:
If to the Senior Lender: at the address specified in the Senior Credit Agreement
If to the Borrower: at the address specified in the Senior Credit Agreement
If to the Subordinated Lender:
MEI Holdings, L.P.
c/o The Hampstead Group
Texas Commerce Tower
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000
10
Attn: Xxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
The Senior Lender, the Borrower and the Subordinated Lender may change their
addresses and transmission numbers for notices by notice in the manner provided
in this Section.
17. Counterparts. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all the parties shall be lodged
with the Senior Lender. Delivery of executed counterparts may occur by
facsimile, provided that any party delivering a signature by facsimile promptly
thereafter shall deliver an original signed counterpart.
18. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
19. Integration. This Agreement represents the agreement of the Senior
Lender and the Subordinated Lender with respect to the subject matter hereof and
there are no promises or representations by the Senior Lender or the
Subordinated Lender relative to the subject matter hereof not reflected herein.
20. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Senior Lender,
the Borrower and the Subordinated Lender; provided that any provision of this
Agreement may be waived by the Senior Lender in a letter or agreement executed
by the Senior Lender or by facsimile transmission from the Senior Lender.
(b) No failure to exercise, nor any delay in exercising, on the part of
the Senior Lender, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
11
21. Section Headings. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
22. Successors and Assigns. (a) This Agreement shall be binding upon the
successors and assigns of the Borrower and the Subordinated Lender and shall
inure to the benefit of the Senior Lender and its successors and assigns.
(b) Upon a successor Senior Lender becoming the Senior Lender under the
Senior Credit Agreement, such successor Senior Lender automatically shall become
the Senior Lender hereunder with all the rights and powers of the Senior Lender
hereunder without the need for any further action on the part of any party
hereto.
23. Governing Law. This Agreement shall be governed by,and construed and
interpreted in accordance with, the law of the State of New York (without giving
effect to principles of conflict of laws other than Section 5-1401 of the New
York General Obligations Law).
12
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
MEI HOLDINGS, L.P.
By: MEI GenPar, L.P.
Its General Partner
By: HH GenPar Partners
Its General Partner
By: Hampstead Associates, Inc.
Its Managing General Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President
MALIBU ENTERTAINMENT WORLDWIDE, INC.
--------------------------------------------------
Xxxxxxx X. XxxxXxxxxxx
Chief Financial Officer
FOOTHILL CAPITAL CORPORATION
--------------------------------------------------
Name:
Title:
13
