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Exhibit 10.12
ALL INDEBTEDNESS EVIDENCED BY THIS AMENDED AND RESTATED 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 AMENDED AND RESTATED SUBORDINATION AGREEMENT, DATED AS OF JUNE 27,
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.
SECOND AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE
$65,000,000 New York, N.Y.
March 27, 1998
FOR VALUE RECEIVED, the undersigned, Malibu Entertainment
Worldwide, Inc., a Georgia corporation ("Maker"), promises to pay to the order
of MEI Holdings, L.P., a Delaware limited partnership (together with any
subsequent holder of this Note, "Holder"), at its offices located at c/o The
Hampstead Group, 0000 Xxxx Xxxxxx., Xxxxx 0000 Xxxx, Xxxxxx, Xxxxx 00000, or at
such other address or to such account as Holder may from time to time designate
in writing, the unpaid principal sum of all advances made by Holder to Maker
from time to time in an aggregate principal amount of up to Sixty Five Million
United States Dollars ($65,000,000), together with interest thereon from the
date hereof on the unpaid principal balance at the rate and otherwise as 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 ten percent (10%) per annum. Accrued but unpaid interest
shall be compounded annually. Interest on the unpaid principal balance of this
Note shall be computed on the actual number of days elapsed, and a year of 360
days.
The unpaid principal amount of this Note and all accrued and
unpaid interest thereon shall become due and be paid on August 31, 2001 (the
"Maturity Date"). Maker may, at its option and upon three (3) Business Days'
prior written notice from Maker to Holder, prepay in whole or in part the
outstanding principal balance of this Note without payment of any premium or
penalty.
Holder shall maintain an account or accounts evidencing the
indebtedness of Maker to Holder resulting from each advance made by Holder,
including the amount of
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principal and interest payable and paid to Holder from time to time hereunder.
The entries made in such account or accounts shall be prima facie evidence of
the existence and the amounts of the obligations recorded therein, provided that
any failure of Holder to maintain such account or accounts or any error therein
shall not in any manner affect the obligation of Maker to repay the advances
made by Holder to Maker in accordance with the terms of this Note.
Maker agrees and acknowledges that Holder has no commitment of
any kind to advance funds to Maker and that all advances previously made by
Holder to Maker and all advances, if any, that may be made by Holder to Maker in
the future have been made and will be made at the sole and absolute discretion
of Holder.
Maker shall use the proceeds of the loan evidenced by this
Note solely to fund its working capital requirements and to repay indebtedness
of the Maker the proceeds of which were used by Maker solely to fund its working
capital requirements.
If Maker fails to make any payment of principal, accrued and
unpaid interest or any other amount due hereunder on any due date therefor,
whether at stated maturity or otherwise, the unpaid amount (including, to the
extent enforceable at law, any unpaid amount of interest) shall bear interest
until paid at a rate per annum equal to the lesser of eighteen percent (18%) per
annum and the maximum rate of interest permitted by applicable law (the "Maximum
Amount"). 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, protest, notice of dishonor, notice of nonpayment,
suit against any party, diligence in collection of this Note, and all other
requirements necessary to enforce this Note.
In no event shall any amount deemed to constitute interest due
or payable hereunder (including interest calculated at the Default Rate) exceed
the Maximum Amount, and in the event such payment is inadvertently paid by Maker
or inadvertently 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 may, at any time during the term of this Note
(including any extensions of the term hereof), by written notice to Maker,
convert this Note into one or more subordinated convertible notes (the
"Convertible SubNotes") having terms that the Investment Banker (as defined
below) advises Maker and Holder (which advice will be in the form of a written
term sheet but need not be given in the form of a formal opinion) would be
required to ensure that the
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proceeds to Holder of an immediate sale of the Convertible SubNote would be
sufficient to repay the sum of (i) the then-outstanding principal and interest
on this Note and (ii) all third party costs incurred by the Maker and the Holder
in an assumed secondary public offering by Holder of the Convertible SubNote,
including without limitation any SEC or other filing fees, printing expenses,
underwriting discounts and fees and other fees and expenses (including
attorneys' and accountants' fees and expenses). Within 20 calendar days of
Maker's receipt of the foregoing notice, Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx
Incorporated ("ML") or, if such firm is unwilling or unable to serve, another
nationally recognized investment banking firm will be selected by Holder and the
members of the Board of Directors of Maker not affiliated with Holder or
employed by Maker (ML or such other firm, the "Investment Banker"). In its
engagement of the Investment Banker, Maker will obtain the Investment Banker's
agreement to render such advice as promptly as is practicable. If Holder is
advised by legal counsel that shareholder approval of the issuance of the
Convertible SubNote or the issuance of Common Stock upon conversion of the
Convertible SubNote is required by law or stock exchange rule, Maker will seek
shareholder approval of the issuance of the Convertible SubNotes at the earlier
of the next annual or special meeting of shareholders after the date hereof. The
Convertible SubNote and any Shares issued to the holder thereof upon conversion
of the Convertible SubNote will be "Registrable Securities" under the
Registration Rights Agreement, dated as of August 28, 1996, by and between Maker
and Holder. Maker will be responsible for all of its and Holder's fees and
expenses (including the Investment Bankers' and any attorneys' fees and
expenses) in connection the execution and delivery of the amendment and
restatement of this Note and any other matters contemplated by this Note.
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 assigns.
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 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 New York, and made by Holder and
accepted by Maker 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 without limitation matters of
construction, validity, and performance, this Note and the
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obligations arising hereunder shall be governed by, and construed in accordance
with, the internal laws of the State of New York 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 governs this Note, and this Note shall be governed by and
construed in accordance with the laws of the State of New York pursuant to ss.
5-1401 of the New York General Obligations Law.
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 IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY,
AND THAT, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, ANY 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 or delegate this Note or any of its
rights or obligations hereunder without the prior consent of Holder (which
consent may be given or withheld in the sole discretion of Holder). Holder may
assign or delegate this Note or any of its rights or obligations hereunder
without prior consent of or notice to Maker.
This Note amends and restates the $30,000,000 Amended and
Restated Subordinated Promissory Note, dated June 5, 1997, from Maker payable to
the order of Holder and is being issued in replacement of and in substitution
for such promissory note.
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.
By:
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Name: Xxxxxxx X. XxxxXxxxxxx
Title: Vice President
