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EXHIBIT 99.11
ALL INDEBTEDNESS EVIDENCED BY THIS THIRD 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
SECOND AMENDED AND RESTATED SUBORDINATION AGREEMENT DATED AS OF JANUARY 20,
1999, 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.
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREUNDER, IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS.
THIRD AMENDED AND RESTATED
SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$65,000,000 Dallas, Texas
January 20, 1999
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 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 payable, and shall be paid on, August 31,
2001 (the "Maturity Date"). Maker may, at its option and upon ten (10) 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.
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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 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 shall bear interest until paid
at the 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"). Interest at the Default Rate, to the extent not paid, shall be added
to the Debt. 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).
The whole of the principal sum of this Note, together with all interest
accrued and unpaid thereon and all other sums due hereunder and under any other
instruments or documents representing, evidencing, securing and/or relating to
or executed in connection with this Note (the "Loan Documents"), or any portion
thereof, shall without notice become immediately due and payable at the option
of Holder if any payment required in this Note or any other Loan Document is not
paid on the date on which it is due (after giving effect to any applicable grace
periods), or upon the happening of any other event of default under any other
Loan Document.
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 exceed the Maximum Amount, and in the event such payment is
inadvertently made 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.
That certain Agreement Regarding Right to Convert Promissory Notes of
even date herewith by and between Maker and Holder grants Holder the right at
any time to convert the outstanding balance of principal, interest and other
charges due or accrued under this Note (including any extensions of the term
hereof) into Series H Preferred Stock of Maker.
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In addition, at any time during the term of this Note (including any
extensions of the term hereof) prior to such conversion, Holder may, 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 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 advise 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 Banker's and any attorneys' fees and
expenses) in connection with the execution and delivery of the amendment and
reinstatement 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 Texas, and made by Holder and accepted by
Maker in the State of Texas, 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 obligations arising hereunder shall
be governed by, and construed in accordance with, the laws of the State of Texas
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.
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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 AGREEMENT THAT, TO THE FULLEST EXTENT LAWFULLY PERMISSIBLE, 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 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,
and/or delegate the same, without prior consent of or notice to Maker.
This Note amends and restates the Second Amended and Restated
Subordinated Promissory Note dated March 27, 1998, from Maker payable to the
order of Holder in the principal sum of $65,000,000, and is being issued in
replacement of and is substitution for such promissory note.
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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: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chief Executive Officer
