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EXHIBIT 99.14
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 NOVEMBER 16, 1998, AS THE SAME MAY BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME, BY AND AMONG MALIBU ENTERTAINMENT
WORLDWIDE, INC., AS BORROWER, SZ CAPITAL, L.P., AS SUBORDINATED LENDER, AND
FOOTHILL CAPITAL CORPORATION, AS SENIOR LENDER.
ALL INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED PROMISSORY NOTE IS SENIOR
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
NOVEMBER 16, 1998, AS THE SAME MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME, BY AND BETWEEN MALIBU ENTERTAINMENT WORLDWIDE,
INC., AS BORROWER, AND MEI HOLDINGS, L.P., AS SUBORDINATED 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.
SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$30,000,000 Dallas, Texas
November 16, 1998
FOR VALUE RECEIVED, the undersigned, Malibu Entertainment Worldwide,
Inc., a Georgia corporation ("Maker"), promises to pay to the order of SZ
Capital, 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 Thirty Million United States Dollars
($30,000,000), 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, based on a year of 360 days.
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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.
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.
This Note is evidence of that certain loan made by Holder to Maker
contemporaneously herewith and is executed pursuant to, and is subject to the
terms and conditions of, that certain Loan Agreement of even date herewith
between Holder and Maker (as amended, supplemented or otherwise modified from
time to time, the "Loan Agreement"). Maker agrees and acknowledges that Holder
has made no commitment of any kind, whether in the Loan Agreement or otherwise,
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, all as set forth in the Loan Agreement.
If Maker fails to make any payment of principal, accrued and unpaid
interest or any other amount due hereunder on or before five (5) days after the
respective 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).
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.
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The Loan Agreement 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 E
Preferred Stock of Maker.
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.
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.
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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
