<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
AMENDMENT NO. 14
Under the Securities Exchange Act of 1934
MALIBU ENTERTAINMENT WORLDWIDE, INC.
(Name of Issuer)
COMMON STOCK, WITHOUT PAR VALUE
(Title of Class of Securities)
561182106
(CUSIP Number)
RICHARD M. FITZPATRICK
MEI HOLDINGS, L.P.
2200 ROSS AVENUE
SUITE 4200
DALLAS, TEXAS 75201
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
ROBERT A. PROFUSEK, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
NOVEMBER 17, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
<PAGE> 2
CUSIP NO. 561182106 13D-1 PAGE 2
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MEI Holdings, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 3
CUSIP NO. 561182106 13D-1 PAGE 3
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MEI GenPar, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 4
CUSIP NO. 561182106 13D-1 PAGE 4
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
HH GenPar Partners
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 5
CUSIP NO. 561182106 13D-1 PAGE 5
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hampstead Associates, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Texas
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 6
CUSIP NO. 561182106 13D-1 PAGE 6
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RAW Genpar, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 7
CUSIP NO. 561182106 13D-1 PAGE 7
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
InMed, Inc. d/b/a Incap, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 8
CUSIP NO. 561182106 13D-1 PAGE 8
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donald J. McNamara
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 9
CUSIP NO. 561182106 13D-1 PAGE 9
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert A. Whitman
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 10
CUSIP NO. 561182106 13D-1 PAGE 10
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Daniel A. Decker
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,323,513(1)
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
81.4%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Does not reflect additional Common Shares to which the Reporting Person may
be entitled, without the payment of additional consideration, upon the
occurrence of certain future events beyond the Reporting Persons' control.
See Item 5.
<PAGE> 11
This Amendment No. 14 amends and supplements the Statement on Schedule 13D
first filed on June 17, 1996, as amended by Amendments No. 1 through 12 (the
"Schedule 13D"), by MEI Holdings, L.P., a Delaware limited partnership
("Holdings"), and certain other persons.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended to add the following at the end thereof:
On November 16, 1998, the Company announced that it had elected not to move
forward with the previously announced possible combination of the Company and
Houlihan's Restaurant Group, a privately held company acquired by Holdings in
June 1998. In connection therewith, the Company announced that it intended to
pursue a recapitalization plan on a stand-alone basis.
The Company's proposed recapitalization plan is described in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, filed
with the Securities and Exchange Commission on November 16, 1998.
Holdings has advised the Company that it presently intends to pursue
the proposed recapitalization and in connection therewith is willing, among
other things, to convert $45.6 million of Company debt presently held by
Holdings into convertible preferred stock with a pay-in-kind feature. However,
there can be no assurance that the third party lenders, Holdings and the Company
will be able to reach agreement on the terms of a recapitalization and, as of
the date of this Amendment, Holdings has no legal obligation to proceed with the
Company's proposed recapitalization or to fund the Company's operating and
capital requirements for this purpose or in the future. Holdings has informed
the Company that it is not willing to invest additional capital in the Company
unless the recapitalization and proposed modifications to the Company's Top
Eliminator contract are completed on terms satisfactory to it, and that, after
the recapitalization is completed, it has no present intention to provide more
capital to fund operations or capital expenditures.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Holdings and Nomura Asset Capital Corporation have amended the terms of the
Loan Agreement and Promissory Note between them as set forth in Exhibits 99.2
through 99.9
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 is hereby amended to add the following at the end thereof:
Exhibit 99.2 Amended and Restated Promissory Note by MEI Holdings, L.P., in
favor of Nomura Asset Capital Corporation
Exhibit 99.3 Amended and Restated Loan Agreement between MEI Holdings, L.P.,
as borrower and Nomura Asset Capital Corporation, as lender
Exhibit 99.4 Reaffirmation and Ratification of Guaranty made by MEI Holdings,
L.P., in favor of Nomura Asset Capital Corporation
Exhibit 99.5 Note Modification Agreement between Nomura Asset Capital
Corporation and MEI Holdings, L.P.
Exhibit 99.6 Second Amendment to Amended and Restated Pledge and Security
Agreement between MEI Holdings, L.P. and Nomura Asset Capital
Corporation
Exhibit 99.7 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Note Modification
Exhibit 99.8 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Term Extension
Exhibit 99.9 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Loan from Nomura Asset Capital
Corporation to MEI Holdings, L.P.
<PAGE> 12
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement may
be filed collectively on behalf of it and each of the other signatories hereto.
Date: November 18, 1998
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: /s/ Daniel A. Decker
---------------------------------
Daniel A. Decker
Executive Vice President
MEI GENPAR, L.P.
By: HH GenPar Partners
Its General Partner
By: Hampstead Associates, Inc.
Its Managing General Partner
By: /s/ Daniel A. Decker
---------------------------------
Daniel A. Decker
Executive Vice President
HH GENPAR PARTNERS
By: Hampstead Associates, Inc.
Its Managing General Partner
By: /s/ Daniel A. Decker
---------------------------------
Daniel A. Decker
Executive Vice President
HAMPSTEAD ASSOCIATES, INC.
By: /s/ Daniel A. Decker
---------------------------------
Daniel A. Decker
Executive Vice President
<PAGE> 13
RAW GENPAR, INC.
By: /s/ Robert A. Whitman
----------------------------
Robert A. Whitman
President
INMED, INC.
By: /s/ Daniel A. Decker
----------------------------
Daniel A. Decker
President
/s/ Donald J. McNamara
-------------------------------
Donald J. McNamara
/s/ Robert A. Whitman
-------------------------------
Robert A. Whitman
/s/ Daniel A. Decker
-------------------------------
Daniel A. Decker
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
Exhibit 99.2 Amended and Restated Promissory Note by MEI Holdings, L.P., in
favor of Nomura Asset Capital Corporation
Exhibit 99.3 Amended and Restated Loan Agreement between MEI Holdings, L.P., as
borrower and Nomura Asset Capital Corporation, as lender
Exhibit 99.4 Reaffirmation and Ratification of Guaranty made by MEI Holdings,
L.P., in favor of Nomura Asset Capital Corporation
Exhibit 99.5 Note Modification Agreement between Nomura Asset Capital
Corporation and MEI Holdings, L.P.
Exhibit 99.6 Second Amendment to Amended and Restated Pledge and Security
Agreement between MEI Holdings, L.P. and Nomura Asset Capital
Corporation
Exhibit 99.7 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Note Modification
Exhibit 99.8 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Term Extension
Exhibit 99.9 Letter Agreement between MEI Holdings, L.P. and Nomura Asset
Capital Corporation re: Loan from Nomura Asset Capital
Corporation to MEI Holdings, L.P.
</TABLE>
<PAGE> 1
EXHIBIT 99.2
AMENDED AND RESTATED PROMISSORY NOTE
New York, New York
$20,000,000 May 8th, 1998
WHEREAS, PAYEE (hereinafter defined), is the lawful owner and holder of
that certain Note dated June 5, 1997 (the "Original Note") which evidences the
indebtedness of MEI Holdings, L.P., a Delaware limited partnership (hereinafter
referred to as "Maker"), in the total existing outstanding principal amount of
$10,000,000; and
WHEREAS, Maker and Payee desire to amend and restate the terms and
conditions of the Original Note in its entirety, in the manner hereinafter set
forth, and to replace the Original Note with this Note.
NOW, THEREFORE, by Maker's execution and delivery, and Payee's acceptance
of delivery from Maker, of this Note, this Note is deemed to amend, modify and
restate the Original Note and the Original Note is hereby amended, modified and
restated in its entirety, and consolidated, so that the terms, covenants,
agreements, rights, obligations and conditions contained in this Note shall
supersede and control the terms, covenants, agreements, rights, obligations and
conditions of the Original Note, as follows:
FOR VALUE RECEIVED, Maker having its principal place of business at c/o The
Hampstead Group, Texas Commerce Tower, 2200 Ross Ave., Suite 4200-W, Dallas,
Texas 75201, promises to pay to the order of NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation, at its principal place of business at Two World Financial
Center, Building B, New York, New York 10281 (hereinafter referred to as
"Payee"), or at such place as the holder hereof may from time to time designate
in writing, the principal sum of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
thereon to be computed on the unpaid principal balance from time to time
outstanding at the Applicable Interest Rate (as hereinafter defined) for each
interest period, and to be paid in installments as follows:
Maker shall pay interest, in arrears, on June 1, 1998 and,
thereafter, for each one month interest period (or portion
thereof) from and including the first Business Day (hereinafter
defined) of each calendar month to but excluding the first
Business Day of the immediately succeeding calendar month, on the
first day of each calendar month during the term hereof
<PAGE> 2
(or if such day is not a Business Day, the next day which is a
Business Day).
The balance of said principal sum together with all accrued and unpaid interest
thereon shall be due and payable on September 30, 1998 (the "Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis of
the actual number of days elapsed and a three hundred sixty (360) day year. All
amounts due under this Note shall be payable without setoff, counterclaim or any
other deduction whatsoever and are payable without relief from valuation and
appraisement laws and with all expenses, costs and charges incurred in
collection or enforcement hereof, including, without limitation, attorneys' fees
and court costs.
1. The term "Applicable Interest Rate" as used in this Note
shall mean a rate per annum equal to LIBOR (as defined on Exhibit A) plus 350
basis points. The Applicable Interest Rate for each one-month interest period
shall be determined monthly on the Determination Date (as defined on Exhibit A)
immediately preceding such interest period.
2. This Note is evidence of that certain loan made by Payee to
Maker contemporaneously herewith (the "Loan") and is executed pursuant to, and
is subject to, the terms and conditions of that certain Amended and Restated
Loan Agreement executed the date hereof between Maker and Payee (as amended,
supplemented or otherwise modified from time to time, the "Loan Agreement").
This Note is (x) secured by, among other things that certain Amended and
Restated Pledge and Security Agreement, dated June 27, 1997, as amended by that
certain Amendment To Amended And Restated Pledge And Security Agreement, dated
the date hereof each between Maker and Payee (the "Pledge") and other Loan
Documents (as defined in the Loan Agreement) and (y) guarantied by that certain
Guaranty executed by Malibu Centers, Inc., dated as of June 27, 1997, as such
guaranty has been reaffirmed by that certain Reaffirmation of Guaranty, dated
the date hereof (collectively, the "Guaranty"). Reference is made to the Pledge,
the Guaranty and the other Loan Documents for a description of the nature and
extent of the security afforded thereby, the rights of the holder hereof in
respect of such security, the terms and conditions upon which this Note is
secured and the rights and duties of the holder of this Note. The holder of this
Note is entitled to the benefits of the Pledge, the Guaranty and the other Loan
Documents and may enforce the agreements contained therein and exercise the
remedies provided therein or otherwise in respect thereof, all in accordance
with the terms thereof. No reference herein to any of the Pledge, the Guaranty
and the other Loan Documents and no other provision of this Note or of the
Pledge, the Guaranty or the other Loan Documents shall alter or impair the
obligation of Maker, which is absolute and unconditional, to pay the principal
of and interest on this Note at the time and place and at the rates and in the
monies and funds described herein. All of the
2
<PAGE> 3
agreements, conditions, covenants, provisions and stipulations contained in the
Pledge, the Guaranty and the other Loan Documents which are to be kept and
performed by Maker are by this reference hereby made part of this Note to the
same extent and with the same force and effect as if they were fully set forth
in this Note, and Maker covenants and agrees to keep and perform the same, or
cause the same to be kept and performed, in accordance with their terms. All
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Loan Agreement.
3. If any sum payable under this Note is not paid on the date
on which it is due, Maker shall pay to Payee upon demand an amount equal to the
lesser of three percent (3%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray a portion of the expenses incurred by Payee
in handling and processing such delinquent payment and to compensate Payee for
the loss of the use of such delinquent payment. If the day when any payment
required under this Note is due is not a Business Day, then payment shall be due
on the first Business Day thereafter. The term "Business Day" shall mean a day
other than (i) a Saturday or Sunday, or (ii) any day on which national banks in
New York, New York are not open for business.
4. 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 the other Loan Documents (all such sums hereinafter collectively referred
to as the "Debt"), or any portion thereof, shall without notice become
immediately due and payable at the option of Payee if any payment required in
this Note 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
(as defined in the Loan Agreement). In the event that it should become necessary
to employ counsel to collect or enforce the Debt or to protect or foreclose the
security therefor, Maker also shall pay on demand all costs of collection
incurred by Payee, including, without limitation, reasonable attorneys' fees,
and costs reasonably incurred for the services of counsel whether or not suit be
brought.
5. Maker does hereby agree that upon the occurrence of an
Event of Default, Payee shall be entitled to receive and Maker shall pay to
Payee interest on the entire unpaid principal sum of this Note and any other
amounts (including interest to the extent permitted by applicable law) due at
the Default Rate (as defined in the Loan Agreement). Interest at the Default
Rate shall be computed from the occurrence and during the continuance of the
Event of Default until the actual receipt and collection of the Debt (or that
portion thereof that is then due). Interest at the Default Rate, to the extent
not paid, shall be added to the Debt and shall be secured by the Pledge. This
paragraph, however, shall not be construed as an agreement or privilege to
extend the
3
<PAGE> 4
date of payment of the Debt, nor as a waiver of any other right or remedy
accruing to Payee by reason of the occurrence of any Event of Default.
6. This Note may be prepaid in accordance with Section 2.3 of
the Loan Agreement.
7. INTENTIONALLY DELETED.
8. It is expressly stipulated and agreed to be the intent of
Maker and Payee at all times to comply with applicable state law or applicable
United States federal law (to the extent that it permits Payee to contract for,
charge, take, reserve or receive a greater amount of interest than under state
law) and that this paragraph shall control every other covenant and agreement
in this Note, the Loan Agreement, the Pledge and the other Loan Documents. If
the applicable law (state or federal) is ever judicially interpreted so as to
render usurious any amount called for under this Note, the Loan Agreement, the
Pledge or any of the other Loan Documents or contracted for, charged, taken,
reserved or received with respect to the Debt, or if Payee's exercise of the
option to accelerate the Maturity Date or any prepayment by Maker results in
Maker having paid any interest in excess of that permitted by applicable law,
then it is Maker's and Payee's express intent that all excess amounts
theretofore collected by Payee shall be credited on the principal balance of
this Note and all other Debt and the provisions of this Note, the Loan
Agreement, the Pledge and the other Loan Documents immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Payee for the use, forbearance or detention of the Debt shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full stated term of the Debt until payment in full so
that the rate or amount of interest on account of the Debt does not exceed the
maximum lawful rate from time to time in effect and applicable to the Debt for
so long as the Debt is outstanding.
9. (a) The liability and obligation of Maker hereunder are
full recourse obligations of Maker. Anything contained herein, or in any other
Loan Document to the contrary notwithstanding, no recourse shall be had for the
obligations against any shareholder, partner, agent, director, officer, or
employee of Maker. It is understood that the preceding sentence shall not (A) in
the event of any malfeasance, such as fraud, misappropriation of funds or
intentional misrepresentation, estop the Payee from instituting or prosecuting a
legal action or proceeding or otherwise making a claim against the person or
persons committing such malfeasance, (B) constitute a waiver, release or
discharge of any Obligation, and the same shall continue until paid
4
<PAGE> 5
or discharged in full or, (C) affect the validity or enforceability of any
guaranty made in connection with the Loan or any of the rights and remedies of
Payee thereunder.
(b) Notwithstanding anything to the contrary contained in this
Note, the Loan Agreement, the Pledge or any of the other Loan Documents: (i)
Payee shall not be deemed to have waived any right which Payee may have under
Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy
Code to file a claim for the full amount of the Debt secured by the Pledge or to
require that all collateral shall continue to secure all of the Debt owing to
Payee in accordance with the Loan Documents.
10. This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Maker or Payee, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought. Whenever used, the singular number
shall include the plural, the plural the singular, and the words "payee" and
"maker" shall include their respective successors, assigns, heirs, executors and
administrators. If Maker consists of more than one person or party, the
obligations and liabilities of each such person or party shall be joint and
several.
11. Maker and all others who may become liable for the payment
of all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, protest, notice of protest, notice of
nonpayment, notice of intent to accelerate the maturity hereof and notice of
acceleration. No release of any security for the Debt or any person liable for
payment of the Debt, no extension of time for payment of this Note or any
installment hereof, and no alteration, amendment or waiver of any provision of
the Loan Documents made by agreement between Payee and any other person or party
shall release, modify, amend, waive, extend, change, discharge, terminate or
affect the liability of Maker and any other person or party who may become
liable under the Loan Documents for the payment of all or any part of the Debt.
12. The remedies of the holder hereof as provided in this Note
or in the Pledge, the Guaranty or the other Loan Documents shall be cumulative
and concurrent, and may be pursued singly, successively, or together at the sole
discretion of the holder hereof, and may be exercised as often as occasion
therefor shall occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release thereof. Nothing herein
contained shall be construed as limiting the holder of this Note to the remedies
mentioned above.
5
<PAGE> 6
13. Maker (and the undersigned representative of Maker, if any)
represents that Maker has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note, the Loan Agreement,
the Pledge and the other Loan Documents and that this Note, the Loan Agreement,
the Pledge and the other Loan Documents constitute valid and binding obligations
of Maker subject to applicable bankruptcy, insolvency, reorganization and
similar laws affecting rights of creditors generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law).
14. If any term or provision of this Note or the application thereof to
any person or circumstance shall to any extent be invalid, illegal or
unenforceable, the remainder of this Note or the application of such term or
provision to persons or circumstances other than those as to which it is
invalid, illegal or unenforceable shall not be affected thereby.
15. Payee is hereby authorized to endorse on a schedule attached to
this Note (or on a continuation of such schedule attached to this Note and made
a part thereof) an appropriate notation evidencing the date and amount of the
Additional Advance (as defined in the Loan Agreement). Such schedule shall,
absent manifest error, constitute prima facie evidence of the accuracy of the
information contained therein. The failure of the Payee to make a notation on
the schedule to this Note as aforesaid shall not affect the obligations of the
Maker hereunder or under this Note or any other Loan Document in any respect.
All of the advances of the principal amount of this Note shall collectively
constitute one general obligation of the Maker to the Payee.
16. All notices or other communications required or permitted to be
given pursuant hereto shall be given and shall be effective in the manner
specified in the Loan Agreement, directed to the parties at their respective
addresses as provided therein.
17. MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF AN ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY MAKER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
PAYEE IS HEREBY AUTHORIZED
6
<PAGE> 7
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER BY MAKER.
18. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
7
<PAGE> 8
Maker has duly executed this Promissory Note the day and year first
above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P., its general partner
By: HH GenPar Partners, its general partner
By: Hampstead Associates, Inc., a
managing general partner
By: /s/ KYM IRVIN
---------------------------------
Name: KYM IRVIN
Title: Authorized Representative
Pay to the order of ______________________________, without recourse.
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
8
<PAGE> 9
Maker has duly executed this Promissory Note the day and year first
above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P., its general partner
By: HH GenPar Partners, its general
partner
By: Hampstead Associates, Inc., a
managing general partner
By:
--------------------------------
Name:
Title:
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By: /s/ CHRISTOPHER M. TIERNEY
-------------------------------------------
Name: Christopher M. TIERNEY
Title: Vice President
Pay to the order of ______________________________, without recourse.
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
-------------------------------------------
Name:
Title:
8
<PAGE> 10
EXHIBIT A
DEFINITIONS
"DETERMINATION DATE" shall mean the date which is two
Eurodollar Business Days prior to the first day of a calendar month.
"EURODOLLAR BUSINESS DAY" shall mean a Business Day on which
banks in the City of London, England, are open for interbank or foreign exchange
transactions.
"LIBOR" shall mean the rate (expressed as a percentage per
annum) for deposits in U.S. dollars, for a one-month period, that appears on
Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London, England
time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London, England time, on the related
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen LIBOR Page as of 11:00 a.m.,
London, England time, on such Determination Date, if at least two such offered
rates so appear. If fewer than two such offered rams appear on the Reuters
Screen LIBOR Page as of 11:00 a.m., London, England time, on such Determination
Date, Payee shall request the principal London, England office of any four major
reference banks in the London interbank market selected by Payee to PROVIDE SUCH
bank's offered quotation (expressed as a percentage per annum) to prime banks in
the London interbank market for deposits in U.S. dollars for a one-month period
as of 11:00 a.m., London, England time, on such Determination Date, for amounts
of not less than U.S. $1,000,000. If at least two such offered quotations are so
provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than
two such offered quotations are so provided, Payee shall request any three major
banks in New York City selected by Payee to provide such bank's rate (expressed
as a percentage per annum) for loans in U.S. dollars to leading European banks
for a one-period as of approximately 11:00 a.m., New York City time, on the
applicable Determination Date for amounts of not less than U.S. $1,000,000. If
at least two such rates are so provided, LIBOR shall be the arithmatic mean of
such rates. If fewer than two such rates are so provided, then LIBOR shall be
LIBOR as in effect on the Eurodollar Business Day immediately preceding the
applicable Determination Date. LIBOR shall be determined in accordance with this
paragraph by Payee or its agent.
<PAGE> 11
SCHEDULE A
<TABLE>
Date of Additional Advance Amount of Additional Advance
- -------------------------- ----------------------------
<S> <C>
</TABLE>
<PAGE> 1
===============================================================================
EXHIBIT 99.3
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of May 8, 1998
Between
MEI HOLDINGS, L.P.
as Borrower
and
NOMURA ASSET CAPITAL CORPORATION,
as Lender
===============================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION................................................................ 1
Section 1.1 Definitions................................................................. 1
Section 1.2 Principles of Construction.................................................. 5
II. GENERAL TERMS.......................................................................................... 5
Section 2.1 Loan Commitment; Disbursement............................................... 5
2.1.1 Initial Loan; Phase II Loan................................................. 5
2.1.2 The Note.................................................................... 7
Section 2.2 Use of Proceeds............................................................. 7
Section 2.3 Loan Repayment.............................................................. 7
2.3.1. Repayment and Prepayment.................................................... 7
2.3.2 Recourse.................................................................... 7
Section 2.4 Interest and Principal...................................................... 8
2.4.1 Generally................................................................... 8
2.4.2 Default Rate................................................................ 8
Section 2.5 Payments and Computations................................................... 8
2.5.1 Making of Payments.......................................................... 8
2.5.2 Computations................................................................ 8
III. CONDITIONS PRECEDENT................................................................................... 9
Section 3.1 Conditions Precedent to Closing............................................. 9
IV. REPRESENTATIONS AND WARRANTIES......................................................................... 10
Section 4.1 Borrower Representations.................................................... 10
Section 4.2 Survival of Representations................................................. 12
V. AFFIRMATIVE COVENANTS.................................................................................. 12
Section 5.1 Borrower Covenants.......................................................... 12
VI. NEGATIVE COVENANTS..................................................................................... 15
Section 6.1 Borrower's Negative Covenants............................................... 15
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
VII. DEFAULTS.................................................................................................. 15
Section 7.1 Event of Default............................................................ 15
Section 7.2 Remedies.................................................................... 17
Section 7.3 Remedies Cumulative......................................................... 18
Section 7.4 Indemnification Against Tax................................................. 18
VIII. MISCELLANEOUS.......................................................................................... 18
Section 8.1 Survival.................................................................... 18
Section 8.2 Lender's Discretion......................................................... 19
Section 8.3 Governing Law............................................................... 19
Section 8.4 Modification; Waiver in Writing............................................. 20
Section 8.5 Delay Not a Waiver.......................................................... 20
Section 8.6 Notices..................................................................... 21
Section 8.7 Trial by Jury............................................................... 22
Section 8.8 Headings.................................................................... 22
Section 8.9 Severability................................................................ 22
Section 8.10 Preferences................................................................. 23
Section 8.11 Waiver of Notice............................................................ 23
Section 8.12 Remedies of Borrower........................................................ 23
Section 8.13 Expenses.................................................................... 23
Section 8.14 Exhibits and Schedules Incorporated......................................... 24
Section 8.15 Offsets, Counterclaims and Defenses......................................... 24
Section 8.16 No Joint Venture or Partnership; No Third
Party Beneficiaries......................................................... 25
Section 8.17 Publicity................................................................... 25
Section 8.18 Waiver of Counterclaim...................................................... 25
Section 8.19 Conflict; Construction of Documents; Reliance............................... 25
Section 8.20 Brokers and Financial Advisors.............................................. 26
Section 8.21 Prior Agreements............................................................ 26
</TABLE>
Exhibit A - Form of Pledge and Security Agreement
Schedule 2.2 -- Indebtedness of Malibu To Be Repaid.
ii
<PAGE> 4
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of May 8,
1998 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, this "AGREEMENT" or "LOAN AGREEMENT"), is between NOMURA ASSET
CAPITAL CORPORATION, a Delaware corporation, having an address at Two World
Financial Center, Building B, New York, New York 10281 ("LENDER"), and MEI
HOLDINGS, L.P., a Delaware limited partnership whose address is c/o The
Hampstead Group, Texas Commerce Tower, 2200 Ross Ave., Suite 4200-W, Dallas,
Texas 75201 ("BORROWER").
Certain capitalized terms used herein shall have the
respective meanings set forth in Article I hereof.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan Agreement dated June 5,
1997 between Borrower and Lender as amended by that certain Letter Agreement
dated June 27, 1997 and that certain Letter Agreement dated March 30, 1998 (the
"ORIGINAL LOAN AGREEMENT"), Lender made a $10,000,000.00 loan to Borrower (the
"ORIGINAL LOAN");
WHEREAS, Borrower has requested Lender to, amongst other
things, increase the amount of the Original Loan to $20,000,000; and
WHEREAS, as a condition to Lender extending such additional
credit to Borrower, Lender has required that Borrower amend and restate the
Original Loan Agreement pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement, the parties hereto
hereby covenant, agree, represent and warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
<PAGE> 5
"ADDITIONAL ADVANCE" shall mean each Advance of the Loan
(other than the Original Advance and the Initial Advance) made on an Additional
Advance Closing Date, in aggregate amount not to exceed $5,000,000.00 and such
Additional Advance shall not be less than $2,500,000.00.
"ADDITIONAL ADVANCE CLOSING DATE" shall mean the Business Day
which is twenty (20) days after the date Lender receives an Advance Request.
"ADVANCE" shall mean each of the Initial Advance and each
Additional Advance.
"ADVANCE REQUEST" shall have the meaning set forth in Section
3.2(a).
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or of
an Affiliate of such Person.
"APPLICABLE INTEREST RATE" shall mean a rate per annum equal
to LIBOR plus 350 basis points. The Applicable Interest Rate for each one-month
interest period shall be determined monthly on the Determination Date
immediately preceding such interest period.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code, as amended.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banks in New York, New York are not
open for business.
"CLOSING DATE" shall mean the date hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"DEBT" shall mean the outstanding principal amount set forth
in, and evidenced by, the Note together with all interest accrued and unpaid
thereon and all other sums due to Lender in respect of the Loan under the Note,
this Agreement, or any other Loan Document.
"DEFAULT" shall mean the occurrence of any event which, but
for the giving of notice or the passage of time, or both, would be an Event of
Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum (adjusted monthly on each Determination Date) equal to the Applicable
Interest Rate plus 500 basis points; provided, however, in no event shall such
rate exceed the maximum rate permitted by applicable law.
2
<PAGE> 6
"DETERMINATION DATE" shall mean the date which is two
Eurodollar Business Days prior to the first day of a calendar month.
"DISCLOSURE DOCUMENT" shall mean any filing regarding Malibu
made by Borrower under the Exchange Act.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EURODOLLAR BUSINESS DAY" shall mean a Business Day on which
banks in the City of London, England, are open for interbank or foreign exchange
transactions.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
7.1(a).
"EXCHANGE ACT" shall mean the Securities and Exchange Act of
1934, as amended.
"FINANCING PERIOD" shall have the meaning set forth in Section
2.1.1(a).
"FISCAL YEAR" shall mean each twelve month period commencing
on January 1 and ending on December 31 during the term of the Loan.
"GAAP" shall mean generally accepted accounting principles in
the United States of America.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or authority of any nature whatsoever for any governmental
unit (federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
"INITIAL ADVANCE" shall have the meaning set forth in Section
2.1.1(a).
"LIBOR" shall mean the rate (expressed as a percentage per
annum) for deposits in U.S. dollars, for a one-month period, that appears on
Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London, England
time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London, England time, on the related
Determination Date, LIBOR shall be the arithmetic mean of the offered rates
(expressed as a percentage per annum) for deposits in U.S. dollars for a
one-month period that appear on the Reuters Screen LIBOR Page as of 11:00 a.m.,
London, England time, on such Determination Date, if at least two such offered
rates so appear. If fewer than two such offered rates appear on the Reuters
Screen LIBOR Page as of 11:00 a.m., London, England time, on such Determination
Date, Lender shall request the principal London, England office of any four
major reference banks in the London interbank market selected by Lender to
provide such bank's offered
3
<PAGE> 7
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one-month period as of 11:00
a.m., London, England time, on such Determination Date for the amounts of not
less than U.S. $1,000,000. If at least two such offered quotations are so
provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than
two such offered quotations are so provided, Lender shall request any three
major banks in New York City selected by Lender to provide such bank's rate
(expressed as a percentage per annum) for loans in U.S. dollars to leading
European banks for a one-month period as of approximately 11:00 a.m., New York
City time, on the applicable Determination Date for amounts of not less than
U.S. $1,000,000. If at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates. If fewer than two such rates are so provided,
then LIBOR shall be LIBOR as in effect on the Eurodollar Business Day
immediately preceding the applicable Determination Date. LIBOR shall be
determined in accordance with this paragraph by Lender or its agent.
"LIEN" shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower or any of its properties or assets,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic's,
materialmen's and other similar liens and encumbrances.
"LOAN" shall mean the Loan made by Lender to Borrower, as set
forth in, and evidenced by, the Note and secured by the other Loan Documents.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the Security Agreement, and any other document executed and/or delivered
by Borrower in connection with the Loan or the Original Loan.
"MALIBU" shall mean Malibu Entertainment Worldwide, Inc., a
Georgia corporation.
"MATERIAL ADVERSE CHANGE" shall mean a material adverse change
in any of the following (i) the condition (financial or otherwise), business,
performance, operations or the following properties of (a) Borrower or MCI or
(b) Borrower and MCI taken as one enterprise, (ii) the legality or validity of
any Loan Documents, MCI Loan Documents, the MEI Guaranty or the MCI Guaranty,
(iii) Borrower's ability to pay the Debt in accordance with the terms hereof and
otherwise substantially comply with the material terms of this Agreement, (iv)
the Pledged Shares, (v) Lender's Lien on the Pledged Shares or the priority of
such Lien, (vi) MCI's ability to pay the MCI Debt in accordance with the terms
of the MCI Loan Agreement and otherwise substantially comply with the material
terms of the MCI Loan Agreement, (vii) the physical condition or value of the
MCI Properties or (viii) Lender's Lien on the MCI Properties or the priority of
such Lien.
4
<PAGE> 8
"MATURITY DATE" shall mean the date on which the final payment
of principal of the Note becomes due and payable as therein provided, whether at
the Stated Maturity, by declaration of acceleration, or otherwise.
"MAXIMUM LOAN AMOUNT" shall have the meaning set forth in
Section 2.1.1(a).
"MCI" shall mean Malibu Centers, Inc., a Delaware corporation.
"MCI AMENDMENT DOCUMENTS" shall mean those certain documents
executed by MCI, each in a form, substance and scope satisfactory to Lender,
which amend the MCI Loan Documents to reflect the Loan and the terms of this
Agreement and the other Loan Documents.
"MCI DEBT" shall have the meaning ascribed to Debt in the MCI
Loan Agreement.
"MCI GUARANTY" shall mean that certain guaranty executed by
MCI guarantying the Loan and all of Borrower's Obligations under the Loan
Documents, as such guaranty has been reaffirmed by the MCI Reaffirmation.
"MCI LOAN" shall mean that certain loan made by Lender to
Borrower pursuant to the MCI Loan Agreement.
"MCI LOAN AGREEMENT" shall mean that certain Loan Agreement
dated June 27, 1997 between Lender and MCI, as amended by that certain Letter
Agreement dated as of March 30, 1998.
"MCI LOAN DOCUMENTS" shall have the meaning ascribed to Loan
Documents in the MCI Loan Agreement.
"MCI MORTGAGES" shall have the meaning ascribed to Mortgages
in the MCI Loan Agreement.
"MCI PROPERTIES" shall have the meaning ascribed to Properties
in the MCI Loan Agreement.
"MCI REAFFIRMATION" shall mean that certain Reaffirmation and
Ratification of Guaranty, dated the date hereof and executed by MCI.
"MCI TITLE INSURANCE POLICIES" shall have the meaning ascribed
to Title Insurance Policies in the MCI Loan Agreement.
5
<PAGE> 9
"MEI GUARANTY" shall mean that certain guaranty executed by
Borrower guarantying the MCI Loan and all of MCI's Obligations under the MCI
Loan Documents.
"NOTE" shall mean that certain Amended and Restated Promissory
Note dated as of the date hereof, made by Borrower in favor of Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
"OBLIGATIONS" shall mean any and all debt, liabilities and
obligations of Borrower to Lender in connection with the (x) Loan, including,
without limiting the generality of the foregoing, the Debt and (y) MCI Loan,
including, without limitation pursuant to the MCI Guaranty.
"OFFICERS' CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by any authorized senior officer of the
Borrower or Borrower's controlling general partner.
"ORIGINAL ADVANCE" shall have the meaning set forth in Section
2.1.1(b) hereof.
"ORIGINAL CLOSING DATE" shall mean June 5, 1997.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.
"PLEDGED SHARES" shall mean the shares of common stock of
Malibu pledged from time to time under the Security Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITY AGREEMENT" shall mean that certain Amended and
Restated Pledge and Security Agreement made by Borrower in favor of Lender,
dated June 27, 1997, as amended by the Security Agreement Amendment as the same
shall be amended, modified and supplemented and in effect from time to time.
"SECURITY AGREEMENT AMENDMENT" shall mean that certain
Amendment to Amended and Restated Pledge and Security Agreement dated the date
hereof between Borrower and Lender.
"STATED MATURITY" shall mean September 30, 1998.
"TERMINATION DATE" shall mean September 10, 1998.
6
<PAGE> 10
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. Unless otherwise specified, 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. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.
II. GENERAL TERMS
SECTION 2.1 LOAN COMMITMENT; DISBURSEMENT.
2.1.1 INITIAL LOAN; PHASE II LOAN.
(a) THE LOAN. From and including the Closing Date to but not
including the Termination Date (the "FINANCING PERIOD"), subject to and upon the
terms and conditions set forth herein, Lender hereby agrees to lend to Borrower
the original principal amount of up to $20,000,000 (the "MAXIMUM LOAN AMOUNT").
(b) Borrower hereby acknowledges that $10,000,000 of the
Maximum Loan Amount was advanced to Borrower on the Original Closing Date (the
"ORIGINAL ADVANCE"). Borrower hereby agrees to accept the next Advance of the
Loan, in the amount of $5,000,000 (the "INITIAL ADVANCE") on the Closing Date.
Upon the terms and subject to the conditions of this Agreement, not later than
1:00 p.m. (New York City time) on the Closing Date, Lender shall make available
to Borrower the Initial Advance of the Loan, in immediately available funds, at
an account of Borrower in the United States designated in writing by Borrower to
Lender on or prior to the Closing Date.
(c) Lender shall make each Additional Advance to Borrower upon
satisfaction of: (i) the conditions contained in Section 3.2 hereof including
but not limited to Lender's receipt of the items specified in Section 3.2(d), in
each case from time to time within the twenty (20) days preceding the Additional
Advance Closing Date in sufficient time for Lender and its counsel to review the
same prior to the Additional Advance Closing Date, but in no event less than
three (3) Business Days prior to each Additional Advance Closing Date.
(d) The Loan shall mature on the Maturity Date.
2.1.2 DISBURSEMENT TO BORROWER. Borrower may request and
receive only four (4) borrowings hereunder in respect of the Loan (which include
the Original Advance, the Initial Advance and each Additional Advance). Any
amount borrowed and repaid hereunder in
7
<PAGE> 11
respect of the Loan may not be reborrowed. Borrower (x) confirms receipt of the
Original Advance on the Original Closing Date, (y) shall, on the Closing Date,
receive the Initial Advance and (z) shall, on each Additional Advance Closing
Date, receive each Additional Advance. Borrower shall not be entitled to any
borrowing other than as set forth in the previous clauses (x)-(z).
2.1.3 THE NOTE. The Loan shall be evidenced by the Note of
Borrower. The Loan shall bear interest as provided in the Note and in Section
2.4 hereof and shall be subject to repayment as provided in the Note and in
Section 2.3 hereof. The holder of the Note shall be entitled to the benefits of
this Agreement.
SECTION 2.2 USE OF PROCEEDS.
Borrower shall use the proceeds of the Loan solely to fund a
loan to Malibu (the proceeds of which shall be used by Malibu solely to fund its
working capital requirements) and to repay the indebtedness described on
Schedule 2.2 (or of the same type described on Schedule 2.2) not to exceed in
the aggregate $20,000,000, which indebtedness Borrower represents and warrants
was used by Malibu solely to fund its working capital requirements.
SECTION 2.3 LOAN REPAYMENT.
2.3.1 REPAYMENT AND PREPAYMENT. Borrower shall repay any
outstanding principal indebtedness of the Loan in full on the Maturity Date of
the Loan, together with interest thereon to (but excluding) the date of
repayment. Borrower may, at its option and upon three (3) Business Days' prior
written notice from Borrower to Lender, prepay in whole or in part the Debt
without payment of any other premium or penalty; provided, however, that in the
event that Borrower makes any prepayment of the Debt on a day other than the
last day of an interest period, Borrower shall reimburse Lender for any costs,
fees or expenses incurred by Lender in connection with such prepayment
including, without limitation, costs, fees and expenses associated with the
unwinding of any LIBOR contract. No amount so paid or prepaid may be reborrowed.
2.3.2 RECOURSE. The Obligations are full recourse obligations
of the Borrower. Anything contained herein, or in any other Loan Document to the
contrary notwithstanding, no recourse shall be had for the Obligations against
any partner, shareholder, agent, director, officer, or employee of the Borrower.
It is understood that the preceding sentence shall not (A) in the event of any
malfeasance, such as fraud, misappropriation of funds or intentional
misrepresentation, estop the Lender from instituting or prosecuting a legal
action or proceeding or otherwise making a claim against the person or persons
committing such malfeasance, and (B) constitute a waiver, release or discharge
of any Obligation, and the same shall continue until paid or discharged in full.
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SECTION 2.4 INTEREST AND PRINCIPAL.
2.4.1 GENERALLY. Borrower shall pay interest, in arrears, on
June 1, 1998 and, thereafter, for each one month interest period (or portion
thereof) from and including the first Business Day of each calendar month to but
excluding the first Business Day of the immediately succeeding calendar month,
on the unpaid principal balance from time to time outstanding at the Applicable
Interest Rate for such interest period, on the first day of each calendar month
during the term hereof (or if such day is not a Business Day, the next day which
is a Business Day). The balance of the principal sum together with all accrued
and unpaid interest thereon shall be paid on the Maturity Date, all in
accordance with the terms and provisions set forth in the Note.
2.4.2 DEFAULT RATE. Borrower agrees that upon the occurrence
of an Event of Default, Lender shall be entitled to receive and Borrower shall
pay to Lender interest on the entire unpaid principal sum of the Loan and any
other amounts (including interest to the extent permitted by applicable law) due
at the Default Rate. Interest at the Default Rate, to the extent not paid, shall
be added to the Debt. This Section, however, shall not be construed as an
agreement or privilege to extend the date of payment of the Debt, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default. Lender retains its rights under the Loan
Documents to accelerate and to continue to demand payment of the Debt upon the
happening of any Event of Default.
SECTION 2.5 PAYMENTS AND COMPUTATIONS.
2.5.1 MAKING OF PAYMENTS. Each payment by Borrower hereunder
or under the Note shall be made in funds settled through the New York Clearing
House Interbank Payments System or other funds immediately available to Lender
by 11:00 a.m., New York City time, on the date such payment is due, to Lender by
deposit to a bank account specified by Lender from time to time in writing.
Whenever any payment hereunder or under the Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the first
Business Day thereafter.
2.5.2 COMPUTATIONS. Interest payable hereunder or under the
Note shall be computed on the basis of the actual number of days elapsed and a
360-day year.
2.5.3 LATE PAYMENT CHARGE. If any principal, interest or any
other sums due under the Loan Documents is not paid by Borrower on the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of three percent (3%) of such unpaid sum or the maximum amount permitted
by applicable law in order to defray the expense incurred by Lender in handling
and processing such delinquent payment and to compensate Lender for the loss of
the use of such delinquent payment. Any such amount shall be in addition be in
addition to any other amounts required under the Loan Documents and shall be
secured by the Pledge and the other Loan Documents.
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III. CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE.
The obligation of Lender to make the Initial Advance hereunder
is subject to the fulfillment by Borrower or waiver by Lender of the following
conditions precedent no later than the Closing Date:
(a) Representations and Warranties; Compliance with
Conditions.
(i) The representations and warranties of Borrower
contained in this Agreement and the other Loan Documents shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on and as of such date, and no Default or Event of Default
shall have occurred and be continuing; and Borrower shall be in compliance in
all material respects with all terms and conditions set forth in this Agreement
and in each other Loan Document on its part to be observed or performed and no
Material Adverse Change shall have occurred.
(ii) The representations and warranties of MCI contained
in the MCI Loan Agreement and the other MCI Loan Documents shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on and as of such date, and no Default or Event of Default
shall have occurred and be continuing under the MCI Loan Agreement; and MCI
shall be in compliance in all material respects with all terms and conditions
set forth in the MCI Loan Agreement and in each other MCI Loan Document on its
part to be observed or performed.
(b) Loan Agreement and Note. Lender shall have received a copy
of this Agreement and the Note, in each case, duly executed and delivered on
behalf of Borrower.
(c) Security Agreement. Lender shall have received a copy of
the Security Agreement Amendment duly executed and delivered on behalf of
Borrower.
(d) MCI Agreement. Lender shall have received a copy of each
MCI Amendment Document and the MCI Reaffirmation each duly executed and
delivered on behalf of Borrower.
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(e) Related Documents. Each additional document not
specifically referenced herein, but requested by Lender and relating to the
transactions contemplated herein, shall have been duly authorized, executed and
delivered by all parties thereto and Lender shall have received and approved
originals thereof.
(f) Delivery of Organizational Documents. On or before the
Closing Date, Borrower shall have delivered or caused to be delivered to Lender
certified copies of all organizational documentation related to Borrower and MCI
as Lender may request in its sole discretion, including, without limitation,
such good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates as may be requested by Lender.
(g) Opinions of Borrower's Counsel. Lender shall have received
opinions of Jones, Day, Reavis & Pogue, Borrower's counsel, with respect to due
execution, authority, enforceability of the Loan Documents, the MCI Amendment
Documents (except with respect to the enforceability of any MCI Amendment
Document not governed by New York law), the MCI Guaranty and such other matters
as Lender may require, all such opinions to be in form, scope and substance
satisfactory to Lender and Lender's counsel in their sole discretion.
(h) Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and the other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.
(i) Financial Statements. Lender shall have received a
certified copy of the Borrower's certified financial statements for the 12 month
period ended December 31, 1997.
(j) Structure Fee. Lender shall have received an amount equal
to six and one half percent of (6.5%) of the Initial Advance.
(k) MCI Properties. Lender shall have received such
endorsements to the MCI Title Insurance Policies, in form and substance
satisfactory to Lender in its sole discretion, as Lender shall require including
"bring down endorsements" to insure that, after giving effect to the Initial
Advance, the Lien created by the MCI Mortgages and insured by the MCI Title
Insurance Policies is in full force and effect and unmodified; Borrower shall
provide Lender with such evidence as is available as Lender may require in order
to satisfy Lender that the Initial Advance shall have the same priority over
liens or encumbrances against the MCI Properties as the Original Advance
(including without limitation a new title policy if a "bring down endorsement"
acceptable to Lender is not available). Lender shall have also received evidence
of payment of all mortgage, mortgage recording, stamp, intangible and other
similar taxes, recording charges and filing fees, if any, incurred in connection
with the Initial Advance.
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SECTION 3.2 CONDITIONS PRECEDENT TO EACH ADDITIONAL ADVANCE.
The obligation of Lender to make each Additional Advance is subject to
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the date required therefore as hereinafter provided:
(a) Advance Request. Borrower shall have delivered to Lender a
written request for the Additional Advance (such request, the "ADVANCE
REQUEST"). The Advance Request shall indicate the proposed amount of the
Additional Advance (in no event shall such amount be greater than $5,000,000 and
in no event shall the amount of any Additional Advance be less than $2,500,000)
requested by Borrower and the date on which Borrower requests Lender to make the
Additional Advance (in no event shall such date be sooner than twenty (20) days
following Lenders receipt of the Advance Request).
(b) Certificates and Legal Matters. Such certificates and
documentation relating to the Additional Advance (including, without limitation,
all corporate and other proceedings) as Lender shall reasonably require, all
documents and all legal matters in connection with the Additional Advance shall
be reasonably satisfactory in form and substance to Lender.
(c) Representations and Warranties; Compliance with
Conditions. The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Additional Advance Closing Date after giving effect to
the making of the Additional Advance with the same effect as if made on and as
of such date and no Material Adverse Change shall have occurred.
(d) Document Deliveries. On or prior to the Additional Advance
Closing Date, all of the conditions set forth in Section 3.1 with respect to the
Initial Advance shall have been fulfilled and the Borrower shall, at its sole
cost and expense, deliver to Lender the following, in form and content
acceptable to Lender, with respect to the Additional Advance:
(i) Advance Certificate. A certificate executed and
delivered by an authorized officer, director, general partner or
managing member of the Borrower, as applicable certifying, as of the
Additional Advance Closing Date, (x) as to the matters set forth in
this Section 3.2, and (y) as to the principal amount outstanding under
the Notes, after taking into account the Additional Advance;
(ii) MCI Properties. Lender shall have received such
endorsements to the MCI Title Insurance Policies, in form and substance
satisfactory to Lender in its sole discretion, as Lender shall require
including "bring down endorsements" to insure that
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that, after giving effect to the Additional Advance, the Lien created
by the MCI Mortgages and insured by the MCI Title Insurance Policies is
in full force and effect and unmodified; Borrower shall provide Lender
with such evidence as is available as Lender may require in order to
satisfy Lender that the Additional Advance shall have the same priority
over liens or encumbrances against the MCI Properties as the Initial
Advance (including without limitation a new title policy if a "bring
down endorsement" acceptable to Lender is not available). Lender shall
have also received evidence of payment of all mortgage, mortgage
recording, stamp, intangible and other similar taxes, recording charges
and filing fees, if any, incurred in connection with the Additional
Advance;
(iii) Expenses. Payment of all reasonable out of pocket
expenses of the transactions to be consummated on the Additional
Advance Closing Date, including without limitation, all reasonable
attorneys' fees, appraisal fees, accounting fees, consultant fees, and
other expenses of Lender;
(iv) Updates to Legal Opinions. To the extent Lender
determines in its reasonable discretion that any legal opinion
delivered pursuant to Section 3.1(g) does not adequately address the
Additional Advance (including without limitation that the Additional
Advance shall have the same priority as the Initial Advance and shall
have no negative effect on the priority of the Liens created by any
Loan Document), Lender shall have received updates to each such legal
opinion. Such updates shall be in form, scope and substance
satisfactory to Lender and Lender's counsel in their reasonable
discretion and shall, among other things, provide that the Additional
Advance shall have no effect on the priority of the Liens created by
the Loan Documents and the MCI Loan Documents;
(v) Amendments to Loan Documents. Borrower (or MCI, as
applicable) shall execute such amendments to the Loan Documents and the
MCI Loan Documents (including but not limited to the MCI Guaranty), as
reasonably requested by Lender, to ensure that the Loan Documents (and
the MCI Loan Documents) secure the Loan after giving effect to the
Additional Advance and such amendments shall be in form and substance
satisfactory to Lender.
(e) No Injunction. On the Additional Advance Closing Date, no
law or regulation shall have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued and no litigation shall be pending
or threatened, which in the good faith judgment of Lender would enjoin, prohibit
or restrain, or impose or result in the imposition of any material adverse
condition upon, the making or repayment of the Additional Advance or the Loan or
the consummation of the transactions contemplated by this Agreement or the other
Loan Documents.
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(f) Acceptance of Borrowings. The acceptance by Borrower of
the proceeds of the Additional Advance shall constitute a representation and
warranty by the Borrower to Lender that all of the conditions to be satisfied
under Section 3.2 in connection with the making of the Additional Advance and
Section 3.1 in connection with the Initial Advance have been satisfied or waived
by Lender.
(g) Form of Documents and Related Matters. The certificates,
agreements, and other documents and papers referred to in this Section 3.2 shall
be delivered to Lender, and shall be reasonably satisfactory in form and
substance to Lender.
(h) Structuring Fee. Lender shall have received an amount
equal to six and one half percent (6.5%) of the Additional Advance.
IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.1 BORROWER REPRESENTATIONS.
Borrower represents and warrants as of the date hereof and as
of the Closing Date that:
(a) Organization. Borrower has been duly organized and is
validly existing and in good standing under the laws of the State of Delaware,
with requisite power and authority to own its properties and to transact the
businesses in which it is now engaged. Borrower is duly qualified to do business
and is in good standing in each jurisdiction, where it is required to be so
qualified in connection with its properties, businesses and operations. Borrower
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the
businesses in which it is now engaged.
(b) Proceedings. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws affecting rights of creditors
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(c) No Conflicts. The execution, delivery and performance of
this Agreement and the other Loan Documents by Borrower will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the
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property or assets of Borrower pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement, partnership agreement, operating
agreement or other agreement or instrument to which Borrower (or Malibu) is a
party or by which any of Borrower's or Malibu's property or assets is subject,
nor will such action result in any violation of the provisions of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over Borrower or any of Borrower's properties or assets, and any
consent, approval, authorization, order, registration or qualification of or
with any court or any such regulatory authority or other governmental agency or
body required for the execution, delivery and performance by Borrower of this
Agreement or any other Loan Documents has been obtained and is in full force and
effect.
(d) Litigation. There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority or other agency now
pending or threatened against or affecting Borrower, which actions, suits or
proceedings, if determined against Borrower, might materially adversely affect
the condition (financial or otherwise) or business of Borrower.
(e) Agreements. Neither Borrower nor any Affiliate of Borrower
is a party to any agreement or instrument or subject to any restriction which
might materially and adversely affect Borrower, or Borrower's business,
properties or assets, operations or condition (financial or otherwise). Borrower
is not in default in any material respect in the performance, observance or
fulfillment of any obligations, covenants or conditions contained in any
agreement or instrument, material to Borrower, to which Borrower is a party or
by which Borrower is bound.
(f) Full and Accurate Disclosure. No statement of fact made by
Borrower (x) in this Agreement or in any of the other Loan Documents, (y) in any
Disclosure Document, or (z) in any written materials relating to the business,
operations or condition (financial or otherwise) of Borrower (or Malibu) that
were supplied to Lender in connection with Lender's due diligence investigation
(other than financial projections in respect of which no representation is made)
contains (or, in the case of such written material, at the time supplied
contained) any untrue statement of a material fact or omits (or omitted, as the
case may be) to state any material fact necessary to make the statements
contained herein or therein not misleading.
(g) No Plan Assets. Borrower is not an "employee benefit plan"
(as defined in Section 3(3) of ERISA), subject to Title I of ERISA, and none of
the assets of Borrower constitutes or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition,
(i) Borrower is not a "governmental plan" within the meaning of Section 3(32) of
ERISA and (ii) transactions by or with Borrower are not subject to state
statutes regulating investments of, and fiduciary obligations with respect to,
governmental plans.
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(h) Financial Information.
(i) All financial data, including, without limitation, the
statements of cash flow and income and operating expense, that have
been delivered to Lender in respect of the Borrower, (A) are true,
complete and correct in all material respects, (B) accurately present
the financial condition of the Borrower as of the date of such reports,
and (C) have been prepared in accordance with GAAP consistently applied
throughout the periods covered, except as disclosed therein. Borrower
does not have any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to
Borrower and reasonably likely to have a materially adverse effect on
the Borrower. Since the date of such financial statements, there has
been no materially adverse change in the financial condition,
operations or business of Borrower from that set forth in said
financial statements.
(ii) All federal and state income tax returns have been
filed by Borrower and there are no income taxes due and owing by
Borrower.
(i) Federal Reserve Regulations. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, or for
any purposes prohibited by applicable laws or by the terms and conditions of
this Agreement or the other Loan Documents.
(j) Enforceability. The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Borrower, including the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable except to the extent such unenforceability may be the result of
bankruptcy, insolvency, reorganization or similar laws affecting rights of
creditors generally or general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), and Borrower has not
asserted any right of rescission, set-off, counterclaim or defense with respect
thereto.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS.
Borrower agrees that all of the representations and warranties
of Borrower set forth in Section 4.1 and elsewhere in this Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
Lender under this Agreement or any of the other Loan Documents by Borrower. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf.
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V. AFFIRMATIVE COVENANTS
SECTION 5.1 BORROWER COVENANTS.
From the date hereof and until payment and performance in full
of all obligations of Borrower under the Loan Documents, Borrower hereby
covenants and agrees with Lender that:
(a) Existence; Compliance with Law. Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its existence and its material, rights, licenses, permits and franchises
and comply with all laws applicable to it. Borrower shall at all times maintain,
preserve and protect all franchises and trade names and preserve all the
remainder of its property used or useful in, and material to, the conduct of its
business, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto.
(b) Litigation. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened
against Borrower which might materially adversely affect Borrower's condition
(financial or otherwise) or business.
(c) Notice of Default. Borrower shall promptly advise Lender
of any material adverse change in Borrower's condition, financial or otherwise,
or of the occurrence of any Default or Event of Default of which Borrower has
knowledge.
(d) Cooperate in Legal Proceedings. Borrower shall cooperate
fully with Lender with respect to any proceedings before any court, board or
other Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election, to participate in
any such proceedings.
(e) Further Assurances. Borrower shall, at Borrower's sole
cost and expense:
(i) furnish to Lender each and every document,
certificate, agreement and instrument required to be furnished by
Borrower pursuant to the terms of the Loan Documents or reasonably
requested by Lender in connection therewith;
(ii) execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings, and do such
other acts necessary or
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desirable, to evidence, preserve and/or protect the collateral at any
time securing or intended to secure the obligations of Borrower under
the Loan Documents, as Lender may reasonably require; and
(iii) do and execute all and such further lawful and
reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement
and the other Loan Documents, as Lender shall reasonably require from
time to time.
(f) Financial Reporting.
(i) Borrower will furnish to Lender annually, within 90
days following the end of each Fiscal Year, financial statements of
Borrower for each such fiscal year, certified, by the chief financial
officer of the Borrower, to have been prepared in accordance with GAAP,
together with a certificate of such officer, addressed to Lender,
stating that, to such officer's knowledge, no Event of Default is in
existence. Such certified financial statements shall include a balance
sheet, profit and loss statement, and statement of cash flow.
(ii) Together with the foregoing, Borrower also shall
deliver to Lender Malibu's Form 10-Q Quarterly Reports, Form 10-K
Annual Reports, and Form 8-K Current Reports as filed under the
Exchange Act, and any other filings made by Borrower or Malibu with the
U.S. Securities and Exchange Commission, as soon as the same are filed,
and all other information, including financial reports, that is
provided by Borrower to its partners or by Malibu to its shareholders,
and any other report reasonably requested by Lender relating to the
financial condition of Borrower or Malibu.
(g) Estoppel Statements.
Within ten (10) days after request by Lender, Borrower
shall furnish Lender with an Officer's Certificate, setting forth (A) the amount
of the original principal amount of the Note, (B) the unpaid principal amount of
the Note, (C) the Applicable Interest Rate of the Note, (D) the date
installments of interest and principal were last paid, (E) any offsets or
defenses to the payment of the Debt, if any, and (F) that the Note, this
Agreement and the other Loan Documents are valid, legal and binding obligations
of Borrower and have not been modified or, if modified, giving particulars of
such modification.
(h) Loan Proceeds. Borrower shall use the proceeds of the Loan
only for the purposes set forth in Section 2.2 hereof.
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(i) Principal Place of Business. Borrower shall not change its
principal place of business set forth on the first page of this Agreement
without first giving Lender thirty (30) days prior written notice.
VI. NEGATIVE COVENANTS
SECTION 6.1 BORROWER'S NEGATIVE COVENANTS.
From the date hereof until payment and performance in full of
all obligations of Borrower under the Loan Documents, Borrower covenants and
agrees with Lender that it will not do, directly or indirectly, any of the
following:
(a) Dissolution. Borrower shall not dissolve, terminate,
liquidate, merge with, consolidate into another Person.
(b) Affiliate Transactions. Borrower shall not enter into, or
be a party to, any transaction with any non-subsidiary Affiliate of Borrower
except in the ordinary course of business and on terms which are fully disclosed
to and approved by Lender in advance and are no less favorable to Borrower or
such any non-subsidiary Affiliate than would be obtained in a comparable
arm's-length transaction with an unrelated third party.
(c) Operation of Borrower. Borrower shall not make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than its present
business. Borrower shall not create, incur or assume any debt other than the
Debt. Borrower shall not cancel or otherwise forgive or release any claim or
debt owed to Borrower by any Person, except for adequate consideration and in
the ordinary course of Borrower's business.
VII. DEFAULTS
SECTION 7.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of
default hereunder (an "EVENT OF DEFAULT"):
(i) any portion of the Debt is not paid when due;
(ii) any representation or warranty made by Borrower
herein or in any other Loan Document, or in any report, certificate,
financial statement or other instrument, agreement or document
furnished by or on behalf of Borrower to Lender, shall have been false
or misleading in any material respect as of the date the
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representation or warranty was made; provided, however, if such false or
misleading representation or warranty is susceptible of being cured within
thirty (30) days, the same shall be an Event of Default hereunder only if the
same is not cured within a reasonable time not to exceed thirty (30) days after
notice from Lender;
(iii) Borrower shall make an assignment for the benefit of
creditors;
(iv) a receiver, liquidator or trustee shall be appointed
for Borrower, or Borrower shall be adjudicated a bankrupt or insolvent,
or any petition for bankruptcy, reorganization or arrangement pursuant
to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to or acquiesced in by Borrower, or
any proceeding for the dissolution or liquidation of Borrower shall be
instituted; provided, however, that if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by
Borrower, then the same shall be an Event of Default hereunder only if
the same is not discharged, stayed or dismissed within sixty (60) days
after the date of such appointment or adjudication, the date such
petition is first filed or the date such proceeding is instituted, as
the case may be;
(v) Borrower attempts to assign its rights under this
Agreement or any of the other Loan Documents or any interest herein or
therein in contravention of the Loan Documents;
(vi) Borrower breaches any of its negative covenants
contained in Section 6.1 hereof;
(vii) Borrower shall continue to be in Default under any
of the other terms, covenants or conditions of this Agreement not
specified in Section 7.1(a) (i) to (x), for ten (10) days after notice
to Borrower from Lender, in the case of any Default which can be cured
by the payment of a sum of money, or for thirty (30) days after notice
to Borrower from Lender in the case of any other Default; provided,
however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided
further that Borrower shall have commenced to cure such Default within
such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, such 30-day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence
to cure such Default, such additional period not to exceed sixty (60)
days; or
(viii) there shall be default under any of the other Loan
Documents beyond any applicable cure periods contained in such
documents, or any other such event shall occur or condition shall
exist, if the effect of such event or condition is to accelerate the
maturity of any portion of the Debt or to permit Lender to accelerate
the maturity of all or any portion of the Debt.
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(ix) Borrower shall be in default with respect to
indebtedness in excess of $500,000 or any event specified in any note,
agreement, indenture or other document evidencing or relating to any
such indebtedness of such person, if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both)
to permit the holder or holders of such indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause such indebtedness
to become due, or to be prepaid in full (whether by redemption,
purchase or other otherwise), prior to its stated maturity.
(x) An Event of Default (as defined in the MCI Loan
Agreement) shall occur.
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (iii), (iv) or (v) above) and at any time
thereafter, Lender may, in addition to any other rights or remedies available to
it pursuant to this Agreement and the other Loan Documents or at law or in
equity, take such action, without notice or demand, that Lender deems advisable
to protect and enforce its rights against Borrower, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower, including, without limitation, all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (iii), (iv) or (v) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
SECTION 7.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
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<PAGE> 25
(b) Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "SEVERED LOAN DOCUMENTS"), in such denominations
as Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, that Lender shall
not make or execute any such documents under such power until three (3) days
after notice has been given to Borrower by Lender of Lender's intent to exercise
its rights under such power.
SECTION 7.3 REMEDIES CUMULATIVE.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon. Any and all amounts collected or
retained by Lender while an Event of Default has occurred and is continuing,
including, but not limited to, interest at the Default Rate, late charges or any
escrowed amount, may be applied by Lender to payment of the Debt in any order or
priority that Lender in its sole discretion may elect.
SECTION 7.4 INDEMNIFICATION AGAINST TAX.
Borrower indemnifies and agrees to defend and hold Lender
harmless against all real estate transfer, mortgage recording, documentary stamp
and intangible taxes and other amounts imposed on Lender by virtue of its
execution of any of the Loan Documents or by reason of the Loan (other than
Lender's income tax or franchise taxes of Lender based on or imposed in lieu of
income tax), including any penalties, interest and attorneys' fees incurred by
Lender in connection therewith, and all such charges shall be secured by the
Security Agreement and bear interest at the Default Rate until paid.
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VIII. MISCELLANEOUS
SECTION 8.1 SURVIVAL.
This Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party. All covenants, promises and agreements
in this Agreement, by or on behalf of Borrower, shall inure to the benefit of
the legal representatives, successors and assigns of Lender.
SECTION 8.2 LENDER'S DISCRETION.
Whenever pursuant to this Agreement, Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.
SECTION 8.3 GOVERNING LAW.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM 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 LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT
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AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION AND ENFORCEMENT OF THE
LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE APPLICABLE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO
THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF
NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE 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 LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT CT CORPORATION SYSTEMS, 1633 BROADWAY, NEW YORK, NEW YORK 10019, 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 MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER 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 SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND 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.
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SECTION 8.4 MODIFICATION; WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement, or of the Note, or of any other
Loan Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on
Borrower, shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances.
SECTION 8.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the Note
or under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
SECTION 8.6 NOTICES.
All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
(including by facsimile) and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail, postage
prepaid, or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with receipt of delivery, or (c) facsimile (with
acknowledged transmission), addressed as follows:
If to Borrower: MEI HOLDINGS, L.P.
c/o The Hampstead Group
Texas Commerce Tower
2200 Ross Ave., Suite 4200-W
Dallas, Texas 75201
Attention: Daniel A. Decker
Telephone: (214) 220-4565
Facsimile: (214) 220-4949
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with copies to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Attention: Robert A. Profusek, Esq.
Telephone: (212) 326-3800
Facsimile: (212) 755-7306
Munsch Hardt Kopf Harr & Dinan
1445 Ross Avenue, Suite 4000
Dallas, Texas 75202
Attention: Michael A. Krywucki, Esq.
Telephone: (214) 855-7522
Facsimile: (214) 855-7584
If to Lender: Nomura Asset Capital Corporation
Two World Financial Center, Building B
New York, New York 10281
Attention: Raymond Anthony
Telephone: (212) 667-1850
Facsimile: (212) 667-1666
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: J. Philip Rosen, Esq.
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
or at such other address and person as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section. A notice shall be deemed to
have been given: in the case of hand delivery, at the time of delivery; in the
case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; or in the case of expedited prepaid delivery and
facsimile, upon the first attempted delivery or acknowledged transmission, as
applicable, on a Business Day.
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SECTION 8.7 TRIAL BY JURY.
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
SECTION 8.8 HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 8.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be 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 Agreement.
SECTION 8.10 PREFERENCES.
Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
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SECTION 8.11 WAIVER OF NOTICE.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable law, permitted to waive the giving of
notice. To the fullest extent permitted by applicable law, Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Agreement or the other Loan Documents do not specifically
and expressly provide for the giving of notice by Lender to Borrower.
SECTION 8.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages, and Borrower's sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.
SECTION 8.13 EXPENSES.
Borrower covenants and agrees to pay, or if Borrower fails to
pay to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including, without limitation, any opinions requested by Lender as to any legal
matters arising under this Agreement or the other Loan Documents); (ii)
Borrower's ongoing performance of and compliance with Borrower's respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) Lender's ongoing performance and compliance with
all agreements and conditions contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date;
(iv) the negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters requested by Lender; (v)
the filing and recording of the Loan Documents, and reasonable fees and expenses
of counsel for providing to Lender all
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required legal opinions, and other similar expenses incurred in creating and
perfecting the Liens in favor of Lender pursuant to this Agreement and the other
Loan Documents; (vi) enforcing or preserving any rights, in response to third
party claims or the prosecuting or defending of any action or proceeding or
other litigation, in each case against, under or affecting Borrower, this
Agreement, the other Loan Documents or any other security given for the Loan;
and (vii) enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the other Loan Documents or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence, illegal acts, fraud or willful misconduct of Lender.
SECTION 8.14 EXHIBITS AND SCHEDULES INCORPORATED.
The exhibits and schedules annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.
SECTION 8.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement,
the Note and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to such documents which
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
SECTION 8.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in any collateral other than that of
secured party or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and Borrower and nothing contained in this Agreement or
the other Loan Documents shall be deemed to confer upon anyone other than Lender
and Borrower any right to insist upon or to enforce the performance or
observance of any of the obligations contained herein or therein. All conditions
to the obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
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require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
SECTION 8.17 PUBLICITY.
All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public (other than
the filing of a Disclosure Document) which refers to the Loan Documents or the
financing evidenced by the Loan Documents or to Lender or any of its Affiliates
shall be subject to the prior written approval of Lender.
SECTION 8.18 WAIVER OF COUNTERCLAIM.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.
SECTION 8.19 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this
Loan Agreement and any of the other Loan Documents, the provisions of this Loan
Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower acknowledges that, with respect to the Loan, Borrower
shall rely solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender's exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.
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SECTION 8.20 BROKERS AND FINANCIAL ADVISORS.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower hereby
agrees to indemnify and hold Lender harmless from and against any and all
claims, liabilities, costs and expenses of any kind in any way relating to or
arising from a claim by any Person that such Person acted on behalf of Borrower
in connection with the transactions contemplated herein. The provisions of this
Section 8.20 shall survive the expiration and termination of this Agreement and
the payment of the Debt.
SECTION 8.21 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written.
SECTION 8.22 MEI GUARANTY.
(a) Borrower acknowledges the continuing validity of the MEI
Guaranty and represents, warrants and confirms as of the Closing Date the
non-existence of any offsets, defenses or counterclaims to its obligations
thereunder and waives its right to assert any set-off, counterclaim or
crossclaim of any nature whatsoever in any litigation relating to the MEI
Guaranty or otherwise with respect to its obligations thereunder (provided,
however that the foregoing shall not be deemed a waiver of the right of the
Guarantor to assert any compulsory counterclaim maintained in a court of the
United States, or of the State of New York if such counterclaim is compelled
under local law or rule of procedure).
(b) Borrower reacknowledges and reaffirms all of the
representations, warranties, terms and obligations contained in the MEI
Guaranty, which shall remain in full force and effect for all of Borrower's
obligations under the MEI Guaranty and acknowledges, agrees, represents and
warrants that no oral or other agreements, understandings, representations or
warranties exist with respect to the MEI Guaranty or with respect to the
obligations of Borrower thereunder except those specifically set forth in this
Section 8.22.
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed by their duly authorized representatives, all as of the day
and year first above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners, its general partner
By: Hampstead Associates, Inc., a managing
general partner
By: /s/ KYM IRVIN
----------------------------------------
Name: Kym Irvin
Title: Authorized Representative
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By: /s/ CHRISTOPHER M. TIERNEY
----------------------------------------
Name: Christopher M. Tierney
Title: Vice President
<PAGE> 1
EXHIBIT 99.4
REAFFIRMATION AND RATIFICATION
OF GUARANTY
THIS REAFFIRMATION AND RATIFICATION OF GUARANTY
("REAFFIRMATION") made as of the 13th day of October, 1998, by MEI HOLDINGS,
L.P., a Delaware limited partnership, ("MEI" or "GUARANTOR") in favor of NOMURA
ASSET CAPITAL CORPORATION, a Delaware corporation ("LENDER").
W I T N E S S E T H :
WHEREAS, Malibu Centers, Inc., a Delaware corporation ("MCI"
or "BORROWER"), has entered into a Loan Agreement, dated as of June 27, 1997, as
amended by that certain Letter Agreement dated as of March 30, 1998, as further
amended by that certain Letter Agreement dated the date hereof (the "LOAN
AGREEMENT"), pursuant to which Lender made a $21,390,375 loan to Borrower (the
"LOAN");
WHEREAS, in connection with the Loan Agreement Guarantor
executed and delivered a certain Guaranty in favor of Lender, dated as of June
27, 1997 (the "ORIGINAL GUARANTY") as reaffirmed by the Amended and Restated
Loan Agreement dated as of May 8, 1998 (the "REAFFIRMATION", the Reaffirmation
and the Original Guaranty are hereinafter collectively referred to as the
"GUARANTY");
WHEREAS, MEI and MCI have each chosen to exercise each one's
respective option to extend the term of the MEI and MCI loans and to amend the
terms and provisions of the Guaranty.
NOW THEREFORE, in consideration of Ten Dollars ($10.00), the
receipt of which is hereby acknowledged, the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto, and in order to reaffirm and ratify
the Guaranty, Guarantor hereby acknowledges, agrees for itself, its successors
and assigns and confirms that all of the above recitals are true, correct and
complete, and Guarantor hereby covenants and agrees with Lender as follows:
1. References to the MEI Guaranty or any guaranty executed by
MEI or MEI Holdings, L.P. in any or all of the Loan Documents (as such term is
defined in the
<PAGE> 2
Loan Agreement), including the MEI Loan Documents (as hereinafter defined shall
be deemed to include references to such Guaranty as reaffirmed and ratified by
this Reaffirmation.
2. Guarantor acknowledges the continuing validity of its
Guaranty in favor of Lender and represents, warrants and confirms the
non-existence of any offsets, defenses or counterclaims to its obligations
thereunder and waives its right to assert any set-off, counterclaim or
crossclaim of any nature whatsoever in any litigation relating to its Guaranty
or otherwise with respect to the Obligations (provided, however that the
foregoing shall not be deemed a waiver of the right of Guarantor to assert any
compulsory counterclaim maintained in a court of the United States, or of the
State of New York if such counterclaim is compelled under local law or rule of
procedure).
3. Guarantor reacknowledges and reaffirms all of the
representations, warranties, terms and obligations contained in the Guaranty,
which shall remain in full force and effect for all the obligations of Guarantor
now or hereafter owing to Lender pursuant to the terms and conditions of the
Guaranty and acknowledges, agrees, represents and warrants that no oral or other
agreements, understandings, representations or warranties exist with respect to
the Guaranty or with respect to the obligations of Guarantor thereunder except
those specifically set forth in this Reaffirmation.
4. Guarantor hereby acknowledges and affirms that the certain
loan between MEI Holdings, Inc. and Lender dated as of June 5, 1997 as amended
by that certain Letter Agreement dated as of June 27, 1997 as amended by that
certain Letter Agreement dated as of March 30, 1998, (the "ORIGINAL LOAN
AGREEMENT") as amended and restated by that certain Amended and Restated Loan
Agreement dated as of May 8, 1998 pursuant to which Lender made an additional
$10,000,000 loan to Borrower (the "AMENDED LOAN AGREEMENT") has been further
amended by that certain Letter Agreement dated as of the date hereof pursuant to
which Lender made an additional $1,034,759 loan to Borrower (the "MEI LOAN").
Guarantor hereby acknowledges and affirms that the aggregate principal amount of
the MEI Loan is $21,034,759. Guarantor also acknowledges and affirms that the
current outstanding principal amount of the MEI Loan is $21,034,759.
5. Guarantor represents, warrants and confirms that no
Material Adverse Change has occurred since May 8, 1998, that there are no
judgments against it in any of the courts of the United States and that there is
no litigation, active, pending or to the
2
<PAGE> 3
best of its actual knowledge, threatened, against it which might adversely
affect its ability to pay when due any amounts which may become payable in
respect of its Guaranty or the MEI Loan Agreement (hereinafter defined).
6. Guarantor restates all of the representations and
warranties contained in that certain Loan Agreement, dated June 27, 1997,
between Guarantor and Lender, as amended by that certain Letter Agreement dated
as of March 30, 1998, as amended and restated by that certain Amended and
Restated Loan Agreement dated as of May 8, 1998, as further amended by that
certain Letter Agreement dated the date hereof (the "MEI LOAN AGREEMENT") and
represents and warranties to Lender that all of the representations and
warranties contained in the MEI Loan Agreement are true and correct in all
material respects and that no Default (as defined in the MEI Loan Agreement) or
Event of Default (as defined in the MEI Loan Agreement) has occurred or is
continuing and that Guarantor is in compliance in all material respects with all
terms and conditions set forth in the MEI Loan Agreement and in each other Loan
Document (as defined in the MEI Loan Agreement, such documents the "MEI LOAN
DOCUMENTS") on its part to be observed or performed. The MEI Loan Documents are
not subject to any right of rescission, set-off, counterclaim or defense by
Guarantor, including the defense of usury, nor would the operation of any of the
terms of the MEI Loan Documents, or the exercise of any right thereunder, render
the MEI Loan Documents unenforceable except to the extent such unenforceability
may be the result of bankruptcy, insolvency, reorganization or similar laws
affecting rights of creditors generally or general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law), and Guarantor has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.
7. This Reaffirmation may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.
8. If Guarantor fails to execute this Reaffirmation, or if
such execution shall prove ineffective for any reason, there shall be no
implication arising out of such failure to sign that Guarantor, is released from
any of its obligations under the Guaranty.
9. Guarantor acknowledges and agrees that it has entered into
and delivered this Reaffirmation of its own free will, voluntarily and without
coercion or duress of any kind, and has been represented in connection herewith
by counsel of its choice and is fully aware of the terms contained in this
Reaffirmation.
3
<PAGE> 4
IN WITNESS WHEREOF, Guarantor has duly executed this Reaffirmation the
day and year first above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners, its general partner
By: Hampstead Associates, Inc., a
managing general partner
By: /s/ KYM IRVIN
------------------------------------
Name: Kym Irvin
Title: Authorized Representative
4
<PAGE> 1
EXHIBIT 99.5
NOTE MODIFICATION AGREEMENT
THIS NOTE MODIFICATION AGREEMENT (the "AGREEMENT") made this
13th day of October, 1998, between NOMURA ASSET CAPITAL CORPORATION, a Delaware
corporation, having an address at Two World Financial Center, Building B, New
York, New York 10281 ("PAYEE"), and MEI HOLDINGS, L.P., a Delaware limited
partnership, having an address at c/o The Hampstead Group, Texas Commerce Tower,
2200 Ross Avenue, Suite 4200-W, Dallas, Texas 75201 ("MAKER").
W I T N E S S E T H
WHEREAS, Maker and Payee entered into that certain Loan
Agreement in the amount of $10,000,000, dated as of June 5, 1997, between Maker,
as borrower, and Payee, as lender, as further amended by that certain Letter
Agreement dated as of June 27, 1997, as amended by that certain Letter Agreement
dated as of March 30, 1998 (the "LETTER AGREEMENT"), as amended and restated by
that certain Amended and Restated Loan Agreement dated as of May 8, 1998 whereby
the Loan was increased to $20,000,000 (the "LOAN") as further amended by that
certain side letter between Maker and Payee dated the date hereof (the "LOAN
AGREEMENT"); and
WHEREAS, the Loan is evidenced by that certain Note dated June
5, 1997 (the "ORIGINAL NOTE"), as amended and restated by that certain Amended
and Restated Promissory Note (the "AMENDED NOTE") dated May 8, 1998 (the
Original Note as amended and restated by the Amended Note are hereinafter
referred to as the "NOTE");
WHEREAS, the Note is secured, in part, by that certain
Guaranty dated as of June 27, 1997 (the "ORIGINAL GUARANTY") between Malibu
Centers, Inc. ("MCI") and Payee, as reaffirmed by that certain Reaffirmation and
Ratification of Guaranty dated as of May 8, 1998 (the "REAFFIRMATION"), as
further reaffirmed by that certain Second Reaffirmation and Ratification of
Guaranty dated the date hereof (the "SECOND REAFFIRMATION", the Original
Guaranty as reaffirmed by the Reaffirmation, as further reaffirmed by the Second
Reaffirmation, hereinafter referred to as the "GUARANTY").
<PAGE> 2
WHEREAS, the Guaranty is secured by, among other things, that
certain Deed of Trust, Assignment of Leases and Rents and Security Agreement,
dated June 27, 1997 among MCI, Payee and Stewart Title of California, Inc., as
trustee, recorded in Los Angeles County, California as instrument number 97
988989 (the "ORIGINAL CALIFORNIA DEED OF TRUST") as amended by the First
Amendment to Deed of Trust, Assignment of Leases and Rents and Security
Agreement dated as of May 8, 1998 (the "FIRST CALIFORNIA AMENDMENT"), as further
amended by that Second Amendment to Deed of Trust, Assignment of Leases and
Rents and Security Agreement dated the date hereof (the "SECOND CALIFORNIA
AMENDMENT", the Original California Deed of Trust as amended by the First
California Amendment as further amended by the Second California Amendment
hereinafter referred to as the "CALIFORNIA DEED OF TRUST");
WHEREAS, the Guaranty is also secured by, among other things,
that certain Deed of Trust, Assignment of Leases and Rents and Security
Agreement, dated June 27, 1997 among MCI, Lender and Stewart Title of North
Texas, as trustee, recorded in Harris County, Texas at Clerks File number S
526094 (the "ORIGINAL TEXAS DEED OF TRUST") as amended by the First Amendment to
Deed of Trust, Assignment of Leases and Rents and Security Agreement dated as of
May 8, 1998 (the "FIRST TEXAS AMENDMENT") as further amended by that certain
Second Amendment to Deed of Trust, Assignment of Leases and Rents and Security
Agreement dated the date hereof (the "SECOND TEXAS AMENDMENT", the Original Deed
of Trust as amended by the First Amendment as further amended by the Second
Texas Amendment hereinafter referred to as the "CALIFORNIA DEED OF TRUST", the
California Deed of Trust and the Texas Deed of Trust hereinafter collectively
referred to as the "MORTGAGE"); and
WHEREAS, Maker and Payee have agreed in the manner hereinafter
set forth to modify the terms of the Note.
NOW, THEREFORE, by Maker's and Payee's execution and delivery
hereof, and in consideration of the foregoing and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Maker and Payee agree as follows:
1. All capitalized terms not defined herein shall have
the meaning ascribed to them in the Note.
2
<PAGE> 3
2. The definition of "Maturity Date" in the Note is
hereby modified to January 20, 1999.
3. The principal sum of the Note is hereby increased to
TWENTY ONE MILLION THIRTY FOUR THOUSAND SEVEN HUNDRED
FIFTY NINE AND NO/100 DOLLARS ($21,034,759.00). All
references in the Note to the principal sum of the
Note shall from and after the date hereof until
repaid mean $21,034,759.
4. Borrower represents and warrants that the current
outstanding principal sum on the Note, as modified by
this Agreement, is the principal sum of $21,034,759.
5. From and after the date hereof, all references in the
Note to the "Loan Agreement", the "Note", the
"Pledge", the "Guaranty" and the other "Loan
Documents" shall mean such documents as modified,
amended or supplemented from time to time.
6. In addition to other all amounts secured by the lien
of the Mortgage, the lien of the Mortgage shall
secure the increased principal amount. Except as
modified by the Second Texas Amendment and the Second
California Amendment, the Mortgage remains unmodified
and in full force and effect and shall continue to
constitute a lien on the California Property and the
Texas Property.
7. The Maker and Payee hereby agree that the Pledge, the
Guaranty and the other Loan Documents (as defined in
the Loan Agreement) shall continue to secure or
guaranty, as the case may be, the Note, as modified
hereby.
8. The Maker represents that there are no present
defenses, offsets or counterclaims with respect to
the Mortgage and the Note, as modified hereby.
9. This Agreement may be executed in any number of
separate counterparts, each of which shall,
collectively and separately, constitute one
agreement.
3
<PAGE> 4
IN WITNESS WHEREOF, Maker and Payee have duly executed this
Agreement as of the day and year first written above written.
MAKER:
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners, its general
partner
By: Hampstead Associates, Inc.,
a managing general partner
By: /s/ KYM IRVIN
---------------------------------
Name: Kym Irvin
Title: Authorized Representative
PAYEE:
NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation
By: /s/ LANCE W. HABERIN
---------------------------------
Name: Lance W. Haberin
Title: Vice President
4
<PAGE> 1
Exhibit 99.6
SECOND AMENDMENT TO AMENDED AND RESTATED PLEDGE AND
SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED PLEDGE AND
SECURITY AGREEMENT ("AMENDMENT") is made as of October 13, 1998, between MEI
HOLDINGS, L.P., a Delaware limited partnership with its principal place of
business and chief executive office at c/o The Hampstead Group, Texas Commerce
Tower, 2200 Ross Ave., Suite 4200-W, Dallas, Texas 75201 (the "DEBTOR"), and
NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, with offices at Two
World Financial Center, Building B, New York, New York 10281, (the "SECURED
PARTY").
W I T N E S S E T H:
WHEREAS, Debtor and the Secured Party are parties to that
certain Loan Agreement, dated as of June 5, 1997, as amended by that certain
Letter Agreement dated June 27, 1997, as further amended by that certain Letter
Agreement dated as of March 30, 1998 (the "ORIGINAL LOAN AGREEMENT"), as amended
and restated by that certain Amended and Restated Loan Agreement dated as of May
8, 1998, pursuant to which the Secured Party made an additional $10,000,000 loan
to Debtor as further amended by that certain letter agreement dated the date
hereof between Debtor and Secured Party (the "RESTATED MEI LOAN AGREEMENT")
pursuant to which the Secured Party made an additional $1,034,759 loan to Debtor
for an aggregate loan amount of $21,034,759 (the "LOAN");
WHEREAS, the Secured Party and Malibu Centers, Inc., ("MCI")
are parties to that certain Loan Agreement, dated as of June 27, 1997, as
amended by that certain Letter Agreement dated as of March 30, 1998 as further
amended by that certain letter agreement dated the date hereof (the "MCI LOAN
AGREEMENT"), pursuant to which the Secured Party made a loan to MCI in an
aggregate outstanding principal amount of $21,390,375 as further amended by that
certain Letter Agreement between MCI and Secured Party dated as of the date
hereof (the "MCI LOAN");
WHEREAS, the MCI Loan is guarantied by Debtor pursuant to that
certain Guaranty dated June 27, 1997, as reaffirmed by Debtor in connection with
the Restated MEI Loan Agreement, as reaffirmed pursuant to that certain
Reaffirmation and Ratification of Guaranty dated the date hereof (the "MEI
GUARANTY");
<PAGE> 2
WHEREAS, the Loan and the MEI Guaranty are secured, in part,
by that certain Amended and Restated Pledge and Security Agreement, dated as of
June 27, 1997, between the Secured Party and the Debtor (the "ORIGINAL PLEDGE")
as reaffirmed by Debtor in connection with the Restated Loan Agreement by that
certain Amendment to Amended and Restated Pledge and Security Agreement (the
"PLEDGE AMENDMENT") dated as of May 8, 1998 (the Original Pledge as amended by
the Pledge Amendment hereinafter referred to as the "PLEDGE");
WHEREAS, Debtor and MCI have each chosen to exercise the
option to extend the term of each one's respective loan and to amend the terms
and provisions of the Pledge.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby amend the Pledge as follows:
1. Debtor hereby acknowledges that the Maturity Date of the
Loan is extended to January 20, 1999.
2. Debtor hereby acknowledges that the principal amount
outstanding on the Loan as of the date hereof is $21,034,759.
3. All references in the Pledge to the term "this Agreement"
shall be deemed to mean the Pledge as amended by this Amendment and as the same
may be further amended from time to time hereafter.
4. All references in the Pledge to the term "Loan Agreement"
shall mean the Loan Agreement as the same may be further amended from time to
time hereafter.
5. If there shall be any inconsistencies between the terms,
covenants, conditions and provisions set forth in the Pledge and the terms,
covenants, conditions and provisions set forth in this Amendment, then, the
terms, covenants, conditions and provisions of this Amendment shall prevail.
Whenever possible, the provisions of this Amendment shall be deemed supplemental
to and not in derogation of the terms of the Pledge and any documents relating
thereof.
2
<PAGE> 3
6. Debtor hereby confirms and ratifies all of the terms and
provisions of the Pledge as amended by this Amendment. Except as expressly
amended hereby, all of the terms of the Pledge and shall remain in full force
and effect.
7. This Amendment may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
8. Debtor acknowledges and agrees that the Pledge constitutes
a valid first lien upon the Pledged Interest (as such term is defined therein)
in favor of Secured Party and secures, inter alia, the obligations of Debtor
under the Loan Agreement and the MEI Guaranty. The Pledged Interest is an shall
remain subject to and encumbered by the lien, charge and encumbrance of the
Pledge, and nothing herein contained shall affect or be construed to affect the
lien or encumbrance of the Pledge or the priority thereof over other liens or
encumbrances.
3
<PAGE> 4
IN WITNESS WHEREOF, this Amendment has been duly signed and
delivered as of the day and year first above written.
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners, its general partner
By: Hampstead Associates, Inc., a
managing general partner
By: /s/ KYM IRVIN
--------------------------------------
Name: Kym Irvin
Title: Authorized Representative
NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation, as the Secured Party
By: /s/ LANCE W. HABERIN
------------------------------------------
Name: Lance W. Haberin
Title: Vice President
<PAGE> 1
EXHIBIT 99.7
MEI HOLDINGS, L.P.
c/o THE HAMPSTEAD GROUP
Texas Commerce Tower
2200 Ross Avenue
Suite 4200-W
Dallas, Texas 75201
October 13, 1998
Nomura Asset Capital Corporation
Two World Financial Center, Building B
New York, New York 10281
RE: NOTE MODIFICATION
Ladies and Gentlemen:
We refer to that certain Note dated June 5, 1997 in the amount
of $10,000,000 (the "Original Note") between MEI HOLDINGS, INC. (the "Borrower")
and NOMURA ASSET CAPITAL CORPORATION ("Lender"), as amended and restated by that
certain Amended and Restated Promissory Note dated May 8, 1998, pursuant to
which the principal amount of the Original Note was increased to $20,000,000 (as
amended and restated, the "Restated Note"), as further amended by that certain
Note Modification Agreement dated the date hereof, pursuant to which the
principal amount of the Restated Note is increased to $21,034,759 (the "Modified
Note", the Original Note as amended and restated by the Restated Note and as
modified by the Modified Note are hereinafter referred to as the "Note"). Unless
otherwise indicated, capitalized terms herein shall have the meaning ascribed to
them in the Note.
Contemporaneously herewith, Borrower is exercising its option
to extend the maturity date of the Note pursuant to that certain Letter
Agreement dated March 30, 1998 between Borrower and Lender, and Malibu Centers,
Inc. ("MCI") is exercising its option to extend the maturity date of that
certain Promissory Note between MCI and Lender dated June 27, 1997 pursuant to
that certain Letter Agreement dated March 30,
<PAGE> 2
1998 between MCI and Lender, and in connection therewith Borrower has agreed to,
among other things, pay Lender an extension fee equal to $2,069,518 (the
"Extension Fee"), all or a portion of which may be waived as hereinafter
provided and Borrower and Lender have agreed to increase the principal amount of
the Note to $21,034,759.
Lender agrees to waive its right to the entire Extension Fee
if the Debt is repaid in full as provided in the immediately following paragraph
on or prior to October 31, 1998. Lender agrees to waive its right to one half of
the Extension Fee if the Debt is repaid in full as provided in the immediately
following paragraph after October 31, 1998 and on or prior to November 30, 1998.
If Borrower is entitled to a waiver of all or any portion of
the Extension Fee, Borrower may reduce the Debt by the amount of the Extension
Fee or the portion thereof which is waived (the "Waived Amount") rather than
paying the Waived Amount to Borrower.
This agreement may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
2
<PAGE> 3
Please indicate your acceptance of the terms of this letter
agreement by signing in the space provided below.
Very truly yours,
MEI HOLDINGS, L.P., a Delaware limited
partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners,
its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By: /s/ KYM IRVIN
--------------------------------
Name: Kym Irvin
Title: Authorized Representative
ACCEPTED AND AGREED TO:
NOMURA ASSET CAPITAL CORPORATION
By: /s/ LANCE W. HABERIN
-----------------------------
Name: Lance W. Haberin
Title: Vice President
3
<PAGE> 1
EXHIBIT 99.8
MEI HOLDINGS, L.P.
c/o THE HAMPSTEAD GROUP
Texas Commerce Tower
2200 Ross Avenue
Suite 4200-W
Dallas, Texas 75201
October __, 1998
Nomura Asset Capital Corporation
Two World Financial Center, Building B
New York, New York 10281
RE: TERM EXTENSION
Ladies and Gentlemen:
We refer to that certain Loan Agreement in the amount of
$10,000,000, dated as of June 5, 1997, between MEI Holdings, L.P. ("MEI"), as
borrower, and Nomura Asset Capital Corporation, ("Lender"), as lender, as
amended by that certain Letter Agreement dated as of June 27, 1997, as amended
by that certain Letter Agreement dated as of March 30, 1998, as further amended
and restated by that certain Amended and Restated Loan Agreement dated as of May
8, 1998 whereby the amount was increased to $20,000,000 (the "Loan Agreement").
Unless otherwise indicated, capitalized terms herein shall have the meaning
ascribed to them in the Loan Agreement.
This letter shall serve to modify the Loan Agreement in the
following manner:
1. The definition for Stated Maturity" is deleted in its
entirety and replaced with the following: "Stated Maturity" shall mean January
20, 1999.
<PAGE> 2
2. Section 2.1.1(a) is deleted in its entirety and replaced
with the following:
(a) THE LOAN. From and including the Closing Date to but not
including the Termination Date (the "FINANCING PERIOD"), subject to and upon the
terms and conditions set forth herein, Lender hereby agrees to lend to Borrower
the original principal amount of up to $21,034,759 (the "MAXIMUM LOAN AMOUNT").
If there shall be any inconsistencies between the terms,
covenants, conditions and provisions set forth in the Loan Agreement and the
terms, covenant, conditions and provisions set forth in this Letter, then the
terms, covenants, conditions and provisions of this Letter shall prevail.
Whenever possible, the provisions of this Letter shall be deemed supplemental to
and not in derogation of the terms of the Loan Agreement and any documents
relating thereof.
MEI hereby confirms and ratifies all of the terms and
provisions of the Loan Agreement as amended by this Letter. Except as expressly
amended hereby, all of the terms of the Loan Agreement shall remain in full
force and effect.
This agreement may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
2
<PAGE> 3
Please indicate your acceptance of the terms of this letter
agreement by signing in the space provided below.
Very truly yours,
MEI HOLDINGS, L.P., a Delaware limited
partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners,
its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By:
-----------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
NOMURA ASSET CAPITAL CORPORATION
By:
----------------------------
Name:
Title:
3
<PAGE> 1
EXHIBIT 99.9
As of October 13, 1998
Nomura Asset Capital Corporation
2 World Financial Center
21st Floor
New York, New York 10281
Re: Loan from Nomura Asset Capital Corporation
(together with its successors and assigns,
"Lender") to MEI Holdings, L.P. ("Borrower")
Ladies and Gentlemen:
Borrower and Lender have executed and delivered that certain
Loan Agreement dated as of June 5, 1997 as amended by that certain Letter
Agreement dated as of June 27, 1997, as amended by that certain Letter Agreement
dated as of March 30, 1998 as amended and restated by that certain Amended and
Restated Loan Agreement dated as of May 8, 1998 as further amended by that
certain Letter Agreement dated the date hereof between Borrower and Lender (the
"Loan Agreement"). Capitalized terms not otherwise defined herein shall have
their respective meanings set forth in the Loan Agreement.
Borrower acknowledges that the documents set forth on Exhibit
A hereto that were to have been delivered at the Closing have not been
delivered. Borrower acknowledges that Lender does not waive delivery of those
documents and performance of certain conditions, and, as an inducement to Lender
to advance the Loan being advanced today and to extend the Maturity Date of the
Loan, Borrower agrees to perform those conditions and deliver the documents set
forth on Exhibit A hereto, in each case to Lender's satisfaction, within the
applicable time periods set forth on Exhibit A hereto.
<PAGE> 2
This letter agreement shall constitute a Loan Document. Upon
any failure to complete the conditions or deliver the documents within the
applicable time periods set forth on Exhibit A, Lender shall have the right to
declare an Event of Default for all purposes under the Loan Agreement and the
other Loan Documents. Except as expressly set forth herein, Lender, has not, and
shall not been deemed to have, waived compliance by Borrower with any provision
of the Loan Documents or to have waived any rights of Lender thereunder.
This letter agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York, without
regard to principles of conflicts of laws. This letter agreement may not be
modified or amended or any term or provision hereof waived or discharged except
by a writing signed by Lender and Borrower. All of the terms of this letter
agreement shall be binding upon Borrower, its respective successors and assigns,
and inure to the benefit of Lender.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
2
<PAGE> 3
IN WITNESS WHEREOF, Borrower has executed this letter
agreement as of the date first written above.
Very truly yours,
MEI HOLDINGS, L.P., a Delaware limited
partnership
By: MEI GENPAR, L.P.
its general partner
By: HH GenPar Partners,
its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By: /s/ KYM IRVIN
------------------------------
Name: Kym Irvin
Title: Authorized Representative
3
<PAGE> 4
EXHIBIT A
<TABLE>
<CAPTION>
====================================================================================================================
DELIVERY TIME AFTER CLOSING
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Borrower agrees to purchase the title Within 10 days of
insurance policy evidenced by the title Lender's request
commitment issued by Stewart Title North Texas or an Event of
dated September 27, 1998 (No. 97113147) Default.
attached hereto as Exhibit B either upon Lender's request or within 10
days of the occurrence of an Event of Default.
- --------------------------------------------------------------------------------------------------------------------
2. Borrower agrees to deliver an opinions each in 10 Days
a form reasonably acceptable to Lender from
from New York counsel and California counsel
where applicable with respect to the
enforceability and due authorization of the
relevant Loan Documents executed on the day
hereof.
====================================================================================================================
</TABLE>
4
