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EXHIBIT 99.17
FIRST AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
THIS FIRST AMENDED AND RESTATED RECAPITALIZATION AGREEMENT ("AGREEMENT")
is entered into as of May 10, 1999 between Nomura Asset Capital Corporation
("NOMURA"), Malibu Entertainment Worldwide, Inc. ("MALIBU"), Malibu Centers,
Inc. ("MCI"), MEI Holdings, L.P. ("MEIH") and SZ Capital, L.P. ("SZ").
1. AMENDMENT AND RESTATEMENT OF PRIOR AGREEMENT. The parties hereto have
previously entered into that certain Recapitalization Agreement dated
as of March 1, 1999, as amended by letter agreement dated April 26,
1999 (collectively, the "PRIOR AGREEMENT") to evidence the parties'
agreements with respect to the $21,390,375 loan from Nomura to MCI
(the "MCI LOAN"), the $21,034,759 loan from Nomura to MEIH (the "MEIH
LOAN"), the loan from SZ to Malibu (the "SZ LOAN"), the loans from
MEIH to Malibu (the "MALIBU LOANS") and the recapitalization of
Malibu. The parties are entering into this Agreement to amend and
restate the Prior Agreement in its entirety.
2. FINAL DOCUMENTATION. The parties agree to work diligently and in good
faith to complete and execute final documentation incorporating the
terms of this Agreement, and such other terms as the parties may
reasonably require, on or before the date (the "CLOSING DATE") that is
the earlier of (a) the closing date under those certain Purchase
Agreements dated as of May 5, 1999 by and between MCI, as seller, and
XXXXXXXXXXXXXXXXXXXX., as buyer, copies of which have been provided to
Nomura, and (b) June 30, 1999. Except for Paragraph 3, this Agreement
is subject to the completion of such final documentation.
3. INTEREST ACCRUAL. Nomura agrees that no interest payments will be
payable under the MCI Loan and the MEIH Loan prior to the Closing
Date. Such interest will instead be capitalized on the dates such
interest payments were due. Each reference in Paragraphs 4, 5, 6 and 7
below to the "amount" of the MCI Loan, the MEIH Loan, the SZ Loan or
the Malibu Loans, as applicable, will be deemed to include all
principal (including capitalized interest), accrued but unpaid
interest and other charges due and owing with respect to such loan.
4. MCI LOAN. The MCI Loan is currently secured by first mortgages on
parks in ▇▇▇▇▇▇ Hills, California and Houston (Willowbrook), Texas and
guaranteed by MEIH. On or before the Closing Date, MCI will pay to
Nomura in cash (a) $11.4 million of the MCI Loan, and (b) all costs
and expenses reasonably incurred by Nomura in connection with the
transactions contemplated by this Agreement. Upon such payment, Nomura
will exchange the remaining balance of the MCI Loan as of such date
for preferred stock of Malibu having the terms described for "Series
B" on Exhibit "A" ("SERIES B PREFERRED STOCK") at par, resulting in
the discharge of the MCI Loan and the release of the collateral
securing it.
5. MEIH LOAN. On the Closing Date (a) Nomura will exchange the entire
amount of the MEIH Loan as of such date for Series B Preferred Stock
at par, resulting in the discharge of the MEIH Loan and the release of
the collateral securing it,
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and (b) without payment of additional consideration, Malibu will issue
to Nomura 6 million shares of Malibu common stock. If all of the
Series B Preferred Stock has not been redeemed on or before September
30, 2000, Nomura will be entitled to receive the following: (i) an
additional 2 million shares of Malibu common stock issued by Malibu;
and (ii) an additional 4 million shares of Malibu common stock
conveyed by MEIH, all without payment of additional consideration.
6. SZ LOAN. On the Closing Date, SZ will convert the entire amount of the
SZ Loan as of such date (currently approximately $6 million) into
preferred stock of Malibu having the terms described for "Series A" on
Exhibit "A" ("SERIES A PREFERRED STOCK"). SZ will also agree on the
Closing Date to advance to Malibu (by purchasing additional Series A
Preferred Stock) during the period beginning on the Closing Date and
ending on the third anniversary of the Closing Date (a) up to $12
million in the aggregate (including amounts advanced between November
1, 1998 and the Closing Date) to cover deferred maintenance, working
capital, certain past due payables, and other specified needs of
Malibu, and (b) up to an additional $2 million in the aggregate to
cover cash flow shortfalls resulting from below-budget operating
performance or other reasons. Notwithstanding anything to the contrary
in this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇ may not acquire, in the aggregate, in excess
of $16 million in par value of Series A Preferred Stock.
7. MALIBU LOANS. On the Closing Date, MEIH will convert the entire amount
of the Malibu Loans as of such date into preferred stock of Malibu
having the terms described for "Series C" on Exhibit "A" ("SERIES C
PREFERRED STOCK")
8. RIGHT TO CONSULT WITH MALIBU ON OPERATING BUDGETS. In order to provide
the parties with a common benchmark against which to measure whether
SZ will be obligated to advance the additional $2 million described
above, Nomura will have the right to review (in good faith) and
approve (not to be unreasonably withheld, conditioned or delayed)
Malibu's initial operating budget for 1999 and subsequent years during
which Nomura owns Series B Preferred Stock.
9. FAILURE OF RECAPITALIZATION TO OCCUR. If the events described in
Paragraphs 4-7 do not occur on or before the Closing Date, then
monthly interest payments as set forth in the loan documents will
again become due and owing from and after the first day after the
Closing Date.
10. RELEASES. The final documentation to be executed by the parties on the
Closing Date will include mutual waivers and releases of Nomura, on
the one hand, and Malibu, MCI, MEIH and SZ, on the other hand, with
respect to any and all claims and causes of action arising out of or
in connection with the MCI Loan, the MEIH Loan, the SZ Loan and the
Malibu Loans on or before the Closing Date (other than such parties'
obligations under this Agreement and the final documentation).
11. AGREEMENT IN PRINCIPLE. Except for Paragraph 3 hereof, this Agreement
is only a conceptual overview of the recapitalization of Malibu and
the other matters discussed herein. Additional reasonable details
regarding such transactions (consistent with the terms of this
Agreement) will be agreed upon by the parties and reflected in the
final documentation.
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Executed as of the date first above written.
NOMURA ASSET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
Title:
MALIBU CENTERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
Title:
MEI HOLDINGS, L.P., a Delaware limited partnership
By: MEI GENPAR, L.P., its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name:
Title:
SZ CAPITAL, L.P., a Delaware limited partnership
By: SZ GENPAR, L.P., its general partner
By: Hampstead Associates, Inc.,
a managing general partner
By: /s/ ▇▇▇▇ ▇. READ
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Name:
Title:
MALIBU ENTERTAINMENT WORLDWIDE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name:
Title:
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EXHIBIT "A" TO RECAPITALIZATION AGREEMENT
TERMS OF SERIES B
CUMULATIVE
PREFERRED STOCK
OF MALIBU
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TERM: Perpetual.
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DIVIDEND RATE: 9% per annum.
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DIVIDEND PAYMENTS: Payable quarterly in cash (except as provided
below) if and when the Board declares a
dividend on Series B Preferred Stock.
At any time prior to January 1, 2002, dividends
will be payable in kind (in additional shares
of Series B Preferred Stock) at Malibu's
option.
If cash dividends are not paid when due
(beginning on January 1, 2002) for at least two
quarters, then (i) MEIH will agree to vote its
shares for a slate of directors of Malibu
selected by the holders of the Series B
Preferred Stock equal in number to the number
of MEIH directors on the board, and (ii) the
holders of the Series B Preferred Stock and
MEIH will agree to vote their shares to elect 3
additional directors mutually acceptable to,
and not affiliated with, the holders of the
Series B Preferred Stock and MEIH.
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ACCUMULATION: Unpaid dividends accumulate.
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RANK: Senior in dividend and liquidation preference
to all other Malibu capital stock except Series
A Preferred Stock.
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LIQUIDATION PREFERENCE: $100,000 per share plus accrued and unpaid
dividends.
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VOTING RIGHTS: The holders of a majority of the shares of
Series B Preferred Stock voting as a class must
approve any amendment of the terms of the
Series B Preferred Stock. If the Series B
Preferred Stock is not redeemed prior to
January 1, 2014, then (i) MEIH will agree to
vote its shares for a slate of directors of
Malibu selected by the holders of the Series B
Preferred Stock equal in number to the number
of MEIH directors on the board, and (ii) the
holders of the Series B Preferred Stock and
MEIH will agree to vote their shares to elect 3
additional directors mutually acceptable to,
and not affiliated with, the holders of the
Series B Preferred Stock and MEIH.
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REDEMPTION: Redeemable at par plus accrued dividends until
January 1, 2001. Thereafter, redeemable as
follows:
1) Between January 1, 2001 and January 1,
2002, at 105% of par plus accrued and
unpaid dividends.
2) During each of the next 4 one year periods
thereafter, at a premium to par that
decreases 1% each year (in each case plus
accrued and unpaid dividends).
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ADJUSTMENTS FOR MERGERS, ETC.: Standard for this type of security.
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REGISTRATION RIGHTS: The holders of the Series B Preferred Stock
will receive registration rights that are
reasonable and customary in transactions of
this type. Such rights will be set forth in a
registration rights agreement.
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STOCK GRANTS As additional consideration for the debt
conversion outlined herein:
1) Malibu will issue 6 million shares of
common stock to Nomura at the closing of
the conversion. (Malibu currently has
approximately 50 million shares of common
stock outstanding.) Nomura will have the
same registration rights with respect to
this stock as outlined above.
2) Malibu and MEIH will commit to transfer an
additional 6 million shares of common
stock to Nomura on September 30, 2000 if
the Series B Preferred Stock has not been
redeemed prior to that date.
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MISCELLANEOUS o Malibu will be obligated to make a
repurchase offer at par plus accrued and
unpaid dividends in the event anyone other
than MEIH or affiliated entities acquires
a majority of the Malibu common shares and
effects a change in a majority of the
Malibu board.
o Malibu may issue senior preferred stock as
consideration for new capital invested in
Malibu, including the Series A Preferred
stock.
o Standard anti-dilution protections on 6
million shares which may be required to be
issued on September 30, 2000.
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TERMS OF SERIES C
CUMULATIVE CONVERTIBLE
PREFERRED STOCK
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INTRODUCTION: Concurrent with the closing of the
recapitalization, new Series C Preferred Stock
would be issued to MEIH in exchange for the
conversion of all of its subdebt (plus accrued
interest).
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GENERALLY: Same terms and rights as Series B Preferred
Stock except as described below.
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RANK: Junior to Series A & B Preferred Stock but
senior to all other Malibu capital stock as to
dividends and liquidation preference.
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DIVIDEND RATE: 7%
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CONVERSION Convertible into common stock at $2.50 per
share (subject to standard anti-dilution
protections).
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STOCK GRANTS None.
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TERMS OF SERIES A
CUMULATIVE CONVERTIBLE
PREFERRED STOCK
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GENERALLY: Same terms and rights as Series B Preferred
Stock except as described below.
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RANK: Senior in dividend and liquidation preference
to all other Malibu capital stock.
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DIVIDEND PAYMENTS Payable quarterly in cash (except as provided
below) if and when the Board declares a
dividend on Series A Preferred Stock.
At any time prior to January 1, 2004, dividends
will be payable in kind (in additional Series A
Preferred Shares) at Malibu's option.
If cash dividends are not paid when due
(beginning on January 1, 2004), the holders of
the Series A Preferred Stock will have the
right, as a class, to elect a majority of the
directors of Malibu.
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STOCK GRANTS None
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CONVERSION: Beginning September 30, 2000, convertible at
any time at the holder's option into Malibu
Common Shares at 120% of market at the time of
the conversion, determined based on the volume
weighted trading price for the 20 day period
prior to conversion, but not to exceed
$2.50/share. (Holders will be entitled to
standard anti-dilution protections.)
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