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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
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TABLE OF CONTENTS
Page
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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
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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
Exhibit A - Form of Pledge and Security Agreement
Schedule 2.2 -- Indebtedness of Malibu To Be Repaid.
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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
Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000 ("LENDER"), and MEI
HOLDINGS, L.P., a Delaware limited partnership whose address is x/x Xxx
Xxxxxxxxx Xxxxx, Xxxxx Commerce Tower, 0000 Xxxx Xxx., Xxxxx 0000-X, Xxxxxx,
Xxxxx 00000 ("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:
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"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.
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"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
xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx 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
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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.
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"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.
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"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.
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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
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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 Xxxxx, Day, Xxxxxx & Xxxxx, 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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(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 XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX, 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, 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, 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
0000 Xxxx Xxx., Xxxxx 0000-X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with copies to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lender: Nomura Asset Capital Corporation
Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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/ XXX XXXXX
----------------------------------------
Name: Xxx Xxxxx
Title: Authorized Representative
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By: /s/ XXXXXXXXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
