EXHIBIT 99.1
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LOAN AGREEMENT
Dated as of June 5, 1997
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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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of June 5, 1997 (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 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Lender"), and MEI HOLDINGS, L.P., a Delaware limited
partnership whose address is ▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Commerce Tower, ▇▇▇▇
▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇-▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("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, Borrower has requested Lender to extend credit to it in an
aggregate principal amount of $10,000,000; and
WHEREAS, Lender is willing to extend such credit to Borrower, subject to
and in accordance with the terms of this Agreement and the other Loan Documents.
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:
"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 shall be adjusted
monthly on the Determination Date.
"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 June 5, 1997.
"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.
"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.
"Fiscal Year" shall mean each twelve month period commencing on
January 1 and ending on December 31 during the term of the Loan.
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"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
▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) whether
now or hereafter in existence.
"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
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.
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"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.
"Malibu" shall mean Malibu Entertainment Worldwide, Inc., a Georgia
corporation.
"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.
"Note" shall mean that certain 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 Loan, including,
without limiting the generality of the foregoing, the Debt.
"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.
"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 the Pledge and Security Agreement
made by Borrower in favor of Lender, in the form of Exhibit A hereto, as the
same shall be amended, modified and supplemented and in effect from time to
time.
"Stated Maturity" shall mean July 15, 1997.
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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) 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 $10,000,000 aggregate principal amount
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.
(b) On or prior to the 11th day after the Closing Date (the
"Phase II Notice Date") the Borrower shall have the right to request jointly
with Malibu that, on the third Business Day following the Phase II Notice Date
(the "Second Closing Date"), subject to the conditions precedent set forth in
this Section 2.1.1, $10,000,000 of credit (the "Phase II Loan") be extended by
Lender to a subsidiary of Malibu, on the following terms:
(i) The borrower under the Phase II Loan would be a
newly-formed subsidiary of Malibu (the "SPC"). The SPC shall be a
bankruptcy remote, special purpose entity, whose activities will be
limited to owning and operating the Property (herein defined) and
whose form, structure, ownership and organizational documents shall
be acceptable to Lender in its sole discretion. The managing member,
general partner or board of directors of the SPC shall have at least
one independent director (or the functional equivalent), whose
responsibility will be limited solely to matters involving
insolvency and bankruptcy issues and whose vote will be required to
approve any election by the SPC to voluntarily seek protection from
creditors under any applicable bankruptcy or insolvency laws or the
SPC's dissolution. Lender shall have the right to designate such
director.
(ii) The stated maturity of the Phase II Loan would be
September 30, 1998 (and the stated maturity of the Loan would be
extended to that same date).
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(iii) The Borrower would guaranty the SPC's obligations
under the Phase II loan agreement, and pledge to Lender the Pledged
Shares as security therefor, pursuant to documentation satisfactory
to Lender in its sole discretion.
(iv) Malibu would make a limited recourse guaranty of
the SPC's obligations under the Phase II loan agreement, limited to
a pledge to Lender of the capital stock of the SPC.
(c) The Borrower and Malibu shall give the Lender irrevocable
written notice of their request for a Phase II Loan not later than 1:00 p.m.
(New York City time) on the Phase II Notice Date. Such notice shall be signed by
the chief financial officers of the Borrower and Malibu and shall certify that
on the date thereof (both immediately preceding and after giving effect thereto)
each representation and warranty of the Borrower in this Agreement, and the
other Loan Documents, is true and correct on and as of the date of the proposed
Additional Draw as if made on and as of such date and that no Default or Event
of Default exists on or as of such date.
(d) As additional conditions precedent to Lender's obligation
to fund a Phase II Loan:
(i) the SPC shall have granted Lender collateral
security for the Loan in the form of real property (the "Property"),
the condition, value and other quality of which shall be
satisfactory to the Lender in its sole discretion,
(ii) the Property shall be mortgaged to the Lender under
mortgages satisfactory in form, scope, and substance to Lender in
its sole discretion,
(iii) Lender shall have received a true and correct copy
of payoff letters or releases of liens for all of the existing debt
encumbering the Property,
(iv) Lender shall have received (X) executed
counterparts of amended and restated Loan Documents, and (Y) such
title insurance, reports, assignments of leases, and such other
documents, as Lender may require, all in such form, scope, and
substance satisfactory to Lender in its sole discretion,
(v) Lender shall have received opinions of Borrower's
and Malibu's counsel with respect to such matters as Lender may
require, all such
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opinions to be in form, scope and substance satisfactory to Lender
and Lender's counsel in their sole discretion, and
(vi) Borrower shall have paid Lender a non-refundable
fee for debt structure advice of $650,000 (in addition to the fee
referenced in Section 3.1).
2.1.2 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
$10,000,000, 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. 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, 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 July 1,
1997 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 the following account:
Mellon Bank Pittsburgh
ABA# 043 000 261
Account Name: NACC Clearance Account
Account # 109-2525
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇/Ref: Malibu Entertainment/MEI Holdings
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.
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III. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Closing.
The obligation of Lender to make the Loan 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. 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.
(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 duly executed and delivered on behalf of Borrower.
(d) 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.
(e) 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 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.
(f) Opinions of Borrower's Counsel. Lender shall have received
opinions of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, Borrower's counsel, with respect to due
execution, authority, enforceability of the Loan Documents 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.
(g) Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated by this
Agreement and the
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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.
(h) Financial Statements. Lender shall have received a certified
copy of the Borrower's certified financial statements for the 12 month period
ended December 31, 1996.
(i) Structure Fee. Borrower shall have paid Lender a non-refundable
fee of $650,000.
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 property
or assets of Borrower pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, operating
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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.
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.
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:
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(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 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.
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(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.
(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.
14
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.
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 certificate or other agreement
furnished by it to Lender, shall have been false or misleading in any
material respect as of the date the representation or warranty was made;
(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
15
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 subsections (i) to (vi) above, for five (5) 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 five (5) 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 5-day period and provided further that Borrower shall
have commenced to cure such Default within such 5-day period and
thereafter diligently and expeditiously proceeds to cure the same, such
5-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 ten (10) 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.
(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.
(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
16
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.
(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.
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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.
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.
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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 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
▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ OF NEW YORK, AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT ▇▇▇▇▇ DAY ▇▇▇▇▇▇ & ▇▇▇▇▇
(ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇), ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇. Y. 10022, 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.
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
20
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
▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇-▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-755-7306
If to Lender: Nomura Asset Capital Corporation
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
21
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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
22
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.
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
23
(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 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.
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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
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
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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.
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.
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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:
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Name:
Title:
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
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Name:
Title: