-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AQhl5gjKjF/2M4cV4JDCWZ284UmpketMCvHFvVBTInJiAdarz3cRoAMjDaVntjGF 7IL2Jiu2AOM9uZyAS4j7tg== /in/edgar/work/20000814/0000950134-00-006960/0000950134-00-006960.txt : 20000921 0000950134-00-006960.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950134-00-006960 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALIBU ENTERTAINMENT WORLDWIDE INC CENTRAL INDEX KEY: 0000912027 STANDARD INDUSTRIAL CLASSIFICATION: [7990 ] IRS NUMBER: 581949379 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11709 FILM NUMBER: 697224 BUSINESS ADDRESS: STREET 1: 5895 WINDWARD PKWY STREET 2: STE 220 CITY: ALPHARETTA STATE: GA ZIP: 30202 BUSINESS PHONE: 4044426640 MAIL ADDRESS: STREET 1: 5895 WINDWARD PARKWAY SUITE 220 CITY: ALPHARETTA STATE: GA ZIP: 30202 FORMER COMPANY: FORMER CONFORMED NAME: MOUNTASIA ENTERTAINMENT INTERNATIONAL INC DATE OF NAME CHANGE: 19930914 10-Q 1 e10-q.txt FORM 10-Q FOR QUARTER ENDED JUNE 30, 2000 1 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) Of the Securities Exchange Act of 1934 For the Quarter Ended June 30, 2000 ---------- MALIBU ENTERTAINMENT WORLDWIDE, INC. 717 North Harwood, Suite 1650 Dallas, Texas 75201 (214) 210-8701 ---------- Incorporated in Georgia SEC File No.: 0-22458 IRS Employer Id. No.: 58-1949379 ---------- The Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. At August 9, 2000, 57,142,547 shares of the Company's Common Stock were outstanding. =============================================================================== 2 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, 2000 1999 (UNAUDITED) (AUDITED) ------------- ------------- ASSETS Current assets Cash and cash equivalents $ 3,781,358 $ 1,873,074 Restricted cash 1,497,989 1,527,493 Inventories 1,113,290 1,066,042 Current portion of notes receivable 15,809 25,436 Assets held for sale 14,771,621 14,771,621 Prepaid expenses 897,881 553,545 ------------- ------------- Total current assets 22,077,948 19,817,211 ------------- ------------- Property and equipment, less accumulated depreciation 36,883,550 38,915,251 ------------- ------------- Other noncurrent Investments in and advances to limited partnerships 115,620 188,986 Other assets 124,390 152,341 Debt issuance costs, less accumulated amortization 456,972 1,145,009 Intangible assets, less accumulated amortization 755,217 782,076 ------------- ------------- Total other noncurrent assets 1,452,199 2,268,412 ------------- ------------- $ 60,413,697 $ 61,000,874 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of notes payable $ 11,990,480 $ 9,726,776 Accounts payable 1,219,698 2,353,195 Accrued expenses 7,447,520 6,363,829 Accrued expenses related to assets held for sale 563,626 610,902 ------------- ------------- Total current liabilities 21,221,324 19,054,702 Line of credit 7,500,000 7,500,000 Term loan revolver 2,500,000 2,500,000 Notes payable 2,205,839 2,616,666 Dividends on preferred stock 1,877,417 3,383,475 Other accrued expenses 1,886,643 1,901,784 ------------- ------------- Total liabilities 37,191,223 36,956,627 ------------- ------------- Commitments and contingencies Shareholders' equity Preferred stock, 6,000,000 shares authorized with no par value; $100,000 liquidation value Series AA, 5000 shares authorized; 151.24 outstanding 15,124,004 14,370,897 Series BB, 5000 shares authorized; 347.61 outstanding 28,759,789 26,711,089 Series CC, 5000 shares authorized; 524.96 outstanding 52,496,643 50,058,192 Series F, 2,700,000 authorized; none outstanding Series G, 213,551 authorized; none outstanding Common stock, 100,000,000 shares authorized with no par value; 57,142,547 shares issued and outstanding 145,872,669 145,745,010 Outstanding warrants 435,100 435,100 Accumulated deficit (219,465,731) (213,276,041) ------------- ------------- Total shareholders' equity 23,222,474 24,044,247 ------------- ------------- $ 60,413,697 $ 61,000,874 ============= =============
2 3 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE FOR THE THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------------------- ---------------------------------- 2000 1999 2000 1999 --------------- --------------- --------------- --------------- OPERATING REVENUES Entertainment revenue $ 12,956,067 $ 12,346,498 $ 21,892,627 $ 20,765,718 --------------- --------------- --------------- --------------- OPERATING EXPENSES Entertainment expenses 9,024,240 9,362,953 16,716,583 17,206,669 General and administrative expenses 1,381,301 1,433,008 2,742,519 2,643,391 Other expenses 272,735 93,423 457,873 186,261 Depreciation and amortization 1,235,478 2,067,208 2,405,790 4,114,495 --------------- --------------- --------------- --------------- Total operating expenses 11,913,754 12,956,592 22,322,765 24,150,816 --------------- --------------- --------------- --------------- Operating income (loss) 1,042,313 (610,094) (430,138) (3,385,098) OTHER (EXPENSE) INCOME Interest expense (1,334,928) (2,915,119) (2,488,156) (5,612,410) Interest income 48,667 7,628 80,333 17,324 Other, net (78,221) (72,047) (102,198) 67,634 --------------- --------------- --------------- --------------- Net loss before extraordinary item (322,169) (3,589,632) (2,940,159) (8,912,550) EXTRAORDINARY ITEM Debt forgiveness 484,669 -- 484,669 -- --------------- --------------- --------------- --------------- Net income (loss) $ 162,500 $ (3,589,632) $ (2,455,490) $ (8,912,550) =============== =============== =============== =============== NET LOSS APPLICABLE TO COMMON STOCK Net income (loss) $ 162,500 $ (3,589,632) $ (2,455,490) $ (8,912,550) Less: Preferred stock dividends 1,877,417 -- 3,734,202 -- --------------- --------------- --------------- --------------- Net loss applicable to common stock $ (1,714,917) $ (3,589,632) $ (6,189,692) $ (8,912,550) =============== =============== =============== =============== Basic and diluted loss per share of common stock $ (0.03) $ (0.08) $ (0.11) $ (0.19) =============== =============== =============== =============== Weighted average number of shares of common stock used in calculating net loss per share 57,142,547 46,508,625 57,142,547 46,508,625 =============== =============== =============== ===============
3 4 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 1999 ------------ ------------ Operating activities: Net loss $ (2,455,490) $ (8,912,550) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 2,405,790 4,114,495 Interest expense associated with amortization of loan costs 1,069,674 691,215 Extraordinary item (484,669) -- Non-cash compensation expense 127,659 191,490 Loss (gain) on sale of property and equipment 25,234 (71,764) Changes in assets and liabilities Increase in inventories (61,940) (172,075) Increase in prepaid expenses and other assets (285,251) (204,189) Increase in debt issuance costs and intangible assets (400,000) (136,219) Decrease in accounts payable (1,133,497) (2,178,588) Increase in accrued expenses 1,099,525 826,769 Increase in accrued interest due shareholder -- 3,025,135 Decrease in accrued expenses related to assets held for sale (47,276) (138,522) ------------ ------------ Cash used in operating activities (140,241) (2,964,803) ------------ ------------ Investing activities: Purchases of property and equipment (412,418) (2,847,630) Proceeds from disposal of property and equipment 10,900 900,448 Principal receipts under notes receivable 9,627 9,678 Decrease in investments in and advances to limited partnerships 73,366 2,859 Decrease (increase) in restricted cash 29,504 (380,797) ------------ ------------ Cash used in investing activities (289,021) (2,315,442) ------------ ------------ Financing activities: Proceeds from borrowings 2,543,914 5,805,364 Payments of borrowings (206,368) (669,420) ------------ ------------ Cash provided by financing activities 2,337,546 5,135,944 ------------ ------------ Increase (decrease) in cash and cash equivalents 1,908,284 (144,301) Cash and cash equivalents, beginning of period 1,873,074 237,336 ------------ ------------ Cash and cash equivalents, end of period $ 3,781,358 $ 93,035 ============ ============ Cash paid for interest $ 1,343,504 $ 1,060,665 ============ ============ Non-cash dividends on preferred stock $ 3,734,202 $ -- ============ ============
4 5 MALIBU ENTERTAINMENT WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the consolidated financial position and results of operations of the Company and its subsidiaries as of the dates and for the periods presented. The Company's business is seasonal in nature, therefore, operating results for the six month period ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's report on Form 10-K for the year ended December 31, 1999. Among other things, the auditor's opinion accompanying the Company's financial statements for the year ended December 31, 1999 includes a going-concern qualification. 2. ASSET SALES In February 2000, the Company sold its McAllen, Texas facility for a profit participation based on future income earned at the location for the next 5 years. In calendar year 1999, this facility generated $0.8 million of net revenues and $0.2 million of operating losses. Substantially all of the assets were transferred to the new owner. In July and August 2000, the Company entered into contracts to sell four properties that it determined to be non-core assets. The gross proceeds of the sales would be approximately $4.4 million. If the sales are completed, the net proceeds will be used to pay down the Company's primary lender's note. Two of the sale agreements are subject to customary closing conditions, such as the buyer's satisfaction with its due diligence review. There can be no assurance that the sale transactions will close or as to the timing of such transactions. 3. DEBT OBLIGATIONS The Company and its primary lender have agreed in writing to forebearance agreements relating to the Company's debt obligations, which were originally due June 30, 2000 to August 31, 2000. The Company and this lender are currently negotiating the terms of an amended and restated credit agreement. There can be no assurance that an agreement will be reached or as to the timing or effects thereof. The Company also restructured its debt obligations with another lender, which resulted in debt forgiveness of approximately $484,000 and has been recorded in the second quarter. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources; Recent Developments The Company's internally generated cash has been insufficient to fund its working capital, debt service and capital expenditure requirements for the past several years. The Company historically funded its operations and capital expenditures principally through external financing and cash flow from operations. The Company presently expects that it will not have sufficient cash resources to fund its operations after December 2000 unless it is able to generate cash through asset sales or other transactions. 5 6 The Company's primary lender has agreed to two forbearances of the Company's debt obligations, which were originally due June 30, 2000. The holder of the $21.6 million of secured debt has agreed to refrain from exercising any of its remedies under the loan until August 31, 2000. The Company and this lender are currently negotiating the terms of an agreement and restated credit agreement, which is expected to be finalized by August 31, 2000. It is anticipated that the new agreement will require the Company to continue to divest certain assets in an effort to generate cash to fund its working capital, debt service, capital expenditure requirements and to repay indebtedness. If the Company is unsuccessful in selling these assets, in obtaining other financing, modifying the terms of its existing indebtedness or if the proceeds of such sales are significantly less than their recorded value, the Company will be required to take extraordinary steps to preserve cash and satisfy its obligations or to restructure its obligations, including seeking to curtail normal operations at various facilities, liquidating assets or significantly altering its operations. There can be no assurance that the Company will be able to take such actions or, if so, as to the timing, terms or effects thereof. If the Company is unable to take such actions or they are not sufficient to permit the Company to continue to operate, the Company may seek or be forced to seek to restructure or reorganize its liabilities, including through proceedings under the federal bankruptcy laws. At June 30, 2000, the Company had $22.1 million of current assets (including $1.5 million of restricted cash) and $ 21.2 million of current liabilities (including $12.0 million of current debt), or working capital of $0.9 million (compared to working capital of $0.8 million at December 31, 1999, which included $1.5 million of restricted cash). The Company's principal uses of cash during the six months ended June 30, 2000 were to pay debt ($0.2 million) and capital expenditures ($0.4 million). During the six months ended June 30, 2000, the Company financed its operations primarily through borrowings from its primary lender ($2.5 million). Seasonality The business of the Company is seasonal. Approximately two-thirds of the Company's revenues have historically been generated during the six-month period of April through September. As a result, the Company's operating income can be expected to be substantially lower in the first and last quarters of the year than the second and third quarters. Furthermore, since many of the attractions at the parks involve outdoor activities, prolonged periods of inclement weather result in a substantial reduction of revenues during such periods. Accordingly, the Company believes that the results of operations for the six months ended June 30, 2000 are not necessarily indicative of the Company's future results of operations. Results of Operations For the three months ended June 30, 2000, the Company had a net loss to common shareholders of $1.7 million ($0.03 per common share), compared to a net loss of $3.6 million ($0.08 per common share) for the comparable period last year. For the six months ended June 30, 2000, the Company had net loss to common shareholders of $6.2 million ($0.11 per common share), compared to a net loss of $8.9 million ($0.19 per common share) for the comparable period last year. Entertainment revenue increased by $0.6 million (or 5%) and $1.1 million (5%) respectively, for the three and six months ended June 30, 2000 from $12.3 million and $20.8 million for the three and six months ended June 30, 1999 to $13.0 million and $21.9 million for the three and six months ended June 30, 2000. The increase in revenue is primarily due to having a group sales force that was fully staffed in 2000, price increases implemented in the first quarter of 2000 and increased revenues from the parks on which significant renovations were performed during 1999. The increase was partially offset by the loss in revenues on the facility that was sold in February 2000. Entertainment expenses decreased by $0.3 million (or 4%) and $0.5 million (or 3%) respectively, for the three and six months ended June 30, 2000 from $9.4 million and $17.2 million for the three and six months ended June 30, 1999 to $9.0 million and $16.7 million for the three and six months ended June 30, 2000. The decrease is primarily due to reductions in payroll and operating costs. General and administrative expenses for the three and six months ended June 30, 2000 were essentially unchanged from the comparable period in 1999. Depreciation and amortization for the quarter and six months ended June 30, 2000 decreased by $0.8 million and $1.7 million respectively, due principally the writedown of assets at year-end in compliance with Statement of Financial Accounting Standards No. 121. 6 7 Interest expense decreased by $1.6 million and $3.1 million for the three and six months ended June 30, 2000, as compared to the comparable periods in the prior year due to the recapitalization completed in 1999 described in the Company's 1999 Form 10-K. Stock Listing In June, the Company withdrew its appeal of the American Stock Exchange's ("AMEX") decision to de-list the Company's stock. As previously reported, the Company did not meet the published guidelines for continued listing on the AMEX. The Company ceased trading on the AMEX on June 25, 2000. Currently, the Company's common shares are quoted on the National Association of Securities Dealers' Electronic Bulletin Board (the "OCTBB"). The new trading symbol for the Company is "MBEW". ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK A portion of the Company's long-term debt as of June 30, 2000 bore interest at variable rates and the Company is exposed to market risk from changes in interest rates primarily through its borrowing activities, which are described in the "Notes Payable" section to the Financial Statements included in the Company's 1999 Form 10-K. At June 30, 2000, the Company did not hold any derivatives related to interest rate exposure for any of its debt facilities and it does not use financial instruments for trading or other speculative purposes. Based on the Company's borrowings at June 30, 2000, if the prime rate were to increase by 1%, the Company's cash flow and interest expense would increase by approximately $0.2 million. However, management has determined that this does not materially effect the Company's financial position. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Due to the nature of the attractions at the Company's entertainment parks, the Company has been, and will likely continue to be, subject to a significant number of personal injury lawsuits, certain of which may involve claims for substantial damages. The Company also is from time to time a party to other claims and legal proceedings, and is subject to environmental, zoning and other legal requirements. As of the date of this report, the Company does not believe that any such matter is reasonably likely to have a material adverse effect on the Company's financial position or results of operations. However, there can be no assurance in this regard or that the Company will not be subject to material claims or legal proceedings or requirements in the future. ITEM 5. OTHER INFORMATION Forward-Looking Statements This Report (including any documents incorporated by reference herein) contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to the Company that is based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the management of the Company. When used herein, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or the Company's management, identify forward-looking statements. Such statements reflect the current views of the Company's management with respect to future events and are subject to certain risks, uncertainties and assumptions relating to the Company's ability to obtain additional capital resources and/or working capital, the Company's operations and results of operations of the Company and the success of the Company's business and plan, competitive factors and pricing pressures; general economic conditions; the failure of market demand for the types of entertainment opportunities the Company provides or plans to provide in the future and for family entertainment in general to be commensurate with management's expectations or past experience; impact of present and future laws; ongoing need for capital improvements; changes in operating expenses; adverse changes in governmental rules or policies; changes in demographics, economics and other factors. Should one or more of these assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as anticipated, believed, estimated, expected or intended. Accordingly, shareholders are cautioned not to place undue reliance on such forward-looking statements. 7 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit No. Description 10.27 Forbearance Agreement dated July 1, 2000, between the Company and Foothill Capital Corporation (filed herewith) 10.28 Forbearance Agreement dated July 26, 2000 between the Company and Foothill Capital Corporation (filed herewith) 27 Financial Data Schedule (for SEC purposes only) (b) No reports of Form 8-K were filed during the period covered by this report. 8 9 SIGNATURES In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on behalf by the undersigned, thereunto duly authorized. MALIBU ENTERTAINMENT WORLDWIDE, INC. By: /s/ R. SCOTT WHEELER ------------------------------ R. Scott Wheeler Chief Financial Officer August 14, 2000 10 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 10.27 Forbearance Agreement dated July 1, 2000, between the Company and Foothill Capital Corporation (filed herewith) 10.28 Forbearance Agreement dated July 26, 2000 between the Company and Foothill Capital Corporation (filed herewith) 27 Financial Data Schedule (for SEC purposes only)
EX-10.27 2 ex10-27.txt FORBEARANCE AGREEMENT JULY 1, 2000 1 EXHIBIT 10.27 Foothill Capital Corporation 11111 Santa Monica Boulevard, Suite 1500 Los Angeles, California 90025 July 1, 2000 To each of the Persons identified on Schedule I attached hereto c/o Malibu Entertainment Worldwide, Inc. 717 North Harwood, Suite 1650 Dallas, Texas 75201 Re: Foothill Capital Corporation; Malibu Entertainment Worldwide, Inc. and certain of its Affiliates Ladies and Gentlemen: Reference hereby is made to that certain Consolidated, Amended, and Restated Loan and Security Agreement, dated as of May 31, 1996 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Loan Agreement"), among Malibu Entertainment Worldwide, Inc., a Georgia corporation ("Malibu"), certain of Malibu's Affiliates identified on the signature pages thereof (such Affiliates, together with Malibu, each a "Borrower" and collectively, jointly and severally, the "Borrowers"), and Foothill Capital Corporation, a California corporation ("Lender"). Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement. The Borrowers hereby acknowledge that a material Event of Default has occurred and is continuing as a result of their failure to deliver to Lender no later than June 30, 2000 the required mandatory prepayments of the Obligations required by Section 2.12 of the Loan Agreement (such failure being referred to herein as the "Designated Event of Default"). After careful consideration of, among other things, the Borrowers' request for the Lender's forbearance relative to the Designated Event of Default, Lender hereby agrees that, anything in the Loan Agreement or the other Loan Documents to the contrary notwithstanding and subject to the terms and conditions hereof, Lender shall forbear from exercising any of its rights, remedies, or powers (including its right to declare all of the Obligations immediately due and payable pursuant to Section 9.1(a) of the Loan Agreement) solely with respect to the Designated Event of Default for a period commencing on the date hereof and ending on July 31, 2000. Effective upon the satisfaction of the terms and conditions set forth herein, Lender hereby further agrees that, anything contained in the definition of "Required 2 Amount" set forth in the Loan Agreement to the contrary notwithstanding, the Borrowers may sell each Non-Core Property (as defined below) for cash consideration less than that set forth in the definition of "Required Amount" so long as (1) no Default or Event of Default shall have occurred or be continuing or would result therefrom, (2) the terms and conditions of any sale of a Non-Core Property (including, without limitation, the sale price thereof) are acceptable to Lender, (3) Lender shall have given its prior written consent to such sale, and (4) the Borrowers shall have caused the purchaser of each Non-Core Property to wire transfer to Lender in immediately available funds all net cash proceeds received by the Borrowers in consideration of such sale. As used herein, "Non-Core Property" means all of the Borrowers' real and personal property located in either (i) Miami, Florida, (ii) Kennesaw, Georgia, (iii) Charlotte, North Carolina, (iv) Spartanburg, North Carolina, (v) Arlington, [Texas] [Virginia], (vi) Columbus, Ohio, (vii) Tampa, Florida, or (viii) Redwood City, California. The effectiveness of this letter agreement shall be conditioned upon Lender's receipt of a counterpart of this letter agreement duly executed by the Borrowers. Except as, and to the extent, set forth herein: (a) Lender hereby reserves all remedies, powers, rights, and privileges that Lender may have under the Loan Agreement or the other Loan Documents, at law (including under the Code), in equity, or otherwise; and (b) all terms, conditions, and provisions of the Loan Agreement and the other Loan Documents are and shall remain in full force and effect and nothing herein shall operate as a consent to or a waiver, amendment, or forbearance in respect of any other or further matter (including any Event of Default other than the Designated Event of Default) or any other right, power, or remedy of Lender under the Loan Agreement and the other Loan Documents. No delay on the part of Lender in the exercise of any remedy, power, right or privilege shall impair such remedy, power, right, or privilege or be construed to be a waiver of any default, nor shall any partial exercise of any such remedy, power, right or privilege preclude further exercise thereof or of any other remedy, power, right or privilege. This letter agreement is a Loan Document. [signature page follows] 2 3 This letter agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this letter agreement by signing any such counterpart. Delivery of an executed counterpart of this letter agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this letter agreement. Any party delivering an executed counterpart of this letter agreement by telefacsimile also shall deliver an original executed counterpart of this letter agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this letter agreement. Very truly yours, Foothill Capital Corporation By: ------------------------------ Name: ---------------------------- Title: --------------------------- Agreed and Acknowledged as of the date first above written: Malibu Entertainment Worldwide Inc., a Georgia corporation, and each of its Affiliates identified on Schedule I attached hereto By: ----------------------------------- Name: ---------------------------------- Title: Responsible officer for each of the above referenced Persons 3 4 SCHEDULE I Mountasia Family Entertainment Centers, Inc., a Texas corporation Mountasia Management Company, a Georgia corporation Malibu Grand Prix Corporation, a Delaware corporation Tucson MGPC, Inc., an Arizona corporation Fresno MGPC, Inc., a California corporation North Hollywood Castle MGPC, Inc., a California corporation Puente Hills MGPC, Inc., a California corporation Puente Hills Showboat MGPC, Inc., a California corporation Redondo Reach Castle MGPC, Inc., a California corporation Redwood City Castle MGPC, Inc., a California corporation Redwood City MGPC, Inc., a California corporation San Diego MGPC, Inc., a California corporation Portland MGPC, Inc., an Oregon corporation Austin MGPC, Inc., a Texas corporation Dallas Castle MGPC, Inc., a Texas corporation San Antonio Castle MGPC, Inc., a Texas corporation San Antonio MGPC, Inc., a Texas corporation Mountasia Development Company, a Georgia corporation Malibu Grand Prix Design & Manufacturing, Inc., a California corporation Malibu Grand Prix Financial Services, Inc., a California corporation Off Track Management, Inc., a California corporation MGP Special, Inc., a California corporation Amusement Management Florida, Inc., a Florida corporation Malibu Grand Prix Consulting, Inc., a California corporation Mountasia - Mei International, Inc., a Georgia corporation Mountasia - Mei Limited Company, Inc., a California corporation Mountasia - Mei California, Inc., a California corporation Mountasia - Mei International, Inc., a Georgia corporation, in its capacity as general partner of Mountasia - Mei California Limited Partnership, a California limited partnership 4 EX-10.28 3 ex10-28.txt FORBEARANCE AGREEMENT JULY 26, 2000 1 EXHIBIT 10.28 Foothill Capital Corporation 11111 Santa Monica Boulevard, Suite 1500 Los Angeles, California 90025 July 26, 2000 To each of the Persons identified on Schedule I attached hereto c/o Malibu Entertainment Worldwide, Inc. 717 North Harwood, Suite 1650 Dallas, Texas 75201 Re: Foothill Capital Corporation; Malibu Entertainment Worldwide, Inc. and certain of its Affiliates Ladies and Gentlemen: Reference hereby is made to that certain Consolidated, Amended, and Restated Loan and Security Agreement, dated as of August 22, 1996 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Loan Agreement"), among Malibu Entertainment Worldwide, Inc., a Georgia corporation ("Malibu"), certain of Malibu's Affiliates identified on the signature pages thereof (such Affiliates, together with Malibu, each a "Borrower" and collectively, jointly and severally, the "Borrowers"), and Foothill Capital Corporation, a California corporation ("Lender"). Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement. The Borrowers hereby acknowledge that a material Event of Default has occurred and is continuing as a result of their failure to deliver to Lender no later than June 30, 2000 the required mandatory prepayments of the Obligations required by Section 2.12 of the Loan Agreement (such failure being referred to herein as the "Designated Event of Default"). After careful consideration of, among other things, the Borrowers' request for the Lender's forbearance relative to the Designated Event of Default, Lender hereby agrees that, anything in the Loan Agreement or the other Loan Documents to the contrary notwithstanding and subject to the terms and conditions hereof, Lender shall forbear from exercising any of its rights, remedies, or powers (including its right to declare all of the Obligations immediately due and payable pursuant to Section 9.1(a) of the Loan Agreement) solely with respect to the Designated Event of Default for a period commencing on the date hereof and ending on August 31, 2000 (the "Forbearance Period"). Effective upon the satisfaction of the terms and conditions set forth herein and solely during the continuance of the Forbearance Period, Lender hereby further agrees that, 2 anything contained in the definition of "Required Amount" set forth in the Loan Agreement to the contrary notwithstanding, the Borrowers may consummate the sale of a Non-Core Property (as defined below) during the Forbearance Period for cash consideration less than that set forth in the definition of "Required Amount" so long as (1) no Default or Event of Default shall have occurred or be continuing or would result therefrom, (2) the terms and conditions of any sale of a Non-Core Property (including, without limitation, the sale price thereof) are reasonably acceptable to Lender, (3) Lender shall have given its prior written consent to such sale (which consent shall not be unreasonably withheld or delayed), and (4) the Borrowers shall have caused the purchaser of each Non-Core Property to wire transfer to Lender in immediately available funds all net cash proceeds received by the Borrowers in consideration of such sale. As used herein, "Non-Core Property" means all of the Borrowers' real and personal property located in either (i) Miami, Florida, (ii) Kennesaw, Georgia, (iii) Charlotte, North Carolina, (iv) Spartanburg, North Carolina, (v) Arlington, Texas, (vi) Columbus, Ohio, (vii) Tampa, Florida, or (viii) Redwood City, California. The effectiveness of this letter agreement shall be conditioned upon Lender's receipt of a counterpart of this letter agreement duly executed by the Borrowers. Except as, and to the extent, set forth herein: (a) Lender hereby reserves all remedies, powers, rights, and privileges that Lender may have under the Loan Agreement or the other Loan Documents, at law (including under the Code), in equity, or otherwise; and (b) all terms, conditions, and provisions of the Loan Agreement and the other Loan Documents are and shall remain in full force and effect and nothing herein shall operate as a consent to or a waiver, amendment, or forbearance in respect of any other or further matter (including any Event of Default other than the Designated Event of Default) or any other right, power, or remedy of Lender under the Loan Agreement and the other Loan Documents. No delay on the part of Lender in the exercise of any remedy, power, right or privilege shall impair such remedy, power, right, or privilege or be construed to be a waiver of any default, nor shall any partial exercise of any such remedy, power, right or privilege preclude further exercise thereof or of any other remedy, power, right or privilege. This letter agreement is a Loan Document. [signature page follows] 2 3 This letter agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this letter agreement by signing any such counterpart. Delivery of an executed counterpart of this letter agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this letter agreement. Any party delivering an executed counterpart of this letter agreement by telefacsimile also shall deliver an original executed counterpart of this letter agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this letter agreement. Very truly yours, Foothill Capital Corporation By: ---------------------------- Name: -------------------------- Title: ------------------------- Agreed and Acknowledged as of the date first above written: Malibu Entertainment Worldwide Inc., a Georgia corporation, and each of its Affiliates identified on Schedule I attached hereto By: ----------------------------------- Name: --------------------------------- Title: Responsible officer for each of the above referenced Persons 3 4 SCHEDULE I Mountasia Family Entertainment Centers, Inc., a Texas corporation Mountasia Management Company, a Georgia corporation Malibu Grand Prix Corporation, a Delaware corporation Tucson MGPC, Inc., an Arizona corporation Fresno MGPC, Inc., a California corporation North Hollywood Castle MGPC, Inc., a California corporation Puente Hills MGPC, Inc., a California corporation Puente Hills Showboat MGPC, Inc., a California corporation Redondo Reach Castle MGPC, Inc., a California corporation Redwood City Castle MGPC, Inc., a California corporation Redwood City MGPC, Inc., a California corporation San Diego MGPC, Inc., a California corporation Portland MGPC, Inc., an Oregon corporation Austin MGPC, Inc., a Texas corporation Dallas Castle MGPC, Inc., a Texas corporation San Antonio Castle MGPC, Inc., a Texas corporation San Antonio MGPC, Inc., a Texas corporation Mountasia Development Company, a Georgia corporation Malibu Grand Prix Design & Manufacturing, Inc., a California corporation Malibu Grand Prix Financial Services, Inc., a California corporation Off Track Management, Inc., a California corporation MGP Special, Inc., a California corporation Amusement Management Florida, Inc., a Florida corporation Malibu Grand Prix Consulting, Inc., a California corporation Mountasia - Mei International, Inc., a Georgia corporation Mountasia - Mei Limited Company, Inc., a California corporation Mountasia - Mei California, Inc., a California corporation Mountasia - Mei International, Inc., a Georgia corporation, in its capacity as general partner of Mountasia - Mei California Limited Partnership, a California limited partnership 4 EX-27 4 ex27.txt FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 3,781,358 0 15,809 0 1,113,290 22,077,948 36,883,550 0 60,413,697 21,221,324 12,205,839 0 96,380,436 145,872,669 435,100 60,413,697 21,892,627 21,892,627 0 22,322,765 (102,198) 0 2,488,156 (2,940,159) 0 (2,940,159) 0 484,669 0 (6,189,692) (.11) (.11) PP&E is net of Accumulated Depreciation
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