-----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, EPkUij5rT30jGqr5p0N2dX6pJLlM2ZipatnA++AjL9iQDLsYgTnw1hKuaUUVtRsK fC8rVGvXuDGT3QEi/BbCug== 0000950134-01-501485.txt : 20010514 0000950134-01-501485.hdr.sgml : 20010514 ACCESSION NUMBER: 0000950134-01-501485 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALIBU ENTERTAINMENT WORLDWIDE INC CENTRAL INDEX KEY: 0000912027 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [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: 1629491 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 d87027e10-q.txt FORM 10-Q FOR QUARTER ENDED MARCH 31, 2001 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 March 31, 2001 --------------- 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
--------------- Securities registered pursuant to Section 12 (g) of the Securities Exchange Act: TITLE OF CLASS Common Stock, no par value --------------- Indicate by check mark whether the registrant (1) has filed all reports required to by filed by Section 13 or 15 (d) of the Securities Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] At May 4, 2001, 57,142,547 shares of the Company's Common Stock were outstanding. 2 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 DECEMBER 31, (UNAUDITED) 2000 ------------------- ------------------- ASSETS Current assets Cash and cash equivalents $ 2,310,495 $ 4,131,713 Restricted cash 1,454,052 1,351,098 Inventories 976,752 966,551 Current portion of notes receivable 8,107 8,107 Assets held for sale 5,000,000 6,000,000 Prepaid expenses 758,153 743,463 ------------------- ------------------- Total current assets 10,507,559 13,200,932 ------------------- ------------------- Property and equipment, less accumulated depreciation 31,029,871 31,731,844 ------------------- ------------------- Other noncurrent assets Investments in and advances to limited partnerships 6,124 52,076 Other assets 108,730 114,231 Debt issuance costs, less accumulated amortization - 23,209 Intangible assets, less accumulated amortization 467,759 530,233 ------------------- ------------------- Total other noncurrent assets 582,613 719,749 ------------------- ------------------- $ 42,120,043 $ 45,652,525 =================== =================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of notes payable $ 15,956,531 $ 16,695,042 Accounts payable 738,592 1,544,248 Accrued expenses 6,639,455 6,012,011 Accrued expenses related to assets held for sale 537,628 584,524 ------------------- ------------------- Total current liabilities 23,872,206 24,835,825 Notes payable 1,976,515 2,101,754 Other accrued expenses 1,036,960 1,044,736 ------------------- ------------------- Total liabilities 26,885,681 27,982,315 ------------------- ------------------- 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; 165.45 and 161.99 outstanding 16,544,514 16,078,017 Series BB, 5000 shares authorized; 378.88 and 370.97 outstanding 31,888,170 31,096,920 Series CC, 5000 shares authorized; 561.61 and 552.37 outstanding 56,161,135 55,236,636 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 146,438,138 146,375,428 Outstanding warrants 60,000 60,000 Accumulated deficit (235,857,595) (231,176,791) ------------------- ------------------- Total shareholders' equity 15,234,362 17,670,210 ------------------- ------------------- $ 42,120,043 $ 45,652,525 =================== ===================
2 3 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------------- 2001 2000 ----------- ----------- OPERATING REVENUES Entertainment revenue $ 7,416,522 $ 8,936,560 ----------- ----------- OPERATING EXPENSES Entertainment expenses 7,044,359 7,692,343 General and administrative expenses 1,264,214 1,361,218 Other expenses 222,429 185,138 Depreciation and amortization 910,143 1,170,312 ----------- ----------- Total operating expenses 9,441,145 10,409,011 ----------- ----------- Operating Loss (2,024,623) (1,472,451) OTHER (EXPENSE) INCOME Interest expense (503,438) (1,153,228) Interest income 44,132 31,666 Other, net (14,629) (23,977) ----------- ----------- Net Loss $(2,498,558) $(2,617,990) =========== =========== NET LOSS APPLICABLE TO COMMON STOCK Net loss $(2,498,558) $(2,617,990) Less: Preferred stock dividends (non-cash) 2,182,247 1,856,785 ----------- ----------- Net loss applicable to common stock $(4,680,805) $(4,474,775) =========== =========== Basic and diluted loss per share of common stock $ (0.08) $ (0.08) =========== =========== Weighted average number of shares of common stock used in calculating net loss per share 57,142,547 57,142,547 =========== ===========
3 4 MALIBU ENTERTAINMENT WORLDWIDE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31 2001 2000 ------------ ----------- Operating activities: Net loss $(2,498,558) $(2,617,990) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization 910,143 1,170,312 Interest expense associated with amortization of loan costs 23,209 489,780 Non-cash compensation expense 62,710 63,829 (Gain) loss on sale of property and equipment (32,097) 25,234 Changes in assets and liabilities Increase in inventories (10,201) (44,411) (Increase) decrease in prepaid expenses and other assets (47,736) 81,398 Increase in debt issuance costs and intangible assets - (400,000) Decrease in accounts payable (805,656) (1,154,516) Increase in accrued expenses 630,189 688,569 Decrease in accrued expenses related to assets held for sale (46,896) (4,909) ----------- ----------- Cash used in operating activities (1,814,893) (1,702,704) ----------- ----------- Investing activities: Purchases of property and equipment (157,303) (50,675) Proceeds from assets held for sale 1,069,509 - Proceeds from disposal of property and equipment 2,221 10,900 Decrease in investments in and advances to limited partnerships 45,952 72,799 (Increase) decrease in restricted cash (102,954) 18,968 ----------- ----------- Cash (used in) provided by investing activities 857,425 51,992 ----------- ----------- Financing activities: Proceeds from borrowings - 2,400,000 Payments of borrowings (863,750) (112,065) ----------- ----------- Cash (used in) provided by financing activities (863,750) 2,287,935 ----------- ----------- (Decrease) increase in cash and cash equivalents (1,821,218) 637,223 Cash and cash equivalents, beginning of period 4,131,713 1,873,074 ----------- ----------- Cash and cash equivalents, end of period $ 2,310,495 $ 2,510,297 =========== =========== Cash paid for interest $ 557,552 $ 592,702 =========== =========== Non-cash dividends on preferred stock $ 2,182,247 $ 1,856,785 =========== ===========
4 5 MALIBU ENTERTAINMENT WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2001 (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 Malibu Entertainment Worldwide, Inc., (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 three month period ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. 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, 2000. Among other things, the auditor's opinion accompanying the Company's financial statements for the year ended December 31, 2000 includes a going-concern qualification. 2. ASSET SALES In January 2001, the Company sold a property being held for sale for net proceeds of approximately $1.0 million. The vast majority of the proceeds were used to pay down the note to the Company's primary lender in accordance with the agreement. The remainder of the proceeds were used to fund working capital requirements. 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, sales of non-core assets, and cash flow from operations. On April 27, 2001, the Company and its primary lender amended the Company's credit agreement to extend the mandatory date for payment of $6.5 million from April 30, 2001 to May 31, 2001. The Company will not have sufficient cash resources to fund its debt obligations on May 31, 2001 without selling assets, obtaining other financing or modifying the terms of its existing indebtedness. Furthermore, the Company presently expects that it will not have sufficient cash resources to fund its operations after the end of December 2001 unless it is able to generate cash through asset sales or other transactions. Therefore, the Company is continuing to attempt to sell certain assets. If the Company is unsuccessful in selling these assets, in obtaining other financing, modifying the terms of its 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 otherwise 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 if 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 March 31, 2001, the Company had $10.5 million of current assets (including $1.4 million of restricted cash and $5.0 million of assets held for sale) and $23.9 million of current liabilities (including $15.9 million of current debt), or negative working capital of $13.4 million (compared to negative working capital of $11.6 million at December 31, 2000, which included $1.3 million of 5 6 restricted cash and $6.0 million of assets held for sale). The Company's principal uses of cash during the three months ended March 31, 2001 were to fund operations ($1.8 million), pay down debt ($0.9 million) and capital expenditures ($0.2 million). The Company has developed a conceptual model and pro forma for a new generation SpeedZone. Parks developed as a new SpeedZone would feature the key elements of existing SpeedZones, plus a family oriented racetrack targeting younger participants. The Company is seeking to raise the capital necessary to implement the new SpeedZone model. However, the Company has not been successful to date in raising the necessary funds to begin construction of this new SpeedZone model. There can be no assurance that the Company will be successful in raising the required funds to develop parks with the new model, or if so, as to the timing thereof. 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 three months ended March 31, 2001 are not necessarily indicative of the Company's future results of operations. Results of Operations For the three months ended March 31, 2001, the Company had a net loss to common shareholders of $4.7 million ($0.08 per common share), compared to a net loss of $4.5 million ($0 .08 per common share) for the comparable period last year. Entertainment revenue decreased by $1.5 million (17%) for the three months ended March 31, 2001 from $8.9 million for the three months ended March 31, 2000 to $7.4 million for the three months ended March 31, 2001. The decrease in revenue is primarily due to the sale or closing of parks in 2000 ($0.7 million) and to poor weather conditions in the southeast and the south for the three months ending March 31, 2001 as compared to the same period last year. Entertainment expenses decreased by $0.6 million (8%) for the three months ended March 31, 2001 from $7.7 million for the three months ended March 31, 2000 to $7.0 million for the three months ended March 31, 2001. The decrease is primarily due to the sale or closing of parks in 2000 ($0.8 million). General and administrative expenses for the three months ended March 31, 2001 were essentially unchanged from the comparable period in 2000. Depreciation and amortization for the three months ended March 31, 2001 decreased by $0.3 million due principally to the writedown of assets during the fourth quarter of 2000 in compliance with Statement of Financial Accounting Standards No. 121. Interest expense decreased by $0.6 million for the three months ended March 31, 2001, as compared to the comparable period in the prior year due to the Company selling properties and paying down the note to the Company's primary lender in accordance with the agreement. Stock Listing The Company's Common Shares are quoted on the National Association of Securities Dealers' ("NASDAQ") Electronic Bulletin Board (the "OTCBB"). The trading symbol for the Company is "MBEW". ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK A majority of the Company's long-term debt as of March 31, 2001 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 2000 Form 10-K. At March 31, 2001, 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 6 7 speculative purposes. Based on the Company's borrowings at March 31, 2001, if the prime rate were to increase by 1%, the Company's cash flow would decrease and interest expense would increase by approximately $0.1 million. Likewise, if rates were to decrease, the Company would realize a savings of a like amount. However, management has determined that this does not materially effect the Company's financial position or results of operations. In addition, because the Company does not use financial instruments, the implementation of Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities" did not have a significant impact on its financial position or results of operations. 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. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit No. Description 10.24 Amendment Number Thirteen to Consolidated, Amended and Restated Loan and Security Agreement dated April 25, 2001 (filed herewith).
(b) No reports of Form 8-K were filed during the period covered by this report. 7 8 SIGNATURES In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on it's behalf by the undersigned, thereunto duly authorized. MALIBU ENTERTAINMENT WORLDWIDE, INC. By: /s/ R. SCOTT WHEELER ----------------------------- R. Scott Wheeler Chief Financial Officer May 11, 2001 8 9 INDEX TO EXHIBITS
Exhibit No. Description - ------- ----------- 10.24 Amendment Number Thirteen to Consolidated, Amended and Restated Loan and Security Agreement dated April 25, 2001 (filed herewith).
EX-10.24 2 d87027ex10-24.txt AMENDED/RESTATED LOAN & SECURITY AGRMT. - 4/25/01 1 EXHIBIT 10.24 AMENDMENT NUMBER THIRTEEN TO CONSOLIDATED, AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT THIS AMENDMENT NUMBER THIRTEEN TO CONSOLIDATED, AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Amendment"), is entered into as of April ____, 2001 between FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a place of business located at 2450 Colorado Avenue, Suite 3000W, Santa Monica, California 90404, MALIBU ENTERTAINMENT WORLDWIDE, INC., a Georgia corporation ("MEWI"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA MANAGEMENT COMPANY, a Georgia corporation ("MMC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MALIBU GRAND PRIX CORPORATION, a Delaware corporation ("MGPC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, TUCSON MGPC, INC., an Arizona corporation ("Tucson"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, PUENTE HILLS MGPC, INC., a California corporation ("PH"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, PUENTE HILLS SHOWBOAT MGPC, INC., a California corporation ("PHS"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, REDONDO BEACH CASTLE MGPC, INC., a California corporation ("RBC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, REDWOOD CITY CASTLE MGPC, INC., a California corporation ("RCC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, SAN DIEGO MGPC, INC., a California corporation ("San Diego"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, PORTLAND MGPC, INC., an Oregon corporation ("Portland"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, DALLAS CASTLE MGPC, INC., a Texas corporation ("DC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, SAN ANTONIO CASTLE MGPC, INC., a Texas corporation ("SAC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, SAN ANTONIO MGPC, INC., a Texas corporation ("San Antonio"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA DEVELOPMENT COMPANY, a Georgia corporation ("MDC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MALIBU GRAND PRIX DESIGN & MANUFACTURING, INC., a California corporation ("MGPDMI"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MALIBU GRAND PRIX FINANCIAL SERVICES, INC., a California corporation ("MGPFSI"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, OFF TRACK MANAGEMENT, INC., a California corporation ("Off Track"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MGP SPECIAL, INC., a California corporation ("Special"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, AMUSEMENT MANAGEMENT FLORIDA, INC., a Florida corporation 2 ("Amusement"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MALIBU GRAND PRIX CONSULTING, INC., a California corporation ("Consulting"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA - MEI INTERNATIONAL, INC., a Georgia corporation ("MMEII"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA - - MEI LIMITED COMPANY, INC., a California corporation ("MMEILC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA - MEI CALIFORNIA, INC., a California corporation ("MCNC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA - MEI CALIFORNIA LIMITED PARTNERSHIP, a California limited partnership ("MMEICLP"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, MOUNTASIA FAMILY ENTERTAINMENT CENTERS, INC., a Texas corporation ("MFEC"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201, and MALIBU CENTERS, INC., a California corporation ("MCI"), with its chief executive office located at 717 North Harwood, Suite 1650, Dallas, Texas 75201. Recitals: A. Borrower and Foothill are parties to the Consolidated, Amended, and Restated Loan and Security Agreement, entered into as of August 22, 1996 (as amended from time to time prior to the date hereof, the "Loan Agreement"). B. Borrower has requested that Foothill extend the date on which the mandatory prepayment of the Obligations are due from April 30, 2001 to May 31, 2001; and C. Foothill is willing to consent to the extension of the mandatory prepayment date from April 30, 2001 to May 31, 2001 on the terms and conditions set forth herein. Agreement: NOW, THEREFORE, in consideration of the mutual promises contained herein, Foothill and Borrower hereby agree as follows: 1. Definitions. All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Loan Agreement. 2. Amendments to the Loan Agreement. a. Section 1.1 of the Loan Agreement hereby is amended by adding or amending and restating, as applicable, each of the following definitions in alphabetical order: 2 3 "Thirteenth Amendment" means that certain Amendment Number Thirteen to Consolidated, Amended, and Restated Loan and Security Agreement, dated as of April ___, 2001. "Thirteenth Amendment Closing Date" means the date on which each of the conditions precedent set forth in Section 3 of the Thirteenth Amendment are satisfied in full. b. Section 2.12(b) of the Loan Agreement hereby is amended and restated in its entirety as follows: (b) On or before May 31, 2001, Borrower shall make a mandatory prepayment of the Obligations in an amount sufficient to reduce the aggregate amount of the Obligations outstanding to not more than $9,000,000. 3. Condition to the Effectiveness of this Amendment. The effectiveness of this Amendment is subject to the fulfillment, to the satisfaction of Foothill, of each of the following conditions precedent: a. Foothill shall have received on or before the Thirteenth Amendment Closing Date, this Amendment, duly executed and in form and substance satisfactory to Foothill. b. The representations and warranties in this Amendment, the Agreement as amended by this Amendment, and the other Loan Documents shall be true and correct in all material respects on and as of the date hereof as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); c. After giving effect hereto, no Default or Event of Default shall have occurred and be continuing on the date hereof, nor shall result from the consummation of the transactions contemplated herein; and d. No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force by any governmental authority against Borrower, Foothill, or any of their respective Affiliates. 4. Representations and Warranties. Borrower hereby represents and warrants to Foothill that (a) the execution, delivery, and performance of this Amendment are within its corporate powers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governments authority, or of the terms of its charter or 3 4 bylaws, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected, (b) the Loan Agreement, as amended by this Amendment, constitutes Borrower's legal, valid, and binding obligation, enforceable against Borrower in accordance with its terms, and (c) this Amendment has been duly executed and delivered. 5. Further Assurances. Borrower shall execute and deliver all financing statements, agreements, documents, and instruments, in form and substance satisfactory to Foothill, and take all actions as Foothill may reasonably request from time to time, to perfect and maintain the perfection and priority of Foothill's security interests in the Collateral, and to fully consummate the transactions contemplated under the Loan Agreement and this Amendment. 6. Effect on Loan Documents. The Loan Agreement, as amended hereby, and the other Loan Documents shall be and remain in full force and effect in accordance with their respective terms and each hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of or as an amendment of any right, power, or remedy of Foothill under the Loan Agreement, as in effect prior to the date hereof. 7. Miscellaneous. a. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment, the Eleventh Amendment, Twelfth Amendment, and this Amendment. b. Upon the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", 'thereof" or words of like import referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment, the Eleventh Amendment, Twelfth Amendment, and this Amendment. 4 5 c. This Amendment shall be governed by and construed in accordance with the laws of the State of California. d. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. [The remainder of this page is intentionally left blank] 5 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed on the date first written above. MALIBU ENTERTAINMENT WORLDWIDE, INC., a Georgia corporation 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 PUENTE HILLS MGPC, INC., a California corporation PUENTE HILLS SHOWBOAT MGPC, INC., a California corporation REDONDO BEACH CASTLE MGPC, INC., a California corporation REDWOOD CITY CASTLE MGPC, INC., a California corporation SAN DIEGO MGPC, INC., a California corporation PORTLAND MGPC, INC., an Oregon 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 MALIBU CENTERS, INC., a California corporation By: ------------------------------------------ Name: Title: Responsible officer for each of the above referenced Persons composing Borrower [signature page continues] 6 7 FOOTHILL CAPITAL CORPORATION, a California corporation By: ------------------------------ Name: Title: 7 -----END PRIVACY-ENHANCED MESSAGE-----