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EXHIBIT 99.13
AGREEMENT REGARDING RIGHT TO
CONVERT PROMISSORY NOTES
THIS AGREEMENT REGARDING RIGHT TO CONVERT PROMISSORY NOTES (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT") is dated as of January 20, 1999 by and between MEI HOLDINGS, L.P.,
a Delaware limited partnership ("LENDER"), and MALIBU ENTERTAINMENT WORLDWIDE,
INC., a Georgia corporation ("BORROWER").
RECITALS:
A. Borrower has executed that certain Third Amended and Restated
Subordinated Promissory Note dated as of January 20, 1999 made payable to the
order of Lender in the original principal sum of $65,000,000 (the "$65 MILLION
NOTE") and that certain Second Amended and Restated Promissory Note dated as of
January 20, 1999 made payable to the order of Lender in the original principal
sum of $10,000,000 (the "$10 MILLION NOTE" and together with the $65 Million
Note, as same may be increased, amended, restated, replaced, supplemented or
otherwise modified from time to time, and all notes issued upon transfer,
division or combination of, or in substitution therefor, collectively the
"NOTES" and individually, a "NOTE"). Capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Notes.
B. In consideration of, among other things, Lender's agreement to
subordinate the indebtedness evidenced by the Notes to certain other
indebtedness of Borrower, Borrower has agreed to grant to Lender the right to
convert the indebtedness evidenced by the Notes into preferred stock of the
Borrower.
C. Borrower and Lender desire to execute this Agreement to set forth
the terms and conditions of such conversion of such indebtedness.
AGREEMENT:
NOW, THEREFORE, in consideration of the covenants, agreements,
representations and warranties set forth in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby covenant, agree, represent and warrant
as follows:
1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
a. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly required or unless the context clearly
indicates a contrary intent:
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banks in Dallas, Texas are not open
for business.
"CERTIFICATE OF DESIGNATIONS" shall mean that certain
Certificate of Designations relating to the Series H Preferred Stock that is
attached as Exhibit "A" hereto and is made a part hereof for all purposes.
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"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 Notes,
this Agreement, or any other Loan Documents.
"LOAN" shall mean, in the aggregate, the Advances made by
Lender to Borrower, as set forth in, and evidenced by, the Notes and the other
Loan Documents.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Notes and any other document executed and/or delivered by Borrower in connection
with the Loan.
"MATURITY DATE" shall mean the date on which the final payment
of principal of either of the Notes becomes due and payable as therein provided,
whether at the stated maturity, by declaration of acceleration, or otherwise.
"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.
"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.
"SERIES H PREFERRED STOCK" shall mean the preferred stock of
the Borrower having the terms set forth in the Certificate of Designations
attached as Exhibit "A" and made a part hereof for all purposes.
"STOCK EXCHANGE" shall mean the principal national securities
exchange on which the shares of common stock of Borrower are listed or admitted
to trading or, if the shares are not listed or admitted to trading on any
national securities exchange, the National Association of Securities Dealers,
Inc. Automated Quotation System or any similar national system on which the
common stock is quoted or traded.
2. CONVERSION OF THE DEBT.
a. CONVERSION OF THE DEBT INTO SERIES H PREFERRED STOCK. Lender
shall have the right (the "CONVERSION RIGHT"), at any time on
or prior to the Maturity Date (or within five (5) Business
Days thereafter in the case of (i) an acceleration of the
Debt, or (ii) Borrower's failure to repay the Debt and all
other Obligations in full on the Maturity Date), even if
Borrower has previously delivered a notice of prepayment of
the Notes, at its option, subject to the provisions of this
Section 2, to convert all or any part of the Debt into shares
of Series H Preferred Stock. The amount of Debt to be
converted must be an integral multiple of $100,000 unless the
entire Debt is being converted. The number of shares of Series
H Preferred Stock to be issued in such conversion will equal
the quotient obtained by dividing the amount of the Debt, or
such portion of the Debt to be converted, on the date of the
Conversion Notice (defined below) by $100,000. All shares of
Series H Preferred
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Stock issuable upon the exercise of the Conversion Right shall
be validly issued, fully paid and nonassessable and without
any preemptive rights.
b. MANNER OF EXERCISE. Lender may exercise the Conversion Right
on any Business Day, prior to 5:00 p.m. Dallas, Texas time, on
or before the Maturity Date (or within five (5) Business Days
thereafter in the case of (i) an acceleration of the Debt, or
(ii) Borrower fails to repay the Debt and all other
Obligations in full on the Maturity Date). In order to
exercise the Conversion Right, Lender must (i) deliver to
Borrower written notice of its election to exercise the
Conversion Right (the "CONVERSION NOTICE," a copy in blank of
which is attached as Exhibit "B"), and (ii) notify Borrower
that it is ready, willing and able to surrender to Borrower
each Note being converted upon receipt of the certificates
and, if applicable, the new Note described in Subsection 2.c.
below. The date of delivery of the Conversion Notice is the
"CONVERSION DATE".
c. ISSUANCE OF CERTIFICATES. As soon as practicable, and in any
event within two (2) Business Days after the Conversion Date,
Borrower will file the Certificate of Designations with the
Secretary of State of Georgia (if not previously filed) and
will execute, issue and deliver to Lender, upon Lender's
tender to Borrower of the Note or Notes being converted, a
certificate or certificates representing the aggregate number
of shares of Series H Preferred Stock to be issuable upon such
conversion and, if the Conversion Right was exercised in part
and either Borrower or Lender so requests, a new Note
identical as to terms and conditions to each surrendered Note
on the Conversion Date except as to reflect the new reduced
principal amount thereof. The stock certificate or
certificates so delivered shall be, to the extent possible, in
such denominations as Lender shall request in the Conversion
Notice and shall be registered in the name of Lender or such
other name as Lender shall request in the Conversion Notice.
The applicable Note (or portion thereof for which the
Conversion Right was exercised) shall be deemed to have been
converted, and such certificate or certificates shall be
deemed to have been issued, and Lender or any other Person so
designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the
Conversion Date.
d. SHAREHOLDER APPROVAL. If Lender is advised by nationally
recognized or Lender's regular legal counsel that shareholder
approval of the issuance of a new Note or the issuance of the
Series H Preferred Stock upon conversion of any Note is
required by law or by the rules of the Stock Exchange,
Borrower will seek such shareholder approval at the earlier of
the next annual or special meeting of the shareholders of
Borrower after the date hereof, or if no such meeting is
scheduled to be held within 60 calendar days after the date of
the Conversion Notice, Borrower agrees to cause its secretary
to call such special meeting within 30 calendar days after the
date of the Conversion Notice at the place and upon the notice
provided by law and in the Bylaws of the Company for the
holding of meetings of shareholders. If any such special
meeting required to be called as above provided has not been
called by the secretary of Borrower within such 30 calendar
day period, then Lender may call such meeting to be held at
the place and upon the notice above provided, and
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for that purpose will have access to the stock ledger of
Borrower. The foregoing remedy will not be deemed exclusive,
and shall be in addition to all other rights and remedies
available at law or equity to Lender.
e. CONVERSION EXPENSES AND TAXES. No fees will be charged by
Borrower to Lender with respect to any conversion hereunder.
Borrower will be responsible for all of its and Lender's fees
and expenses in connection with the conversion and any of the
other actions described in this Section 2. Borrower will also
be responsible for all taxes and other governmental charges
that may be imposed with respect to the issuance or delivery
of the shares, unless such tax or charge is imposed by law
upon Lender or transfer taxes are payable because the shares
are to be issued in the name of a Person other than Lender, in
which case such taxes or charges shall be paid by Lender.
f. REGISTRABLE SECURITIES. The Notes and the Series H Preferred
Stock will be "Registrable Securities" under the Registration
Rights Agreement dated August 28, 1996 by and between Borrower
and Lender.
g. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS; ANTI-DILUTION PROTECTION.
i. In case Borrower shall reorganize its capital,
reclassify its capital stock, consolidate or merge
with or into another corporation (where Borrower is
not the surviving corporation or where there is a
change in or distribution with respect to the
preferred stock of Borrower), or sell, transfer or
otherwise dispose of all or substantially all its
property, assets or business to another corporation
and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or
disposition of assets, shares of capital stock or
other securities or property of any nature whatsoever
(including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("OTHER
PROPERTY"), are to be received by or distributed to
the holders of capital stock of Borrower, then Lender
shall have the right thereafter to receive, upon
exercise of the Conversion Right, the number of
shares of preferred stock of the successor or
acquiring corporation or of Borrower, if it is the
surviving corporation, and Other Property that would
have been receivable upon or as a result of such
reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of
the number of shares of Series H Preferred Stock had
the Notes been converted into Series H Preferred
Stock immediately prior to such event, it being
agreed that if such event occurs before the Lender
has exercised the Conversion Right, the Notes shall
be treated as being exercisable as of the date
immediately prior to such event as if such date were
the Conversion Date. In case of any such
reorganization, reclassification, merger,
consolidation, or disposition of assets, the
successor or acquiring corporation (if other than
Borrower) shall expressly assume the due and punctual
observance and performance of each and every covenant
and condition of the Notes to be performed and
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observed by Borrower and all the obligations and
liabilities hereunder, and the Notes shall be
convertible, on the terms set forth herein, for
preferred stock of the successor or acquiring
corporation having substantially identical terms to
those set forth in the Certificate of Designations.
For purposes of this Subsection 2.g, "preferred stock
of the successor or acquiring corporation" shall mean
capital stock having terms no less favorable to the
holder thereof than the terms of the Series H
Preferred Stock. The foregoing provisions of this
Subsection 2.g. shall similarly apply to successive
reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
ii. In the event that any time and from time to time (i)
all or any part of the Debt is converted into shares
of Series H Preferred Stock in accordance with this
Section 2 and (ii) any event or circumstance occurs
after the date hereof but prior to the date of any
such conversion which, had it occurred after the
issuance of such shares of Series H Preferred Stock,
would have required an adjustment in the Conversion
Rate Cap (as such term is defined in the Certificate
of Designations) under Section 2.8.6 of the
Certificate of Designations (or any other adjustment
covered thereby), then in each such event the
Borrower shall concurrently with each such conversion
of Debt into shares of Series H Preferred Stock take
such action as is reasonably necessary to ensure that
the holder of such shares of Series H Preferred Stock
is entitled to receive upon or in connection with the
conversion of such shares of Series H Preferred Stock
that additional number of shares of the common stock
of Borrower (the "ADDITIONAL SHARES") that such
holder would have been entitled to receive under the
Certificate of Designations as a result of the
occurrence of such event or circumstance if such
holder had acquired such shares of Series H Preferred
Stock on the date hereof. Such actions may include,
among other things, the amendment by the Borrower of
the Certificate of Designations to provide for the
appropriate adjustment to the Conversion Rate Cap (or
to provide for any other appropriate adjustments) or,
in the event the Borrower does not reasonably believe
that it is practicable to amend the Certificate of
Designations, then such actions may include, in lieu
of such an amendment, (i) the written agreement of
the Borrower to issue to such holder such Additional
Shares upon the exercise by such holder of such
shares of Series H Preferred Stock, for a per share
consideration of the Additional Shares not to exceed
the then-current par value of such Additional Shares,
(ii) the establishment by the Borrower of another
series of convertible preferred stock and the
issuance by the Borrower to the holder of that number
of shares of such convertible preferred stock that
would be convertible into the Additional Shares, with
such shares of convertible preferred stock having a
per share consideration not to exceed the
then-current par value of such convertible preferred
stock and with such shares being convertible solely
in connection with the conversion of shares of Series
H Preferred Stock, or (iii) the issuance by the
Borrower to such holder, for no cash consideration,
of warrants to acquire the Additional Shares, with
such warrants having an exercise price not to
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exceed the then-current par value of the Additional
Shares and with such warrants being exercisable
solely in connection with the conversion of shares of
Series H Preferred Stock.
h. NOTICES TO LENDER.
i. NOTICE OF ADJUSTMENTS. Whenever an event specified in
Subsection 2.g shall occur, Borrower shall forthwith
prepare a certificate to be executed by the chief
financial officer of Borrower describing, in
reasonable detail, the event requiring the giving of
such notice and describing the number and kind of any
other shares of stock or Other Property for which the
Notes are exercisable. Borrower shall promptly cause
a signed copy of such certificate to be delivered to
Lender. Borrower shall keep at its principal office
or the copies of all such certificates and cause the
same to be available for inspection at said office
during normal business hours by any Lender or any
prospective purchaser of a Note designated by a
Lender thereof.
ii. NOTICE OF CORPORATE ACTIONS. If at any time:
(1) Borrower shall take a record of the holders
of its Series H Preferred Stock for the
purpose of entitling them to receive a
dividend (other than a cash dividend payable
out of earnings or earned surplus legally
available for the payment of dividends under
the laws of the jurisdiction of
incorporation of Borrower) or other
distribution, or any right to subscribe for
or purchase any evidences of its
indebtedness, any shares of stock of any
class or any other securities or property,
or to receive any other right, or
(2) there shall be any capital reorganization of
Borrower, any reclassification or
recapitalization of the capital stock of
Borrower or any consolidation or merger of
Borrower with, or any sale, transfer or
other disposition of all or substantially
all the property, assets or business of
Borrower to, another corporation, or
(3) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of
Borrower;
then, in any one or more of such cases, Borrower
shall give to Lender at least 30 days' prior written
notice of the date on which a record date shall be
selected for such dividend, distribution or right or
for determining rights to vote in respect of any such
reorganization, reclassification, merger,
consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Such notice
in accordance with the foregoing clause also shall
specify (i) the date on which any such record is to
be taken for the purpose of such dividend,
distribution or right, the date on which the holders
of Series H Preferred Stock shall be entitled to any
such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any
such
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reorganization, reclassification, merger,
consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take
place and the time, if any such time is to be fixed,
as of which the holders of Series H Preferred Stock
shall be entitled to exchange their shares of Series
H Preferred Stock for securities or other property
deliverable upon such reorganization,
reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or
winding up. Each such written notice shall be
sufficiently given if addressed to Lender at the last
address of Lender appearing on the books of Borrower
and delivered in accordance with Subsection 3.e.
hereof
i. NO IMPAIRMENT. Borrower shall not by any action, including,
without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, seek to avoid the
observance or performance of any of the terms of this
Agreement, and will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the
rights of Lender against impairment. Without limiting the
generality of the foregoing, Borrower will (a) not take any of
the actions specified in Section 2.8.2 of the Certificate of
Designations attached hereto as Exhibit "A", (b) take all such
action as may be necessary or appropriate in order that
Borrower may validly and legally issue fully paid and
nonassessable shares of Series H Preferred Stock upon exercise
of the Conversion Right and fully paid and nonassessable
shares of common stock upon the conversion of the shares of
Series H Preferred Stock, and (c) use its best efforts to
obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may
be necessary to enable Borrower to perform its obligations
under the Notes.
j. RESERVATION AND AUTHORIZATION OF SERIES H PREFERRED STOCK AND
COMMON STOCK. Borrower shall at all times reserve and keep
available for issue upon the exercise of the Conversion Right
such number of its authorized but unissued shares of Series H
Preferred Stock as will be sufficient to permit the exercise
in full of the Conversion Right and shall at all times reserve
and keep available for issue upon the conversion of Series H
Preferred Stock such number of its authorized but unissued
shares of common stock as would be sufficient to permit the
conversion in full of the Series H Preferred Stock (assuming
conversion in full of the Debt into Series H Preferred Stock).
k. TAKING OF RECORD; STOCK AND NOTE TRANSFER BOOKS. In the case
of all dividends or other distributions by Borrower to the
holders of its Series H Preferred Stock with respect to which
any provision hereof refers to the taking of a record of such
holders, Borrower will not at any time, except upon
dissolution, liquidation or winding up of Borrower, close its
stock transfer books or Note transfer books so as to result in
preventing or delaying the exercise of any Conversion Right or
the transfer of any Note.
l. LIMITATION OF LIABILITY. No provision hereof, in the absence
of affirmative action by Lender to purchase shares of Series H
Preferred Stock, and no enumeration herein of the rights or
privileges of Borrower hereof, shall give rise to any
liability of Lender for the purchase price of any Series H
Preferred Stock or as a stockholder of Borrower, whether such
liability is asserted by Borrower or by creditors of Borrower.
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3. MISCELLANEOUS
a. 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 Notes, and shall continue in full force and
effect so long as all or any of the Debt is outstanding and
unpaid or any other Obligations or other amounts remain owing
under the Loan Documents 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.
b. GOVERNING LAW. This Agreement was negotiated in the State of
Texas, and made by Lender and accepted by Borrower in the
State of Texas, and the proceeds of the Notes delivered in
connection herewith were or are to be disbursed from the State
of Texas, 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 Texas
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. 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 Notes, and
this Agreement and the Notes shall be governed by and
construed in accordance with the laws of the State of Texas.
Any legal suit, action or proceeding against Lender or
Borrower arising out of or relating to this Agreement may at
Lender's option be instituted in any Federal or State court in
the City of Dallas, County of Dallas, Texas, 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 agree that service of process
upon an officer of Borrower at Borrower's address set forth
herein and written notice of such 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 Texas.
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 Dallas, Texas (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
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if its authorized agent ceases to have an office in Dallas,
Texas or is dissolved without leaving a successor.
c. WAIVER OF JURY TRIAL. BORROWER, TO THE FULLEST EXTENT THAT IT
MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING WITHOUT LIMITATION ANY TORT ACTION,
BROUGHT WITH RESPECT TO THIS AGREEMENT. LENDER MAY FILE A COPY
OF THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF
BORROWER'S KNOWING. VOLUNTARY, AND BARGAINED-FOR AGREEMENT
IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY, AND THAT, TO
THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, ANY DISPUTE OR
CONTROVERSY WHATSOEVER BETWEEN BORROWER AND LENDER SHALL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.
d. MODIFICATION; WAIVER IN WRITING. No modification, amendment,
extension, discharge, termination or waiver of any provision
of this Agreement, or of the Notes, 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.
e. 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: Malibu Entertainment Worldwide, Inc.
000 Xxxxx Xxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
If to Lender: MEI HOLDINGS, L.P.
Texas Commerce Tower,
0000 Xxxx Xxx., Xxxxx 0000-X,
Xxxxxx, Xxxxx 00000
Attn: Secretary/Treasurer
Facsimile: (000) 000-0000
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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;
in the case of expedited prepaid delivery, upon the first
attempted delivery on a Business Day; and in the case of
facsimile, upon acknowledged transmission (if a copy thereof
is also sent by another method authorized hereunder) on a
Business Day.
f. HEADINGS. The Section headings in this Agreement are included
herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
g. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of
this Agreement.
h. EXHIBITS AND SCHEDULES INCORPORATED. Any 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.
i. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE. In the event of
any conflict between the provisions of this Agreement and any
of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the
negotiation, drafting and execution of the Loan Documents and
that such Loan Documents shall not be subject to the principle
of construing their meaning against the party which drafted
same.
j. LOSS OR MUTILATION. Upon receipt by Borrower from Lender of
evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note and
indemnity reasonably satisfactory to it, and in case of
mutilation upon surrender and cancellation hereof, Borrower
will execute and deliver in lieu hereof a new Note of like
tenor to Lender; provided, in the case of mutilation, no
indemnity shall be required if the Note in identifiable form
is surrendered to Borrower for cancellation.
k. PRIOR AGREEMENTS. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR
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ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
MEI HOLDINGS, L.P.
By: MEI GenPar, L.P.
Its General Partner
By: HH GenPar Partners
Its General Partner
By: Hampstead Associates, Inc.
Its Managing General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxxx
-----------------------
Title: Vice President
----------------------
MALIBU ENTERTAINMENT WORLDWIDE, INC.
a Georgia corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
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EXHIBIT "A"
CERTIFICATE OF DESIGNATIONS OF SERIES H PREFERRED STOCK
[SEE ATTACHED]
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ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
OF
MALIBU ENTERTAINMENT WORLDWIDE, INC.
In accordance with Section 14-2-1006 of the Georgia Business
Corporation Code (the "Code"), Malibu Entertainment Worldwide, Inc., a Georgia
corporation (the "Company"), hereby certifies as follows:
1. The name of the corporation is Malibu Entertainment Worldwide, Inc.
2. In accordance with the authority of the Company's Board of Directors
(the "Board") pursuant to Section 14-2-602 of the Code and the Articles of
Incorporation of the Company (the "Charter"), the Board hereby designates the
powers, designations, preferences and relative, participating, optional and
other special rights and the qualifications, limitations or restrictions of
Series H Preferred Stock of the Company as follows:
2.8 Series H Preferred Stock. Five thousand shares of
Preferred Stock, no par value, of the Company are designated as "Series
H Preferred Stock" having the voting powers, preferences and relative
participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, are as set forth
below (the "Series H Preferred").
2.8.1 Dividends and Distributions. (a) The holders of
shares of Series H Preferred, in preference to the holders of Common
Stock (the "Common Stock") and of any other class or series of
preferred or other capital stock of the Company other than the Series E
Preferred (as defined below) ("Junior Stock"), will be entitled to
receive dividends at an annual rate of $9,000 per share, payable
quarterly in arrears on the 15th day of each of January, April, July
and October of each year (except that if any such date is a Saturday,
Sunday or legal holiday, then such dividend will be payable on the next
day that is not a legal holiday) (the "Dividend Payment Date"),
commencing with the date of the first issuance of any shares of the
Series H Preferred (the "Initial Issuance Date"), prior and in
preference to any declaration or payment of any dividend on Junior
Stock (other than a dividend or distribution solely in shares of Common
Stock and then only with Class E approval prior thereto as provided in
Section 2.8.2(b)(ii)). Such dividends will be cumulative and accrue
with respect to each share of Series H Preferred from date of issuance
of such share of Series H Preferred (the "Dividend Commencement Date"),
whether or not declared by the Board and whether or not there are funds
of the Company legally available for payment of such dividends. No
accrued or accumulated dividends on the Series H
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Preferred will bear interest. Except as set forth in Sections
2.8.1(b)(i), 2.8.5 and 2.8.6 hereof, the Company will have no
obligation to pay such dividends unless so declared by the Board and
unless funds are legally available therefor. As used herein, the term
"Series E Preferred" means shares of preferred stock of the Company
issued pursuant to the Loan Agreement, dated as of November 16, 1998,
between the Company and SZ Capital, L.P., as amended from time to time.
(b) Any dividends accruing prior to January 1, 2004
may at the election of the Board in its sole discretion be paid (i) by
the issuance as of the Dividend Payment Date of additional shares of
fully paid, nonassessable Series H Preferred having an aggregate
liquidation preference equal to the amount of such accrued dividends or
(ii) in cash. In the event that dividends are declared and paid by the
issuance of additional shares of Series H Preferred as provided in the
previous sentence, such dividends will be deemed paid in full and will
not accumulate. The Company will deliver certificates representing
shares of Series H Preferred issued pursuant to Section 2.8.1(a)(i)
promptly after the Dividend Payment Date.
(c) From and after January 1, 2004, dividends accrued
and payable pursuant to Section 2.8.1(a) will be payable in cash only
and will be cumulative from and after such date.
(d) Each dividend will be payable to holders of
record as they appear on the stock books of the Company on the last day
of each fiscal quarter of the Company.
2.8.2 Voting Rights. Holders of Series H Preferred
will have no voting rights and their consent will not be required for
taking any corporate action except (a) as otherwise required by law or
provided elsewhere herein and (b) that, if any share of Series H
Preferred is then outstanding, the affirmative vote or consent of the
holders of a majority of the then-outstanding shares of Series H
Preferred, voting together as a single class (a "Class H Approval"),
will be required in order for the Company to:
(i) Except with respect to the powers, designations,
preferences and relating participating, optional and other
special rights and the qualifications, limitations or
restrictions of the Series E Preferred, amend the Charter in
any way, whether by amending the terms of this Section 2.8 or
any other provision of the Charter, that adversely affects any
of the powers, designations, preferences and relative,
participating, optional and other special rights of the Series
H Preferred, and the qualifications, limitations or
restrictions thereof, whether by direct amendment or in
connection with or pursuant to a merger, consolidation or any
other transaction involving any change in the Charter;
(ii) Declare or pay any dividends on, or make any
other distributions in respect of, any shares of Junior Stock;
(iii) Redeem or purchase or otherwise acquire for
consideration any shares of any Junior Stock (except for
Series E Preferred or in connection with the exercise of
employee stock options);
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(iv) Issue any shares of capital stock ranking prior
or superior to, or on parity with, the Series H Preferred with
respect to dividends or other distributions or upon
liquidation, dissolution or winding up of the Company (except
for shares of Series E Preferred and except to employees of
the Company under the Company's stock option or long term
incentive plans);
(v) Effect any merger, consolidation, combination,
recapitalization, reorganization or other transaction in which
the powers, designations, preferences and relative,
participating, optional or other special rights of the Series
H Preferred, or the qualifications, limitations or
restrictions thereof would be materially adversely affected;
(vi) Subdivide or otherwise change shares of Series H
Preferred into a different number of shares whether in a
merger, consolidation, combinations, recapitalization,
reorganization or otherwise (whether or not any provision of
Section 2.8.6 is applicable to such transaction); or
(vii) Issue any shares of Series H Preferred other
than pursuant to the Agreement Regarding Right to Convert to
Promissory Notes, dated as of January 20, 1999, between the
Company and MEI Holdings, L.P.
The Company will not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the
Company unless the Company could purchase or otherwise acquire such
shares at such time and in such manner in accordance with the foregoing
restrictions.
2.8.3 Reacquired Shares. If permitted by law, any
shares of Series H Preferred that are issued and thereafter cease to be
issued and outstanding for any reason, whether because they are
converted into Junior Stock as provided herein or are purchased or
otherwise acquired by the Company in any manner whatsoever, will be
restored to the status of authorized but unissued shares of preferred
stock of the Company, including shares of Series H Preferred, and may
be reissued as part of a new series of preferred stock of the Company
subject to the conditions and restrictions on issuance set forth herein
or in any other certificate of designations creating a series of
preferred or any similar stock of the Company.
2.8.4 Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Company, no
distribution will be made to the holders of shares of Junior Stock
unless, prior thereto, the holders of shares of Series H Preferred
shall have received $100,000 per share plus accrued and unpaid
dividends. Neither a consolidation or merger of the Company with
another corporation, nor a sale or transfer of all or part of the
Company's assets for cash, securities or other property will be
considered a liquidation, dissolution or winding up of the Company.
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2.8.5 Redemption. (a) Redemption Price. Shares of
Series H Preferred (i) will not be redeemable prior to January 1, 2002
and (ii) will be redeemable (to the extent not previously redeemed or
converted and as to which no Conversion Notice has been delivered to
the Company on or before the date fixed for redemption) at any time
(A) after January 1, 2002 and prior to or on January
1, 2003, at a price per share of $104,000 plus accrued and
unpaid dividends through the date such redemption price is
paid ("Accrued Dividends");
(B) after January 1, 2003 and prior to or on January
1, 2004, at a price per share of $103,000 plus Accrued
Dividends;
(C) after January 1, 2004 and prior to or on January
1, 2005, at a price per share of $102,000 plus Accrued
Dividends;
(D) after January 1, 2005 and prior to or on January
1, 2006, at a price per share of $101,000 plus Accrued
Dividends; and
(E) after January 1, 2006, at a price per share of
$100,000 plus Accrued Dividends.
(b) Redemption Procedures. At least 30 calendar days
and not more than 60 calendar days prior to the date fixed for any
redemption of Series H Preferred, written notice ("Redemption Notice")
will be given by the Company by first class mail, postage prepaid, to
each holder of record of Series H Preferred on the record date fixed
for such redemption by the Board at such holder's address as it appears
on the stock books of the Company, provided that no failure to give
such notice nor any deficiency therein will affect the validity of the
procedure for redemption of any shares of Series H Preferred except as
to the holder or holders to whom the Company has failed to give such
notice or whose notice was defective. The Redemption Notice will state:
(i) the redemption price;
(ii) whether all or fewer than all of the outstanding
shares of Series H Preferred are to be redeemed and the total
number of shares of Series H Preferred being redeemed;
(iii) the date fixed for redemption by the Board,
which date will occur within the applicable redemption period
specified in clause (a) above (the "Redemption Date");
(iv) the place or places and manner in which the
holder is to surrender his or her certificate(s) to the
Company; and
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(v) that dividends on the shares of Series H
Preferred to be redeemed will cease to accumulate on the
Redemption Date unless the Company defaults on the redemption
price.
Upon surrender of the certificate(s) representing shares of Series H
Preferred that are the subject of redemption pursuant to Section
2.8.5(a), duly endorsed (or otherwise in proper form for transfer, as
determined by the Company), in the manner and at the place designated
in the Redemption Notice and on the Redemption Date, the full
redemption price for such shares will be paid in cash to the person or
entity whose name appears on such certificate(s) as the owner thereof,
and each surrendered certificate will be canceled and retired. In the
event that fewer than all of the shares represented by any one
certificate are redeemed, a new certificate will be issued representing
the unredeemed shares.
(c) On and after the Redemption Date, unless the
Company defaults in the payment in full of the applicable redemption
price, dividends on the Series H Preferred to be redeemed will cease to
accumulate, and all rights of the holders thereof will terminate with
respect thereto on the Redemption Date, other than the right to receive
the redemption price, provided, however, that if a Redemption Notice
has been given as provided in Section 2.8.5(b) and the funds necessary
for redemption (including an amount in cash in respect of all dividends
that will accumulate to the Redemption Date) have been irrevocably
deposited in trust with a bank having an aggregate shareholders' equity
of at least $5.0 billion for the equal and ratable benefit of all
holders of shares of Series H Preferred that are to be redeemed, then,
at the close of business on the day on which such funds are deposited
in trust, dividends on the Series H Preferred to be redeemed will cease
to accumulate and the holders thereof will cease to be shareholders of
the Company and be entitled only to receive the redemption price.
(d) If the funds of the Company legally available for
redemption of shares of Series H Preferred on the date scheduled for a
redemption are insufficient to redeem the total number of shares of
Series H Preferred to be redeemed on such date, those funds that are
legally available will be used to redeem the maximum possible number of
such shares ratably among the holders of such shares to be redeemed
based on their holdings of Series H Preferred. The shares of Series H
Preferred not redeemed will remain outstanding and entitled to all the
rights and preferences provided herein. At any time thereafter when
additional funds of the Company are legally available for the
redemption of shares of Series H Preferred, such funds will immediately
be used to redeem the balance of the shares that the Company has become
obligated to redeem on any scheduled redemption date that it has not
redeemed.
2.8.6 Conversion. (a) Conversion Rate. At any time on
or after January 1, 2000, each share of the Series H Preferred will be
convertible, at the option of the holder thereof, into the number of
fully paid and nonassessable shares of Common Stock determined, subject
to adjustment as described below, by dividing $100,000 plus the total
accrued and unpaid dividends through the date of conversion by the
Conversion Price. As
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used herein, "Conversion Price" means $2.50 and "Conversion Rate" means
the number of shares of Common Stock into which each share of Series H
Preferred may be converted.
(b) No Fractional Shares. No fractional shares of
Common Stock will be issued upon conversion of Series H Preferred and,
if any shares of Series H Preferred surrendered by a holder, in the
aggregate, for conversion would otherwise result in a fractional share
of Common Stock, then such fractional share will be redeemed at the
then-effective Conversion Price per share, payable as promptly as
possible when funds are legally available therefor.
(c) Mechanics of Conversion. Before any holder of
shares of Series H Preferred will be entitled to convert the same into
shares of Common Stock, such holder must deliver a written notice (a
"Conversion Notice") to the attention of the Secretary or Treasurer of
the Company at the Company's principal place of business of its desire
to exercise its rights to convert, specifying the number of shares of
Series H Preferred to be converted and the holder's calculation of the
Conversion Rate. Such computation will be deemed correct for all
purposes hereof absent manifest error. In the event of any disagreement
between the Company and the holder as to the correct Conversion Price,
the Conversion Price will be finally determined by an investment
banking or brokerage firm selected by the holder, the fees and expenses
of which will be paid by the Company. Such conversion will be deemed to
have been made as of the close of business on the fifth business day
after such notice has been so delivered or such other date as the
holder exercising such conversion right and the Company agree. The
Company will, promptly upon receipt of all certificates representing
Series H Preferred as have been issued to such holder that are to be
converted, issue the appropriate number of shares of Common Stock to
such holder. All certificates issued upon the exercise of the
conversion will contain a legend governing restrictions upon the
disposition of such shares imposed by applicable securities laws. Such
legend will be removed by the Company by delivery of substitute
certificates without such legend in the event that such legend is no
longer required for purposes of applicable securities laws upon receipt
by the Company of an opinion of counsel to the effect that such legend
is no longer so required.
(d) Adjustment for Subdivisions or Combinations of
Common Stock. In the event that the Company at any time or from time to
time after the Initial Issuance Date effects a subdivision or
combination of its outstanding Common Stock into a greater or lesser
number of shares, then and in each such event the Conversion Rate will
be increased or decreased proportionately.
(e) Adjustments for Dividends, Distributions on
Common Stock. In the event the Company at any time or from time to time
after the Initial Issuance Date makes or issues, or fixes a record date
for the determination of holders of Common Stock entitled to receive a
dividend or other distribution (a "Common Stock Distribution") payable
in additional shares of Common Stock or other securities or rights
(other than the rights, options or warrants offered to Series H
Preferred pursuant to Section 2.8.6(g)) that are convertible into or
entitling the holder thereof to receive additional shares of Common
Stock
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(such other securities or rights, "Common Stock Equivalents") without
payment of any consideration by such holder of such Common Stock
Equivalents for the additional shares of Common Stock, without a
proportionate and corresponding dividend or other distribution to
holders of Series H Preferred calculated as if all of the Series H
Preferred had been converted in accordance with the terms hereof as of
the record date for such dividend or other distribution, then and in
each such event, the Conversion Rate will be decreased as of the time
of such issuance or, in the event such a record date will have been
fixed, as of the close of business on such record date, by multiplying
the Conversion Rate by a fraction,
(i) the numerator of which will be the total number
of (A) shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date, plus (B) the maximum number of
shares of Common Stock (not including any shares described in
clause (ii)(B) immediately below) issuable upon conversion or
exercise of all outstanding Common Stock Equivalents as of
immediately prior to the time of such issuance or the close of
business on such record date (the sum of the shares described
in clauses (A) and (B) immediately above, the "Outstanding
Shares"); and
(ii) the denominator of which will be the total
number of (A) Outstanding Shares, plus (B) the number of
shares of Common Stock issuable in payment of such dividend or
distribution or upon conversion or exercise of such Common
Stock Equivalents;
provided, however, (i) if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the Conversion Rate will be recomputed
accordingly as of the close of business on such record date and
thereafter the Conversion Rate will be adjusted pursuant to this
Section 2.8.6(e) as of the time of actual payment of such dividends or
distributions; (ii) if such Common Stock Equivalents provide, with the
passage of time or otherwise, for any decrease or increase in the
number of shares of Common Stock issuable upon conversion or exercise
thereof, the Conversion Rate computed upon the original issue thereof,
and any subsequent adjustments based thereon, will, upon any such
decrease or increase becoming effective, be recomputed to reflect such
decrease or increase insofar as it affects the rights of conversion or
exercise of the Common Stock Equivalents then outstanding; (iii) upon
the expiration of any rights of conversion or exercise under any
unexercised Common Stock Equivalents, the Conversion Rate computed upon
the original issue thereof (or upon the occurrence of a record date
with respect thereto), and any subsequent adjustments based thereon,
will, upon such expiration, be recomputed as if the only additional
shares of Common Stock issued were the shares of such stock, if any,
actually issued upon the conversion or exercise of such Common Stock
Equivalents; or (iv) in the event of issuance of Common Stock
Equivalents which expire by their terms not more than 60 calendar days
after the date of issuance thereof, no adjustments of the Conversion
Rate will be made until the expiration or exercise of all such Common
Stock Equivalents, whereupon such adjustment will be made in the manner
provided in this Section 2.8.6(e). The adjustments
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provided for in this Section 2.8.6(e) will be made successively
whenever any such dividend or distribution is made.
(f) Reorganization, Merger, Consolidation or Sale of
Assets. If at any time or from time to time there shall be a capital
reorganization of the Common Stock (other than a subdivision,
combination, reclassification or exchange of shares provided for
elsewhere in this Section 2.8.6) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other
person which is effected so that holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock,
then, as a part of such capital reorganization, merger, consolidation
or sale, proper provision will be made so that the holders of the
Series H Preferred will thereafter be entitled to receive upon
conversion of the Series H Preferred the number of shares of stock,
securities or assets of the Company, or of the successor corporation
resulting from such merger or consolidation or sale, to which a holder
of the Common Stock deliverable upon conversion of Series H Preferred
would have been entitled on such capital reorganization, merger,
consolidation or sale (regardless of whether the Series H Preferred is
then-convertible and assuming a Conversion Price of $2.50). In any
such case, appropriate adjustment will be made in the application of
the provisions of this Section 2.8.6 with respect to the rights of the
holders of the Series H Preferred after the reorganization, merger,
consolidation or sale to the end that the provisions of this Section
2.8.6 (including adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the Series H
Preferred) will be applicable after that event as nearly equivalent as
may be practicable. This provision will apply to successive capital
reorganizations, mergers, consolidations or sales.
(g) Rights Offering. If at any time or from time to
time the Company shall offer to any of the holders of Common Stock any
right, option or warrant to acquire additional shares of capital stock
of the Company, then each holder of a share of then-outstanding Series
H Preferred will be entitled to receive rights, options or warrants to
acquire such number of additional shares of capital stock of the
Company as such holder would have been entitled to receive had such
holders of Series H Preferred been converted immediately prior to the
record date for the offering of such rights, options or warrants, at
the Conversion Rate then in effect or, if prior to January 1, 2000, at
a Conversion Rate using a deemed Conversion Price of $2.50.
(h) No Adjustment. No adjustment to the Conversion
Rate will be made if such adjustment would result in a change in the
Conversion Rate of less than 0.001%. Any adjustment of less than 0.001%
which is not made will be carried forward and will be made at the time
of and together with any subsequent adjustment which, on a cumulative
basis, amounts to an adjustment of 0.001% or more in the Conversion
Rate.
(i) Certificate as to Adjustments. Upon the
occurrence of each adjustment or readjustment of the Conversion Rate
pursuant to this Section 2.8.6, the Company at its expense will
promptly compute such adjustment or readjustment in accordance with the
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terms hereof and cause independent public accountants selected by the
Company to verify such computation and prepare and furnish to each
holder of Series H Preferred a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company will, upon the
written request at any time of any holder of Series H Preferred,
furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the
Conversion Rate at that time in effect, and (iii) the number of shares
of Common Stock and the amount, if any, of other property which at that
time would be received upon the conversion of Series H Preferred.
(j) Reservation of Stock Issuable Upon Conversion.
The Company will at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose
of effecting the conversion of the shares of the Series H Preferred
such number of its shares of Common Stock as will from time to time be
sufficient to effect the conversion of all then-outstanding shares of
the Series H Preferred; and if at any time the number of authorized but
unissued shares of Common Stock will not be sufficient to effect the
conversion of all then-outstanding shares of the Series H Preferred,
the Company will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as will be sufficient
for such purpose.
2.8.7 Fractional Shares. Series H Preferred may be
issued in fractions of a share which will entitle the holder, in
proportion to such holder's fractional shares, to receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Series H Preferred.
2.8.8 Rank. The Series H Preferred will rank senior
as to all capital stock of the Company other than the Series E
Preferred of the Company, including all Junior Stock, in each case as
to the payment of dividends or other distributions or upon liquidation,
dissolution or winding up.
2.8.9 Notice to Holders. Any notice given by the
Company to holders of record of Series H Preferred will be effective if
addressed to such holders at their last addresses as shown on the stock
books of the Company and deposited in the U.S. mail, sent first-class,
and will be conclusively presumed to have been duly given, whether or
not the holder of the Series H Preferred receives such notice.
2.8.10 Amendment of Terms of Series H Preferred. Upon
request of the holders of a majority of the then-outstanding shares of
Series H Preferred, the Company will amend the terms of the Series H
Preferred as set forth herein, or issue a new series of preferred stock
in exchange for such Series H Preferred, in order to make the terms of
the Series H Preferred, in the opinion (which need not be written) of a
nationally recognized financial advisor selected by the holders of a
majority of the then-outstanding shares of Series H Preferred,
consistent with terms applicable generally to preferred stock being
issued in the public securities markets by companies with comparable
credit characteristics to the Company, provided, however, that no
amendment or other change will be made
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under this Section 2.8.10 to the dividend rate, Conversion Rate or
Conversion Price applicable to the Series H Preferred.
2.8.11 Certain Limitations. Notwithstanding any other
provision in the Charter or applicable law to the contrary, (a) the
vote of any holder of Series H Preferred will not be affected by any
direct or indirect interest of the holder or any affiliate or associate
or other person or entity in the matter under consideration or any
other matter, (b) holders of Series H Preferred will have only the
rights set forth herein and will have no fiduciary or similar rights,
and (c) no holder of Series H Preferred or any affiliate or associate
thereof will have any liabilities or obligations to any other person or
entity, including without limitation any other holder of Series H
Preferred or any other class or series of capital stock of the Company,
by reason of the giving or withholding of any vote or consent hereunder
or otherwise, it being the expectation and intention that such vote or
consent will be so given or withheld in the sole discretion of such
holder regardless of the effect thereof on any other person or entity.
2.8.12 Contractual Rights of Holders. The various
provisions set forth herein for the benefit of the holders of the
Series H Preferred will be deemed contract rights enforceable by them,
including without limitation, by one or more actions for specific
performance.
IN WITNESS WHEREOF, this amendment to the Certificate of
Designations is executed on behalf of the Company as of this __th day of
____________, ___.
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Title:
