EXHIBIT 2
OPTION AND VOTING AGREEMENT
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THIS OPTION AND VOTING AGREEMENT (this "AGREEMENT") is made effective as of
the 29th day of March, 2001, by and among NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation ("NOMURA"), PARTNERSHIP ACQUISITION TRUST V, a Delaware
business trust (the "TRUST"), and MEI HOLDINGS, L.P., a Delaware limited
partnership ("MEIH").
RECITALS
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A. On July 20, 1999, the parties hereto entered into that certain Second
Amended and Restated Recapitalization Agreement (the "RECAPITALIZATION
AGREEMENT"), which provided for the consummation of various transactions,
including the conversion of certain outstanding loans to preferred stock of
Malibu Entertainment Worldwide, Inc., a Georgia corporation (the "COMPANY"), and
the issuance of additional shares of preferred stock and shares of common stock
of the Company to the Trust.
B. On July 19, 1999, to effect the transactions contemplated by the
Recapitalization Agreement, the Company filed with the Secretary of State of the
State of Georgia (i) the Certificate of Designations of Series BB Preferred
Stock (the "SERIES BB CERTIFICATE") and (ii) the Certificate of Designations of
Series CC Preferred Stock (the "SERIES CC CERTIFICATE"), regarding the
preferences and rights of, respectively, (x) the Series BB Preferred Stock, no
par value, of the Company (the "SERIES BB PREFERRED") and (y) the Series CC
Preferred Stock, no par value, of the Company (the "SERIES CC PREFERRED"). The
Series BB Preferred and the Series CC Preferred are collectively referred to
herein as the "PREFERRED STOCK."
C. On July 20, 1999, pursuant to the terms of the Recapitalization Agreement,
(i) the Company and the Trust entered into a Registration Rights Agreement (the
"SERIES BB REGISTRATION RIGHTS AGREEMENT") and (ii) the Company and MEIH entered
into a Registration Rights Agreement (the "SERIES CC REGISTRATION RIGHTS
AGREEMENT" and, together with the Series BB Registration Rights Agreement, the
"REGISTRATION RIGHTS AGREEMENTS"). The Recapitalization Agreement and the
Registration Rights Agreements are collectively referred to herein as the "PRIOR
AGREEMENTS."
D. The parties hereto desire to enter into this Agreement for the granting by
Nomura and the Trust to MEIH or its designee of an option to purchase from the
Trust certain shares of Series BB Preferred and common stock of the Company, no
par value (the "COMMON STOCK" and collectively with the Preferred Stock, the
"SECURITIES"), and to set forth certain terms and conditions relating to the
granting of such option.
AGREEMENT
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NOW, THEREFORE, in consideration of the covenants, agreements,
representations, and warranties set forth in this Agreement, the parties to this
Agreement hereby agree as follows:
ARTICLE I
GRANT OF OPTION TO MEIH OR ITS DESIGNEE
Section 1.1 Grant of Option to Purchase Shares.
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(a) Subject to and upon the terms and conditions contained herein, Nomura and
the Trust hereby grant to MEIH or its designee an option (the "OPTION") to
purchase on the Closing Date (as defined below), in whole but not in part,
(i) all of the shares of Series BB Preferred held by the Trust (and any
Affiliate (as defined below) of the Trust, including Nomura), whether now
held or hereafter acquired by or issued to Nomura or the Trust, and (ii)
that number of shares of Common Stock held by the Trust (and any Affiliate
of the Trust, including Nomura), whether now held or hereafter acquired by
or issued to Nomura or the Trust, that exceeds 7.5% of the Outstanding
Shares (as defined below) of Common Stock (the "TRUST COMMON STOCK" and,
collectively with the Series BB Preferred, the "OPTION SHARES"). For
purposes of this Agreement, the calculation of the Outstanding Shares is
intended to protect the Trust against any dilution of its interest that
might result from the issuance of Common Stock or convertible securities to
fund the Purchase Price (as defined below) or from the issuance of Common
Stock upon the exchange or conversion by MEIH or its designee of any shares
of Series BB Preferred or Series CC Preferred on or after the Closing Date,
but is not intended to protect the Trust against any dilution of its
interest resulting from the issuance of capital stock for other purposes.
Accordingly, the term "OUTSTANDING SHARES" shall mean, as of the Closing
Date, the sum of (x) all of the issued and outstanding shares of Common
Stock of the Company at such time, plus (y) in the event that any shares of
Common Stock or capital stock convertible into or exercisable for shares of
Common Stock are issued by the Company to any party at any time after the
date hereof and on or prior to the Closing Date solely to fund or assist
with the funding of all or any portion of the Purchase Price, all such
shares of Common Stock or Common Stock issuable upon conversion or exercise
of such shares of capital stock, plus (z) in the event that MEIH or its
designee exchanges or converts any shares of Series BB Preferred or Series
CC Preferred into shares of Common Stock on or after the Closing Date
pursuant to Section 1.5(a), all such shares of Common Stock that are issued
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by the Company upon such exchange or conversion. In the event that, at any
time on or after the Closing Date, any shares of capital stock of the
Company are issued for any reason other than as described in clauses (y)
and (z) of the preceding sentence, or are redeemed or cancelled, the
calculation of Outstanding Shares shall be made prior to any such issuance,
redemption or cancellation.
(b) Notwithstanding anything to the contrary contained in the foregoing Section
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1.1(a), if, on the Closing Date, the Trust and its Affiliates collectively
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hold a number of shares of Common Stock that is less than 7.5% of the
Outstanding Shares, then at the Closing, MEIH or its designee shall
transfer, or cause to be issued, to the Trust, free and clear of all liens,
restrictions on transfer or adverse claims of any kind, other than
restrictions arising under federal or state securities laws, that number of
shares of Common Stock as are necessary for the Trust and its Affiliates to
collectively be the holder on the Closing Date of 7.5% of the Outstanding
Shares of Common Stock. Any shares delivered under this Section 1.1(b)
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shall be deemed to be part of the Purchase Price to be paid by MEIH
pursuant to Section 1.2 hereof.
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Section 1.2 Purchase Price. The aggregate purchase price for the Option Shares
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(the "PURCHASE PRICE") shall be as follows:
(a) If the Option is exercised at any time on or before September 30, 2001, $2
million; or
(b) If the Option is exercised at any time after September 30, 2001, but on or
before September 30, 2002, $2.5 million.
(c) If required pursuant to Section 1.1(b) hereof, the Purchase Price shall
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also include any shares of Common Stock that MEIH or its designee
transfers, or causes to be issued, to the Trust on the Closing Date under
Section 1.1(b).
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Section 1.3 Payment of Purchase Price. The Purchase Price shall be payable at
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the Closing to the Trust in immediately available funds by wire transfer to an
account designated by Nomura in writing to MEIH at least two (2) business days
prior to the Closing Date and, if applicable, through the transfer or issuance
to the Trust of any shares of Common Stock required to be delivered to the Trust
on the Closing Date pursuant to Section 1.1(b) hereof.
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Section 1.4 Option Period. The Option may be exercised by MEIH or its designee
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at any time during the period commencing on the date hereof and ending on
September 30, 2002, after which time this Option shall expire (the "OPTION
PERIOD"). Notwithstanding anything contained herein to the contrary, in no case
may the Option be exercised after the expiration of the Option Period.
Section 1.5 Cancellation or Conversion of Preferred Stock.
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(a) If the Option is exercised by MEIH or its designee, then on the Closing
Date, MEIH or its designee shall, at its option, either (i) contribute to
the capital of the Company some or all of the Series BB Preferred and/or
some or all of its shares of Series CC Preferred (in which event MEIH or
its designee shall deliver certificates representing such shares for
cancellation by the Company) or (ii) exchange or convert some or all of the
shares of Series BB Preferred and Series CC Preferred into shares of Common
Stock (either pursuant to the terms of the Series BB Certificate or Series
CC Certificate, or otherwise on terms mutually agreed to by the Company and
MEIH or its designee).
(b) The decision as to whether to contribute, on the one hand, or exchange or
convert, on the other hand, the shares of Series BB Preferred or Series CC
Preferred shall be made by MEIH or its designee in its sole and
unreviewable discretion. MEIH or its designee will also have the
discretion as to which shares, if any, will be contributed and which
shares, if any, will be exchanged or converted and may, if so desired,
contribute certain shares and exchange or convert other shares. Nothing
herein shall obligate MEIH or its designee to contribute any such shares to
the capital of the Company (i.e., all of such shares may be exchanged or
converted in lieu of being contributed to the capital of the Company). The
only requirement imposed hereunder is that all shares be either contributed
or exchanged or converted on the Closing Date such that after the Closing
Date, none of such shares remain outstanding.
Section 1.6 Exercise Procedure. Subject to the terms and conditions contained
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herein, the Option may be exercised by MEIH or its designee by giving written
notice to Nomura at the address set forth on the signature page hereto in
accordance with Section 5.13 at any time during the Option Period (the
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"NOTICE").
Section 1.7 Closing. If the Option is exercised by MEIH or its designee, the
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purchase and sale of the Option Shares shall be consummated at a closing (the
"CLOSING") to be held in Dallas, Texas at a place and time that shall be set
forth in the Notice, and which shall, in any event, be within five (5) business
days after the Notice is sent to Nomura (the "CLOSING DATE"). At the Closing,
(i) MEIH or its designee shall cause to be transferred to Nomura as set forth
Section 1.3 the Purchase Price (including, if applicable, certificates
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representing any shares of Common Stock to be transferred by MEIH to the Trust
pursuant to Section 1.1(b) hereof), and (ii) Nomura and the Trust shall deliver
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to MEIH or its designee the stock certificates representing all of the Option
Shares duly endorsed for transfer and free and clear of all liens, restrictions
on transfer or adverse claims of any kind, other than restrictions arising under
federal or state securities laws or those liens, restrictions on transfer or
adverse claims, if any, arising under this Agreement or the Recapitalization
Agreement.
ARTICLE II
VOTING AGREEMENT
Section 2.1 Designation of Board Members. Prior to the Closing Date and
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subject to Section 2.3 below, for so long as Nomura and/or the Trust own in the
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aggregate (a) 50% or more of the Series BB Preferred held collectively by Nomura
and the Trust as of the date hereof and (b) 50% or more of the Common Stock held
collectively by Nomura and the Trust as of the date hereof, and upon 30 days
prior written notice to each party to this Agreement by Nomura, each party to
this Agreement shall vote all of the Securities over which such party has voting
control and shall take all other necessary or desirable action, within such
party's control or capacity as a shareholder (including, without limitation,
attendance at meetings in person or by proxy for purposes of obtaining a quorum
and execution of written consents or resolutions in lieu of meetings), in order
to elect the directors designated by Nomura so that:
(i) one (1) member of the Company's Board of Directors (the "BOARD") may be
designated by Nomura (the "NOMURA DESIGNEE"); and
(ii) one (1) additional member of the Board who is not an Affiliate of Nomura or
the Trust may be designated by Nomura so long as such designee has
appropriate entertainment industry experience and expertise that can result
in a material positive contribution to the Board, as determined by the
members of the Board who are not Affiliated with Nomura or the Trust in
their sole discretion (the "NOMURA ADDITIONAL DESIGNEE"). For purposes of
this Agreement, the term "AFFILIATE" shall mean, with respect to any
person, (a) any other person which, directly or indirectly, is in control
of, is controlled by, or is under common control with such person, or (b)
any other person who is a director or officer of such person or of any
person described in clause (a) above. For purposes of this definition,
control of a person shall mean the power, direct or indirect, (x) to vote
5% or more of the securities having ordinary voting power for the election
of directors of such person, or (y) to direct or cause the direction of the
management and policies of such person whether by contract or otherwise.
If any event occurs after the date hereof that allows Nomura and/or the Trust to
elect, or to nominate or designate for election, directors of the Company
(including without limitation under Section 2.9.3 of the Series BB Certificate),
then the number of directors that Nomura and/or the Trust shall be entitled to
elect or nominate or designate for election shall include (and shall not be in
addition to) the Nomura Designee and the Nomura Additional Designee.
Section 2.2 Reimbursement of Expenses. MEIH shall use reasonable efforts to
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cause the Company to pay, in accordance with the Company's current policies, as
may be amended from time to time, the reasonable out-of-pocket travel, lodging
and other related expenses of all directors elected pursuant to Section 2.1
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hereof incurred in connection with attendance of meetings of the Board or any
committee thereof.
Section 2.3 Termination of Voting Agreement. In the event that (a) MEIH or its
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designees exercises the Option or (b) the Trust or Nomura (or any Affiliate
thereof) transfers any Option Shares pursuant to the procedures set forth in
Article IV, with the result being that as of the First Offer Closing
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Date (as defined below) or the Third Party Closing Date (as defined below), as
applicable, for such transfer the Trust, Nomura and their Affiliates
collectively hold a number of shares of Common Stock that is less than 7.5% of
the Outstanding Shares of Common Stock as of such date; then notwithstanding
anything to the contrary in this Agreement, from and after the Closing Date, the
First Offer Closing Date or the Third Party Closing Date, as applicable, Nomura
shall no longer have any right to designate directors pursuant to Section 2.1
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hereof and the other parties hereto shall no longer be required to vote for, or
nominate or designate for election, the Nomura Designee or the Nomura Additional
Designee.
ARTICLE III
WAIVER AND AMENDMENT OF CERTAIN AGREEMENTS
Section 3.1 Waiver of Certain Rights in Series BB Certificate. Provided that
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the Option is exercised, then by executing this Agreement and without the need
for any further action by any other party, each party holding shares of Series
BB Preferred hereby waives any right to require the repurchase by the Company of
any shares of Series BB Preferred upon a Change in Control (as defined in the
Series BB Certificate) of the Company pursuant to Section 2.9.7 of the Series BB
Certificate, regardless of when such Change in Control occurs.
Section 3.2 Waiver of Certain Rights Under Series BB and Series CC Registration
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Rights Agreements. Provided that the Option is exercised, then by executing this
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Agreement and without the need for any further action by any other party, each
party hereto hereby waives any rights it has under Section 3 of the Series BB
Registration Rights Agreement or the Series CC Registration Rights Agreement,
including without limitation any rights to "Demand Registrations" thereunder.
In addition, notwithstanding anything to the contrary contained in Section 11(b)
of the Series BB and Series CC Registration Rights Agreements, each party hereto
agrees that the Company may issue, after the date hereof, piggyback registration
rights to third parties that rank senior or pari passu to the piggyback
registration rights granted under the Registration Rights Agreements, including
with respect to priority in the event of any underwriters' cutbacks in
underwritten registrations.
Section 3.3 Waiver of Certain Rights Under the Recapitalization Agreement. By
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executing this Agreement and without the need for any further action by any
other party, each party hereby waives, effective as of the date specified below,
the following rights that such party has under the Recapitalization Agreement:
(a) The Trust hereby agrees that the term "Exit Date," as used in Section
3.4(b) of the Recapitalization Agreement, is hereby deemed to be the date
that is the first business day after the expiration of the Option Period
(the "NEW EXIT DATE"), it being the intent of the Trust that the obligation
of the Company and/or MEIH to issue or transfer any shares of Common Stock
to the Trust thereunder be deferred until the New Exit Date; provided that
in the event that the Option is exercised by MEIH or its designee during
the Option Period, then the Trust, by executing this Agreement and without
the need for any further action by any other party, does hereby waive all
rights it has under Section 3.4(b) of the Recapitalization Agreement
regarding subsequent issuances and transfers of Common Stock by MEIH and
the Company to the Trust, such waiver to be effective as of the Closing
Date; and
(b) The Trust hereby waives all rights it has under Section 9.10 of the
Recapitalization Agreement regarding the Trust's right to receive materials
from the Board, such waiver to be effective as of the Closing Date.
ARTICLE IV
RIGHT OF FIRST OFFER
Section 4.1 Grant of Right of First Offer.
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(a) During the Option Period, if Nomura and/or the Trust (for purposes of this
Article IV, an "OFFERING STOCKHOLDER") proposes to transfer (in one
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transaction or in a series of transactions) any Securities (other than a
transfer pursuant to Section 1.1) to another individual or entity not a
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party hereto (each, a "PROPOSED TRANSFEREE") (whether or not such Proposed
Transferee is currently a holder of Securities of the Company), the
Offering Stockholder shall give written notice at least 30 days prior to
making any such transfer (the "FIRST OFFER NOTICE") to MEIH of such
proposal. The First Offer Notice shall specify the number and type of
Securities proposed to be transferred, the proposed price (which must be in
cash), terms, and conditions of the transfer and the identity of the
Proposed Transferee.
(b) MEIH or its designee shall have the right and option (the "FIRST OFFER
OPTION"), exercisable within 30 days after the date of the First Offer
Notice (the "FIRST OFFER OPTION PERIOD"), to purchase the Securities at the
price (which must be in cash) and substantially on the terms and conditions
set forth in the First Offer Notice, by providing written notice of that
election to the Offering Stockholder.
(c) The failure of MEIH or its designee to advise the Offering Stockholder of
its decision to purchase shares within the First Offer Option Period
described above shall be deemed to constitute a notification to the
Offering Stockholder of a decision not to exercise the First Offer Option
described herein.
(d) The closing for all sales of the Securities purchased by MEIH or its
designee under this Section 4.1 shall occur within 90 days of the last day
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of the First Offer Option Period, or at such other time as may be mutually
agreed upon by the Offering Stockholder and MEIH or its designee (such date
being referred to herein as the "FIRST OFFER CLOSING DATE"), with the
purchase price being paid in immediately available funds at such closing,
and with the Offering Stockholder being required to deliver stock
certificates representing the Securities being transferred duly endorsed
for transfer and free and clear of all liens, restrictions on transfer or
adverse claims of any kind, other than restrictions arising under federal
or state securities laws. If MEIH or its designee does not exercise the
First Offer Option, or if MEIH or its designee exercises the First Offer
Option but does not close within the time designated for closing, then the
Offering Stockholder shall be free to sell the Securities to the Proposed
Transferee identified in the First Offer Notice, at the price and on the
terms and conditions specified in the First Offer Notice, provided that
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such transfer shall be effected within 90 days after the expiration of the
First Offer Option Period in the event that MEIH or its designee does not
exercise the First Offer Option during the First Offer Option Period (or,
in the event that MEIH or its designee does so exercise the First Offer
Option but then fails to close within the required time period, then within
90 days after the failure of MEIH or its designee to so purchase the
Securities pursuant to the First Offer Notice) (the date of the closing for
such transfer being referred to herein as the "THIRD PARTY CLOSING DATE");
provided further that it shall be a condition to any such transfer that the
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Proposed Transferee agrees in writing to be bound by all of the terms and
conditions of this Agreement (and a copy of such writing shall be delivered
to MEIH contemporaneously with the closing of any such transfer). Any
Securities not transferred within such 90-day period shall be re-offered to
MEIH or its designee in accordance with this Section 4.1 prior to any
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subsequent transfer.
(e) Nothing contained in this Section 4.1 is intended to any way to restrict or
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otherwise limit the right of MEIH or its designee to exercise the Option at
any time during the Option Period as described in Article I hereof.
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ARTICLE V
MISCELLANEOUS
Section 5.1 Representations and Warranties of Nomura and the Trust. In
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granting this Option, Nomura and the Trust each represents and warrants to MEIH
and its designee that on the date hereof the Trust is the sole record and
beneficial owner of the Option Shares free and clear of all liens, encumbrances,
restrictions on transfer or adverse claims of any kind, other than restrictions
on transfer arising under federal or state securities laws or those liens,
restrictions on transfer or adverse claims, if any, arising under this Agreement
or the Recapitalization Agreement. Nomura and the Trust each hereby represents
and warrants to MEIH that on the date hereof the Trust holds of record 327.12
shares of Series BB Preferred and 6,000,000 shares of Common Stock and each
further represents and warrants that, on the date hereof, neither Nomura nor any
Affiliate of Nomura (other than the Trust) holds any shares of capital stock of
the Company. Nomura and the Trust agree to provide a certificate as at either
the Closing Date or the First Offer Closing Date (whichever is applicable)
representing and warranting the ownership position as at that date.
Section 5.2 Representations and Warranties of Parties. Each party hereby
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represents and warrants to each of the other parties as of the date hereof (a)
that such party is duly organized, validly existing and in good standing under
the laws of its state of organization; (b) that the execution and delivery of
this Agreement and the performance of the obligations of such party hereunder
have been duly authorized; (c) that this Agreement constitutes a valid and
legally binding obligation of such party hereto enforceable against such party
in accordance with its terms; (d) that no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with any federal, state or local governmental authority or any person or
entity not a party hereto is required in connection with the consummation of the
transactions contemplated by this Agreement; and (e) that the execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement do not, and will not, conflict with or result in
any violation or breach of or default (with or without notice or lapse of time,
or both) under any provision of (i) the Articles of Incorporation or the By-laws
or comparable, organizational documents of such party, or (ii) any loan or
credit agreement, note, bond, debenture, mortgage, indenture, guarantee, lease
or other contract, commitment, agreement, instrument, arrangement,
understanding, obligation, undertaking, permit, concession, franchise,
certificate, license or similar authorization, whether oral or written,
applicable to such party or its properties or assets. Nomura and the Trust
agree to provide a certificate as at either the Closing Date or the First Offer
Closing Date (whichever is applicable) representing and warranting as to the
matters listed in this Section 5.2 as at that date.
Section 5.3 Indemnification.
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(a) Indemnification by MEIH. MEIH shall indemnify Nomura and the Trust
(collectively, the "INDEMNITEES") against, and hold each Indemnitee
harmless from, any demand, damage, claim, action, cause of action, fine,
liability or other loss or expense including, without limitation, interest,
penalties and attorneys' fees and expenses (collectively, net of insurance
recoveries and other benefits and recoveries realized and paid or received
by the Indemnitees, "DAMAGES") arising out of or resulting from any action,
suit, claim or proceeding (a "CLAIM") brought against Indemnitees by any
person or entity
(other than the parties to this Agreement or the Company) (a "THIRD-PARTY
CLAIMANT") to the extent such Claim relates to the transactions
contemplated by this Agreement.
(b) Indemnification Procedures. Any Indemnitee making a claim for
indemnification pursuant to Section 5.3(a) (an "INDEMNIFIED PARTY") must
give any party hereto from whom indemnification is sought (an "INDEMNIFYING
PARTY") written notice of such Claim (an "INDEMNIFICATION CLAIM NOTICE")
promptly after the Indemnified Party receives any written notice of such
Claim or potential Claim against or involving the Indemnified Party by a
Third-Party Claimant or otherwise discovers or becomes aware of the
liability, obligation or facts giving rise to such Claim; provided that a
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Claim cannot be asserted by the Indemnified Party against an Indemnifying
Party until asserted by a Third-Party Claimant against an Indemnitee;
provided, further, that the failure to notify or delay in notifying an
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Indemnifying Party will not relieve any Indemnifying Party of its
obligations pursuant to Section 5.3(a) except to the extent the
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Indemnifying Party's ability to defend such Claim is materially prejudiced
by the failure of the Indemnified Party to provide timely notice of such
Claim; provided, further, that failure to so notify the Indemnifying Party
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shall not release the Indemnifying Party from any liability which it may
have otherwise than on account of the indemnification obligation hereunder.
Such Indemnification Claim Notice must specify in reasonable detail the
nature of such Claim and the circumstances under which it has arisen. No
claim for indemnification hereunder by an Indemnified Party shall be valid
unless the Indemnification Claim Notice relating to such Claim is given to
the Indemnifying Party by the Indemnified Party within the applicable
survival period set forth in Section 5.3(d) hereof. After receipt of an
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Indemnification Claim Notice by an Indemnifying Party with respect to a
Claim, if the Indemnifying Party shall acknowledge in writing to the
Indemnified Party that the Indemnifying Party shall be obligated under the
terms of its indemnity hereunder in connection with such Claim, then the
Indemnifying Party shall be entitled, if it so elects, to take control of
the defense and investigation of such Claim and to employ and engage
attorneys of its own choice to handle and defend the same, at the
Indemnifying Party's cost, risk and expense.
(c) Control of Defense; Exceptions. Notwithstanding the provisions of Section
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5.3(a) and 5.3(b), the Indemnified Party will be entitled to participate in
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the defense of such Claim and to employ counsel of its choice for such
purpose at its own expense (provided that the Indemnifying Party will bear
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the reasonable fees and expenses of such separate counsel incurred prior to
the date upon which the Indemnifying Party effectively assumes control of
such defense). In addition, the Indemnifying Party will not be entitled to
assume control of the defense of such Claim, and will pay the reasonable
fees and expenses of legal counsel retained by the Indemnified Party, if:
(i) (A) the Indemnified Party reasonably believes that an adverse
determination of such Claim could be detrimental to or injure the
Indemnified Party's reputation or future business prospects, (B) the
Indemnified Party reasonably believes upon advice of legal counsel that
there exists or could arise a conflict of interest which, under applicable
principles of legal ethics, could prohibit a single legal counsel from
representing both the Indemnified Party and the Indemnifying Party in such
Claim, or (C) a court of competent jurisdiction rules that the Indemnifying
Party has failed or is failing to prosecute or defend vigorously such
Claim; and (ii) the Indemnified Party obtains the prior written consent,
which consent shall not be unreasonably withheld, of the Indemnifying Party
prior to entering into any settlement of such Claim or ceasing to defend
such Claim.
(d) Indemnification Limitations. Notwithstanding anything contained herein to
the contrary, the obligations of MEIH for indemnification of Nomura and the
Trust shall continue in full force and effect for the later of (i) a period
of two years from the date hereof or (ii) a period of two years from the
Closing Date, but shall thereafter terminate and be of no further force or
effect. Notwithstanding the forgoing, in the event any Indemnitee makes an
Indemnification Claim Notice for which such Indemnitee is entitled to
indemnification hereunder during either of the two-year periods referred to
in the
immediately preceding sentence, the indemnification obligations of MEIH
hereunder shall survive until such claim is resolved.
Section 5.4 No Violation or Default. Nomura and the Trust each hereby agrees
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that as of the date hereof there exists no breach or default by any other party
of any provision of the Prior Agreements or the Series BB Certificate, and to
the extent that there is any such breach or default, such breach or default is
hereby waived.
Section 5.5 Binding Effect; Assignment. This Agreement shall be binding on,
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and inure to the benefit of the parties hereto and their respective
representatives, successors and permitted assigns. Notwithstanding anything
stated in this Agreement, any transfer by Nomura or the Trust of any rights,
interests or obligations hereunder to a Proposed Transferee in connection with a
sale of Securities to such Proposed Transferee pursuant to the terms of Section
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4.1(d) hereof shall not require the prior written consent of MEIH. MEIH may
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transfer or assign this Agreement (or any interest herein) to any person without
the prior written consent of any other party; provided that reasonably prompt
written notice is provided to the other parties after the transfer or assignment
is consummated. The Company is entitled to rely on the waivers and agreements
of the parties in Articles II and III hereof. Nothing in this Agreement, express
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or implied, is intended to confer upon any party, other than the parties and
their respective successors and assigns and the Company, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 5.6 Legends. On the date hereof, the Trust agrees to deliver
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certificates representing the Option Shares to the Company to imprint a legend
on such certificates to reflect the existence of this Agreement, after which the
certificates so imprinted shall be returned by the Company to the Trust.
Section 5.7 Further Assurances. Each party hereto agrees to take all such
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action to fulfill any conditions precedent and to take such further action as
may be reasonably necessary in order to effect the consummation of the
transaction contemplated by this Agreement.
Section 5.8 Expenses. The parties hereto shall each pay its own expenses in
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connection with the preparation of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, fees of its own
counsel, auditors, and other experts, whether or not such transactions are
consummated; provided that MEIH agrees that it shall pay at Closing the
reasonable out-of-pocket expenses of Nomura and the Trust incurred in connection
with the exercise by MEIH or its designee of the Option, including, without
limitation, reasonable fees of one counsel for Nomura and the Trust, up to an
aggregate amount not to exceed $10,000.
Section 5.9 Entire Agreement. This Agreement constitutes the entire contract
----------------
and shall supersede all prior agreements and understandings, both written and
oral, between the parties hereto with respect to the subject matter hereof and
no party shall be liable or bound to the other in any manner by any
representations or warranties except as specifically set forth herein or
agreement executed in connection herewith or expressly required to be made or
delivered pursuant thereto. Notwithstanding the foregoing, the Prior
Agreements, the Series BB Certificate and the Series CC Certificate shall remain
in full force and effect after the date hereof in accordance with their
respective terms, except to the extent any provisions thereof are expressly
amended, modified or waived hereby.
Section 5.10 Disclosure. Except as and to the extent required by law or by an
----------
order of a court of competent jurisdiction, without the prior written consent of
the other parties, no party will, and each will direct its representatives not
to make, directly or indirectly, any public comment, statement, or communication
with respect to or otherwise to disclose or to permit the disclosure of the
existence of
discussions regarding this Agreement between the parties or any of the terms,
conditions, or other aspects of the transaction proposed in this Agreement. If a
party is required by law or by an order of a court of competent jurisdiction to
make any such disclosure, it shall promptly provide to the other parties the
content of the proposed disclosure.
Section 5.11 Identical Counterparts. This Agreement may be executed in one or
----------------------
more counterparts, each of which shall for all purposes be deemed to be an
original, but all of which together will constitute one and the same instrument.
Each such counterpart may be transmitted via facsimile transmission or other
similar electronic means and a counterpart so transmitted shall be deemed an
original signature for all purposes and have the same force and effect as a
manually signed original.
Section 5.12 Modification and Waiver. Any of the terms or conditions of this
-----------------------
Agreement may be waived in writing at any time, whether before or after action
thereon by the party which is entitled to the benefits thereof; and this
Agreement may be modified or amended at any time, whether before or after action
thereon by the parties; provided, however, that no supplement, modification or
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amendment of this Agreement shall be binding unless executed in writing by all
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 5.13 Notices. All notices, consents, requests, instructions, approvals
-------
and/or communications provided for herein, shall be validly given, made or
served if in writing and delivered personally or sent by facsimile transmission,
commercial delivery service, or registered or certified mail, return receipt
requested, postage prepaid, addressed as set forth on the signature page hereto.
The designation of the person to be so notified or the address of such person
for the purposes of such notice may be changed from time to time by a similar
notice. Any notice which is delivered personally in the manner provided herein
shall be deemed to have been duly given to the party to whom it is directed upon
actual receipt by such party (or its agent for notices hereunder). Written
notice shall also be deemed effectively given: (i) when sent by confirmed
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (ii) one day after deposit with a nationally recognized
commercial delivery service, specifying next day delivery, with written
verification of receipt, or (iii) if sent by registered or certified mail,
return receipt requested, then on the date shown on the United States Post
Office postage prepaid receipt.
Section 5.14 Governing Law. This Agreement will be construed and enforced in
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accordance with and governed by the laws of the State of Georgia, without regard
to conflict of laws principles. This Agreement will not be construed for or
against a party merely because that party prepared it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, as of the date or dates
set forth below to be effective as of the day and year first written above.
NOMURA:
------
NOMURA ASSET CAPITAL CORPORATION
By:/s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Director
Date: March 29, 2001
NOTICE ADDRESS:
Nomura Asset Capital Corporation
2 World Financial Xxxxxx
Xxxxxxxx X, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
TRUST:
-----
PARTNERSHIP ACQUISITION TRUST V
By:/s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Attorney in Fact
Date: March 29, 2001
NOTICE ADDRESS:
Partnership Acquisition Trust V
C/o Nomura Asset Capital Corporation
2 World Financial Xxxxxx
Xxxxxxxx X, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
MEIH:
----
MEI HOLDINGS, L.P.
By: MEI GenPar, L.P.
its general partner,
By: HH GenPar Partners,
its general partner,
By: Hampstead Associates, Inc.,
a managing general partner,
By:/s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
Date: March 29, 2001
NOTICE ADDRESS:
MEI Holdings, X.X.
Xxxxx Tower
0000 Xxxx Xxxxxx, Xxxxx 0000 - X
Xxxxxx, Xxxxx 00000
Attention: Secretary/Treasurer
Facsimile: (000) 000-0000
