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EXHIBIT 99.23
OPTION AND VOTING AGREEMENT
THIS OPTION AND VOTING AGREEMENT (this "AGREEMENT") is made effective
as of the 30th 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
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
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:
STOCK PURCHASE OPTION AGREEMENT
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ARTICLE I
GRANT OF OPTION TO MEIH OR ITS DESIGNEE
Section 1.1 Grant of Option to Purchase Shares.
(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 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 1.1(a), if, on the Closing Date, the Trust and its Affiliates
collectively 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) shall be deemed to be part of the
Purchase Price to be paid by MEIH pursuant to Section 1.2 hereof.
Section 1.2 Purchase Price. The aggregate purchase price for the Option
Shares (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
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(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 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).
Section 1.3 Payment of Purchase Price. The Purchase Price shall be
payable at 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.
Section 1.4 Option Period. The Option may be exercised by MEIH or its
designee 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.
(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 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
"NOTICE").
Section 1.7 Closing. If the Option is exercised by MEIH or its
designee, the 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
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
to MEIH or its designee the
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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
subject to Section 2.3 below, for so long as Nomura and/or the Trust own in the
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 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 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 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
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
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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 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 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 Rights Agreements. Provided that the Option is exercised, then by
executing this 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 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.
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ARTICLE IV
RIGHT OF FIRST OFFER
Section 4.1 Grant of Right of First Offer.
(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 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 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 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 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 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 subsequent transfer.
(e) Nothing contained in this Section 4.1 is intended to any
way to restrict or 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
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 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.
(a) Indemnification by MEIH. MEIH shall indemnify Nomura and
the Trust and their respective Affiliates (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 or governmental agencies) (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
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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 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 Indemnifying Party will not relieve any Indemnifying Party of its obligations
pursuant to Section 5.3(a) except to the extent the 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 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
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 5.3(a) and 5.3(b), the Indemnified Party will be entitled
to participate in 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 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 that as of the date hereof there exists no breach or default by any other
party of any provision of the Prior Agreements
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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, 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
4.1(d) hereof shall not require the prior written consent of MEIH. MEIH may
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 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
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 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 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.
OPTION AND VOTING AGREEMENT
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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
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 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.
OPTION AND VOTING AGREEMENT
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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:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Date:
-------------------------------------
NOTICE ADDRESS:
Nomura Asset Capital Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TRUST:
PARTNERSHIP ACQUISITION TRUST V
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney in Fact
Date:
--------------------------------------
NOTICE ADDRESS:
Partnership Acquisition Trust V
C/o Nomura Asset Capital Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
STOCK PURCHASE OPTION AGREEMENT
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with a copy to
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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:
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
Date:
--------------------------------------
NOTICE ADDRESS:
MEI Holdings, ▇.▇.
▇▇▇▇▇ Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ - ▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary/Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
STOCK PURCHASE OPTION AGREEMENT
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