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FORM OF
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
by and among
METRO-XXXXXXX-XXXXX INC.
SEVEN NETWORK LIMITED
TRACINDA CORPORATION
METRO-XXXXXXX-XXXXX STUDIOS INC.
XX. XXXXX X. XXXXXXX
and
THE OTHER PARTIES SPECIFIED ON THE
SIGNATURE PAGES HERETO
Dated as of August 4, 1997
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS..............................................1
Section 1.1 Definitions..............................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES...........................4
Section 2.1 Representations and Warranties of the Company............4
Section 2.2 Representations and Warranties of Seven..................4
Section 2.3 Representations and Warranties of Tracinda...............5
Section 2.4 Representations and Warranties of MGM Studios............5
Section 2.5 Representations and Warranties of the Executives.........6
ARTICLE III LEGEND; TAG-ALONG RIGHTS.................................6
Section 3.1 Legend...................................................6
Section 3.2 "Tag-Along" Rights.......................................7
ARTICLE IV REGISTRATION RIGHTS......................................10
Section 4.1 Demand Registrations.....................................10
Section 4.2 Piggyback Registrations..................................11
Section 4.3 Holdback Agreements......................................11
Section 4.4 Registration Procedures..................................12
Section 4.5 Registration Expenses....................................15
Section 4.6 Indemnification..........................................15
Section 4.7 Participation in Underwritten Registrations..............17
Section 4.8 Current Public Information...............................18
Section 4.9 Preparation; Reasonable Investigation....................18
Section 4.10 Certain Rights of Holders................................18
Section 4.11 Form S-8.................................................19
ARTICLE V GENERAL PROVISIONS.......................................19
Section 5.1 Notices..................................................19
Section 5.2 Assignment; Binding Effect; Benefit; Successors..........21
Section 5.3 Entire Agreement.........................................21
Section 5.4 Amendment................................................21
Section 5.5 Governing Law; Effective Date............................22
Section 5.6 Counterparts.............................................22
Section 5.7 Headings.................................................22
Section 5.8 Interpretation...........................................22
Section 5.9 Severability.............................................23
Section 5.10 Enforcement of Agreement.................................23
Section 5.11 Termination of Original Shareholders Agreement...........23
Section 5.12 Antidilution Adjustment..................................23
FORM OF AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
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THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT, dated as of
August 4, 1997 (this "Agreement"), by and among METRO-XXXXXXX-XXXXX
INC., a corporation organized under the laws of the State of Delaware
and formerly known as P&F Acquisition Corp. (the "Company"), SEVEN
NETWORK LIMITED, a corporation organized under the laws of the
Commonwealth of Australia ("Seven"); TRACINDA CORPORATION, a
corporation organized under the laws of the State of Nevada
("Tracinda"); METRO-XXXXXXX-XXXXX STUDIOS INC., a corporation
organized under the laws of the State of Delaware ("MGM Studios") and
formerly known as Metro-Xxxxxxx-Xxxxx Inc.; Xx. Xxxxx X. Xxxxxxx ("Xx.
Xxxxxxx"), and the Persons listed on the signature pages hereto
(Xx.Xxxxxxx and each such Person is herein referred to as an
"Executive" and together as the "Executives")[F1], amends and
supersedes that certain Shareholders Agreement, dated as of October
10, 1996, by and among MGM Studios, Seven, Tracinda, the Company, Xx.
Xxxxxxx and the other parties thereto (the "Original Shareholders
Agreement").
[FN]
[F1] At the execution of this Agreement, the signature pages
hereto will indicate the names of the Executives, who shall not
exceed 18 in number.
A. The Executives will be granted options ("Options") to acquire
shares of capital stock of the Company pursuant to the Plan (as
defined below).
B. Xx. Xxxxxxx executed an amended and restated employment
agreement with the Company and MGM Studios dated as of August 4, 1997
pursuant to which Xx. Xxxxxxx may acquire from time to time shares of
capital stock of the Company.
C. The Company intends to commence with an Approved Initial
Public Offering (as defined below) of the Common Stock (as defined
below) of the Company and to enter into certain related transactions.
D. The parties hereto have agreed to enter into this Agreement
for the purpose of amending and restating in its entirety the
provisions of the Original Shareholders Agreement as provided herein.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS.
"Affiliate": of any Person, means (i) any other Person
controlling, controlled by or under common control with such Person,
(ii) any director or executive officer of such Person or of any
Affiliate of such Person and (iii) any family member of any director
or executive officer of such Person or any director or executive
officer of any Affiliate of such Person.
"Agreement": as defined in the preamble to this Agreement.
"Antidilution Adjustment": as defined in Section 5.12.
"Approved Initial Public Offering": has the meaning set forth in
the Investors Shareholder Agreement as the same may be amended from
time to time in accordance with the terms thereof.
"Commission": means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Common Stock": means the common stock of the Company.
"Company": as defined in the preamble to this Agreement.
"Demand Registrations": as defined in Section 4.1(a).
"Exchange Act": means the Securities Exchange Act of 1934, as
amended, and rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Executives": as defined in the preamble to this Agreement.
"Investors Shareholder Agreement": the Amended and Restated
Investors Shareholder Agreement dated as of August 4, 1997 by and
among MGM Studios, the Company, Tracinda, Seven and Xx. Xxxxxxx.
"IPO Closing": means the closing of an Approved Initial Public
Offering at which the Company first receives the funds described in
the definition of "Approved Initial Public Offering," whether or not
the underwriters have at such time exercised any over-allotment
option.
"IPO Closing Date": means the date of the IPO Closing.
"MGM Studios": as defined in the preamble to this Agreement.
"Notice Date": as defined in Section 3.2.
"Options": as defined in the preamble to this Agreement.
"Original Shareholders Agreement": as defined in the preamble to
this Agreement.
"Other Securityholders": as defined in Section 3.2.
"Permitted Transferee": means:
(a) (i) the successors in interest to such Executive, in the
case of a Transfer upon the death of such Executive, provided that
each such successor in interest would be a Permitted Transferee under
clauses (a)(ii) or (a)(iv) of this definition, (ii) such Executive's
spouse, parents, grandparents, siblings and descendants (whether by
blood or adoption, and including stepchildren) and the spouses of such
persons, (iii) such Executive, with respect to the disposition of the
community property interest of such Executive's spouse in all or any
part of the Common Stock upon the dissolution of the marriage of the
Executive and his or her spouse or upon the death of such spouse, (iv)
any transferee occasioned by the incompetence of such Executive and
(v) in the case of a Transfer during such Executive's lifetime, any
Person in which no Person has any interest (directly or indirectly)
except for any of such Executive, such Executive's spouse, parents,
grandparents, siblings and descendants (whether by blood or adoption,
and including stepchildren) and the spouses of such persons; and
(b) the beneficiaries or the grantor of any trust all the
beneficiaries of which are natural persons; provided, however, that
each such beneficiary or grantor of such trust is a Person who would
be a Permitted Transferee under clause (a) of this definition.
"Person": means any natural person, corporation, partnership,
limited liability company, firm, association, trust, government,
governmental agency, or other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Piggyback Registration": as defined in Section 4.2(a).
"Plan": means, collectively, the Stock Incentive Plan and the
Stock Option Agreement.
"Registrable Securities": means (i) any shares of Common Stock
owned by, or otherwise hereafter acquired by, Tracinda, Seven or any
Executive and (ii) any securities issued as a dividend on or other
distribution with respect to or in exchange, replacement or in
subdivision of, any such Common Stock. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale
of such securities shall have been declared effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, or (ii) such securities
shall have been sold (other than in a privately negotiated sale)
pursuant to Rule 144 (or any successor provision) under the Securities
Act and in compliance with the requirements of paragraphs (c), (e),
(f)and (g)of Rule 144.
"Registration Expenses": as defined in Section 4.5(a).
"Securities Act": means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder, as the
same shall be in effect at the time.
"Series A Options": as defined in the Plan.
"Series B Options": as defined in the Plan.
"Seven": as defined in the preamble to this Agreement.
"Short-Form Registrations": as defined in Section 4.1(a).
"Stock Incentive Plan": means the Company's Amended and Restated
1996 Stock Incentive Plan, in substantially the form attached hereto
as Exhibit A.
"Stock Split": as defined in Section 5.12.
"Stock Option Agreement": means the Company's several Stock
Option Agreements, in substantially the form attached hereto as
Exhibit B, entered into pursuant to the Stock Incentive Plan.
"Subsidiary": of any Person means any corporation or other legal
entity of which such Person (either alone or through or together with
any other direct or indirect Subsidiary) owns, directly or indirectly,
50% or more of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
"Tag-Along Notice": as defined in Section 3.2.
"Tag-Along Sale": as defined in Section 3.2.
"Tracinda": as defined in the preamble to this Agreement.
"Transfer": as defined in Section 3.2.
"Transferring Party": as defined in Section 3.2.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the other parties
hereto as follows: (i) the Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery by
the Company of this Agreement, and the consummation by the Company of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of the Company; (iii) this
Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or general
principles of equity and except to the extent that the indemnity
provisions set forth in Article IV may not be valid under applicable
securities laws or by reason of public policy; (iv) no consent,
approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is
required by, or with respect to, the Company in connection with the
execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby;
and (v) the execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby by the
Company does not conflict with, or result in a breach of, any law or
regulation of any governmental authority applicable to the Company or
any material agreement to which the Company is a party.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF SEVEN.
Seven hereby represents and warrants to the other parties hereto
as follows: (i) Seven has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby; (ii) the execution and delivery by Seven of this
Agreement, and the consummation by Seven of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Seven; (iii) this Agreement has been
duly executed and delivered by Seven and constitutes a valid and
binding obligation of Seven enforceable against Seven in accordance
with its terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally or general principles of equity and except to the
extent that the indemnity provisions set forth in Article IV may not
be valid under applicable securities laws or by reason of public
policy; (iv) no consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign, is required by, or with respect
to, Seven in connection with the execution and delivery by Seven of
this Agreement or the consummation by Seven of the transactions
contemplated hereby; and (v) the execution and delivery by Seven of
this Agreement and the consummation by Seven of the transactions
contemplated hereby does not conflict with, or result in a breach of,
any law or regulation of any governmental authority applicable to
Seven or any material agreement to which Seven is a party.
SECTION 2.3. REPRESENTATIONS AND WARRANTIES OF TRACINDA.
Tracinda hereby represents and warrants to the other parties
hereto as follows: (i) Tracinda has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery by
Tracinda of this Agreement, and the consummation by Tracinda of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of Tracinda; (iii) this
Agreement has been duly executed and delivered by Tracinda and
constitutes a valid and binding obligation of Tracinda enforceable
against Tracinda in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or general
principles of equity and except to the extent that the indemnity
provisions set forth in Article IV may not be valid under applicable
securities laws or by reason of public policy; (iv) no consent,
approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is
required by, or with respect to, Tracinda in connection with the
execution and delivery of this Agreement by Tracinda or the
consummation by Tracinda of the transactions contemplated hereby; and
(v) the execution and delivery of this Agreement by Tracinda and the
consummation by Tracinda of the transactions contemplated hereby does
not conflict with, or result in a breach of, any law or regulation of
any governmental authority applicable to Tracinda or any material
agreement to which Tracinda is a party.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES OF MGM STUDIOS.
MGM Studios hereby represents and warrants to the other parties
hereto as follows: (i) MGM Studios has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery by
MGM Studios of this Agreement, and the consummation by MGM Studios of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of MGM Studios; (iii) this
Agreement has been duly executed and delivered by MGM Studios and
constitutes a valid and binding obligation of MGM Studios enforceable
against MGM Studios in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or general
principles of equity and except to the extent that the indemnity
provisions set forth in Article IV may not be valid under applicable
securities laws or by reason of public policy; (iv) no consent,
approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is
required by, or with respect to, MGM Studios in connection with the
execution and delivery of this Agreement by MGM Studios or the
consummation by MGM Studios of the transactions contemplated hereby;
and (v) the execution and delivery of this Agreement by MGM Studios
and the consummation by MGM Studios of the transactions contemplated
hereby does not conflict with, or result in a breach of, any law or
regulation of any governmental authority applicable to MGM Studios or
any material agreement to which MGM Studios is a party.
SECTION 2.5. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVES.
Each of the Executives (as to himself only) hereby represents and
warrants to the other parties hereto, as of the date of the execution
of this Agreement by such Executive, as follows: (i) such Executive
has all requisite power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby; (ii) this
Agreement has been duly executed and delivered by such Executive and
constitutes a valid and binding obligation of such Executive
enforceable against such Executive in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally
or general principles of equity and except to the extent that the
indemnity provisions set forth in Article IV may not be valid under
applicable securities laws or by reason of public policy; (iii) no
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign, is required by, or with respect to, such
Executive in connection with the execution and delivery of this
Agreement by such Executive or the consummation by Executive of the
transactions contemplated hereby; and (iv) the execution and delivery
of this Agreement by such Executive and the consummation by such
Executive of the transactions contemplated hereby does not conflict
with, or result in a breach of, any law or regulation of any
governmental authority applicable to such Executive or any material
agreement to which such Executive is a party.
ARTICLE III
LEGEND; TAG-ALONG RIGHTS
SECTION 3.1. LEGEND. Tracinda and Seven hereby acknowledge and
agree that each of the certificates representing the shares of Common
Stock beneficially owned by each of them shall include the following
legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY BE OFFERED OR SOLD
ONLY IF REGISTERED UNDER THE SECURITIES ACT OF 1933 OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE SHARES ARE SUBJECT TO CERTAIN
LIMITATIONS ON TRANSFER AND CERTAIN OTHER MATTERS SET FORTH IN AN
AGREEMENT DATED AS OF AUGUST 4, 1997 BY AND AMONG SEVEN NETWORK
LIMITED, TRACINDA CORPORATION, METRO-XXXXXXX-XXXXX STUDIOS INC.,
METRO-XXXXXXX-XXXXX INC., XX. XXXXX X. XXXXXXX, AND CERTAIN OTHER
PERSONS (THE "AGREEMENT"). A COPY OF THE AGREEMENT IS ON FILE WITH THE
SECRETARY OF METRO-XXXXXXX-XXXXX INC.
SECTION 3.2. "TAG-ALONG" RIGHTS.
(a) If either of Seven or Tracinda (a "Transferring Party")
desires to sell, transfer, assign, pledge or otherwise dispose of
("Transfer") directly or indirectly, in whole or in part, any shares
of Common Stock beneficially owned by it (a "Tag-Along Sale"), the
Transferring Party shall provide the Company and each of the
Executives and Tracinda or Seven, as the case may be (the "Other
Securityholders"), with written notice (the "Tag Along Notice")
setting forth:
(i) the number of shares of Common Stock proposed to be
Transferred;
(ii) the name and address of the prospective purchaser;
(iii) all material terms and conditions of such
proposed transaction including the date of the proposed closing of
such transaction and the proposed amount and the form of consideration
to be paid for such Common Stock;
(iv) that the Transferring Party is offering each of
the Other Securityholders the right to participate in such Transfer on
a pro rata basis on the same terms and conditions as are applicable to
the Transferring Party;
(v) the aggregate number of shares of Common Stock
beneficially owned by such Transferring Party as of the date of the
Tag Along Notice (the "Notice Date") from the Transferring Party to
the Company;
(vi) the Company's calculation of the maximum number of
shares of Common Stock that each such Other Securityholder is entitled
to include in the Tag-Along Sale (as computed in accordance with the
equation set forth in subsection (a) of this Section 3.2); and
(vii) a copy of the proposed agreements for the
Tag-Along Sale.
The Company shall have the obligation to provide the calculation
described in clause (vi) above to the Transferring Party upon request
by the Transferring Party and shall take full and complete
responsibility for the accuracy and completeness of such calculation.
Within 20 calendar days following the delivery of the Tag Along
Notice, each Other Securityholder, by notice in writing to the
Transferring Party, shall have (i) in the case of the Executives, the
right to exercise any Options held by such Executives to the extent
required to realize the rights of such Executives provided in this
Section 3.2 and (ii) the opportunity to sell to the prospective
purchaser (upon the same terms and conditions as the Transferring
Party) on the proposed date of the closing of the applicable
transaction as specified in the applicable Tag Along Notice up to that
number of shares of Common Stock specified in the Tag Along Notice
owned by such Other Securityholder (excluding any shares of Common
Stock acquired pursuant to open market purchases) as shall equal the
product of (x) a fraction, the numerator of which is the number of
shares of Common Stock specified in the Tag Along Notice beneficially
owned by such Other Securityholder as of the date of such proposed
sale (excluding any shares of Common Stock acquired pursuant to open
market purchases), and the denominator of which is the aggregate
number of shares of Common Stock specified in the Tag Along Notice
beneficially owned as of the date of such proposed sale by the
Transferring Party and all of the Other Securityholders (excluding any
shares of Common Stock acquired pursuant to open market purchases),
and (y) the number of shares of Common Stock proposed to be sold;
provided, however, that to the extent the prospective purchaser agrees
to purchase Common Stock in excess of the amount specified in the Tag
Along Notice, such excess amount shall be allocated among the
Transferring Party and the Other Securityholders on a pro-rata basis
based on the allocation procedures specified above; provided further,
however, that to the extent that one or more Other Securityholders
elect not to participate in such sale, the amount of Common Stock
which such Other Securityholder(s) would otherwise have been entitled
to sell in such sale shall not be reallocated to the remaining Other
Securityholders who elect to participate in such sale; and provided
further, however, that in exercising these rights with respect to an
Executive's Series A Option or Series B Option (1) the Series A Option
must be exercised, to the extent then vested, before the Series B
Option, to the extent then vested, is exercised, (2) thereafter, the
Series B Option, to the extent then vested, must be exercised before
the Series A Option, to the extent not vested, is exercised, (3) then,
the balance of the Series A Option must be exercised before the
balance of the Series B Option is exercised and (4) thereafter, the
balance of the Series B Option will be exercisable. The amount of
shares of Common Stock to be sold by the Transferring Party shall be
reduced if and to the extent necessary to provide for such sale of
shares of Common Stock by the Other Securityholders. If an Other
Securityholder does not elect to participate in such sale within the
20 calendar day period referred to above, the Transferring Party shall
be entitled to consummate such sale not later than 90 days after the
end of such 20 calendar day period on terms no more favorable to the
Transferring Party than those stated in the Tag Along Notice without
the participation of such Other Securityholder and all rights of such
Other Securityholder to exercise Options in connection with such sale
shall terminate. An Other Securityholder shall not be deemed to have
entered into a legally binding agreement to sell shares unless and
until such Other Securityholder shall have entered into a definitive
purchase agreement with the prospective transferee which shall include
customary conditions precedent to such Other Securityholder's
obligations thereunder, including, without limitation, the obtaining
of all necessary regulatory approvals, and which shall provide for the
same terms and conditions applicable to the Transferring Party,
including (without limitation) representations, warranties and
indemnities; provided that the maximum indemnity obligation of the
Other Securityholder under any such agreement (in its capacity as a
selling shareholder) shall be limited to the purchase price received
by such Other Securityholder in the applicable transaction and the
indemnity obligations of the Other Securityholder under any such
agreement (in its capacity as a selling shareholder) shall be several,
and not joint, with the other parties selling shares pursuant to the
agreement. The provisions of this Section 3.2 shall not inure to the
benefit of or be binding upon any transferee of Common Stock from
Tracinda or Seven (except in connection with any transfer by either of
them to one or more of their Affiliates) or from any Executive (other
than a Permitted Transferee of an Executive).
(b) The provisions of this Section 3.2 shall not apply to:
(i) any transaction in which shares of Common Stock are
proposed to be sold publicly pursuant to a registration statement
filed under the Securities Act or pursuant to Rule 144 or Regulation S
promulgated under the Securities Act; or
(ii) any one transaction or series of related
transactions involving the transfer by the Transferring Party of less
than 1% of the then issued and outstanding shares of Common Stock; or
(iii) any bona fide pledge to a bank or other
institutional financial lender; or
(iv) any sale from one party to this Agreement to
another party to this Agreement.
(c) The obligations provided for in this Section 3.2 shall
terminate with respect to each Transferring Party at such time as such
Transferring Party beneficially owns less than 250,000 shares of
Common Stock.
(d) If an Option held by an Executive has vested pursuant to
the terms of the Plan but is not exercisable pursuant to the terms of
the Plan at the time of a Tag-Along Sale pursuant to this Section 3.2,
the Executive shall be entitled to exercise such Option as described
in subsection (a) of this Section 3.2.
(e) Notwithstanding anything contained herein to the
contrary, the provisions of this Section 3.2 shall not apply to, in
the case of each of Tracinda and Seven, (i) the transfer of, or the
grant of options for the acquisition of, up to 7,500 shares of Common
Stock (such number to be appropriately adjusted in the event that the
Company should effect any stock dividend, stock split, reverse stock
split, or any similar transaction after the date hereof) beneficially
owned by it to officers, directors, employees, consultants and
affiliates so long as such transferee shall agree in writing to be
bound by all the terms of this Agreement applicable to its transferor
as if the transferee originally had been a party to this Agreement and
(ii) the transfer and assignment of all or any portion of the capital
stock of the Company beneficially owned by it to any direct or
indirect wholly owned subsidiary of such entity so long as (y) such
transferee shall agree in writing to be bound by all the terms of this
Agreement applicable to its transferor as if the transferee originally
had been a party to this Agreement and (z) the transferor agrees to
cause such direct or indirect wholly owned subsidiary to continue to
be a direct or indirect wholly owned subsidiary of the transferor for
so long as such direct or indirect wholly owned subsidiary
beneficially owns any such capital stock of the Company.
ARTICLE IV
REGISTRATION RIGHTS
SECTION 4.1. DEMAND REGISTRATIONS.
(a) Requests for Registration. Subject to Sections 4.1(c)
and 4.3 hereof, each of Seven, Tracinda and each Executive shall have
the right to make up to three requests, in the case of each of Seven
and Tracinda, and up to two requests with respect to all of the
Executives, for registration under the Securities Act of all or part
of their Registrable Securities on Form S-1 or any similar long-form
registration or on Form S-3 or any similar short-form registration
("Short-Form Registrations"); provided that no request for a Demand
Registration may be made at anytime prior to 180 days after the IPO
Closing Date; and provided, further, that any request for a Demand
Registration shall not be otherwise deemed to be effective unless such
request includes Registrable Securities which have an estimated value
of no less than $50,000,000. Each request for a Demand Registration
shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range
for such offering. All registrations requested pursuant to this
Section 4.1(a) are referred to herein as "Demand Registrations."
(b) Short-Form Registrations. Demand Registrations will be
Short-Form Registrations whenever the Company is permitted to use any
applicable short form, unless the party requesting such Demand
Registration is entitled to request, and agrees to bear the
incremental Registration Expenses for, registration on Form S-1 at a
time when use of Short-Form Registration is available. The Company
will use its best efforts to make Short-Form Registrations available
for the sale of Registrable Securities. Demand Registration requests
may be for shelf registrations if the Company is then eligible to
effect shelf registrations.
(c) Restrictions on Demand Registrations. The Company will
not be obligated to effect any Demand Registration within six months
after the effective date of a previous Demand Registration. During any
two-year period, the Company may make a one-time election to postpone
the filing or the effectiveness of a registration statement for a
Demand Registration for up to six months if the board of directors of
the Company determines, in its good faith judgment, that (i) such
Demand Registration would reasonably be expected to have a material
adverse effect on, interfere with or delay any proposal or plan by the
Company or any of its subsidiaries to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or similar transaction, (ii) the filing of
a registration statement or a sale of Registrable Securities pursuant
thereto would require disclosure of material information that the
Company has a bona fide business purpose for preserving as
confidential or (iii) the Company is unable to comply with the
registration requirements of the Commission; provided that, in such
event, the holders of Registrable Securities initially requesting such
Demand Registration will be entitled to withdraw such request and, if
such request is withdrawn, such request for Demand Registration will
not count as a request for Demand Registration hereunder and the
Company will pay all Registration Expenses in connection with such
withdrawn registration request.
(d) Selection of Underwriters. The party requesting a Demand
Registration will have the right to select the managing underwriters
to administer the offering, who shall be of national prominence and
reasonably acceptable to the Company.
SECTION 4.2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever at anytime after the IPO
Closing Date, the Company proposes to register any of its equity
securities under the Securities Act (other than a registration on Form
S-4 or Form S-8 or any successor or similar forms) and the
registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), whether or not
for sale for its own account, the Company will give prompt written
notice to each of Tracinda, Seven and the Executives of its intention
to effect such a registration and the class or classes of equity
securities of the Company to be registered and will include in such
registration all Registrable Securities of the same class or classes
with respect to which the Company has received written requests for
inclusion therein within 20 days after the receipt of the notice from
the Company.
(b) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in
such offering within a price range reasonably acceptable to the
Company, the Company will include in such registration (i) first, the
securities the Company proposes to sell and (ii) second, all other
securities (including the Registrable Securities) requested to be
included in such registration, pro rata among the respective holders
thereof on the basis of the number of securities owned by each such
holder.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of securities of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the
number which can be sold in such offering within a price range
reasonably acceptable to such holders, the Company will include in
such registration the securities (including the Registrable
Securities) requested to be included in such registration, pro rata
among the respective holders thereof on the basis of the number of
securities owned by each such holder.
SECTION 4.3. HOLDBACK AGREEMENTS.
(a) If requested in writing by the Company or the managing
underwriters, if any, of any registration effected pursuant to Section
4.1 or 4.2, each of Seven, Tracinda and the Executives agrees not to
effect any public sale or distribution (including sales pursuant to
Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities,
during the time period reasonably requested by the managing
underwriters, not to exceed the period commencing with the date seven
days prior to and ending with the date 90 days, or such longer period,
not to exceed 180 days, as the applicable managing underwriter shall
request, after the effective date of any underwritten Demand
Registration, any underwritten Piggyback Registration or other
underwritten registration by the Company of its securities (except as
part of such underwritten registration).
(b) If requested in writing by the managing underwriters of
any registration effected pursuant to Section 4.1 or 4.2, the Company
agrees (i) not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the time period reasonably
requested by the managing underwriters, not to exceed the period
commencing with the date seven days prior to and ending with the date
90 days, or such longer period, not to exceed 180 days, as the
applicable managing underwriter shall request, after the effective
date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or
any successor forms), and (ii) to use its best efforts to cause each
holder of its capital stock, which such holder purchased from the
Company at any time after the date of this Agreement (other than in a
registered public offering), to so agree.
(c) If the Company has previously filed a registration
statement with respect to Registrable Securities pursuant to Section
4.1 or 4.2, and if such previous registration has not been withdrawn
or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-4 or Form S-8 or
any successor forms), whether on its own behalf or at the request of
any holder or holders of such securities, until a period of at least
90 days, or such longer period, not to exceed 180 days, as the
applicable managing underwriter shall request, has elapsed from the
effective date of such previous registration.
SECTION 4.4. REGISTRATION PROCEDURES. Whenever Tracinda, Seven or
an Executive has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its best
efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and thereafter
use its best efforts to cause such registration statement to become
effective (provided that, before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies
of all such documents proposed to be filed, which documents will be
subject to review of such counsel);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of either (i) not less than six
months (subject to extension pursuant to Section 4.7(b)) or, if such
registration statement relates to an underwritten offering, such
longer period as in the opinion of counsel for the underwriters a
prospectus is required by law to be delivered in connection with sales
of Registrable Securities by an underwriter or dealer or (ii) such
shorter period as will terminate when all of the securities covered by
such registration statement have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof
set forth in such registration statement (but in any event not before
the expiration of any longer period required under the Securities
Act), and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have
been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of such Registrable Securities owned by such seller
(provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction or (iii) consent
to general service of process in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the
discovery of the happening of any event as a result of which, the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made, and the Company will prepare and file with
the Commission and, at the request of any such seller, furnish to such
seller a reasonable number of copies of, a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(f) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the
Company are then listed and, if not so listed, to be listed on the
Nasdaq National Market;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the holders of a majority of the Registrable Securities
being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a
combination of shares);
(i) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such seller or underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the officers, directors,
employees and independent accountants of the Company to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months
beginning with the first day of the first full calendar quarter of the
Company after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any securities included in such
registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of
such order;
(l) obtain a "cold comfort" letter, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
of the Company in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as the holders of a
majority of the Registrable Securities being sold reasonably request
(provided that such Registrable Securities constitute at least 10% of
the securities covered by such registration statement); and
(m) provide a legal opinion of the outside counsel of the
Company, dated the effective date of such registration statement (and,
if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), with
respect to the registration statement, each amendment and supplement
thereto, the prospectus included therein (including the preliminary
prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by
legal opinions of such nature. The Company may require each seller of
Registrable Securities as to which any registration is being effected
to furnish the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time
reasonably request in writing.
SECTION 4.5. REGISTRATION EXPENSES.
(a) Except as provided in Section 4.1(b), the Company shall
pay all Registration Expenses relating to any registration of
Registrable Securities hereunder. "Registration Expenses" shall mean
any and all fees and expenses incident to the Company's performance of
or compliance with this Article IV, including, without limitation: (i)
Commission, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and all listing fees and
fees with respect to the inclusion of securities on the Nasdaq
National Market, (ii) fees and expenses of compliance with state
securities or "blue sky" laws and in connection with the preparation
of a "blue sky" survey, including, without limitation, reasonable fees
and expenses of blue sky counsel, (iii) printing expenses, (iv)
messenger and delivery expenses, (v) fees and disbursements of counsel
for the Company, (vi) with respect to each registration, reasonable
fees and disbursements of one counsel for the selling shareholders
(other than the Company) (selected by the holders making the Demand
Registration request, in the case of a registration pursuant to
Section 4.1, and selected by the holders of a majority of the
Registrable Securities included in such registration, in the case of a
registration pursuant to Section 4.2) as well as of one local counsel,
(vii) fees and disbursements of all independent public accountants
(including the expenses of any audit and/or "cold comfort" letter) and
fees and expenses of other persons, including special experts,
retained by the Company, and (viii) any other fees and disbursements
of underwriters, if any, customarily paid by issuers or sellers of
securities.
(b) Notwithstanding the foregoing, (i) the provisions of
this Section 4.5 shall be deemed amended to the extent necessary to
cause these expense provisions to comply with "blue sky" laws of each
state in which the offering is made and (ii) in connection with any
registration hereunder, each holder of Registrable Securities being
registered shall pay all underwriting discounts and commissions and
transfer taxes, if any, attributable to the Registrable Securities
included in the offering by such holder.
SECTION 4.6. INDEMNIFICATION.
(a) The Company and MGM Studios jointly and severally agree
to indemnify and hold harmless, to the extent permitted by law, each
holder of Registrable Securities, its officers, directors, employees
and agents and each Person who controls such holder (within the
meaning of the Securities Act) against any losses, claims, damages or
liabilities, joint or several, to which such holder or any such
director, officer, employee, agent or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon (i) any untrue or alleged untrue statement of a material fact
contained (A) in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or (B) in
any application or other document or communication (in this Section
4.6 collectively called an "application") executed by or on behalf of
the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify
any securities covered by such registration statement under the "blue
sky" or securities laws thereof, (ii) any omission or alleged omission
of a material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any violation by the
Company of the Securities Act or any state securities law, or any rule
or regulation promulgated under the Securities Act or any state
securities law, or any other law applicable to the Company relating to
any such registration or qualification, and the Company will reimburse
such holder and each such director, officer and controlling person for
any legal or any other expenses incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or
is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission, made in such registration statement, any
such prospectus or preliminary prospectus or any amendment or
supplement thereto, or in any application, in reliance upon and in
conformity with written information prepared and furnished to the
Company by such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same.
In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to
the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder
will furnish to the Company in writing such information and documents
concerning such holder as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify and hold harmless the
Company, MGM Studios, their respective directors and officers and each
other Person who controls or is controlled by the Company and the
directors and officers of each such controlling or controlled Person
(within the meaning of the Securities Act) against any losses, claims,
damages, liabilities, joint or several, to which the Company or any
such director or officer or controlling or controlled Person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or
are based upon (i) any untrue or alleged untrue statement of a
material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto
or in any application or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such
untrue statement or omission is made in such registration statement,
any such prospectus or preliminary prospectus or any amendment or
supplement thereto, or in any application, in reliance upon and in
conformity with written information concerning such holder prepared
and furnished to the Company by such holder in writing expressly for
use therein, and such holder will reimburse the Company and each such
director, officer and controlling or controlled Person for any legal
or any other expenses incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided that the obligation to indemnify will be
individual to each holder and will be limited to the net amount of
proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnified party will not be
subject to any liability for any settlement made by the indemnifying
party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest
may exist between such indemnified party and any other of such
indemnified parties with respect to such claim. If the indemnifying
party assumes the defense, the indemnified party may engage its own
counsel at its own sole cost and expense. All fees and expenses of
counsel to any indemnified party required to be paid by any
indemnifying party shall be paid by such indemnifying party as
incurred by such indemnified party.
(d) The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer,
director, employee, agent or controlling or controlled Person of such
indemnified party and will survive the transfer of securities by any
holder thereof. If the indemnification provided for herein is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties, on the one hand,
and the indemnified party or parties, on the other hand, in connection
with the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations; provided, however, that in no event shall any
contribution by any holder or any director, officer, employee, agent
or controlling or controlled Person thereof exceed the amount of the
net proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
SECTION 4.7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
(a) If requested by the underwriters for any underwritten
offering pursuant to a Demand Registration requested under Section
4.1, the Company shall enter into a customary underwriting agreement
with the underwriters. Such underwriting agreement shall be
satisfactory in form and substance to the Person who requested such
registration and shall contain such representations and warranties by,
and such other agreements on the part of, the Company and such other
terms as are generally prevailing in agreements of that type,
including, without limitation, indemnities and contribution
agreements. Such underwriting agreement shall also contain such
representations, warranties, indemnities and contributions by the
participating holders as are customary in agreements of that type. In
the case of a registration pursuant to Section 4.2 hereof, if the
Company shall have determined to enter into any underwriting
agreements in connection therewith, all of the holders' Registrable
Securities to be included in such registration shall be subject to
such underwriting agreement. Such underwriting agreement shall also
contain such representations, warranties, indemnities and
contributions by the participating holders as are customary in
agreements of that type.
(b) Each Person that is participating in any registration
hereunder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4.4(e)
above, such Person will forthwith discontinue the disposition of its
Registrable Securities pursuant to the registration statement until
such Person's receipt of the copies of a supplemented or amended
prospectus as contemplated by such Section 4.4(e). In the event the
Company shall give any such notice, the applicable time period
mentioned in Section 4.4(b) during which a registration statement is
to remain effective shall be extended by the number of days during the
period from and including the date of the giving of such notice
pursuant to this paragraph to and including the date when each seller
of a Registrable Security covered by such registration statement shall
have received the copies of the supplemented or amended prospectus
contemplated by Section 4.4(e).
SECTION 4.8. CURRENT PUBLIC INFORMATION. At all times, the
Company will file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and will take such further
action as any holder or holders of Registrable Securities may
reasonably request, all to the extent required to enable such holders
to sell Registrable Securities pursuant to Rule 144.
SECTION 4.9. PREPARATION; REASONABLE INVESTIGATION. In connection
with the preparation and filing of each registration statement under
the Securities Act, the Company will give the holders of Registrable
Securities registered under such registration statement and their
respective counsel, underwriters and accountants, the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss
the business, finances and accounts of the Company and its
Subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
SECTION 4.10. CERTAIN RIGHTS OF HOLDERS. The Company will not
file any registration statement under the Securities Act which refers
to any holder of Registrable Securities by name or otherwise as the
holder of any securities of the Company, unless it shall first have
given such holder the right to require:
(a) the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that, in the opinion of
such holder, the holding of such holder of such securities does not
make such holder a "controlling person" of the Company within the
meaning of the Securities Act and is not to be construed as a
recommendation by such holder of the investment quality of the
Company's securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future financial
requirements of the Company, or
(b) in the event that such reference to such holder by name
or otherwise is not required by the Securities Act or any rules and
regulations promulgated thereunder, the deletion of the reference to
such holder.
SECTION 4.11. FORM S-8. The Company will, within 6 months
following the IPO Closing Date, cause to become effective a
registration statement on Form S-8 with the Commission with respect to
shares of capital stock of the Company subject to Options.
ARTICLE V
GENERAL PROVISIONS
SECTION 5.1. NOTICES. Any notice required to be given hereunder
shall be sufficient if in writing, and sent by facsimile transmission
and by courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class
postage prepaid), addressed as follows:
If to the Company or MGM Studios, to:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 X. Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Tracinda, to:
Tracinda Corporation
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Secretary / Treasurer
Telecopy: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, P.C.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Seven, to:
Seven Network Limited
c/o Culmen Group, L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and:
XXX0
Xxxxx Xxxx
Xxxxxx XXX 0000, Xxxxxxxxx
Attention: Xxxx Xxxx, Managing Director
Telephone: (000) 000-0000
Telecopy: (000) 000-00000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
000 Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to an Executive, to the address of such Executive set forth in
the signature pages hereof or to such other address as any party shall
specify by written notice so given, and such notice shall be deemed to
have been delivered as of the date so telecommunicated, personally
delivered or mailed.
SECTION 5.2. ASSIGNMENT; BINDING EFFECT; BENEFIT; SUCCESSORS.
(a) Except as otherwise expressly provided in this
Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise); provided, however, that
the registration and related rights specified in Article IV shall
inure to the benefit of any transferee of Registrable Securities
pursuant to a Transfer permitted under the terms of this Agreement;
provided, further, however, that each of Tracinda and Seven may assign
its rights under this Agreement to any of their respective direct or
indirect wholly owned Subsidiaries so long as (i) such assignee agrees
to be bound by the terms of this Agreement to the same extent as the
applicable assignor, (ii) the applicable assignor continues to be
bound by, and is not released from, any of its obligations under this
Agreement, and (iii) the applicable assignor will cause the applicable
direct or indirect wholly owned Subsidiary to continue to be a direct
or indirect wholly owned Subsidiary of the applicable assignor for so
long as such assignee shall have rights under this Agreement. For the
purpose of this Agreement, all capital stock of the Company owned by
any direct or indirect wholly owned Subsidiary of Tracinda or Seven,
as applicable, shall be deemed owned by Tracinda or Seven, as
applicable. Subject to the first sentence of this Section 5.2, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Except as
expressly provided in this Agreement, notwithstanding anything
contained in this Agreement to the contrary, nothing in this
Agreement, express or implied, is intended to confer on any person
other than the parties hereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(b) In the event that the Company shall enter into a merger,
consolidation or other similar type transaction, all of the terms of
this Agreement relating to the Company, as applicable, shall apply to
the surviving corporation.
SECTION 5.3. ENTIRE AGREEMENT. Upon the effectiveness hereof,
this Agreement and any certificate delivered by the parties in
connection herewith constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings (oral and written) among the parties
with respect thereto.
SECTION 5.4. AMENDMENT.
(a) Subject to Section 5.4(b), this Agreement may not be
amended or modified except by an instrument in writing signed by or on
behalf of each of the parties hereto which, with respect to the
Executives, shall refer to the holders of a majority of shares of
capital stock of the Company owned by the Executives and subject to
the terms of this Agreement.
(b) The provisions of Article IV of this Agreement which are
solely for the benefit of Tracinda, Seven and/or the Company may be
amended without the consent of the Executives. Any other provision of
Article IV may be amended without the consent of the Executives
provided that, in the case of this sentence, such amendment does not
materially and adversely affect the rights of the Executives under
this Agreement.
SECTION 5.5. GOVERNING LAW; EFFECTIVE DATE. This Agreement shall
be governed by, and construed in accordance with, the internal laws of
the State of Delaware (without regard to conflict of laws principles
which would require the application of the laws of any other State).
Each of the parties hereto agrees that any legal action or proceeding
with respect to this Agreement may be brought in the Courts of the
State of Delaware or the United States District Court located in the
State of Delaware and, by execution and delivery of this Agreement,
each party hereto hereby irrevocably submits itself in respect of its
property, generally and unconditionally to the non-exclusive
jurisdiction of the aforesaid courts in any legal action or proceeding
arising out of this Agreement. Each of the parties hereto hereby
irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement brought in the
courts referred to in the preceding sentence. Each party hereto hereby
consents to process being served in any such action or proceeding by
the mailing of a copy thereof to the address set forth in Section 5.1
hereof and agrees that such service upon receipt shall constitute good
and sufficient service of process or notice thereof. Nothing in this
Section 5.5 shall affect or eliminate any right to serve process in
any other manner permitted by law. This Agreement shall become
effective at the time of the IPO Closing. Prior to the issuance of any
Options or shares of capital stock of the Company to any Executive of
the Company, MGM Studios or any of their respective Subsidiaries, the
Company shall cause such Executive to become a party to this
Agreement.
SECTION 5.6. COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies of this Agreement, each
of which may be signed by less than all of the parties hereto, but
together all such copies are signed by all of the parties hereto.
SECTION 5.7. HEADINGS. Headings of the Articles and Sections of
this Agreement are for the convenience of the parties only and shall
be given no substantive or interpretive effect whatsoever.
SECTION 5.8. INTERPRETATION. In this Agreement, unless the
context otherwise requires, words describing the singular number shall
include the plural and vice versa, "including" shall mean including,
without limitation, and words denoting any gender shall include all
genders and words denoting natural persons shall include corporations
and partnerships and vice versa.
SECTION 5.9. SEVERABILITY. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or
otherwise affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
SECTION 5.10. ENFORCEMENT OF AGREEMENT. The parties hereto agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any Delaware court, this being in
addition to any other remedy to which they may be entitled at law or
in equity.
SECTION 5.11. TERMINATION OF ORIGINAL SHAREHOLDERS AGREEMENT.
Seven, Tracinda, the Company, MGM Studios, and Executives hereby
mutually agree that, effective as of the IPO Closing Date, the
Original Shareholders Agreement shall terminate and be of no further
force or effect and none of them shall have any further rights, duties
or obligations thereunder from and after the effective date of such
termination. Until such time as the IPO Closing Date shall occur, the
Original Shareholders Agreement shall remain in full force and effect
and shall be unaffected hereby, except that no party hereto shall be
entitled to effect a Piggyback Registration pursuant to the Approved
Initial Public Offering.
SECTION 5.12. ANTIDILUTION ADJUSTMENT. Prior to or concurrent
with the consummation of the IPO Closing, the Company will effect, in
one or more transactions, a net stock split of the Common Stock (the
"Stock Split"). As a result of the Stock Split, before this Agreement
becomes effective, the number of shares of Common Stock in Section
3.2(c) will be multiplied by the Stock Split (the "Antidilution
Adjustment"). By way of illustration, if the Stock Split is 50 for 1
by virtue of the Antidilution Adjustment, the 250,000 number in
Section 3.2(c) of this Agreement will become 12,500,000.
IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf as of the day and
year first written above.
SEVEN NETWORK LIMITED
By:
-----------------------------------------------------
Name:
Title:
TRACINDA CORPORATION
By:
-----------------------------------------------------
Name:
Title:
METRO-XXXXXXX-XXXXX STUDIOS INC.
By:
-----------------------------------------------------
Name:
Title:
METRO-XXXXXXX-XXXXX INC.
By:
-----------------------------------------------------
Name:
Title:
-----------------------------------------------------
Xxxxx X. Xxxxxxx
-----------------------------------------------------
[Executive]
-----------------------------------------------------
[Executive]
-----------------------------------------------------
[Executive]
-----------------------------------------------------
[Executive]
The undersigned, an indirect wholly owned subsidiary of Seven
Network Limited, hereby agrees to be bound by the terms of this
Agreement to the same extent as Seven Network Limited.
MILTONSTAR PTY LIMITED
By:
-----------------------------
Name:
Title:
EXHIBIT A
SEE EXHIBIT 10.5
EXHIBIT B
SEE EXHIBIT 10.5
