EXHIBIT 10.28
INDUCEMENT AGREEMENT
This Inducement Agreement (the "Agreement"), dated as of November 5, 1997,
is entered into by Tracinda Corporation ("Tracinda"), Seven Network Limited
("Seven") and Metro-Xxxxxxx-Xxxxx Inc. (formerly known as P&F Acquisition Corp.)
("MGM") with the individuals (each, an "Executive") listed on Schedule A to this
Agreement, in order to induce the Executives to enter into Modification and
Cancellation Agreements in the form of Schedule B to this Agreement (but without
certain attachments and exhibits (the "Modification and Cancellation
Agreements")).
1. Representations and Warranties Concerning Ownership of MGM Common Stock
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(a) Tracinda and MGM jointly and severally represent and warrant to each
Executive that Tracinda owns 871,000 shares of the Common Stock (approximately
68.87% of the outstanding Common Stock) of MGM.
(b) Seven and MGM jointly and severally represent and warrant to each
Executive that Seven owns 389,000 shares of the Common Stock (approximately
30.76% of the outstanding Common Stock) of MGM.
2. Shareholder Approval of Senior Management Bonus Plan
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(a) The Senior Management Bonus Plan (the "Bonus Plan") and Bonus Interest
Agreements to be entered into pursuant to the Modification and Cancellation
Agreements require, as a condition to payments in respect of the Bonus
Interests, that the Bonus Plan be approved by a majority of the shares of Common
Stock of MGM prior to December 31, 1998.
(b) Following the earliest to occur of: (i) the initial public offering
contemplated in the Modification and Cancellation Agreements; and (ii) December
15, 1998 (or such earlier date to which MGM, Tracinda and Seven agree), and in
no case later than December 31, 1998, MGM will cause to be held a meeting of its
shareholders at which a quorum is to be present in person or by proxy, at which
the approval of the Bonus Plan will be considered, or will complete a
solicitation of consents, complying with the proxy rules under the Securities
Exchange Act of 1934, as amended (the "Proxy Rules"), of its shareholders with
respect to the approval of the Bonus Plan. At the meeting of shareholders or by
a written consent of a majority of the outstanding shares of Common Stock of
MGM, as applicable, each of Tracinda and Seven will vote all of the shares of
Common Stock of MGM then owned by it in favor of the approval of the Bonus Plan;
provided, however, that if the shareholder approval is obtained by written
consent, the consent will be executed not less than 20 days following the
distribution of an information statement satisfying the requirements of the
Proxy Rules.
(c) Prior to the earlier of December 31, 1998 and the approval of the Bonus
Plan by the shareholders of MGM in accordance with Section 2(b) hereof: (i) MGM
will not issue any shares of securities if, as a result of its doing so,
Tracinda and Seven would not, after giving effect to the issuance, own a
sufficient number of shares of Common Stock so that, by the vote of those
shares, the Bonus Plan will be approved; and (ii) neither Tracinda nor Seven
will sell, assign or otherwise transfer any shares of the Common Stock of MGM
owned by it, if the transfer would cause MGM and Seven to own less than a
majority of the voting securities of MGM, unless the purchaser, assignee or
transferee of the shares agrees, for the benefit of each of the Executives, to
vote the shares of Common Stock of MGM received from Tracinda or Seven, as the
case may be, in favor of approval of the Bonus Plan.
(d) Section 2(a), (b) and (c) above will be of no force or effect if the
conditions set forth in Section 2(b) of the Modification and Cancellation
Agreements have not been satisfied on or before March 31, 1998.
3. Equitable Remedies; Applicable Law
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(a) The parties to this Agreement will, in addition to damages or other
remedies at law for breach, default or misrepresentation, as appropriate, be
entitled to equitable remedies, including specific performance, for breach or
prospective breach of this Agreement.
(b) Except as provided in Section 4(c) of this Agreement, this Agreement
is governed by and is to be construed and enforced in accordance with the
internal laws, and not the laws pertaining to choice or conflict of laws, of the
State of Delaware.
4. Arbitration of Disputes
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(a) Except as provided in Section 3(b) of this Agreement, all disputes
among the parties to this Agreement, however significant, arising out of,
relating in any way to, or in connection with, this Agreement (including the
validity, scope and enforceability of this Section 4) will be settled only by
an arbitration (i) conducted in accordance with the then rules of the American
Arbitration Association or any similar successor body and (ii) held in Los
Angeles, California.
(b) The arbitration will be held before a single arbitrator mutually
agreed to by the parties to the arbitration, except that, if the parties fail to
agree to an arbitrator within 20 days from the date on which the claimant's
request for arbitration is delivered to the other party(ies) to the arbitration,
the arbitration shall be held before an arbitrator appointed by the American
Arbitration Association.
(c) Discovery will be available in the arbitration proceedings pursuant to
the provisions of California Code of Civil Procedure Section 1283.05, which are
incorporated here by this reference and made applicable to any arbitration held
pursuant to this Section 4.
(d) The award of the arbitrator will be made within 90 days from the date
on which the arbitrator is selected. The award of the arbitrator will be final
and, to the greatest extent allowed by law, the parties waive their right to any
form of appeal. The arbitrator must award costs and fees, including the fees of
the arbitrator, to the prevailing party. Judgment on any award of the
arbitrator may be entered in any court having jurisdiction or application may be
made to such court for the judicial acceptance of the award and for one or more
orders of enforcement.
TRACINDA CORPORATION THE INDIVIDUALS LISTED ON
SCHEDULE A TO THIS AGREEMENT
By ______________________________
Name:_________________________ By_______________________________________
Title:________________________ A. Xxxxxx Xxxxxx, Attorney-in-Fact
SEVEN NETWORK LIMITED METRO-XXXXXXX-XXXXX INC.
By ______________________________ By ______________________________________
Name:_________________________ A. Xxxxxx Xxxxxx, Vice Chairman
Title:________________________
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