EXHIBIT 10.25
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FORM OF
AMENDED AND RESTATED INVESTORS SHAREHOLDER AGREEMENT
by and among
SEVEN NETWORK LIMITED
TRACINDA CORPORATION
METRO-XXXXXXX-XXXXX STUDIOS INC.
METRO-XXXXXXX-XXXXX INC.
and
XXXXX X. XXXXXXX
Dated as of August 4, 1997
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TABLE OF CONTENTS
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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
ARTICLE III CORPORATE GOVERNANCE; CERTAIN CORPORATE ACTIONS................... 5
Section 3.1. Voting of Shares.................................... 5
Section 3.2. Composition of the Board of Directors of the
Company, MGM Studios, Orion and the Committees of
the Company......................................... 6
Section 3.3. Approval of Certain Matters......................... 11
ARTICLE IV FIRST REFUSAL..................................................... 11
Section 4.1. First Refusal....................................... 11
Section 4.2. Legend.............................................. 14
ARTICLE V PREEMPTIVE RIGHTS................................................. 14
Section 5.1. Certain Pre-emptive Rights.......................... 14
ARTICLE VI BUSINESS; CERTIFICATE OF INCORPORATION AND BYLAWS................. 15
Section 6.1. Entertainment Business.............................. 15
Section 6.2. Certificate of Incorporation and By-laws............ 16
Section 6.3. Conversion of Preferred Stock....................... 16
ARTICLE VII GENERAL PROVISIONS................................................ 16
Section 7.1. Notices............................................. 16
Section 7.2. Assignment; Binding Effect; Benefit; Successors..... 18
Section 7.3. Entire Agreement.................................... 18
Section 7.4. Amendment........................................... 19
Section 7.5. Governing Law....................................... 19
Section 7.6. Counterparts; Effective Date........................ 19
Section 7.7. Headings............................................ 19
Section 7.8. Interpretation...................................... 19
Section 7.9. Severability........................................ 19
Section 7.10. Enforcement of Agreement............................ 20
Section 7.11. Certain Rights...................................... 20
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Section 7.12. Termination of Original Investors Shareholder
Agreement........................................... 20
Section 7.13. Antidilution Adjustment............................. 20
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FORM OF AMENDED AND RESTATED INVESTORS
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SHAREHOLDER AGREEMENT
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THIS AMENDED AND RESTATED INVESTORS SHAREHOLDER AGREEMENT, dated as of
August 4, 1997 (this "Agreement"), by and among SEVEN NETWORK LIMITED, a
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corporation organized under the laws of the Commonwealth of Australia ("Seven");
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TRACINDA CORPORATION, a corporation organized under the laws of the State of
Nevada ("Tracinda"); METRO-XXXXXXX-XXXXX INC., a corporation organized under the
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laws of the state of Delaware and formerly known as P&F Acquisition Corp. ( the
"Company"); METRO-XXXXXXX-XXXXX STUDIOS INC., a corporation organized under the
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laws of the State of Delaware and formerly known as Metro-Xxxxxxx-Xxxxx Inc.
("MGM Studios"); and XXXXX X. XXXXXXX ("Xx. Xxxxxxx"), amends and supersedes
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that certain Investors Shareholder Agreement, dated as of October 16, 1996, by
and among Seven, the Company, Tracinda, MGM Studios and Xx. Xxxxxxx (the
"Original Investors Shareholder Agreement").
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A. 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.
B. 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
Investors Shareholder 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.
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"Affiliate": of any Person, means (i) any other Person controlling,
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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.
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"Antidilution Adjustment": as defined in Section 7.13.
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"Approved Initial Public Offering": shall mean an offering of Common Stock
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of the Company to the public through a syndicate of underwriters co-managed by
Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx, Inc. and X. X. Xxxxxx Securities, Inc. and
others (with Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx, Inc. acting as book running
manager) pursuant to an effective registration statement under the Securities
Act by the Company (other than in connection with any employee
benefit plan maintained by the Company or any corporation controlled by it)
provided that the following conditions are met:
(i) the initial public offering price of such shares of Common
Stock (before deduction of underwriters' discounts and commissions and the
out-of-pocket expenses of the Company incurred in connection therewith)
shall be not less than $833.34 per share of Common Stock;
(ii) the aggregate initial offering price of all such shares so
sold in such public offering (before deduction of underwriters' discounts
and commissions and the out-of-pocket expenses of the Company incurred in
connection therewith) shall be not less than $175 million nor more than
$375 million;
(iii) the underwriters shall not have been granted an over-
allotment option to purchase more than 15% of the shares of Common Stock
initially sold to the underwriters at a price equal to the initial public
offering price and such over-allotment option shall only be exercisable
within 30 days after the IPO Closing; and
(iv) concurrently with the IPO Closing, the Company shall sell
to Tracinda shares of Common Stock in a private placement transaction
meeting the following conditions:
(A) the price per share of the Common Stock sold in such
private placement transaction to Tracinda shall be equal to the
initial public offering price of the Common Stock offered to the
public (net of deduction of underwriters' discounts and commissions);
(B) the aggregate price for all the shares of Common
Stock so sold in such private placement transaction to Tracinda shall
be equal to $75 million; and
(C) the number of shares of the Common Stock sold in such
private placement transaction to Tracinda shall be equal to $75
million divided by the initial public offering price of the Common
Stock offered to the public (net of deduction of underwriters'
discounts and commissions).
"Commission": the Securities and Exchange Commission or any other Federal
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agency at the time administering the Securities Act.
"Common Stock": the common stock of the Company.
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"Company": as defined in the preamble to this Agreement.
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"Employment Agreement": the Amended and Restated Employment Agreement by
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and among Xx. Xxxxxxx, the Company and MGM Studios, dated as of August 4, 1997.
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"Exchange Act": the Securities Exchange Act of 1934, as amended, and the
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rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"First Refusal Notice": as defined in Section 4.1(a).
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"HSR Act": the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
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amended.
"IPO Closing": shall mean the closing of an Approved Initial Public
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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": shall mean the date of the IPO Closing.
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"MGM Studios": as defined in the preamble to this Agreement.
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"Non-Transferring Party": as defined in Section 4.1(a).
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"Original Investors Shareholder Agreement": as defined in the preamble to
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this Agreement.
"Orion": Orion Pictures Corporation.
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"Person": any natural person, corporation, partnership, limited liability
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company, firm, association, trust, government, governmental agency, or other
legal entity, whether acting in an individual, fiduciary or other capacity.
"Preferred Stock": shall mean the Series A Convertible Preferred Stock of
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the Company.
"Response Period": as defined in Section 4.1(a).
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"Securities Act": the Securities Act of 1933, as amended, and the rules
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and regulations of the Commission thereunder, as the same shall be in effect at
the time.
"Seven": as defined in the preamble to this Agreement.
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"Shareholders Agreement": the Amended and Restated Shareholders Agreement
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dated as of August 4, 1997 among MGM Studios, the Company, Tracinda, Seven, Xx.
Xxxxxxx and the other parties thereto.
"Stock Split": as defined in Section 7.13.
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"Subsidiary": of any Person shall mean any corporation or other legal
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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.
"Tracinda": as defined in the preamble to this Agreement.
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"Transfer": as defined in Section 4.1(a).
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"Transferring Party": as defined in Section 4.1(a).
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The Company
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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; (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
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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; (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
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represents and warrants to the other parties hereto as follows: (i) Tracinda
has all requisite corporate power
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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; (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
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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; (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.
ARTICLE III
CORPORATE GOVERNANCE; CERTAIN CORPORATE ACTIONS
Section 3.1. Voting of Shares.
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(a) Until the fifteenth anniversary of the IPO Closing Date, Seven
shall (i) vote all of the shares of capital stock of the Company beneficially
owned by Seven, and shall take all other necessary or desirable actions within
its control (including, without limitation, by attendance at meetings in person
or by proxy for the purpose of obtaining a quorum and execution of written
consents in lieu of meetings), to effectuate the provisions of this Agreement
and (ii) use its best efforts to cause the Persons designated by it to serve on
the Company's, MGM Studios' and
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Orion's boards of directors pursuant to this Article III to take all actions
necessary to effectuate the terms of this Agreement.
(b) Until the fifteenth anniversary of the IPO Closing Date, Tracinda
shall (i) vote all of the shares of capital stock of the Company beneficially
owned by Tracinda, and shall take all other necessary or desirable action within
its control (including, without limitation, by attendance at meetings in person
or by proxy for the purpose of obtaining a quorum and execution of written
consents in lieu of meetings) to effectuate the provisions of this Agreement and
(ii) use its best efforts to cause the Persons designated by it to serve on the
Company's, MGM Studios' and Orion's boards of directors pursuant to this Article
III to take all actions necessary to effectuate the terms of this Agreement.
(c) Until the fifteenth anniversary of the IPO Closing Date, each of
the Company and MGM Studios shall take all necessary or desirable actions within
its respective control (including, without limitation, by calling special board
and stockholder meetings) to effectuate the provisions of this Agreement.
(d) Until the fifteenth anniversary of the IPO Closing Date,
Xx. Xxxxxxx shall vote all of the shares of capital stock of the Company
beneficially owned by him, and shall take all other necessary and desirable
action within his control (including, without limitation, by attendance at
meetings in person or by proxy for the purpose of obtaining a quorum and
execution of written consents in lieu of meetings) to effectuate the provisions
of this Agreement.
Section 3.2. Composition of the Board of Directors of the Company, MGM
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Studios, Orion and the Committees of the Company.
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(a) Until the fifteenth anniversary of the IPO Closing Date, Seven
shall vote all of the shares of capital stock of the Company from time to time
beneficially owned by Seven, and shall take all necessary or desirable action
within its control, Tracinda shall vote all of the shares of capital stock of
the Company from time to time beneficially owned by Tracinda, and shall take all
necessary or desirable actions within its control, the Company shall vote all
shares of capital stock of MGM Studios beneficially owned by it, and shall take
all necessary or desirable action within its control, Xx. Xxxxxxx shall vote all
shares of capital stock of the Company from time to time owned by him and shall
take all necessary or desirable action, and MGM Studios shall take all necessary
or desirable action within its control, in each case, so that the composition of
the boards of directors of each of the Company, MGM Studios, Orion and the
committees of the Company shall be as follows:
(i) The authorized board of directors of the Company shall
consist of eleven members (subject to the provisions set forth in clause
(D) below) and the members of such board of directors shall be determined
as follows:
(A) four persons shall be nominated by Tracinda so long as
Tracinda beneficially owns 400,000 or more shares of Common Stock or
two persons shall be nominated by Tracinda so long as Tracinda
beneficially owns less than 400,000, but at least 250,000, shares of
Common Stock; provided, however,
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that Tracinda's right to nominate persons to the board of directors of
the Company pursuant to this clause (A) shall expire on the date that
Tracinda no longer beneficially owns at least 250,000 shares of Common
Stock; provided, further, that if at any time Tracinda is entitled to
nominate less than four directors pursuant to this clause (A), a
majority of the remaining directors of the Company shall be entitled
to nominate a number of directors (who need not qualify as
"independent directors" as specified in clause (D) of this Section
3.2(a)(i)) equal to the amount of such reduction in directors that
Tracinda may nominate; and provided, further, that so long as Tracinda
owns at least 250,000 shares of Common Stock, for each selection by
the board of directors of the Company pursuant to the immediately
preceding proviso of a person who is affiliated with or an associate
of Seven (as such terms are defined in the rules promulgated under the
Exchange Act), a person who is affiliated with or associated with
Tracinda shall be selected by the board of directors to serve as a
director of the Company;
(B) two persons shall be nominated by Seven; provided,
however, that Seven's right to nominate two persons to the board of
directors of the Company shall expire on the date that Seven no longer
beneficially owns at least 250,000 shares of Common Stock and
thereafter such number of directors (who need not qualify as
"independent directors" as specified in clause (D) of this Section
3.2(a)(i)) shall be nominated by a majority of the remaining directors
of the Company;
(C) two persons shall be nominated by the Chairman and
Chief Executive Officer of the Company (one of which persons shall be
Xx. Xxxxxxx so long as he serves as Chief Executive Officer of the
Company); and
(D) three persons who are not affiliated or associated with
either Tracinda or Seven and who otherwise meet the requirements of
the New York Stock Exchange for serving as "independent directors"
shall be nominated and selected by a majority of the members of the
board of directors of the Company, which majority, so long as Tracinda
beneficially owns at least 400,000 shares of Common Stock, must
include Tracinda's nominees on the board of directors of the Company;
provided, however, that notwithstanding anything to the contrary in
this Agreement, each of Tracinda and Seven shall only be obligated to
vote the shares of capital stock from time to time beneficially owned
by them for nominees selected pursuant to this clause (D) if such
nominee(s) are acceptable to Tracinda or Seven, as the case may be,
and shall have the right to vote against such nominee(s) if such
nominee(s) are not acceptable to Tracinda or Seven, as the case may
be; provided further, however, that the number of "independent
directors" on the board of directors shall be subject to reduction
from three persons to two persons if a majority of the existing board
of directors so determines.
(ii) The compensation committee of the board of directors of the
Company shall include members to be determined as follows:
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(A) one person nominated to the board of directors of the
Company by Tracinda, so long as Tracinda beneficially owns 250,000 or
more shares of Common Stock; provided, however, that Tracinda's right
to include in the compensation committee of the board of directors of
the Company a person Tracinda has nominated to the board of directors
of the Company pursuant to this clause (A) shall expire on the date
that Tracinda no longer beneficially owns at least 250,000 shares of
Common Stock; provided, further, that if at any time Tracinda does not
have the right to include its nominee on the compensation committee of
the board of directors of the Company pursuant to this clause (A), the
member of the compensation committee of the board of directors of the
Company shall be a director (who need not qualify as an "independent
director" as specified in clause (C) of this Section 3.2(a)(ii))
nominated by a majority of the remaining directors of the Company;
(B) one person nominated to the board of directors of the
Company by Seven; provided, however, that Seven's right to include in
the compensation committee of the board of directors of the Company
one person nominated by it to the board of directors of the Company
shall expire on the date that Seven no longer beneficially owns at
least 250,000 shares of Common Stock and thereafter such member of the
compensation committee of the board of directors of the Company shall
be a director (who need not qualify as an "independent director" as
specified in clause (C) of this Section 3.2(a)(ii)) nominated by a
majority of the remaining directors of the Company; and
(C) one person who is not affiliated or associated with
either Tracinda or Seven and who otherwise meets the requirements of
the New York Stock Exchange for serving as an "independent director"
and who was nominated and selected as a director by a majority of the
members of the board of directors of the Company, which majority, so
long as Tracinda beneficially owns at least 400,000 shares of Common
Stock, must include Tracinda's nominees to the board of directors of
the Company.
(iii) The executive committee of the board of directors of the
Company shall consist of six members to be determined as follows:
(A) three persons nominated to the board of directors of
the Company by Tracinda, so long as Tracinda beneficially owns 400,000
or more shares of Common Stock or two persons nominated to the board
of directors of the Company by Tracinda, so long as Tracinda
beneficially owns less than 400,000, but at least 250,000, shares of
Common Stock; provided, however, that Tracinda's right to include in
the executive committee of the board of directors of the Company
persons Tracinda has nominated to the board of directors of the
Company pursuant to this clause (A) shall expire on the date that
Tracinda no longer beneficially owns at least 250,000 shares of Common
Stock; provided, further, that if at any time Tracinda is entitled to
include in the executive committee of the board of directors of the
Company less than three persons
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Tracinda has nominated to the board of directors of the Company
pursuant to this clause (A), a majority of the directors of the
Company shall be entitled to select a number of members of the
executive committee of the board of directors of the Company equal to
the amount of such reduction in members of the executive committee of
the board of directors of the Company that Tracinda may select;
(B) one person nominated to the board of directors of the
Company by Seven; provided, however, that Seven's right to include in
the executive committee of the board of directors of the Company a
person nominated by it to the board of directors of the Company shall
expire on the date that Seven no longer beneficially owns at least
250,000 shares of Common Stock and thereafter such number of members
of the executive committee of the board of directors of the Company
shall be selected by a majority of the directors of the Company; and
(C) two persons nominated to the board of directors of the
Company by the Chairman and Chief Executive Officer of the Company
(one of which persons shall be Xx. Xxxxxxx so long as he serves as
Chief Executive Officer of the Company).
(iv) The authorized boards of directors of each of MGM Studios
and Orion shall consist of six members (all of whom shall be directors of
the Company) and the members of such boards of directors shall be
determined as follows:
(A) three persons shall be selected by Tracinda so long as
Tracinda beneficially owns 400,000 or more shares of Common Stock or
two persons shall be selected by Tracinda so long as Tracinda
beneficially owns less than 400,000, but at least 250,000, shares of
Common Stock; provided, however, that Tracinda's right to select
persons for the boards of directors of each of MGM Studios and Orion
pursuant to this clause (A) shall expire on the date that Tracinda no
longer beneficially owns at least 250,000 shares of Common Stock;
provided, further, that if at any time Tracinda is entitled to select
less than three directors pursuant to this clause (A), a majority of
the directors of the Company shall be entitled to select a number of
directors equal to the amount of such reduction in directors Tracinda
may select;
(B) one person shall be selected by Seven; provided,
however, that Seven's right to select one person for the boards of
directors of each of MGM Studios and Orion shall expire on the date
that Seven no longer beneficially owns at least 250,000 shares of
Common Stock and thereafter such number of directors shall be selected
by a majority of the directors of the Company; and
(C) two persons shall be selected by the Chairman and Chief
Executive Officer of the Company (one of which persons shall be Xx.
Xxxxxxx so long as he serves as Chief Executive Officer of the
Company).
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(b) Each of Seven and Tracinda, respectively, shall have the
exclusive right (which, to the extent the same may be required by law, may only
be exercised indirectly, through the parties hereto voting at meetings of the
stockholders of the Company and/or through the calling of a special meeting of
the stockholders of the Company) (i) to remove, with or without cause, any
director designated by it in accordance with this Section 3.2 and (ii) to
designate and elect any replacement for a director designated by it in
accordance with this Section 3.2, upon the death, resignation, retirement,
disqualification or removal from office of such director. The board of
directors of the Company shall have the right to remove Xx. Xxxxxxx as a
director of the Company, with or without cause, upon the termination of his
employment as Chief Executive Officer of MGM Studios subject to the terms of Xx.
Xxxxxxx'x employment agreement which shall remain in effect following execution
hereof. Except as specified in the immediately preceding sentence, the board of
directors of the Company shall not have the right to remove Xx. Xxxxxxx as a
director of the Company. Except consistent with the terms of this Agreement,
the board of directors of the Company shall not be authorized to fill a vacancy
on the board of directors of the Company caused by the death, resignation,
retirement, disqualification or removal of a director designated pursuant to
this Section 3.2. To the extent, that at any time, the composition of the board
of directors of the Company is not consistent with provisions of this Section
3.2, each of the parties hereto shall take all necessary or desirable action,
including by calling a special meeting of the stockholders of the Company, to
give effect to the provisions of this Section 3.2. In the event that Xx.
Xxxxxxx shall cease to act as Chief Executive Officer of the Company, promptly
thereafter the parties hereto shall take all necessary or desirable actions,
including a calling of a special meeting of the stockholders of the Company, to
remove the other person then serving as a director of the Company, MGM Studios
and Orion pursuant to Section 3.2(a)(i)(C) and Section 3.2(a)(iv)(C) and then
serving as a member of the executive committee of the board of directors of the
Company pursuant to Section 3.2(a)(iii)(C) unless such other person is
acceptable to the new Chief Executive Officer of the Company.
(c) If Xx. Xxxxxxx shall cease to act as Chief Executive Officer of
the Company, Xx. Xxxxxxx hereby agrees to his resignation as a director of both
the Company and MGM Studios and all other positions held by Xx. Xxxxxxx at MGM
Studios, the Company and their respective Subsidiaries, effective as of the time
he ceases to act as chief executive officer of the Company. For so long as Xx.
Xxxxxxx shall serve as a member of the board of directors of the Company and MGM
Studios, Xx. Xxxxxxx shall act as the chairman of the board of directors of both
the Company and MGM Studios. It shall be a condition precedent to the
nomination by Xx. Xxxxxxx pursuant to Section 3.2(a)(i)(C) and Section
3.2(a)(iv)(C) of a person to serve as a director of the Company, MGM Studios and
Orion and the selection by Xx. Xxxxxxx pursuant to Section 3.2(a)(iii)(C) of a
person to serve on the executive committee of the board of directors of the
Company that such person shall have agreed to his resignation as a director of
the Company, MGM Studios and Orion and a member of the executive committee of
the board of directors of the Company (but not any other positions with the
Company or MGM Studios) at such time as Xx. Xxxxxxx shall no longer serve as the
Chief Executive Officer of the Company.
(d) Each of the parties hereto shall take all such action, and
execute all such documents, as is necessary or desirable to effect the
provisions of this Section 3.2. Each of Tracinda and Seven agrees to use its
best efforts to obtain the resignation from the boards of directors of the
Company, MGM Studios and Orion of the requisite number of persons nominated
10
by it in order to accomplish any reduction in the number of directors
contemplated by clauses (A) and (B), respectively, of Section 3.2(a)(i) and
Section 3.2(a)(iv) and in the number of members of the compensation and
executive committees of the board of directors contemplated by clauses (A) and
(B), respectively, of Section 3.2(a)(ii) and Section 3.2(a)(iii).
(e) Until October 10, 2001, the obligations imposed by this Article
III shall be binding upon any transferee of Seven or Tracinda except that the
provisions of this Article III shall not be binding on:
(i) any person (other than an Affiliate of Tracinda or Seven)
who acquires shares of Common Stock from Tracinda or Seven pursuant to a
public offering registered under the Securities Act or pursuant to Rule 144
or Regulation S promulgated thereunder; or
(ii) any person (other than an Affiliate of Tracinda or Seven)
who acquires not more than 100,000 shares of Common Stock from Tracinda or
Seven, as the case may be, in one transaction or a series of related
transactions.
Section 3.3. Approval of Certain Matters. Until the earlier to
---------------------------
occur of (i) the fifteenth anniversary of the IPO Closing Date and (ii) the
date that Seven no longer beneficially owns at least 250,000 shares of
Common Stock, neither the Company nor MGM Studios nor any of their
Subsidiaries shall (A) sell or agree to sell or (B) license or agree to
license for a period of more than three years in substantially all major
territories of the world in one transaction or a series of related
transactions all or 85% or more of the films then in the library of the
Company, MGM Studios and their Subsidiaries unless such sale, license or
agreement shall have been unanimously approved by the board of directors of
the Company. Thereafter, any such sale, license or agreement shall only
require the approval of a majority of a quorum of directors at a duly
called meeting of the board of directors of the Company.
ARTICLE IV
FIRST REFUSAL
Section 4.1. First Refusal.
-------------
(a) If prior to October 10, 2001, either Tracinda or Seven (as
appropriate in this Article IV, the "Transferring Party"), desires to sell,
------------------
transfer, assign, pledge or otherwise dispose of (a "Transfer"), directly or
--------
indirectly, in whole or part, all or any portion of the shares of capital stock
of the Company beneficially owned by it, the Transferring Party shall provide
the other party (the "Non-Transferring Party") with a written notice (the "First
---------------------- -----
Refusal Notice") (which First Refusal Notice may be sent concurrently with the
--------------
Tag-Along Notice which may be required to be sent with respect to such
transaction pursuant to Section 3.2 of the Shareholders Agreement) setting
forth:
(i) the number and class of shares of capital stock of the
Company proposed to be Transferred;
11
(ii) that the Transferring Party has received a bona fide
written offer from a prospective purchaser of said shares of capital stock
of the Company;
(iii) the name and address of the prospective purchaser;
(iv) the material terms and conditions of such proposed
transaction; and
(v) that the Transferring Party is offering to Transfer such
shares of capital stock of the Company to the Non-Transferring Party on the
same terms and conditions as contained in the bona fide offer.
The Non-Transferring Party shall have 20 calendar days following the receipt of
the First Refusal Notice to respond as to whether it desires to purchase the
shares of capital stock of the Company specified in the First Refusal Notice.
Such 20 calendar day period shall be referred to as the "Response Period."
---------------
Within the Response Period, the Non-Transferring Party shall, by notice in
writing to the Transferring Party, have the opportunity and right to purchase
(on the terms and conditions specified in the First Refusal Notice) the shares
of capital stock of the Company specified in the First Refusal Notice. If the
Non-Transferring Party shall not respond within the Response Period, then such
party shall be deemed to have waived its right to purchase the shares of capital
stock of the Company specified in the First Refusal Notice. If the Non-
Transferring Party fails to exercise or waives its right to purchase the shares
of capital stock of the Company referred to in the First Refusal Notice, then
the Transferring Party shall be free, for a six-month period, to enter into a
definitive agreement to Transfer such shares of capital stock of the Company to
such third party on terms equivalent to or better than the terms specified in
the First Refusal Notice without restriction under this Agreement; it being
understood, however, that if the Transferring Party does not enter into such
definitive agreement within such six-month period, or such definitive agreement
is subsequently terminated, the Transferring Party shall once again be subject
to all the provisions of this Section 4.1.
(b) Each acceptance made hereunder shall constitute a separate and
binding contract obligating the Transferring Party to sell, and the Non-
Transferring Party to purchase, the shares of capital stock of the Company
accepted at the price and upon the terms and conditions as set forth in the
First Refusal Notice. The parties agree to negotiate in good faith to
consummate the transaction as soon as possible, but in no event later than the
date 30 calendar days after the appropriate Response Period has elapsed (as such
period may be extended up to a maximum period of two months (unless further
extension is agreed to by the Transferring Party) by any applicable waiting
period required under the HSR Act or any other applicable law). At the closing,
the Transferring Party shall deliver the certificate or certificates
representing the shares of capital stock of the Company to be sold, duly
endorsed for transfer or accompanied by duly executed stock powers, against
receipt from the Non-Transferring Party of the purchase price for such shares of
capital stock of the Company, in cash by wire transfer of immediately available
funds or certified check, at the option of the Transferring Party, all in
accordance with the terms and conditions set forth in the First Refusal Notice.
Notwithstanding any provision of this Agreement to the contrary, in the event of
failure by the Non-Transferring Party to close said transaction within the
required time periods, the Transferring Party shall be entitled, in addition to
all other available remedies, to treat such failure as a waiver under Section
4.1(a) of this
12
Agreement by the Non-Transferring Party, entitling the Transferring Party to
take the action specified in Section 4.1(a) of this Agreement pursuant to such
waiver.
(c) If the purchase price specified in the First Refusal Notice
includes any property other than cash, the First Refusal Notice shall state how
the non-cash property was valued, unless the Transferring Party and the proposed
transferee expressly agree otherwise as stated in the First Refusal Notice and,
the Non-Transferring Party may pay cash in an amount equal to the fair market
value of any non-cash property determined in the following manner:
(i) The fair market value of securities which are publicly
traded shall be deemed to be the average of the daily closing prices (or,
if no closing price is available, the average of the last bid and ask
prices) of such securities for the five consecutive trading days
immediately prior to the date of the First Refusal Notice; and
(ii) The fair market value of any other property shall be
determined by the good faith agreement of the parties or, if the parties
are unable to agree, by an appropriate expert mutually selected by the
parties.
(d) The provisions of this Section 4.1 shall terminate, with respect
to such capital stock of the Company, upon the transfer, in compliance with this
Section 4.1, by Tracinda or Seven of such capital stock to any Person other than
Tracinda or Seven or their respective Affiliates.
(e) Nothing contained in the provisions of this Section 4.1 shall
affect the tag-along rights of any party pursuant to Section 3.2 of the
Shareholders Agreement.
(f) The provisions of this Section 4.1 shall not apply to any bona
fide pledge to a bank or other institutional financial lender.
(g) Notwithstanding anything contained herein to the contrary, the
provisions of this Section 4.1 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.
13
Section 4.2. Legend. The parties hereby acknowledge and agree that each
------
of the certificates representing the Common Stock 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 SALE,
TRANSFER OR OTHER DISPOSITION AND CERTAIN AGREEMENTS WITH RESPECT TO VOTING
SET FORTH IN AN AMENDED AND RESTATED INVESTORS SHAREHOLDER AGREEMENT DATED
AS OF AUGUST 4, 1997 BY AND AMONG SEVEN NETWORK LIMITED, TRACINDA
CORPORATION, METRO-XXXXXXX-XXXXX STUDIOS INC., METRO-XXXXXXX-XXXXX INC. AND
XX. XXXXX X. XXXXXXX (THE "AGREEMENT"). A COPY OF THE AGREEMENT IS ON FILE
WITH THE SECRETARY OF METRO-XXXXXXX-XXXXX INC.
ARTICLE V
PREEMPTIVE RIGHTS
Section 5.1. Certain Pre-emptive Rights. If at any time prior to the
--------------------------
fifteenth anniversary of the IPO Closing Date, the Company shall propose to
issue to any Person any shares of its Common Stock or any securities exercisable
for the purchase of or convertible into Common Stock (other than (i) the
issuance of Common Stock or securities exercisable for the purchase of or
convertible into Common Stock pursuant to a firm commitment underwritten public
offering or pursuant to Rule 144A or Regulation S promulgated under the
Securities Act, (ii) the issuance of Common Stock or securities exercisable for
the purchase of or convertible into Common Stock pursuant to a registration
statement directly or indirectly to the holders of the outstanding capital stock
of a corporation or other business entity with a class of equity securities
registered under the Exchange Act in connection with the Company's acquisition
of such corporation or other business or substantially all of its assets
(whether by merger, consolidation, purchase of stock or assets or otherwise),
(iii) the grant of stock options to officers, directors or employees of the
Company or any of its Subsidiaries pursuant to stock option plans approved by
the board of directors of the Company or the issuance of Common Stock upon the
exercise of any such stock option, or (iv) the issuance of Common Stock to
officers, directors or employees of the Company or any of its Subsidiaries to
fulfill the Company's obligations pursuant to any savings plans or retirement
plans approved by the board of directors of the Company), Seven, Tracinda and
Xx. Xxxxxxx shall have the right to elect at any time within 10 days after
receipt of notice from the Company, as applicable:
(a) if such issuance is of Common Stock, to subscribe for and
purchase for cash a number of shares of Common Stock such that after giving
effect to such issuance to such other Person and such purchase by any one or
more of Seven, Tracinda and Xx. Xxxxxxx, as the case may be, each party so
electing shall continue to beneficially own the same percentage of outstanding
Common Stock that such electing party beneficially owned prior to such issuance
to
14
such other Person and such purchase by any one or more of Seven, Tracinda and
Xx. Xxxxxxx, as the case may be; and
(b) if such issuance is of securities exercisable for the purchase of
or convertible into Common Stock, to subscribe for and purchase for cash a
number of such securities equal to the product of the aggregate number of such
securities to be issued (including pursuant to this Section 5.1) multiplied by
the percentage of the then outstanding Common Stock that is beneficially owned
by Seven, Tracinda or Xx. Xxxxxxx, as the case may be.
The price to be paid in any such purchase by any one or more of Seven, Tracinda
and Xx. Xxxxxxx and the other terms of purchase shall be the same as applicable
to the purchase of Common Stock or such other securities by such other Person,
except that in all cases the price to be paid by Seven, Tracinda and Xx. Xxxxxxx
shall be paid in cash. In the event that such shares of Common Stock or such
other securities are to be issued to such other Person for property or services,
the price per share or other security to be paid by Seven, Tracinda and Xx.
Xxxxxxx shall be equal to the fair market value per share or other security of
the property or services to be received by the Company from such other Person,
as such fair market value is determined by the "independent directors" of the
Company elected to the board of directors of the Company pursuant to the
provisions of clause (D) Section 3.2(a)(i) of this Agreement. The rights of
Seven and Tracinda set forth in this Section 5.1 shall terminate with respect to
each such party at such time as such party beneficially owns less than 250,000
shares of Common Stock. The rights of Xx. Xxxxxxx set forth in this Section 5.1
shall terminate at such time as Xx. Xxxxxxx is no longer the Chief Executive
Officer of the Company.
ARTICLE VI
BUSINESS; CERTIFICATE OF INCORPORATION AND BYLAWS
Section 6.1. Entertainment Business. The parties hereto agree to use
----------------------
their best efforts to ensure that neither the Company nor any of its
Subsidiaries shall engage in any business activity except the entertainment
business unless (i) all directors of the board of directors shall have approved
such engagement in other business activities or (ii) a majority of the board of
directors shall have approved such engagement in other business activities and
such engagement in other business activities shall have been approved by the
stockholders of the Company in accordance with the applicable provisions of the
Delaware General Corporation Law; provided, however, that the obligations of the
parties hereto provided for in this sentence shall terminate on the fifteenth
anniversary of the IPO Closing Date. As used in this Section 6.1 the
"entertainment business" shall include the acquisition, development, production,
marketing, distribution, exhibition, publication or use of intellectual property
for purposes of providing entertainment, education or information and all
services and activities reasonably related thereto, including the services and
activities currently provided or conducted by the Company and its Subsidiaries.
The parties hereto may amend or terminate this Section 6.1 by mutual agreement
except that no such amendment or termination shall require (i) the approval of
Seven at any time when it beneficially owns less than 250,000 shares of Common
Stock, (ii) the approval of Tracinda at any time when it beneficially owns less
than 250,000 shares of Common Stock or (iii) the approval of Xx. Xxxxxxx after
such time as he shall no longer serve as the Chief Executive Officer of the
Company.
15
Section 6.2. Certificate of Incorporation and By-laws. Each of the
----------------------------------------
parties hereto will take all necessary actions, including, if necessary, by
amending the Certificate of Incorporation and By-laws of the Company and/or MGM
Studios, to assure that the Certificate of Incorporation and By-laws of each of
the Company and MGM Studios do not contain any provision which is inconsistent
with the terms of this Agreement.
Section 6.3. Conversion of Preferred Stock. Each of Seven, Tracinda and
-----------------------------
Xx. Xxxxxxx agrees to convert, on the IPO Closing Date, all shares of Preferred
Stock beneficially owned (as determined in accordance with the rules promulgated
under Section 13 of the Exchange Act) by such holder on the date hereof, which
conversions shall be effected in accordance with the terms of the certificate of
designations establishing such Preferred Stock. Each of the parties hereto
shall use its best efforts to cause each person who beneficially owns Preferred
Stock but who is not a party hereto to convert the same to Common Stock on the
IPO Closing Date.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1. 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
16
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
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 7.2. 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 each of
17
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 pursuant to a written agreement with the Company and MGM
Studios that is reasonably acceptable to each of them, (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 any 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 7.2(a), 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 or MGM Studios shall enter into a
merger, consolidation or other similar type transaction, all of the terms of
this Agreement relating to the Company and MGM Studios, as applicable, shall
apply to the surviving corporation.
Section 7.3. Entire Agreement. Upon the effectiveness hereof, this
----------------
Agreement, the Shareholders Agreement, the Employment 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
supersedes all prior agreements and understandings (oral and written) among the
parties with respect thereto.
Section 7.4. Amendment. 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, except as otherwise provided in Section 6.1 hereof.
Section 7.5. Governing Law. 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
7.1 hereof and agrees that such service upon receipt shall constitute good and
sufficient service of process or notice thereof.
18
Nothing in this Section 7.5 shall affect or eliminate any right to serve process
in any other matter permitted by law.
Section 7.6. Counterparts; Effective Date. 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. This Agreement shall become effective at the time of the
IPO Closing.
Section 7.7. 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 7.8. 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 7.9. 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 7.10. 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 was
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 7.11. Certain Rights. If either Seven or Tracinda shall violate
--------------
or breach the terms of this Agreement or the Shareholders Agreement (the
"breaching party") then, notwithstanding anything to the contrary in this
Agreement or the Shareholders Agreement, upon written notice provided to the
breaching party and, upon the running of a 30-day cure period after the delivery
of such written notice during which the breaching party fails to cure such
violation or breach, the rights (but not the obligations) of the breaching party
under the terms of this Agreement and the Shareholders Agreement shall terminate
(but such termination shall not affect the rights of any other party under this
Agreement or the Shareholders Agreement). This Section 7.11 is not intended for
the benefit of, or to give rights to, any party other than Tracinda or Seven.
19
Section 7.12. Termination of Original Investors Shareholder Agreement.
-------------------------------------------------------
Seven, Tracinda, the Company, MGM Studios and Xx. Xxxxxxx hereby mutually agree
that, effective as of the IPO Closing Date, the Original Investors Shareholder
Agreement and that certain Letter Agreement dated as of August 4, 1997 among the
parties hereto 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 Investors Shareholder Agreement shall
remain in full force and effect and shall be unaffected hereby.
Section 7.13. 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, the following changes will be made in this Agreement,
before it becomes effective (the "Antidilution Adjustment"):
-----------------------
(a) The number of shares of Common Stock in Sections 3.2(a)(i)(A), 3.2
(a)(i)(B), 3.2(a)(i)(D), 3.2(e)(ii), 3.3, 5.1, and 6.1 hereof, prior
to the Antidilution Adjustment, will be multiplied by the Stock Split;
and
(b) The $833.34 amount in the definition of Approved Initial Public
Offering, prior to the Antidilution Adjustment, will be divided by the
Stock Split.
Except as otherwise provided herein, all dollar amounts changed as a result of
the Antidilution Adjustment will be rounded to the nearest xxxxx.
20
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:
_________________________________________
XX. XXXXX X. XXXXXXX
21
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:
22
