Exhibit 99.2
EXECUTION COPY
INDEMNITY AGREEMENT
AGREEMENT dated as of September 23, 2004 (this "Agreement"), by
and between Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation (the
"Company"), on the one hand, and each of Xxxx Xxxxxxxxx ("Kerkorian"),
Tracinda Corporation, a Nevada corporation wholly owned by Kerkorian
("Tracinda"), and 250 Rodeo, Inc., a Delaware corporation wholly owned by
Tracinda and Kerkorian ("Rodeo"), on the other.
RECITALS
In connection with the Agreement and Plan of Merger, dated as of
September 23, 2004 (the "Merger Agreement"), by and between LOC Acquisition
Company, a Delaware corporation ("Newco"), and the Company, Newco has
requested that each of Tracinda and Rodeo enter into a Voting and Support
Agreement (the "Voting Agreement") pursuant to which, subject to the terms
of the Voting Agreement, among other things, each of Tracinda and Rodeo
agrees to vote all shares of common stock of the Company beneficially owned
by it in favor of the merger (the "Merger") contemplated by the Merger
Agreement.
As an inducement to Tracinda and Rodeo to enter into, and to
Kerkorian to cause Tracinda and Rodeo to enter into, the Voting Agreement
and thereby to facilitate the Merger, which the Board of Directors of the
Company has unanimously determined is in the best interests of the
stockholders of the Company, and in recognition of the substantial benefits
which the Board of Directors of the Company believes will inure to the
stockholders of the Company by reason of the Merger, the Board of Directors
of the Company has determined to enter into this agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties
agree as follows:
1. Indemnification. The Company shall hold harmless and indemnify
each of Kerkorian, Tracinda and Rodeo, his or its respective successors and
assigns and, in the case of each of Tracinda and Rodeo, its respective
directors, officers and employees and, in the case of any of the foregoing
parties that is an individual, his or her personal or legal
representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees (each, an "Indemnitee" and,
collectively, the "Indemnitees"), against any and all claims, expenses,
liabilities and losses (including, without limitation, the reasonable
investigation expenses, expert witnesses' and attorneys' fees and expenses,
judgments, penalties, fines, amounts paid or to be paid in settlement any
interest, assessments, or other charges imposed thereon and any federal,
state, local or foreign taxes imposed as a result of actual or deemed
receipt of any payment hereunder) actually incurred by such Indemnitee (net
of any related insurance proceeds or other amounts received by the
Indemnitee or paid by or on behalf of the Company on the Indemnitee's
behalf in compensation of such expenses, liabilities or losses) in
connection with any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative or in arbitration,
to or in which the Indemnitee is a party or participant or is threatened to
be made a party or participant (a "Proceeding"), as a plaintiff, defendant,
respondent, witness or otherwise, based upon, arising from, relating to or
by reason of the execution, delivery and/or performance of the Merger
Agreement and/or the Voting Agreement and/or the consummation of the
transactions contemplated by the foregoing agreements.
Notwithstanding the foregoing, the Company shall not be obligated
to hold harmless and indemnify an Indemnitee:
(i) except as provided in Section 10(b) hereof, in
connection with a Proceeding initiated by the Indemnitee unless such
proceeding (or part thereof) was authorized by a two-thirds vote of
the Board of Directors of the Company; or
(ii) in connection with any claim to the extent that such
claim arises by reason of the insolvency of the Company.
2. Standard of Conduct. Notwithstanding any provision of this
Agreement (but subject to Section 3 hereof), the indemnification provided
to each Indemnitee by this Agreement shall be subject to satisfaction by
the Indemnitee of the same standards of conduct, and shall be subject to
the same limitations, that are applicable to indemnification of directors
and officers of a Delaware corporation under Section 145 of the Delaware
General Corporation Law (the "DGCL"), whether or not, but for the agreement
contained in this paragraph, such standards of conduct and limitations
would be applicable to the Indemnitee.
3. Presumption. Each Indemnitee shall be presumed to be entitled
to such indemnification under this Agreement upon submission of a written
claim pursuant to Section 4 hereof. Thereafter, the Company shall have the
burden of proof to overcome the presumption that the Indemnitee is so
entitled. Such presumption shall only be overcome by a judgment or other
final adjudication, after all appeals and all time for appeals has expired
("Final Determination"), which is adverse to the Indemnitee and which
establishes (i) that his or its acts were (a) not committed in good faith
or in a manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company or (b) with respect to a criminal
action or proceeding, committed with a reasonable cause to believe his or
its conduct was unlawful or (ii) that the Indemnitee in fact personally
gained a financial profit or other advantage to which he or it was not
legally entitled. If any Indemnitee is not wholly successful in any
Proceeding but is successful on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
agrees to indemnify the Indemnitee to the maximum extent permitted by law
against all losses and expenses incurred by the Indemnitee in connection
with each successfully resolved claim, issue or matter. Neither the failure
of the Company (including its Board of Directors, legal counsel or
stockholders) to have made a determination prior to the commencement of
such Proceeding that indemnification of the Indemnitee is proper in the
circumstances, nor an actual determination by the Company (including its
Board of Directors, its legal counsel or its stockholders) that the
Indemnitee has not met the applicable standard of conduct, shall be a
defense to the action or create a presumption that the Indemnitee has not
met the applicable standard of conduct. The purchase, establishment or
maintenance of any insurance or similar protection or other arrangements
(any such insurance, protection or arrangement, an "Indemnification
Arrangement") shall not in any way diminish, restrict, limit or adversely
affect the rights and obligations of the Company or of any Indemnitee under
this Agreement, except as expressly provided herein, and the execution and
delivery of this Agreement by the Company and the Indemnitees shall not in
any way diminish, restrict, limit or adversely affect any Indemnitee's
right to indemnification from the Company or any other party or parties
under any other Indemnification Arrangement, the Certificate of
Incorporation or Bylaws of the Company, or the DGCL. Any presumption
pursuant to this Section 3 that an Indemnitee is or is not entitled to
indemnification shall not be deemed to broaden or limit the scope of such
Indemnitee's right to indemnification as set forth in Sections 1 and 2.
4. Claims for Payments. Each Indemnitee shall have the right to
receive from the Company on demand or, at his or its option, to have the
Company pay promptly on his or its behalf, in advance of a Final
Determination of a Proceeding, all amounts payable by the Company pursuant
to the terms of this Agreement as corresponding amounts are expended or
incurred by the Indemnitee in connection with any Proceeding or otherwise
(such amounts so expended or incurred being referred to as "Advanced
Amounts"). In making any claim for payment by the Company of any amount,
including any Advanced Amount, pursuant to this Agreement, an Indemnitee
shall submit to the Company a written request for payment (a "Claim") which
includes a schedule setting forth in reasonable detail the dollar amount
expended (or incurred or expected to be expended or incurred). Each item on
such schedule shall be supported by the xxxx, agreement, or other
documentation relating thereto, a copy of which shall be appended to the
schedule as an exhibit.
Where an Indemnitee is requesting Advanced Amounts, the
Indemnitee must also provide an undertaking reasonably acceptable to the
Company to repay such Advanced Amounts within thirty (30) days if a Final
Determination is made that the Indemnitee is not entitled to
indemnification or reimbursement hereunder.
5. Section 16(b) Liability. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made
against any Indemnitee for an accounting of profits made from the purchase
or sale by the Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Securities Exchange Act of 1934, and amendments
thereto (the "Exchange Act"), or similar provisions of any state statutory
law or common law.
6. Continuation of Indemnity. All agreements and obligations of
the Company contained herein shall continue for so long as any Indemnitee
shall be subject to the possibility of any Proceeding in respect of which
the Indemnitee is or may be entitled to indemnification hereunder.
7. Representations and Warranties of the Indemnitees. Each of
Kerkorian, Tracinda and Rodeo represents and warrants to the Company as of
the date of this Agreement that, except for this Agreement and the Voting
Agreement, all contracts, arrangements, understandings or relationships
(legal or otherwise) among Kerkorian, Tracinda and Rodeo or their directors
and executive officers or between any of such persons and any other person
with respect to any securities of the Company that are required to be
disclosed under Item 6 of Schedule 13D under the Exchange Act have been
disclosed in the Statement on Schedule 13D, as amended, filed by Kerkorian,
Tracinda and Rodeo with the Securities and Exchange Commission.
8. Successors; Binding Agreement. This Agreement shall be binding
on, and shall inure to the benefit of and be enforceable by, each of the
Company's successors and assigns and by each Indemnitee's successors and
assigns and, in the case of any individual, his or her personal or legal
representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. The Company shall require any
successor or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by written agreement in form and substance
reasonably satisfactory to the Company and to each Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession or assignment had taken place.
9. Notification and Defense of Claim. Promptly after receipt by
any Indemnitee of notice of the commencement of any Proceeding, the
Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement
thereof (which notice shall specify in reasonable detail the nature and
amount of the claim (to the extent known), but the failure to so notify the
Company will not relieve the Company from any liability which it may have
to the Indemnitee, except to the extent that the Company is actually and
materially prejudiced by the Indemnitee's failure to so notify.
With respect to any such Proceeding, the Company will be entitled
(but not obligated) to participate in and/or assume the defense of the
Proceeding. If the Company assumes such defense, the Indemnitee will have
the right to participate in the defense thereof and to employ counsel,
separate from the counsel employed by the Company, at the Indemnitee's own
expense; provided, however, that such Indemnitee shall be entitled to
participate in any such defense with separate counsel at the expense of the
Company if, (i) requested by the Company to employ separate counsel or (ii)
in the opinion of counsel to the Indemnitee (which counsel shall be
reasonably satisfactory to the Company), there are potential defenses
available to the Indemnitee that are materially in conflict with those
available to the Company, provided that the Company shall not be
responsible for the fees and expenses of more than one firm of separate
counsel for the Indemnitees in connection with any Proceeding in the same
jurisdiction, in addition to any local counsel, unless the Company
otherwise consents or a conflict of interest requires separate counsel for
particular Indemnitees. If the Company fails to assume the defense of such
Proceeding within thirty (30) days after the receipt of an Indemnity
Notice, the Indemnitee (upon delivering written notice to such effect to
the Company) shall have the right to undertake, at the Company's cost and
expense, the defense, compromise or settlement of such Claim; provided,
however, that the Indemnitee shall not enter into any such compromise or
settlement without the prior written consent of the Company (which consent
shall not be unreasonably withheld or delayed). In the event the Company
assumes the defense of the Proceeding, the Company will keep the Indemnitee
reasonably informed of the progress of any such defense, compromise or
settlement. The Company shall not, except with the written consent of the
Indemnitee (which consent may be withheld in the Indemnitee's sole and
absolute discretion), consent to the entry of a judgment or enter into a
settlement of any Proceeding other than a judgment or settlement (i)
involving only the payment of money which the Company is required to pay to
or on behalf of the Indemnitee pursuant to the indemnification provisions
of this Agreement and (ii) that includes an unconditional release of the
Indemnitee with respect to the Proceeding.
10. Enforcement. (a) The Company has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce
Tracinda and Rodeo to enter into, and to induce Kerkorian to cause Tracinda
and Rodeo to enter into, the Voting Agreement and thereby to facilitate the
Merger and acknowledges that the Indemnitees are relying upon this
Agreement in entering into the Voting Agreement.
(b) All expenses incurred by any Indemnitee in connection with
the preparation and submission of a request for indemnification hereunder
shall be borne by the Company. In the event any Indemnitee has requested
payment of any amount under this Agreement and has not received payment
thereof within thirty (30) days of such request, the Indemnitee may bring
any action to enforce rights or collect moneys due under this Agreement,
and, if the Indemnitee is successful in such action, the Company shall
reimburse the Indemnitee for all of the Indemnitee's fees and expenses in
bringing and pursuing such action. If it is determined that the Indemnitee
is entitled to indemnification for part (but not all) of the
indemnification so requested, expenses incurred in seeking enforcement of
such partial indemnification shall be reasonably prorated among the claims,
issues or matters for which the Indemnitee is entitled to indemnification
for claims, issues or matter for which the Indemnitee is not so entitled.
The Indemnitee shall be entitled to the advancement of such amounts to the
full extent contemplated by Section 4 hereof in connection with such
Proceeding.
11. Separability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever, (i) the validity, legality and enforceability of the
remaining provisions of this Agreement (including, without limitation, all
portions of any sections or subsections of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
by themselves invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of any section or subsections of this Agreement containing any
such provisions held to be invalid, illegal or unenforceable shall be
construed so as to give effect to the intent of the parties that the
Indemnitors (or any of them) provide protection to the Indemnitee to the
fullest extent enforceable.
12. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged except by an instrument in writing executed
by or on behalf of each party sought to be bound thereby. No waiver by any
party at any time of any breach by another party of, or of compliance with,
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or at any prior or subsequent time. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Delaware, without giving
effect to the principles of conflicts of laws thereof. Any legal action,
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby shall be brought solely in the Federal
courts of the United States located in the State of Delaware; provided that
if (and only after) such courts determine that they lack subject matter
jurisdiction over any such legal action, suit or proceeding, such legal
action, suit or proceeding shall be brought in the United States District
Court for the Southern District of New York; provided, further, that if
(and only after) both the Federal courts of the United States located in
the State of Delaware and the United States District Court for the Southern
District of New York determine that they lack subject matter jurisdiction
over any such legal action, suit or proceeding, such legal action, suit or
proceeding shall be brought in the Chancery Court of the State of Delaware.
Each party to this Agreement hereby irrevocably submits to the exclusive
jurisdiction of such courts in respect of any legal action, suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and hereby waives, and agrees not to assert, as a
defense in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of such courts, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of
the action, suit or proceeding is improper or that this Agreement or the
transactions contemplated hereby may not be enforced in or by such courts.
Each party agrees that notice or the service of process in any action, suit
or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby shall be properly served or delivered if
delivered in the manner contemplated by Section 13. In addition, each of
the parties hereto waives any right to trial by jury with respect to any
claim or proceeding related to or arising out of this Agreement or any
transactions provided for herein.
13. Notices. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, as
follows:
If to any Indemnitee: c/o Tracinda Corporation
000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: General Counsel
If to the Company: Metro-Xxxxxxx-Xxxxx Inc.
Fourteenth Floor
00000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Secretary
or to such other address as any party may have furnished to the other
parties in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
15. Effectiveness. This Agreement shall be effective as of the
day and year first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed as of the day and year first above written.
METRO-XXXXXXX-XXXXX INC.
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
Title: Senior Executive Vice President
and General Counsel
TRACINDA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary/Treasurer
250 RODEO, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary/Treasurer
/s/ Xxxx Xxxxxxxxx
--------------------------------------
XXXX XXXXXXXXX
The undersigned hereby agrees, assuming the consummation of the
Merger, to cause the surviving corporation in the Merger to honor and
perform its obligations under this Agreement.
LOC ACQUISITION COMPANY
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chairman of the Board
