FORM OF
INVESTMENT AGREEMENT
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THIS INVESTMENT AGREEMENT, dated as of November ___, 1997 (this
"Agreement") is by and between TRACINDA CORPORATION, a corporation
organized under the laws of the State of Nevada ("Tracinda") and
METRO-XXXXXXX-XXXXX INC., a corporation organized under the laws of
the State of Delaware ("MGM").
A. The Company intends to commence with an Approved Initial
Public Offering (as defined below) of the Common Stock (as defined
below) of MGM and to enter into certain related transactions.
B. Concurrently with the IPO Closing (as defined below), the
parties hereto have agreed to enter into an agreement embodying the
terms specified herein.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1.1. The following terms, as used herein, have the following
meanings:
"Additional Shares" has the meaning given in Section 2.1.
"Approved Initial Public Offering" has the meaning set forth in
the Investors Shareholder Agreement as the same may be amended from
time to time.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or
required by law to close.
"Common Stock" means the common stock, par value $.01 per share,
of MGM.
"Investors Shareholder Agreement" means the Amended and Restated
Investors Shareholder Agreement, dated as of August 4, 1997, by and
among Seven, Tracinda, MGM, MGM Studios and Xx. Xxxxxxx.
"IPO Closing" has the meaning set forth in the Investors
Shareholder Agreement as the same may be amended from time to time.
"MGM Studios" means Metro-Xxxxxxx-Xxxxx Studios Inc., a
corporation organized under the laws of the State of Delaware.
"Xx. Xxxxxxx" means Xxxxx X. Xxxxxxx.
"Purchase Price" has the meaning given in Section 2.1.
"Seven" means Seven Network Limited.
"Shareholders Agreement" means the Amended and Restated
Shareholders Agreement, dated as of August 4, 1997, by and among
Seven, Tracinda, MGM, MGM Studios, Xx. Xxxxxxx, and the other parties
thereto.
ARTICLE II
ACQUISITION OF ADDITIONAL SHARES OF COMMON STOCK
2.1. Simultaneously with the IPO Closing, Tracinda shall purchase
from MGM, and MGM shall issue and sell to Tracinda, ________
shares of Common Stock (the "Additional Shares") for a purchase price of
$_____ per share, or an aggregate purchase price of $75 million
(the "Purchase Price").
2.2. Tracinda shall pay the Purchase Price for the Additional
Shares to be purchased by it, simultaneously with the IPO Closing, by
wire transfer of immediately available funds to an account or accounts
of MGM designated in writing by MGM to Tracinda at least three
Business Days before the IPO Closing.
2.3. At the IPO Closing, MGM shall deliver to Tracinda a
certificate representing the shares of Common Stock being issued to
such purchaser, with such legends affixed to the reverse thereof as
are required by Section 3.1 of the Shareholders Agreement and Section
4.2 of the Investors Shareholder Agreement. Each of the parties hereto
acknowledges and agrees that the Additional Shares are subject to the
terms of the Shareholders Agreement and the Investors Shareholder
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of MGM. MGM hereby represents
and warrants to the other party hereto as follows: (i) MGM has all
requisite corporate power and authority to enter into this Agreement
and to consummate the transactions set forth in Article II hereof;
(ii) the execution and delivery by MGM of this Agreement, and the
consummation by MGM of the transactions set forth in Article II
hereof, have been duly authorized by all necessary corporate
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[FN]
/1/ The number of shares of Common Stock constituting the
Additional Shares shall be determined at the pricing of the Approved
Initial Public Offering and shall equal (i) $75 million divided by
(ii) the initial public offering price of the shares sold to the
public in the Approved Initial Public Offering, net of underwriting
discounts and commissions.
/2/ The purchase price per share shall be determined at the
pricing of the Approved Initial Public Offering and shall equal the
initial public offering price of the shares sold to the public in the
Approved Initial Public Offering, net of underwriting discounts and
commissions.
action on the part of MGM; (iii) this Agreement has been duly executed
and delivered by MGM and constitutes a valid and binding obligation of
MGM enforceable against MGM 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 in connection with the execution and delivery of
this Agreement by MGM or the consummation by MGM of the transactions
set forth in Article II hereof; (v) the execution and delivery of this
Agreement by MGM and the consummation of the transactions set forth in
Article II hereof by MGM does not conflict with, or result in a breach
of, any law or regulation of any governmental authority applicable to
MGM or any material agreement to which MGM is a party; and (vi) when
issued and paid for in accordance with the provisions of Article II
hereof, the shares of Common Stock sold to Tracinda pursuant to
Article II hereof shall be duly authorized, validly issued, fully
paid, nonassessable, and free of any claims or encumbrances, other
than (a) any claims or encumbrances resulting from actions taken by
Tracinda with respect to the shares to be received by it hereunder, or
(b) pursuant to the Investors Shareholder Agreement or the
Shareholders Agreement.
3.2. Representations and Warranties of Tracinda. Tracinda hereby
represents and warrants to the other party hereto as follows: (i)
Tracinda has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions set forth in Article
II hereof; (ii) the execution and delivery by Tracinda of this
Agreement, and the consummation by Tracinda of the transactions set
forth in Article II hereof, 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 set forth
in Article II hereof; and (v) the execution and delivery of this
Agreement by Tracinda and the consummation by Tracinda of the
transactions set forth in Article II hereof 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.
ARTICLE IV
COVENANTS
4.1. Subject to the terms and conditions of this Agreement, each
party hereto will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things reasonably
necessary or reasonably desirable to consummate the transactions
contemplated by this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
The obligations of each of Tracinda and MGM to consummate its
obligations pursuant to Article II hereof are subject to the
satisfaction on or prior to the IPO Closing of each of the following
conditions:
5.1. All of the conditions to be performed at or prior to the IPO
Closing shall have been satisfied or waived, and the IPO Closing shall
occur simultaneously with the consummation of the transactions set
forth in Article II hereof.
5.2. (a) The other party hereto shall have performed and
satisfied each of its obligations hereunder required to be performed
or satisfied hereunder at or prior to the IPO Closing, (b) each of the
representations and warranties of the other party hereto contained in
this Agreement shall be true and correct, at and as of the date of the
IPO Closing, with the same force and effect as if made on the date of
the IPO Closing, and (c) each party hereto shall have received a
certificate of an officer of each other party hereto, that the
foregoing is true and correct as to such party.
ARTICLE VI
GENERAL PROVISIONS
6.1. 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 MGM, 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 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Tracinda Corporation
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Tracinda, to:
Tracinda Corporation
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Secretary/Treasurer
Telecopy: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, P.C.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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.
6.2. Expenses. Subject to the occurrence of the IPO Closing, MGM
shall pay all out-of-pocket expenses (including, but not limited to,
attorneys' fees and expenses) incurred by Tracinda in connection with
the transactions contemplated by this Agreement, promptly upon the
delivery to MGM of documentation thereof.
6.3. 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 Tracinda may assign its
rights under this Agreement to any of its 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 MGM that is reasonably
acceptable to it, (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 MGM owned by any
direct or indirect wholly owned subsidiary of Tracinda shall be deemed
owned by Tracinda. Subject to the first sentence of this Section
6.3(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 MGM shall enter into a merger,
consolidation or other similar type transaction, all of the terms of
this Agreement relating to MGM shall apply to the surviving
corporation.
6.4. Entire Agreement. This Agreement and any certificate
delivered by the parties in connection herewith constitute the entire
agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings (oral or
written) among the parties with respect thereto.
6.5. Termination. Except as expressly provided in this Section
6.5, this Agreement shall only be terminable upon the written
agreement of all parties hereto.
6.6. 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.
6.7. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the 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 party hereto hereby
consents to process being served in any action or proceeding in
respect of this Agreement by the mailing of a copy thereof to the
address set forth in Section 6.1 hereof and agrees that such service
upon receipt shall constitute good and sufficient service of process
or notice thereof. Nothing in this Section 6.7 shall affect or
eliminate any right to serve process in any other manner permitted by
law.
6.8. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may
consist of a number of copies of this Agreement, each of which may be
signed by less than all of the parties hereto, but together all such
copies are signed by all of the parties hereto.
6.9. 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.
6.10. 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.
6.11. Severability. Any term or provisions 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.
6.12. 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.
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.
TRACINDA CORPORATION
By:
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Name:
Title:
METRO-XXXXXXX-XXXXX INC.
By:
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Name:
Title:
