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FORM OF
AMENDED AND RESTATED INVESTORS SHAREHOLDER AGREEMENT
by and among
SEVEN NETWORK LIMITED
TRACINDA CORPORATION
METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ STUDIOS INC.
METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ INC.
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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
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 corporation organized under the laws of the
Commonwealth of Australia ("Seven"); TRACINDA CORPORATION, a
corporation organized under the laws of the State of Nevada
("Tracinda"); METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ INC., a corporation organized under
the laws of the state of Delaware and formerly known as P&F
Acquisition Corp. ( the "Company"); METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ STUDIOS INC.,
a corporation organized under the laws of the State of
Delaware and formerly known as Metro-▇▇▇▇▇▇▇-▇▇▇▇▇ Inc. ("MGM
Studios"); and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇▇"), amends and supersedes
that certain Investors Shareholder Agreement, dated as of
October 16, 1996, by and among Seven, the Company, Tracinda,
MGM Studios and ▇▇. ▇▇▇▇▇▇▇ (the "Original Investors Shareholder
Agreement").
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.
"Affiliate": of any Person, means (i) any other Person
controlling, controlled by or under common control with such
Person, (ii) any director or executive officer of such Person or of
any Affiliate of such Person and (iii) any family member of any
director or executive officer of such Person or any director or
executive officer of any Affiliate of such Person.
"Agreement": as defined in the preamble to this Agreement.
"Antidilution Adjustment": as defined in Section 7.13.
"Approved Initial Public Offering": shall mean an offering of
Common Stock of the Company to the public through a syndicate of
underwriters co-managed by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
and ▇. ▇. ▇▇▇▇▇▇ Securities, Inc. and others (with ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, 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 agency at the time administering the Securities Act.
"Common Stock": the common stock of the Company.
"Company": as defined in the preamble to this Agreement.
"Employment Agreement": the Amended and Restated Employment
Agreement by and among ▇▇. ▇▇▇▇▇▇▇, the Company and MGM Studios,
dated as of August 4, 1997.
"Exchange Act": the Securities Exchange Act of 1934, as amended,
and the 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).
"HSR Act": the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"IPO Closing": shall mean the closing of an Approved Initial
Public Offering at which the Company first receives the
funds described in the definition of "Approved Initial Public
Offering", whether or not the underwriters have at such time exercised
any over-allotment option.
"IPO Closing Date": shall mean the date of the IPO Closing.
"MGM Studios": as defined in the preamble to this Agreement.
"Non-Transferring Party": as defined in Section 4.1(a).
"Original Investors Shareholder Agreement": as defined in the
preamble to this Agreement.
"Orion": Orion Pictures Corporation.
"Person": any natural person, corporation, partnership, limited
liability company, firm, association, trust, government,
governmental agency, or other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Preferred Stock": shall mean the Series A Convertible Preferred
Stock of the Company.
"Response Period": as defined in Section 4.1(a).
"Securities Act": the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, as
the same shall be in effect at the time.
"Seven": as defined in the preamble to this Agreement.
"Shareholders Agreement": the Amended and Restated Shareholders
Agreement dated as of August 4, 1997 among MGM Studios, the Company,
Tracinda, Seven, ▇▇. ▇▇▇▇▇▇▇ and the other parties thereto.
"Stock Split": as defined in Section 7.13.
"Subsidiary": of any Person shall mean any corporation or other
legal entity of which such Person (either alone or through or together
with any other direct or indirect Subsidiary) owns, directly
or indirectly, 50% or more of the stock or other equity interests,
the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
"Tracinda": as defined in the preamble to this Agreement.
"Transfer": as defined in Section 4.1(a).
"Transferring Party": as defined in Section 4.1(a).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The
Company hereby represents and warrants to the other parties
hereto as follows: (i) the Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery
by the Company of this Agreement, and the consummation by
the Company of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
the Company; (iii) this Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally or general principles of equity; (iv) no consent,
approval, order or authorization of, or registration, declaration
or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign,
is required by, or with respect to, the Company in connection with
the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated
hereby; and (v) the execution and delivery of this Agreement by
the Company and the consummation of the transactions contemplated
hereby by the Company does not conflict with, or result in a
breach of, any law or regulation of any governmental authority
applicable to the Company or any material agreement to which the
Company is a party.
Section 2.2. Representations and Warranties of Seven. Seven
hereby represents and warrants to the other parties hereto as follows:
(i) Seven has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated hereby; (ii) the execution and delivery by Seven of
this Agreement, and the consummation by Seven of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Seven; (iii) this Agreement has
been duly executed and delivered by Seven and constitutes a valid
and binding obligation of Seven enforceable against Seven in
accordance with its terms, except as the enforceability hereof may
be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally or general principles of equity; (iv) no
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign, is required by, or with respect to, Seven in
connection with the execution and delivery by Seven of this Agreement
or the consummation by Seven of the transactions contemplated hereby;
and (v) the execution and delivery by Seven of this Agreement and
the consummation by Seven of the transactions contemplated hereby
does not conflict with, or result in a breach of, any law or
regulation of any governmental authority applicable to Seven or any
material agreement to which Seven is a party.
Section 2.3. Representations and Warranties of Tracinda.
Tracinda hereby represents and warrants to the other parties
hereto as follows:(i) Tracinda has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery by
Tracinda of this Agreement, and the consummation by Tracinda of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of Tracinda; (iii) this
Agreement has been duly executed and delivered by Tracinda and
constitutes a valid and binding obligation of Tracinda enforceable
against Tracinda in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or general
principles of equity; (iv) no consent, approval, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by, or
with respect to, Tracinda in connection with the execution and
delivery of this Agreement by Tracinda or the consummation by Tracinda
of the transactions contemplated hereby; and (v) the execution and
delivery of this Agreement by Tracinda and the consummation by
Tracinda of the transactions contemplated hereby does not conflict
with, or result in a breach of, any law or regulation of any
governmental authority applicable to Tracinda or any material
agreement to which Tracinda is a party.
Section 2.4. Representations and Warranties of MGM Studios. MGM
Studios hereby represents and warrants to the other parties hereto as
follows: (i)MGM Studios has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution and delivery
by MGM Studios of this Agreement, and the consummation by
MGM Studios of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of MGM
Studios; (iii) this Agreement has been duly executed and delivered by
MGM Studios and constitutes a valid and binding obligation of
MGM Studios enforceable against MGM Studios in accordance with its
terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally or general principles of equity; (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.
(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 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,
▇▇. ▇▇▇▇▇▇▇ 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 Studios, Orion and the Committees of the Company.
(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, ▇▇.
▇▇▇▇▇▇▇ 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,
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 ▇▇. ▇▇▇▇▇▇▇ 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:
(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 Tracinda has nominated to the board
of directors of theCompany pursuant to this clause (A), a
majority of thedirectors of the Company shall be entitled to
select anumber 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 ▇▇.
▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ so long as he serves as Chief
Executive Officer of the Company).
(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 ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇'▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇.
▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ shall cease to act as Chief Executive
Officer of the Company, ▇▇. ▇▇▇▇▇▇▇ hereby agrees to his resignation
as a director of both the Company and MGM Studios and all other
positions held by ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇
shall serve as a member of the board of directors of the Company and
MGM Studios, ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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
▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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 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 theCompany proposed to be Transferred;
(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 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.
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-▇▇▇▇▇▇▇-▇▇▇▇▇ STUDIOS INC.,
METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ INC. AND ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (THE
"AGREEMENT"). A COPY OF THE AGREEMENT IS ON FILE WITH THE
SECRETARY OF METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇, 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 such other Person
and such purchase by any one or more of Seven, Tracinda and
▇▇. ▇▇▇▇▇▇▇, 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 ▇▇. ▇▇▇▇▇▇▇, as the case may be.
The price to be paid in any such purchase by any one or more of Seven,
Tracinda and ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ 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
▇▇. ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇ set forth in
this Section 5.1 shall terminate at such time as ▇▇. ▇▇▇▇▇▇▇ 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 ▇▇.
▇▇▇▇▇▇▇ after such time as he shall no longer serve as the Chief
Executive Officer of the Company.
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 ▇▇. ▇▇▇▇▇▇▇ 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-▇▇▇▇▇▇▇-▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Tracinda, to:
Tracinda Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary / Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seven, to:
Seven Network Limited
c/o Culmen Group, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Managing Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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 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. 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.
Section 7.12. Termination of Original Investors Shareholder
Agreement. Seven, Tracinda, the Company, MGM Studios and ▇▇. ▇▇▇▇▇▇▇
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
▇▇▇▇▇.
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-▇▇▇▇▇▇▇-▇▇▇▇▇ STUDIOS INC.
By:-------------------------------------
Name:
Title:
METRO-▇▇▇▇▇▇▇-▇▇▇▇▇ INC.
By:-------------------------------------
Name:
Title:
-------------------------------------
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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: