Preferred Stock Purchase Agreement - On Command Corp. and Ascent Entertainment Group Inc.
Execution Copy
PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement (this "Agreement") is
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made and entered into on June 29, 2001 by and among On Command Corporation, a
Delaware corporation (the "Company"), and Ascent Entertainment Group, Inc., a
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Delaware corporation ("Buyer").
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WHEREAS, the Company desires to issue and sell, and Buyer
desires to purchase shares of a newly issued series of the Company's Preferred
Stock designated "Cumulative Convertible Redeemable Preferred Stock, Series D,
par value $0.01 per share" ("Series D Preferred Stock"), subject to the terms
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and conditions set forth herein; and
WHEREAS, the Series D Preferred Stock will be issued in
separate subseries at each of the Closings (as defined below) specified in this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Purchase and Sale.
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1.1. Purchase and Sale of Purchased Shares. (a) Upon the terms and
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conditions contained herein, (i) at the Series D-1 Closing (as defined below),
the Company shall issue, sell and deliver to Buyer up to 20,000 shares of a
subseries of the Series D Preferred Stock, designated as the "Cumulative
Convertible Redeemable Preferred Stock, Series D-1, par value $0.01 per share"
("Series D-1 Shares"), and Buyer shall purchase such shares for a purchase price
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of $1,000 per share; (ii) at the Series D-2 Closing (as defined below), the
Company shall issue, sell and deliver to Buyer up to 20,000 shares of a
subseries of Series D Preferred Stock, designated as the "Cumulative Convertible
Redeemable Preferred Stock, Series D-2, par value $0.01 per share" ("Series D-2
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Shares"), and Buyer shall purchase such shares for a purchase price of $1,000
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per share; and (iii) at the Series D-3 Closing (as defined below), the Company
shall issue, sell and deliver to Buyer up to 20,000 shares of a subseries of
Series D Preferred Stock, designated as the "Cumulative Convertible Redeemable
Preferred Stock, Series D-3, par value $0.01 per share" ("Series D-3 Shares"),
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and Buyer shall purchase such shares for a purchase price of $1,000 per share.
The Series D-1 Shares, Series D-2 Shares and Series D-3 Shares are referred to
herein collectively as the "Purchased Shares." The Series D-1 Closing, the
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Series D-2 Closing and the Series D-3 Closing are each hereinafter referred to
as a "Closing."
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(b) At each Closing, the purchase price for the applicable subseries of
Series D Preferred Stock being purchased shall be paid by wire transfer of
immediately available funds to an account designated by the Company in writing
(i) two business days prior to the Series D-1 Closing and (ii) with respect to
the Series D-2 Closing and the Series D-3 Closing, as specified in the Company
Notice (as defined below).
(c) The issuances, sales and deliveries set forth in Section 1.1(a) hereof
shall be effected by the delivery to Buyer at each Closing of (i) the
certificate or certificates representing the shares of the applicable subseries
of Series D Preferred Stock being purchased at
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such Closing, issued in the name of Buyer or its designee and (ii) such other
documents or instruments which may be necessary, or which Buyer may reasonably
request, in order to effectively vest in Buyer good and marketable title to the
share of the subseries of Series D Preferred Stock then being purchased, free
and clear of all Liens (as defined below) and Restrictions (as defined below)
other than Permitted Restrictions (as defined below).
1.2. Closings. (a) The closing of the purchase and sale of the Series D-1
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Shares (the "Series D-1 Closing") shall be held at the offices of Buyer, 9197
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South Peoria Street, Englewood, Colorado 80112, or at such other place as the
parties may agree, at 1:00 p.m., local time, on June 29, 2001, or at such other
date and time as the parties may agree (the "Series D-1 Closing Date").
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(b) The closing of the purchase and sale of the Series D-2 Shares (the
"Series D-2 Closing") shall be held at the offices of Buyer, 9197 South Peoria
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Street, Englewood, Colorado 80112, or at such other place as the parties may
agree, at 1:00 p.m., local time, on the date specified in a Company Notice, or
at such other date and time as the parties may agree (the "Series D-2 Closing
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Date"); provided, however, that such Series D-2 Closing Date shall be on a
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Business Day after the Series D-1 Closing Date and prior to September 30, 2001.
(c) The closing of the purchase and sale of the Series D-3 Shares (the
"Series D-3 Closing") shall be held at the offices of Buyer, 9197 South Peoria
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Street, Englewood, Colorado 80112, or at such other place as the parties may
agree, at 1:00 p.m., local time, on the date specified in a Company Notice, or
at such other date and time as the parties may agree (the "Series D-3 Closing
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Date"; each of the Series D-1 Closing Date, the Series D-2 Closing Date and the
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Series D-3 Closing Date is hereinafter sometimes referred to as a "Closing
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Date"); provided, however, that such Series D-3 Closing Date shall be on a
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Business Day after September 30, 2001 and prior to December 31, 2001.
(d) "Company Notice" shall mean a written notice from the Company,
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signed by its Chief Financial Officer, to Buyer (i) specifying the proposed
Closing Date of the Series D-2 Closing or Series D-3 Closing, as applicable,
which specified date shall not be less than three (3) Business Days subsequent
to the date such notice is delivered to Buyer, (ii) setting forth the number of
shares of the subseries of Series D Preferred Stock to be purchased on such
Closing Date and (iii) setting forth a revised representation as to the
capitalization of the Company as of a date not more than 30 days prior to the
proposed Closing Date, which representation shall be deemed to replace in its
entirety the representation set forth in the second sentence of Section 2.4 with
respect to such Closing.
1.3. Conditions to Buyer's Obligation to Close. The obligations of Buyer to
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acquire the applicable subseries of the Series D Preferred Stock at the
applicable Closing shall be subject to the satisfaction or waiver in writing of
the following conditions precedent:
(a) All of the covenants to be performed by the Company prior to the
applicable Closing shall have been performed in all material respects on or
before such Closing Date;
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(b) The representations and warranties of the Company contained herein
shall, if qualified by materiality, be true and correct, and if not so
qualified, be true and correct in all material respects, in each case on and as
of the applicable Closing Date as though they had been made on and as of such
Closing Date; provided that for purposes of this Section 1.3(b) the
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representation set forth in the second sentence of Section 2.4 shall be deemed
replaced in its entirety with the corresponding representation set forth in the
Company Notice applicable to such Closing;
(c) Buyer shall have received a certificate of an executive officer
of the Company, dated as of the applicable Closing Date, evidencing compliance
with the conditions set forth in Sections 1.3(a) and 1.3(b);
(d) No permanent or preliminary injunction or restraining order or
other order by any governmental authority, or other legal restraint or
prohibition preventing consummation of the transactions contemplated hereby as
provided herein shall be in effect and no action shall have taken place and
remain in effect which seeks to obtain damages against Buyer or the Company in
connection with the transactions contemplated by this Agreement;
(e) With respect to the Series D-2 Closing and the Series D-3 Closing,
the purchase and sale of the applicable subseries of Series D Preferred Stock
which was to have occurred prior to the applicable Closing shall have occurred
in accordance with the terms of this Agreement; and
(f) With respect to the Series D-2 Closing and the Series D-3 Closing,
the Company shall be a Subsidiary of Liberty Media Corporation at the applicable
Closing.
1.4. Conditions to the Company's Obligation to Close. The obligations of
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the Company to sell the applicable subseries of the Series D Preferred Stock at
the applicable Closing shall be subject to the satisfaction or waiver in writing
of the following conditions precedent:
(a) The representations and warranties of Buyer contained herein shall,
if qualified by materiality, be true and correct, and if not so qualified, be
true and correct in all material respects in each case on and as of the
applicable Closing Date, as though they had been made on and as of such Closing
Date;
(b) The Company shall have received a certificate of an executive
officer of the Buyer, dated as of the applicable Closing Date, evidencing
compliance with the conditions set forth in Sections 1.4(a); and
(c) No permanent or preliminary injunction or restraining order or
other order by any governmental authority, or other legal restraint or
prohibition preventing consummation of the transactions contemplated hereby as
provided herein shall be in effect and no action shall have taken place and
remain in effect which seeks to obtain damages against Buyer or the Company in
connection with the transactions contemplated by this Agreement.
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2. Representations and Warranties of the Company. The Company represents
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and warrants to Buyer as of the date hereof and as of the applicable Closing
Date, as follows:
2.1. Authority. (a) The Company is a corporation duly organized, validly
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existing and in good standing under the laws of the State of Delaware, and has
all requisite power and authority to conduct its business as now being conducted
and to enter into this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company.
(b) The Certificate of Designations establishing the rights and
preferences of the shares of Series D Preferred Stock (the "Certificate of
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Designations") has been approved by the Company's Board of Directors in
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accordance with the Company's Amended and Restated Certificate of Incorporation
and Delaware law and, prior to the Series D-1 Closing will have been duly filed
and become effective under Delaware law.
2.2. Issuance of Shares. The shares of the subseries of the Series D
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Preferred Stock to be issued and purchased at the applicable Closing, upon
issuance and delivery against payment therefor at such Closing in accordance
with the terms and conditions of this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable, will possess all of the rights,
privileges and preferences provided therefor in the Certificate of Designations,
will be free of all Liens and Restrictions other than Permitted Restrictions,
and will not be issued in violation of any preemptive rights.
2.3. Binding Agreement. This Agreement has been duly executed and delivered
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by the Company and is a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except insofar as enforceability may
be limited by principles governing the availability of equitable remedies.
2.4. Capitalization. At the date hereof, the authorized capital stock of
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Company consists of (a) 150,000,000 shares of common stock, par value $.01 per
share ("Common Stock"), and (b) 10,000,000 shares of preferred stock, par value
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$.01 per share ("Preferred Stock"). As of the close of business on May 11, 2001,
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(i) 30,843,065 shares of Common Stock were issued and outstanding, (ii) 38,500
shares of Preferred Stock were issued and outstanding, 13,500 of which had been
designated as "Convertible Participating Preferred Stock, Series A, par value
$.01 per share" ("Series A Preferred Stock"), 15,000 of which had been
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designated as "Cumulative Redeemable Preferred Stock, Series B, par value $.01
per share" ("Series B Preferred Stock"), and 10,000 of which had been designated
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as "Cumulative Redeemable Preferred Stock, Series C, par value $.01 per share"
("Series C Preferred Stock") and (iii) an aggregate of 12,708,025 shares of
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Common Stock were reserved for issuance upon the exercise, exchange or
conversion of securities which are convertible into (including the Series A
Preferred Stock) or exercisable or exchangeable for Common Stock, and no shares
of Common Stock were held (x) by the Company in its treasury or (y) by any
Subsidiary of Company. Except as specified in this Section 2.4, there are no
subscriptions, options, warrants, calls, rights, commitments or any other
agreements of any character to or by which the Company is a party or is bound
which, directly or indirectly, obligate Company to issue, sell or deliver or
cause to be issued, sold or delivered any shares of Common Stock or Preferred
Stock or any other capital
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stock or equity interest of Company or any securities convertible into, or
exercisable or exchangeable for, or evidencing the right to subscribe for, any
such shares or interests, or obligating Company to grant, extend or enter into
any such subscription, option, warrant, call or right. All issued and
outstanding shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock have been validly issued and are fully paid
and nonassessable, are not subject to and have not been issued in violation of
any preemptive rights and have not been issued in violation of any Federal or
state securities laws.
2.5. No Violation. None of the execution or delivery by the Company of this
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Agreement, the performance by the Company of its obligations hereunder, nor the
consummation of the transactions contemplated hereby (i) has resulted or will
result (with or without notice, lapse of time or otherwise) in a breach of the
terms or conditions of, a default under, a conflict with, or the acceleration of
(or the creation in any person of any right to cause the acceleration of) any
performance or any increase in any payment required by, or the termination,
suspension, modification, impairment or forfeiture (or the creation in any
person of any right to cause the termination, suspension, modification,
impairment or forfeiture) of any material rights or privileges of the Company
under (A) the certificate of incorporation, bylaws or other constituent
documents of the Company, (B) any agreement, contract, arrangement or
understanding, written or oral (collectively, "Contract"), or any judgment,
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writ, order or decree (collectively, "Judgment") to which the Company is a party
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or by or to which the Company, its properties, assets or business or any of the
Purchased Shares being sold by the Company are or may be subject, bound or
affected or (C) any applicable law, rule or regulation (collectively, "Law");
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(ii) has resulted or will result (with or without notice, lapse of time or
otherwise) in the creation, imposition, or foreclosure of or right to exercise
or foreclose any Lien or Restriction of any nature whatsoever upon or in any of
(A) the assets of the Company (other than the Purchased Shares being sold by the
Company) or (B) the Purchased Shares; or (iii) assuming that the issuance, sale
and delivery to Buyer of the Purchased Shares is a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Securities
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Act"), and from qualification or registration under applicable state securities
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laws, requires or will require the Companyto make any filing with, to give any
notice to or to obtain any permit, authorization, consent or approval of any
person.
2.6. Proceedings. Except as set forth in the Company SEC Reports (as
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defined below) publicly filed with the Securities and Exchange Commission (the
"SEC") prior to the date of this Agreement, there is no action, suit,
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investigation or proceeding, governmental or otherwise ("Proceeding"), pending
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or, to the Company's knowledge, threatened against the Company or its
affiliates, directors, officers, employees or agents which has a reasonable
likelihood of having a material adverse effect on the business, financial
condition or results of operations of the Company and its Subsidiaries taken as
a whole or on the ability of the Company to perform its obligations under this
Agreement or with respect to the Purchased Shares, nor is there any basis for
any such Proceeding known to the Company.
2.7. No Brokers. None of the Company, its affiliates or any of their
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respective directors, officers, employees or agents, as such, have entered into
any Contract with any person which will result in the obligation of Buyer to pay
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
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2.8. SEC Filings; Financial Statements.
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(a) The Company has filed all forms, reports and documents required to
be filed by it with the SEC since December 31, 1999, and has heretofore made
available to Buyer, in the form filed with the SEC (excluding any exhibits
thereto), (i) its Annual Reports on Form 10-K for the fiscal years ended
December 31, 1999 and 2000, (ii) its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2000, June 30, 2000, September 30, 2000 and March 31,
2001, (iii) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held on or after December 31, 1999, and
(iv) all other forms, reports and other registration statements, including any
and all amendments or supplements to any of the items referred to herein, filed
by the Company with the SEC since December 31, 1999 (the forms, reports and
other documents referred to in clauses (i), (ii), (iii) and (iv) above being
referred to herein, collectively, as the "Company SEC Reports"). The Company SEC
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requirements of the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as ------------ the case may be, and the rules and
regulations thereunder, and (y) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports was prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto), and each fairly presented the consolidated
financial position, results of operations and cash flows of the Company and its
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to be material in amount). Since
December 31, 2000, there has been no change in any of the significant accounting
(including tax accounting) policies, practices or procedures of the Company or
any of its Subsidiaries.
(c) Except as and to the extent set forth in the Company SEC Reports
publicly filed with the SEC prior to the date of this Agreement, the Company and
its Subsidiaries have not incurred any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), other than liabilities and
obligations which have been incurred in the ordinary course of business.
2.9. Absence of Certain Changes and Events. Except as disclosed in the
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Company SEC Reports publicly filed with the SEC prior to the date of this
Agreement, since December 31, 2000, (a) the Company and the its Subsidiaries
have conducted their respective businesses only in the ordinary course and (b)
there has not been any material adverse change in the business, financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole.
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3. Representations, Warranties and Covenants of Buyer. Buyer represents and
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warrants to the Company as of the date hereof and as of the applicable Closing
Date, as follows:
3.1. Authority. Buyer is a corporation duly organized, validly existing and
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in good standing under the laws of the State of Delaware and has all requisite
power and authority to conduct its business and operations as now being
conducted and to enter into this Agreement and to perform its obligations
hereunder. The execution, delivery and performance by Buyer of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Buyer.
3.2. Binding Agreement. This Agreement has been duly executed and delivered
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by Buyer and is a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, except insofar as enforceability may be limited by
principles governing the availability of equitable remedies.
3.3. No Violations. Except, as to clauses (ii), (iii), and (iv) below, as
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would not have, individually or in the aggregate, a material adverse effect on
Buyer's ability to perform its obligations hereunder, none of the execution or
delivery by Buyer of this Agreement, the performance by Buyer of its obligations
hereunder or the consummation of the transactions contemplated hereby will (i)
violate or conflict with any term or provision of the certificate of
incorporation or bylaws (or other constituent documents) of Buyer, (ii) violate
any provision of any Law or Judgment applicable to Buyer or by which any of its
properties or assets are bound or affected, (iii) require any consent, approval,
filing or notice under any provision of any Law or Judgment applicable to Buyer,
or (iv) require any consent, approval or notice under, or violate, or be in
conflict with, or constitute a breach of or default under (with or without the
giving of notice or the lapse of time or both), or permit the termination of any
provision of, or result in the acceleration of (or give anyone the right to
accelerate) the maturity or performance of any obligation of Buyer under, any
note, bond, indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or commitment to
which Buyer is a party or by which Buyer, or any of its assets or properties are
bound or encumbered.
3.4. No Brokers. None of Buyer, its affiliates or any of their respective
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directors, officers, employees or agents, as such have entered into any Contract
with any person which will result in the obligation of the Company to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
3.5. Investment Representations and Covenants.
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(a) Buyer acknowledges that it is acquiring the shares of the subseries
of the Series D Preferred Stock to be purchased by it on the applicable Closing
Date solely for Buyer's own account, for investment purposes, and not with a
view to, or for resale in connection with, any distribution of such shares.
Buyer understands that the Purchased Shares have not been registered under the
Securities Act or registered or qualified under any state securities laws by
reason of specific exemptions under the provisions thereof which depend in part
upon Buyer's investment intent and on the other representations made by Buyer in
this Purchase Agreement. Buyer understands that the Company is relying upon
Buyer's representations and agreements
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contained in this Purchase Agreement for the purpose of determining whether this
transaction meets the requirements for such exemptions.
(b) Buyer agrees that (i) Buyer will not sell, assign, pledge, give,
transfer or otherwise dispose of the Purchased Shares or any interest therein,
or make any offer or attempt to do any of the foregoing, unless such transaction
is pursuant to a registration of the Purchased Shares under the Securities Act
and all applicable state securities laws or a transaction that is exempt from
the registration provisions of the Securities Act and all applicable state
securities laws, (ii) the certificate(s) representing the Purchased Shares bear
a legend making reference to the foregoing restrictions, and (iii) the Company
and any transfer agent for the Purchased Shares shall not be required to
register or give effect to any purported transfer of the Purchased Shares except
upon evidence of compliance with the foregoing restrictions.
4. Indemnification.
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4.1. Mutual Indemnification.
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(a) Subject to written notice of such claim for indemnification being
given to such party within the appropriate survival period referred to in
Section 4.2 and further subject to the proviso set forth in clause (ii) below,
the Company covenants and agrees to indemnify, defend and hold harmless Buyer
and its affiliates and their respective stockholders, directors, officers,
employees, agents, successors and assigns, and Buyer covenants and agrees to
indemnify, defend and hold harmless the Company and its affiliates and their
respective stockholders, directors, officers, employees, agents, successors and
assigns from and against:
(i) all losses, damages, liabilities, deficiencies, obligations, costs
and expenses resulting from or arising out of any
misrepresentation or breach of warranty or any nonperformance or
breach of any covenant or agreement of such indemnifying party
contained in this Agreement; and
(ii) all claims, actions, suits, proceedings, demands, Judgments,
assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable
legal, accounting, experts and other fees, costs and expenses)
incident or relating to or resulting from any of the foregoing.
(b) Any party entitled to indemnification under Section 4.1(a) (an
"indemnified party") seeking indemnification from a party obligated to indemnify
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such party under Section 4.1(a) (an "indemnifying party") shall give prompt
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notice to the indemnifying party of any claim as to which indemnification is
sought and will give the indemnifying party the right to participate in and, if
it so desires, to control, at its own expense, the conduct of the defense of any
such claim and any litigation arising out of such claim, with counsel reasonably
satisfactory to the indemnified party. Notwithstanding an indemnifying party's
election to assume control of the defense of such claim, the indemnified party
shall have the right to employ separate counsel and to participate in the
defense of such claim, and the indemnifying party shall bear the reasonable fees
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such claim include
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both the indemnifying party and the indemnified party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such claim on behalf of the
indemnified party) or (iii) the indemnifying party has failed to retain counsel
reasonably satisfactory to the indemnified party within a reasonable time of the
notice of the claim. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent, which consent
shall not be unreasonably withheld. If an indemnifying party assumes the defense
of a claim, no settlement thereof may be effected without the indemnified
party's consent unless the sole relief is monetary damages that are to be paid
in full by the indemnifying party and there is no finding or admission of any
violation of law.
4.2. Survival of Representations and Warranties. The representations and
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warranties contained in or made pursuant to this Agreement shall survive the
applicable Closing at which they are made or deemed to be made and will remain
in full force and effect for a period of twelve (12) months after the applicable
Closing Date at which such representations and warranties were made or deemed to
be made; provided that the Company's representations and warranties set forth in
Sections 2.1, 2.2 and 2.3 shall survive indefinitely.
5. Miscellaneous.
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5.1. Governing Law. This Agreement shall be construed in accordance with
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and governed by the laws of the State of Delaware, without regard to principles
of conflicts of laws.
5.2. Definitions. As used in this Agreement, the following terms have the
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following meanings:
(a) "Business Day". Any day other than a Saturday, Sunday or a day on
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which banking institutions in Denver, Colorado are not required to be open.
(b) "Lien" shall mean any security interest, lien, claim, charge,
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restrictive agreement, pledge, adverse interest or other encumbrance of any
kind.
(c) "Permitted Restriction", with respect to the Purchased Shares,
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as the case may be, shall mean Restrictions (i) on the transfer of such shares
under applicable federal and state securities laws or (ii) applicable to such
shares created by Buyer.
(d) "person" shall mean and include any individual, partnership, joint
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venture, corporation, trust, unincorporated organization or association or any
other entity or association of any kind and any governmental or regulatory
authority, federal, state, local or foreign government, any political
subdivision of any thereof and any court, panel, judge, board, bureau,
commission, agency or other entity or body exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
(e) "Restriction", with respect to any capital stock or other
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security, shall mean any voting or other trust or agreement, option, warrant,
escrow arrangement, proxy, buy-sell agreement, power of attorney, stockholders'
agreement or other Contract, any Judgment or any Law which, conditionally or
unconditionally, (i) grants to any person the right to purchase or
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otherwise acquire, or obligates any person to sell or otherwise dispose of or
issue, or otherwise results or, whether upon the occurrence of any event or with
notice or lapse of time or both or otherwise, may result in any person acquiring
(A) any of such capital stock or other security, (B) any of the proceeds of, or
any distributions paid or which are or may become payable with respect to, any
of such capital stock or other security, or (C) any interest in such capital
stock or other security or any such proceeds or distributions; (ii) restricts
or, whether upon the occurrence of any event or with notice or lapse of time or
both or otherwise, may restrict the transfer or voting of, or the exercise of
any rights or the enjoyment of any benefits arising by reason of ownership of,
any of such capital stock or other security or any such proceeds or
distributions; or (iii) creates or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, may create a Lien or
purported Lien affecting such capital stock or other security, proceeds or
distributions.
(f) "Subsidiary" means, with respect to any person, (i) a corporation
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a majority of the voting power of whose capital stock with voting power, under
ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by such person, by a subsidiary of such person, or by such
person and one or more subsidiaries of such person, (ii) a partnership in which
such person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership and has the power to direct the policies and
management of such partnership or (iii) any other person in which such person, a
subsidiary of such person or such person and one or more subsidiaries of such
person, directly or indirectly, at the date of determination thereof, has (A) at
least a majority ownership interest or (B) the power to elect or direct the
election of a majority of the members of the board of directors or other
governing body of such person.
5.3. Expenses. The Company agrees to pay all expenses incurred by Buyer in
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connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby, including all fees and
disbursements of its legal counsel and the payment of any stock transfer or
stamp taxes.
5.4. Restrictive Legend. Buyer acknowledges and agrees that each
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certificate representing the Purchased Shares will (unless the Purchased Shares
evidenced by such certificate shall have been registered under the Securities
Act) be stamped or otherwise imprinted with a legend in substantially the
following form (in addition to any additional legend required under applicable
state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, AND, UNLESS SO REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION."
5.5. Counterparts. This Agreement may be executed in several counterparts
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and as so executed shall constitute one agreement binding on the parties hereto.
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<PAGE>
5.6. Further Actions After the Closings. (a) During the period from the
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date hereof to the date of the Series D-3 Closing, the Company shall deliver to
Buyer within two (2) Business Days of the date of filing with the SEC a copy of
each form, report and document filed by the Company with the SEC after the date
hereof.
(b) If, subsequent to any Closing Date, further documents are
reasonably requested in order to carry out the provisions and purposes of this
Agreement, the parties hereto shall execute and deliver such further documents.
5.7. Severability. In the event that any part or parts of this Agreement
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shall be held to be unenforceable to its or their full extent, then it is the
intention of the parties hereto that such part or parts shall be enforced to the
full extent permitted under the laws, and, in any event, that all other parts of
this Agreement shall remain valid and fully enforceable as if the unenforceable
part or parts had never been a part hereof.
5.8. Amendments. This Agreement may be amended only by written instrument
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signed by all parties.
5.9. Notices. Any notice or other communication required or contemplated by
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the terms of this Agreement shall be delivered in person or sent by telecopy,
overnight courier, or registered or certified mail, postage prepaid, return
receipt requested. Any such notice or other communication shall be addressed to
the intended recipient at the address set forth below such party's signature on
the signature page hereof, or at such other address of which such party shall
have given notice as herein provided. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.
5.10. Assignment. Neither this Agreement nor any of the rights, interests
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or obligations of a party hereunder may be assigned to any person (whether by
operation of law or otherwise) without the prior written consent of the other
party; provided, that Buyer may assign, without the consent of the Company, its
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rights and obligations hereunder to any affiliate of Buyer. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
5.11. Entire Agreement. The provisions of this Agreement set forth the
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complete understanding and intention of the parties with respect to the subject
matter hereof and supersede all prior agreements or understandings, whether
written or oral, relating to the subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first written above.
ON COMMAND CORPORATION
By: /s/ William D. Myers
____________________________
Name: William D. Myers
Title: Executive Vice President and Chief
Financial Officer
Address for Notices:
7900 East Union Avenue
Tower III
Denver, CO 80237
Attention: Pamela Strauss
ASCENT ENTERTAINMENT GROUP, INC.
By: /s/ Gary S. Howard
____________________________
Name: Gary S. Howard
Title: Executive Vice President and Chief
Operating Officer
Address for Notices:
c/o Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Attention: Elizabeth M. Markowski
12