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Exhibit 10.36
Execution Copy
STOCK PURCHASE AGREEMENT
by and between
LODGENET ENTERTAINMENT CORPORATION
and
PAR INVESTMENT PARTNERS, L.P.
December 7, 2006
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the " Agreement ") is
entered into as of December 7, 2006 (the " Agreement
Date "), by and between LodgeNet Entertainment Corporation, a
Delaware corporation (" Seller " or " LodgeNet "),
and PAR Investment Partners, L.P., a Delaware limited partnership
("Buyer"; Buyer and Seller are referred to individually as a "
Party " and collectively as the " Parties .")
RECITALS
A. Seller has entered into a
Stock Purchase Agreement, of even date herewith, with Liberty
Satellite & Technology, Inc. ("LS&T") and Liberty Media
Corporation (in the form attached hereto as Exhibit A, the
"Liberty SPA"), pursuant to which Seller will acquire 100% of the
issued and outstanding shares of capital stock of Ascent
Entertainment Group, Inc. (the "Acquisition"), which prior to the
Acquisition owned 100% of the issued and outstanding shares of
capital stock of On Command Corporation, a Delaware corporation ("
ONCO ").
B. Pursuant to the Liberty
SPA, at the closing of the Acquisition, and as part of the
consideration for such Acquisition, Seller will issue 2,050,000
shares of its common stock to LS&T.
C. Concurrently therewith,
Seller desires to sell to the Buyer and Buyer desires to purchase
from the Seller 1,000,000 shares of common stock, par value $.01
per share (the "Shares") of the Seller, for the consideration and
subject to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in
consideration of the mutual promises and covenants contained in
this Agreement, and intending to be legally bound, the parties
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms have the
following meanings for purposes of this Agreement:
" Affiliate " means, with respect to any Person, any
other Person that, directly or indirectly, Controls or is
Controlled by or is under common Control with such Person.
" Agreement " has the meaning set forth in the
preamble.
" Agreement Date " has the meaning set forth in the
preamble.
" Buyer " has the meaning
set forth in the preamble.
" Closing " has the meaning
set forth in Section 2.3.
" Closing Date " has the
meaning set forth in Section 2.34.
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" Beneficial Ownership and derivative
terms. " As determined pursuant to Rule 13d-3 and
Rule 13d-5 under the Exchange Act and any successor
regulation, except that in determining Beneficial Ownership,
without duplication, equity securities that may be acquired
pursuant to rights to acquire equity securities that are
exercisable more than sixty days after a date shall nevertheless be
deemed to be Beneficially Owned.
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" Blackout
Period ." As defined in Section 7.6 below.
" Board ." The Board of
Directors of LodgeNet.
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" Business Days " means any day other than
Saturday, Sunday, or a day on which banking institutions of the
State of New York are authorized by law or executive order to
close.
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" Current Filings " has the meaning set
forth in Section 4.7.
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" Encumbrance " means any mortgage,
pledge, assignment, lien, charge, restriction, encumbrance or
security interest of any kind or nature.
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" Exchange Act. " The Securities Exchange
Act of 1934, as amended, and the rules and regulations
thereunder.
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" Free Writing Prospectus ." A free
writing prospectus as defined in Rule 405 under the Securities
Act.
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" GAAP " means generally accepted
accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board (and
its predecessors), the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination,
consistently applied.
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" Issuer Free
Writing Prospectus ." An issuer free writing prospectus as
defined in Rule 433 under the Securities Act.
" LodgeNet " has the
meaning set forth in the preamble.
"LodgeNet Securities" means any
equity securities of LodgeNet.
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" PAR Shares " means the Shares and the
1,156,997 shares of LodgeNet common stock previously purchased and
currently owned by Buyer on the date hereof.
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" Party " or " Parties " has the
meaning set forth in the preamble.
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" Person " means an individual, a
partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other entity, or a Governmental
Authority.
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" Piggyback
Notice ." As defined in Section 7.3 below.
" Piggyback Registration ."
As defined in Section 7.3 below.
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" Prospectus ." The prospectus included in
the applicable Registration Statement, as supplemented by any and
all prospectus supplements and as amended by any and all amendments
(including post-effective amendments) and including all material
incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
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" Purchase
Price " has the meaning set forth in
Section 2.2.
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" Registrable Securities " means the
Shares; provided, however , that as to any Registrable
Securities, such securities will irrevocably cease to constitute
Registrable Securities upon the earliest to occur: (i) the
date on which the securities are disposed of pursuant to an
effective registration statement under the Securities Act;
(ii) the date on which all of such securities are eligible to
be sold by Buyer to the public pursuant to Rule 144(k) (or any
successor provision) under the Securities Act; (iii) the date
on which the securities have been transferred to any Person other
than Buyer, except in accordance with a Permitted Transfer; or
(iv) the date on which the securities cease to be
outstanding.
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" Registration
Expenses ." As defined in Section 7.14 below.
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" Registration Statement ." Any
registration statement of LodgeNet under the Securities Act that
covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the related Prospectus, all amendments
and supplements to such registration statement (including
post-effective amendments), and all exhibits and all materials
incorporated by reference or deemed to be incorporated by reference
in such registration statement.
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" Restricted Period ." The period of time
commencing on the Closing Date and ending on the date that is six
(6) months after the Closing Date.
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" Rule 144 ." Rule 144
promulgated under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
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" SEC ." The United States Securities and
Exchange Commission and any successor United States federal agency
or governmental authority having similar powers.
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" Securities Act ." The Securities Act of
1933, as amended, and the rules and regulations
thereunder.
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" Seller " has the meaning set forth in
the preamble.
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" Shares " has the meaning set forth in
Recital C.
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"Shelf Registration ." As defined in
Section 7.1 below.
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" Subsidiaries " means all Persons that
the Company directly or indirectly controls.
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" Underwritten Registration " or "
Underwritten Offering ." A registration in which LodgeNet
Securities are sold to an underwriter for reoffering to the
public.
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ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
Section 2.1. Purchase and
Sale of Shares . Subject to the terms and conditions set forth
in this Agreement, at the Closing, Seller will sell and transfer
the Shares to Buyer, and Buyer will purchase the Shares from
Seller, free and clear of any and all Encumbrances, as set forth in
this Article II.
Section 2.2. Purchase
Price . The aggregate purchase price for the Shares will be
$23,370,000 (the " Purchase Price ").
(a)
The Purchase Price will be paid at the Closing by wire transfer of
immediately available funds pursuant to wire instructions provided
by Seller to Buyer no later than two (2) Business Days prior
to the Closing Date, or by such other means as may be agreed
between the Parties hereto. Seller shall deliver to Buyer a
certificate or certificates representing the Shares to be purchased
by, and sold to, the Buyer pursuant to Section 2.1 hereof,
registered in the names and in the denominations designated and
provided by the Buyer at least three (3) Business Days prior
to the Closing Date.
Section 2.3. Closing .
The closing of the transactions contemplated by this Agreement (the
" Closing ") will take place at the offices of Leonard,
Street and Deinard in Minneapolis, Minnesota on the date on which
the Acquisition is closed or at such other time and place as the
Parties may mutually agree in writing (the " Closing Date
").
ARTICLE III
BUYER’S REPRESENTATIONS AND WARRANTIES
Section 3.1. Organization
of Buyer . Buyer is a limited partnership duly organized,
validly existing, and in good standing under the laws of the State
of Delaware.
Section 3.2.
Authorization; Binding Effect . Buyer has all requisite
partnership power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement, and
this Agreement has been duly executed and delivered by Buyer. This
Agreement constitutes and, when executed and delivered by Buyer at
the Closing will constitute, a legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms,
except insofar as enforcement may be limited
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by bankruptcy, insolvency, or other laws
affecting generally the enforceability of creditors’ rights
and by limitations on the availability of equitable
remedies.
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Section 3.3.
Noncontravention; Consents . Neither the execution and
delivery of this Agreement, nor the consummation of the
transactions contemplated by this Agreement, will (a) violate any
material legal requirement to which Buyer is subject or any
provision of the certificate of limited partnership or governing
documents of Buyer or (b) result in a material breach of,
constitute a material default under, result in the acceleration of,
create in any Person the right to accelerate, terminate, modify or
cancel, any contract, agreement, lease, license or other
arrangement to which Buyer is a party or by which it is bound or to
which its assets are subject. Except for an filing required under
the hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") (if any) Buyer is not required to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority or other Person
in order for Buyer to consummate the transactions contemplated by
this Agreement.
Section 3.4.
Brokers’ Fees . Buyer has no obligation to pay any
fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement.
Section 3.5. Investment
Intent . Buyer is acquiring the Shares under this Agreement
solely for the purpose of investment for its own account, not as a
nominee or agent, and not with a view to, or for sale in connection
with, any distribution of any part thereof within the meaning of
Section 2(11) of the Securities Act or any applicable state
securities or "blue sky laws".
Section 3.6. Disclosure of
Information; Non-reliance . Buyer has been furnished all
information it considers necessary or appropriate for deciding
whether to accept the Shares. Buyer has had an opportunity to ask
questions and receive answers from Seller regarding the business,
properties, financial condition and prospects of the Seller, and
all such questions have been answered to the full satisfaction of
the Buyer. In making its decision to purchase the Shares, Buyer has
relied solely on its own investigation of Seller and has not relied
on any opinions, analyses, representations or warranties of Seller
or any third party, except for the representations and warranties
contained in Article IV hereof.
Section 3.7. Accredited
Investor . Buyer is an "accredited investor" as such term is
defined in Rule 501 of Regulation D under the Securities
Act.
Section 3.8. Current
Ownership . As of the Agreement Date, Buyer owns 1,156,997
shares of common stock of Seller.
Section 3.9. Restricted
Securities . Buyer understands that the Shares are
characterized as "restricted securities" under the United States
federal securities laws inasmuch as such Shares are being acquired
in a transaction not involving a public offering and that under
such laws and applicable regulations such Shares may be resold
without registration under the Securities Act only in certain
limited circumstances. In the
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absence of an effective registration statement
covering such Shares or an available exemption from registration
under the Securities Act, such Shares must be held
indefinitely.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to
Buyer as follows:
Section 4.1. Organization
of Seller . Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware.
Section 4.2.
Authorization; Binding Effect .
(a)
Seller has all requisite corporate power and authority to execute
and deliver this Agreement and such other documents as required to
consummate the Acquisition and to perform its obligations under
this Agreement and such other documents as required to consummate
the Acquisition. As of the Closing Date, this Agreement has been
duly executed and delivered by Seller.
(b)
This Agreement constitutes the legal, valid, and binding obligation
of Seller, enforceable against Seller in accordance with its terms,
except insofar as enforcement may be limited by bankruptcy,
insolvency, or other laws affecting generally the enforceability of
creditors’ rights and by limitations on the availability of
equitable remedies.
Section 4.3.
Noncontravention; Consents . Neither the execution and the
delivery of this Agreement nor the consummation of the transactions
contemplated by this Agreement will (a) violate any material legal
requirement to which Seller is subject or any provision of the
certificate of incorporation or bylaws (or comparable constituent
documents) of Seller or (b) result in a material breach of,
constitute a material default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, any contract, agreement, lease, license, or other
arrangement to which Seller is a party or by which it is bound or
to which its assets are subject. Except for the filing of a
Form D with the SEC (if required), Seller does not need to
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority
or other Person in order for Buyer and Seller to consummate the
transactions contemplated by this Agreement.
Section 4.4. Certain
Proceedings . There is no proceeding against or involving
Seller or any Affiliate of Seller that has been commenced or, to
Seller’s knowledge, threatened against or involving Seller or
any Affiliate of Seller that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the transactions contemplated by this Agreement.
Section 4.5.
Brokers’ Fees . Seller has no obligation to pay any
fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement.
Section 4.6. Delivery of
Shares . The Shares being issued and delivered hereunder, when
issued and delivered in accordance with the terms of this Agreement
for the consideration expressed herein, will be duly authorized,
validly issued, fully paid and non-assessable. The transfer and
delivery of such Shares by Seller to Buyer against the payment of
the Purchase Price as contemplated by this Agreement will transfer
good and valid title to the Shares, free and clear of all
Encumbrances.
Section 4.7. SEC Filings;
Financial Information .
(a)
Seller is a publicly traded company that is listed on The NASDAQ
Global Market under the ticker symbol "LNET" and files reports,
registration and proxy statements and other information with the
SEC on its EDGAR System, all of which are available to Buyer over
the internet at the SEC’s web site at http://www.sec.gov.
(b)
Since January 1, 2006, Seller has filed in a timely manner all
required reports, schedules, forms, statements, and other documents
with the SEC that Seller was required to file under
Section 13, 14(a), and 15(d) of the Exchange Act (the "SEC
Filings"). As of their respective filing dates, (i) the SEC
Filings complied in all material respects with requirements of the
Securities Act or the Exchange Act, as the case may be and the
rules and regulations of the SEC promulgated thereunder applicable
to such SEC Filings, and (ii) none of the SEC Filings
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent
that information contained in any SEC Filing has been revised or
superseded by a later filed SEC Filing, none of the SEC Filings
contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c)
The financial information for Seller and its subsidiaries contained
in the SEC Filings fairly present in all material respects, as of
the dates thereof and for the periods then ended, the financial
position and results of operations of Seller and its consolidated
subsidiaries in conformity with GAAP (except as indicated in the
notes thereto), subject to normal year-end adjustments (that are
not material, either individually or in the aggregate) with respect
to unaudited financial statements. Except as set forth in the SEC
Filings, neither Seller nor any of its subsidiaries has any
material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth
on a consolidated balance sheet of Seller and its consolidated
subsidiaries or in the notes thereto.
Section 4.8. Capital Stock
and Ownership of Seller .
(a)
The authorized capital stock of Seller consists of 50,000,000
shares of Common Stock and 5,000,000 shares of preferred stock,
$.01 par value. As of the date hereof, Seller has (i) 18,690,073
issued and outstanding shares of Common Stock, all of which are
validly issued, fully paid, and non-assessable; and (ii) no
shares of issued or
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outstanding Preferred Stock. No shares of Common
Stock or Preferred Stock that have been issued are held by Seller
in its treasury.
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(b)
As of the date hereof, Seller has (i) outstanding options to
purchase a total of 2,175,775 shares of Common Stock under the
LodgeNet Entertainment Corporation 2003 Stock Option and Incentive
Plan and the LodgeNet Entertainment Corporation 1993 Stock Option
Plan (collectively, the "Plans") and (ii) 180,050 shares of
unvested restricted stock outstanding. As of the date hereof,
696,638 additional shares of Common Stock are available for
issuance under the Plans.
(c)
Except for (x) options issued under and in accordance with the
Plans; and (z) as contained in this Agreement and the Liberty
SPA, there are no options, warrants, convertible securities, or
other rights, agreements, arrangements, or commitments of any
character obligating Seller to issue or sell any additional shares
of capital stock of, or other equity interest in, Seller.
Section 4.9. Liberty
SPA . True, correct and complete copies of the Liberty SPA and
the Stockholders Agreement, dated December 6, 2006, among
LodgeNet, LS&T and Liberty Media Corporation are attached
hereto as Exhibits A and B, respectively.
ARTICLE IVA
COVENANTS
Section 4A.1. Taking of
Necessary Action . (a) Seller and Buyer shall cooperate
with each other and use their respective reasonable best efforts to
take or cause to be taken all actions, and do or cause to be done
all things, necessary, proper or advisable on its part under this
Agreement and applicable law to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable,
including preparing and filing as promptly as practicable all
documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and/or any
governmental authority, including under the HSR Act.
Section 4A.2. Notification
Requirements . Seller shall promptly, but in no event later
than five (5) Business Days, notify Buyer in writing if any of
the events referred to in Sections 8.1(b), (c) or
(d) shall have occurred or if Seller intends to take any of
the actions referred to in Sections 8.1(b) or (c).
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1. Conditions to
Obligation of Buyer . The obligation of Buyer to purchase the
Shares and to take any other such actions required to be taken by
Buyer at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
(a)
the representations and warranties set forth in Article III
shall be true and correct as of the date hereof and true and
correct in all material respects as of the Closing Date;
(b)
the closing of the Acquisition shall have occurred on the terms set
forth in the Liberty SPA;
(c)
if required, the waiting period under the HSR Act shall have
expired or been terminated and any applicable foreign antitrust
approvals required by applicable Antitrust Law shall have been
obtained without any Governmental Authority taking any action to
prevent the consummation of the transactions contemplated by this
Agreement;
(d)
no Proceeding against the Buyer shall be pending before any
Governmental Authority and no statute, judgment, order, decree,
ruling, injunction, or charge shall be in effect, which reasonably
could (i) prevent or materially delay the consummation of any
of the transactions contemplated by this Agreement, or
(ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation; and
(e)
the Shares to be issued to Buyer under this Agreement shall have
been authorized for listing or quotation, as applicable, on the
NASDAQ Stock Market upon official notice of issuance.
Section 5.2. Conditions to
Obligation of Seller . The obligation of Seller to sell the
Shares and to take any other such actions required to be taken by
Seller at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
(a)
the representations and warranties set forth in Article IV
shall be true and correct in all material respects as of the
Closing Date;
(b)
if required, the waiting period under the HSR Act shall have
expired or been terminated and any applicable foreign antitrust
approvals shall have been obtained without any Governmental
Authority taking any action to prevent the consummation of the
transactions contemplated by this Agreement;
(c)
no Proceeding against the Seller shall be pending before any
Governmental Authority, and no statute, judgment, order, decree,
ruling, injunction, or charge shall be in effect, which reasonably
could (i) prevent or materially delay the consummation of any
of the transactions contemplated by this Agreement or
(ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation; and
(d)
the closing of the Acquisition shall have occurred.
ARTICLE VI
STANDSTILL PROVISIONS
Section 6.1. Dispositions
of LodgeNet Securities .
(a)
Transfer Prohibited . For a period of six (6) months
following the Closing Date, Buyer will not Transfer any of the
Shares acquired under this Agreement. For purposes of this
Agreement, "Transfer" means any attempt by Buyer to take any of the
following actions in connection with the Shares:
(i)
sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the
Exchange Act other than a Permitted Transfer, defined herein;
(ii)
enter into any swap or other arrangement that transfers to another
Person, in whole or in part, any of the economic consequences of
ownership of the Shares or any securities convertible into or
exercisable for the Shares or other rights to purchase the Shares,
whether any such transaction is to be settled by delivery of the
Shares or such other securities, in cash or otherwise, other than a
variable forward sale or collar or similar transaction involving a
put and/or call option settled in cash or securities; or
(iii)
publicly announce an intention to effect any transaction prohibited
by this Section 6.1.
(b)
Attempted Transfers Void . Any attempted Transfer by Buyer
of the Shares in violation of this Agreement is void.
Section 6.2. Permitted
Transfer . Notwithstanding anything herein to the contrary, the
provisions of Sections 6.1 and 6.2 shall not apply to any
Transfers by the Buyer to its limited partners (a "Permitted
Transfer"); provided, however , that such limited partner,
as Transferee, shall be bound by and subject to all provisions of
this Agreement as if such Shares were still held by the Buyer.
ARTICLE VII
REGISTRATION RIGHTS.
Section 7.1. Shelf
Registration . Seller shall (i) cause a shelf registration
statement on Form S-3 (or other appropriate form) covering the
resale of all of the Registrable Securities to be filed with the
SEC within six (6) months after the Closing Date, (ii) cause
such registration statement to be declared effective by the SEC no
later than six (6) months after the Closing Date and
(iii) keep such registration statement continuously effective
until Buyer no longer holds any Registrable Securities (the "Shelf
Registration").
Section 7.2. Underwritten
Offering . Buyer will have the right to request one
Underwritten Offering of Registrable Securities under the Shelf
Registration. In the event that Buyer requests an Underwritten
Offering, LodgeNet shall, subject to Buyer’s
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reasonable approval, select one or more
investment banking firms of national standing to be the managing
underwriter for the Underwritten Offering. Buyer agrees to enter
into an underwriting agreement with the underwriters, provided that
the underwriting agreement is in customary form and reasonably
acceptable to Buyer.
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Section 7.3.
Right to Piggyback Registration . If at any time after the
Restricted Period, LodgeNet proposes to file a registration
statement under the Securities Act with respect to an offering of
LodgeNet Securities (other than a registration statement
(a) on Form S-8 or any successor form thereto, (b) on
Form S-4 or any successor form thereto relating solely to the sale
of securities to employees, directors, officers, consultants or
advisors of LodgeNet or its Affiliates pursuant to a stock option,
stock purchase or similar benefit plan or (c) relating to a
transaction under Rule 145 under the Securities Act), whether
or not for its own account, on a form that would permit
registration of Registrable Securities for sale to the public under
the Securities Act, then LodgeNet will give written notice (the
"Piggyback Notice") of such proposed filing to Buyer at least ten
(10) days before the anticipated filing date. Such notice will
include the number and class of equity securities proposed to be
registered, the proposed date of filing of such registration
statement, any proposed means of distribution of such equity
securities, any proposed managing underwriter of such equity
securities, the name of the holders whose LodgeNet securities are
being registered if the registration is a secondary o
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