Exhibit 10.1

 

CONTENT PREPARATION AND DISTRIBUTION SERVICES AGREEMENT

 

by and between

 

ASCENT MEDIA GROUP, INC.

 

and

 

ON COMMAND VIDEO CORPORATION

 

dated as of

 

March 24, 2003

 

Ascent Media Group and On Command Video Corporation Confidential Information

 

--------------------------------------------------------------------------------

 

LIST OF EXHIBITS

 

Exhibit A

 -

Content Preparation Services Agreement

 

 

 

Exhibit B

 -

Content Distribution Service Level Terms and Conditions

 

 

 

Exhibit C

 -

Link Budget

 

 

 

Exhibit D

 -

Mutual Nondisclosure Agreement

 

 

 

Exhibit E

 -

Satellite Specifications

 

 

 

Exhibit F

 -

Additional Payment Terms

 

 

 

Exhibit G

 -

Limitation of Liability

 

 

 

Exhibit H

 -

Early Termination Fee

 

Confidential Information of Ascent Media Group and On Command Video Corporation

 

i

--------------------------------------------------------------------------------

 

Content Preparation and Distribution Services Agreement

 

This Content Preparation and Distribution Services Agreement (this “Agreement”),
dated as of March 24, 2003 (the “Effective Date”), is by and between Ascent
Media Group, Inc., a Delaware corporation with offices at 520 Broadway, 5th
Floor, Santa Monica, CA 90401 (“Ascent”), and On Command Video Corporation, a
Delaware corporation, with offices at 4610 South Ulster Street, 6th Floor,
Denver, CO 80237 (“OCV”).  “Party” means each party individually, and “Parties”
means OCV and Ascent.

 

The Parties, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, agree as follows:

 

Section 1.    Definitions.

 

As used in this Agreement, the following defined terms shall have the meanings
set forth below.  Other capitalized terms used in this Agreement are defined in
the context in which they are used and shall have the meanings there indicated.

 

1.1                               “AMNS Burbank” means Ascent Media Network
Services/Burbank, an operations department of Ascent.

 

1.2                               “Business Day” shall mean each day included in
the definition of Regular Business Hours, except that for purposes of submitting
Transmission Requests, OCV will be deemed to have submitted the Transmission
Request one Business Day prior to such Request if it submits the request (i)
prior to 12 p.m. Pacific Time on the preceding Business Day for all Transmission
Requests scheduled to begin before 12 p.m. the following Business Day, (ii)
prior to 5 p.m. Pacific Time on the preceding Business Day for all Transmission
Requests scheduled to begin after 12 p.m. on the following Business Day.

 

1.3                               “Content” means the content of any programming
material and associated Scripts included in the OCV VOD Offering to its end
customers, and software associated with the OCV VOD Offering.

 

1.4                               “Content Distribution Services” or “Services”
means the maintenance and operation of the Content Distribution System and
provision of the services described in the Service Level Terms and Conditions,
attached as Exhibit B, all in accordance with this Agreement.

 

1.5                               “Content Distribution System” means a content
distribution system consisting of the Uplink Facility and access to the
Satellite Transponder for the purpose of delivering Transmissions from the
Uplink Facility to the Satellite Transponder in accordance with the terms and
conditions of this Agreement.

 

1.6                               “Effective Date” is defined in the first
paragraph of this Agreement.

 

1

--------------------------------------------------------------------------------

 

1.7                               “Equipment” means any hardware, equipment and
related materials (excluding Packages), if any, transferred to Ascent for use
pursuant to this Agreement during the Term.

 

1.8                               “FEC” means the Forward Error Correction rate
applied to Content files.  Unless otherwise specified by OCV in a Transmission
Request, the FEC rate shall be 5%.

 

1.9                               “Force Majeure Event” is defined in Section
12.

 

1.10                        “Governmental Authorities” means all international,
foreign, United States, state and local governmental authorities, regulatory
bodies and courts having jurisdiction over the terms of this Agreement.

 

1.11                        “Intellectual Property Rights” means any:

 

(a)                                    patents whether registered or
unregistered;

 

(b)                                  inventions whether or not capable of
protection by patent or registration;

 

(c)                                   rights in commercial information and
technical information, including know-how, research and development data,
manufacturing methods and data, specifications and drawings, formulas, trade
secrets, algorithms, prototypes and research materials;

 

(d)                                   copyrights (including without limitation
any application, registration or renewal related thereto), registered designs or
design rights (whether or not capable of protection by registration), trademarks
(including without limitation service marks, logos, sound logos, certification
marks, and trade names, together with any applications, registrations and
renewals for any of the foregoing and the goodwill associated with each), mask
work rights, and database rights;

 

(e)                                   applications for the grant of rights of
the foregoing descriptions; and

 

(f)                                      rights of a similar or analogous nature
to any of the foregoing whether in existence now or in the future and wherever
located in the world.

 

1.12                        “Laws” is defined in Section 10.1.7.

 

1.13                        “Licensed Rights” means any and all rights,
licenses, consents and approvals that are necessary for OCV to provide Ascent
with Packages in the form contemplated by this Agreement and for Ascent to
perform its obligations under this Agreement.

 

1.14                        “Link Budget” means the link budget attached as
Exhibit C and incorporated herein.

 

1.15                        “Losses” means all losses, costs, expenses,
liabilities and damages reasonably incurred resulting from or relating to under
any claim, demand, settlement, litigation or final judgment, and all related
reasonable and documented costs and expenses, including reasonable and
documented legal fees, fines, interest and penalties.

 

2

--------------------------------------------------------------------------------

 

1.16                        “Monthly Fee” is defined in Exhibit F.

 

1.17                        “MPAA” means the Motion Picture Association of
America.

 

1.18                        “OCV VOD Offering” means the Content for movies,
video games and audio music that OCV offers to its end customers on a
video-on-demand basis.

 

1.19                        “Package” means the content (i.e., programming
material and Scripts) for each item of Content, which has been prepared for
Transmission.

 

1.20                        “Payment Past Due Date” is as defined in Section
9.2.

 

1.21                        “Receive Station” means the equipment, consisting of
a satellite dish and a receive personal computer (commonly referred to as a
“catcher”) at either (i) a hotel, motel, resort or other location in the
continental United States, Hawaii, Alaska, and parts of Canada and the Caribbean
that participates in the OCV VOD Offering, or (ii) any location for the purpose
of system operations or software or system development.  A hotel, motel or
resort may have more than one catcher and OCV may increase without limitation
the total number of Receive Stations during the Term.

 

1.22                        “Regular Business Hours” means Monday through
Friday, 8 a.m. to 5 p.m. Pacific Time, excluding the following Ascent holidays,
which may be updated from time to time by prior written notice of Ascent: New
Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving, the day after Thanksgiving and Christmas Day.

 

1.23                        “Satellite” means the satellite listed on Exhibit E,
or such other satellite to which Ascent is permitted under this Agreement to
send Transmissions.

 

1.24                        “Satellite Access Agreement” means an agreement
between Ascent and the Satellite Provider allowing Ascent to access the
Satellite Transponder on terms and conditions agreed by Ascent and the Satellite
Provider.

 

1.25                        “Satellite Access Requirements” means all technical,
operational and access requirements of Ascent set forth in the Satellite Access
Agreement.

 

1.26                        “Satellite Provider” means the owner, agent or
broker of the Satellite to which Ascent will contract with to receive access to
the Satellite Transponder.

 

1.27                        “Satellite Transponder” means the satellite
transponder listed in Exhibit E, or such other satellite transponder to which
Ascent is permitted under this Agreement to send Transmissions.

 

1.28                        “Scripts” means all data, text or information
associated with programming material.

 

1.29                        “Service Credit” means an amount credited to OCV due
to Service Failures, which shall offset any amount owed by OCV to Ascent under
this Agreement in the second month following the month such Service Failures
occurred.

 

3

--------------------------------------------------------------------------------

 

1.30                        “Service Failure” means any problem or failure in
the Content Distribution System by Ascent to distribute a Package pursuant to a
Transmission Request (as defined in Exhibit B, Section 1.1.2) that impacts the
Transmission schedule.  A Service Failure shall not include any problem or
failure to complete Transmissions due to the failure of the Satellite, the
Satellite Transponder, a Receive Station, OCV or OCV’s failure to meet its
obligations under this Agreement.

 

1.31                        “Store and Forward Hub” means the transmission
origination station (commonly referred to as the “pitcher”).

 

1.32                        “Technology” means algorithms, designs, drawings,
formulae, know-how, ideas, mask works, inventions, data, programs, improvements,
developments, discoveries, concepts, methodologies, techniques, processes,
software, specifications, and other forms and types of intangible property, in
each case whether or not patentable.

 

1.33                        “Term” is as defined in Section 2.

 

1.34                        “Test Package” is defined in Section 1.1.13 of
Exhibit B.

 

1.35                        “Transmission” means the transmission of a single or
a group of Packages using the Content Distribution System.

 

1.36                        “Uplink Facility” means, collectively, an earth
station facility, an Internet Protocol (IP) encapsulator, an HPA, and a Store
and Forward Hub, provided and maintained in accordance with the terms specified
in this Agreement.

 

Section 2.  Term.

 

The term of the Agreement shall commence on April 1, 2003 (the “Commencement
Date”) and shall expire five years after the Commencement Date, unless sooner
terminated as provided under this Agreement (the “Term”).  This Agreement shall
be effective as of the Effective Date.  This Agreement will automatically
terminate upon the expiration of the Term, unless terminated earlier by mutual
agreement in writing by the Parties or as provided in this Agreement.

 

Section 3.  Contract Documents.

 

The contract documents consist of this Agreement and each of the Exhibits (each
as may be amended from time to time in accordance with the terms of this
Agreement), which are attached and incorporated into this Agreement by this
reference, except that Exhibit A is attached for the convenience of the Parties
only, and shall be considered a separate agreement between the Parties.

 

4

--------------------------------------------------------------------------------

 

Section 4.  Description of Services.

 

4.1                               Content Distribution Services.

 

4.1.1                     Transmission Services.  Ascent shall provide all
services necessary to provide Content Distribution Services for OCV as specified
under this Agreement.

 

4.1.2                     Expanded Services.  If Customer wishes to expand the
scope of Content Distribution Services (the “Expanded Services”), the Parties
shall mutually agree in writing on the terms of such expanded scope of Content
Distribution Services, including but not limited to the related pricing terms,
before Ascent has an obligation to perform the Expanded Services.

 

(a)                                  Satellite Transponder Bandwidth Option.  To
the extent bandwidth is available, OCV shall have the option to increase the
bandwidth of the Satellite Transponder in 1-Mhz increments for a fee per Mhz set
forth in Section 9.1.1(c).  Once increased, the bandwidth shall remain at the
new level for the duration agreed to by the Parties.

 

4.1.3                     Ad-Hoc Services.  Ascent shall provide ad-hoc
services, such as software development and documentation for satellite
distribution integration (“Ad-Hoc Services”), provided that the Parties mutually
agree in writing on the terms of the Ad-Hoc Services, including but not limited
to the related pricing terms, before Ascent has an obligation to perform the
Ad-Hoc Services.

 

4.1.4                     Back-Up Services.  If Content Distribution Services
are unavailable for any reason, including a Force Majeure Event, Ascent shall
use commercially reasonable efforts to use alternate Ascent facilities, obtain
an alternate third party provider or identify options to reconfigure the
facilities used for the Content Distribution Services, as needed, in order for
Ascent to continue providing the Content Distribution Services at the same
polarity and utilizing a satellite in the same orbital position as the Satellite
(the “Back-Up Services”).  Subject to subsection (d) below, the terms of this
Section are not intended to limit OCV’s right to exercise all of its remedies
under this Agreement, including its rights under Section 14.5.  Should Ascent
provide Back-Up Services:

 

(a)                                  Such Back-Up Services shall be provided, to
the extent possible, through the period that the Content Distribution Services
are unavailable;

 

(b)                                 Ascent shall have no liability for services,
or omission of services, provided by an alternate third party provider, if the
reason for the

 

5

--------------------------------------------------------------------------------

 

unavailability of Content Distribution Services is a Force Majeure Event;

 

(c)                                  Ascent shall promptly restore the Content
Distribution Services in accordance with Exhibit B; and

 

(d)                                 OCV shall not be entitled to Service Credits
during the period in which Back-Up Services are being provided in accordance
with the terms and conditions of this Agreement, including the service level
requirements set forth in Exhibit B.

 

(e)                                  OCV shall continue paying the Monthly Fee
(and other applicable fees, if any).

 

4.2                               Content Distribution System.   Ascent shall
provide a Content Distribution System, which shall be operational twenty-four
(24) hours a day, seven (7) days a week.

 

4.3                               Uplink Facility.

 

4.3.1                     Requirements.  Ascent shall provide and maintain an
Uplink Facility meeting the specifications set forth below.  Ascent shall
monitor the Uplink Facility twenty-four (24) hours a day, seven (7) days a week
in accordance with the terms and conditions in this Agreement.  The Uplink
Facility shall have the following specifications:

 

(a)                                  Capable of transmitting Packages to
Satellite Transponder at a 1.5 Mbps sustained information rate, which is
burstable to 3.0 Mbps, or such greater numbers as the Parties agree upon if OCV
exercises its option to increase the bandwidth of the Satellite Transponder
pursuant to Section 4.1.2(a);

 

(b)                                  Digital video broadcast (DVB) compliant as
determined by the Receive Station specifications provided by OCV;

 

(c)                                  FEC capability;

 

(d)                                  Satellite Access Requirements and operation
parameters compliant;

 

(e)                                  Federal Communications Commission (FCC)
compliant;

 

(f)                                    Within three (3) months from the
Effective Date, Uplink Facility will have a redundant uplink, consisting of a
radio frequency (RF) transmit chain, a DVB modulator, an IP encapsulator, a
Store and Forward Hub and a catcher.

 

(g)                                 Provision of security of the Uplink Facility
in compliance with MPAA guidelines, including physical access control to RF
transmit chain, DVB modulator, IP encapsulator, and Store and Forward Hub, and

 

6

--------------------------------------------------------------------------------

 

application access control to the IP encapsulator and the Store and Forward Hub;
and

 

(h)                                 Storage of the Content at the Uplink
Facility in compliance with MPAA guidelines.

 

4.3.2                     Relocation/Changes.  Ascent may, upon sixty (60) days
prior notice, relocate the Uplink Facility and/or change its configuration so
long as Ascent shall use diligent efforts not to disrupt the Content
Distribution Services.  All terms and conditions relating to Ascent’s
obligations to complete Transmissions and OCV’s remedies for any failure to do
so apply to this subsection.

 

4.3.3                     Satellite Transponder.  Ascent shall enter into an
agreement with the Satellite Provider for a transponder with specifications
provided in Section 4.3.1 above covering the continental United States, Hawaii,
Alaska, and parts of Canada and the Caribbean for the Term.  Such agreement
shall obligate the Satellite Provider to provide a Satellite Transponder that is
non-preemptible and protected such that any failure or unavailability of the
Satellite or Satellite Transponder, unless due to OCV’s breach of this Agreement
or its gross negligence or willful misconduct, will be restored on either
another transponder on the Satellite or a New Satellite then in orbit at no
additional cost.  Ascent acknowledges that its obligations set forth in this
Section 4.3.3 constitute material obligations of Ascent.

 

4.3.4                     Acceptability of Satellite Transponder.  OCV
acknowledges that the Satellite Transponder in its current working order is
appropriate for use by Ascent in performing its obligations under this
Agreement.

 

4.3.5                     Disclosure to OCV.  Ascent agrees to make diligent
efforts to include in the Satellite Access Agreement a requirement that the
Satellite Provider notify Ascent of any anticipated or current technical
problems relating to the Satellite, including problems with the Satellite’s CPU
or transponder failures.  Ascent agrees to immediately provide to OCV all
non-confidential information in its possession relating to the performance,
problems or capacity of Satellite or the Satellite Transponder.  To the extent
any such information is deemed confidential, Ascent will seek permission from
the Satellite Provider to share such information with OCV subject to OCV’s
agreement to consider such information as Ascent’s Confidential Information (as
defined in the NDA) and, if required by the Satellite Provider, OCV’s execution
of a nondisclosure agreement with the Satellite Provider.

 

4.3.6                     Compliance with Satellite Access Agreement.  Ascent
agrees to comply with all Satellite Access Requirements.  Ascent shall provide
OCV with immediate notice if the Satellite Provider has indicated, whether in
writing

 

7

--------------------------------------------------------------------------------

 

or orally, that it considers Ascent to be in noncompliance or breach of any of
the Satellite Access Requirements.

 

4.3.7                     Satellite or Transponder Failure.  Unless due to OCV’s
breach of this Agreement or its gross negligence or willful misconduct, if the
Satellite or Satellite Transponder fails, the Parties agree that the following
terms apply:

 

(a)                                  Irreparable Failure.  If (i) the Satellite
Transponder or Satellite fails and such failure is irreparable as determined by
the Satellite Provider, (ii) the Satellite Transponder or Satellite is
unavailable due to actions of a Governmental Authority, or (iii) a change of
Satellite Transponder is mandated by the Satellite Provider, then Ascent shall
take all reasonable measures to exercise its right under the Satellite Access
Agreement to secure access on an alternative Ku-band transponder on the
Satellite or, if unavailable, on a Ku-Band transponder on a different satellite
of the Satellite Provider then in orbit.  In exercising its rights under the
Satellite Access Agreement, Ascent shall take all reasonable measures to secure
an alternative Ku-band transponder on the same polarity as the Satellite
Transponder, if available.  If the Satellite Provider does not provide an
alterative transponder, Ascent shall take all reasonable measures to secure
access on an alternative Ku-band transponder (an “Alternative Transponder
Agreement”). Ascent shall assume any cost increase in securing access to an
alternative transponder, provided, however, that to the extent such cost is more
than 50% greater than Ascent’s cost under the pre-existing Satellite Access
Agreement, then (i) OCV shall pay Ascent’s cost in excess of such 50% threshold,
and (ii) Ascent shall provide notice of such cost increase prior to entering
into such Alternative Transponder Agreement; and (iii) Ascent shall comply with
a request by OCV to limit the term of the Alternative Transponder Agreement.  In
either event, OCV, at its cost, shall re-point and re-tune all current Receive
Stations to receive Transmissions from the new transponder.  If Ascent is unable
to obtain an alternative transponder from the Satellite Provider or an
Alternative Transponder Agreement in accordance with the terms of this
subsection, but has fully complied with its obligations under this Agreement, it
shall be construed as a Force Majeure Event retroactive to the date of failure
of the Satellite or Satellite Transponder.

 

(b)                                  Repairable Satellite or Transponder
Failure.  If the Satellite Transponder or Satellite fails, and the Satellite
Provider has indicated that it will repair such failure within thirty (30) days,
OCV and Ascent shall be subject to the Satellite Provider’s procedures, and the
rights and obligations of Ascent relating to the initiation of Transmissions
shall be postponed until such repairs are completed and the terms of Section 12
shall apply.  The Parties agree that should the Satellite Transponder or
Satellite fail to be operational as required for Ascent to perform its

 

8

--------------------------------------------------------------------------------

 

obligations under this Agreement within thirty (30) days after the date of the
Satellite or Satellite Transponder failure, then such failure will be deemed
irreparable and the terms of Section 4.3.7(a) above shall apply.  Ascent shall
use diligent efforts to work with the Satellite Provider toward the timely
repair of the Satellite Transponder or Satellite.

 

4.3.8                     New Satellite or Satellite Transponder. Ascent, at its
sole cost and expense, may utilize a different Satellite Transponder or
Satellite (either, “New Satellite”) to fulfill its obligations under this
Agreement.  If Ascent decides to do so and such decision is not the result of a
Satellite or Satellite Transponder Failure, then Ascent shall provide OCV with
ninety (90) days prior written notice of its intent to switch to a New Satellite
and the following terms shall apply:

 

(a)                                  Ascent, at its cost, shall re-point and
re-tune all current Receive Stations to receive Transmissions from the New
Satellite and Ascent shall use commercially reasonable efforts not to disrupt
the Content Distribution Services, and in any event shall not disrupt scheduled
Transmissions for more than an aggregate of two (2) days.

 

(b)                                  All terms and conditions of this Agreement
relating to the Satellite, Satellite Transponder and Satellite Access Agreement,
shall apply to the New Satellite.

 

(c)                                  Upon providing OCV with written notice of
its decision to switch to a New Satellite, the Parties will work together to
develop a plan to assess and minimize the impact, if any, on Ascent’s ability to
perform Content Distribution Services under this Agreement.  Ascent shall not
switch to a New Satellite if Ascent reasonably determines that doing so will
materially impact Ascent’s ability to perform the Content Distribution Services
under this Agreement for a period of two (2) days or more, unless Ascent
provides Back-Up Services (where such Back-Up Services distribute Packages to
the pre-existing Satellite Transponder) at no cost to OCV pursuant to Section
4.1.4 of this Agreement and in compliance with the terms and conditions of this
Agreement until all Receive Stations are capable of receiving Transmissions
through the New Satellite.

 

(d)                                  Within fourteen (14) days after the Parties
develop the plan described in Section 4.3.8(c) above, if OCV sends written
notice to Ascent that OCV reasonably determines that OCV will incur significant
expense as a result of the switch to a New Satellite, then Ascent shall not
switch access to a New Satellite unless the Parties agree upon reimbursement
terms for OCV’s expenses.

 

(e)                                  OCV’s failure to send notice pursuant to
Section 4.3.8(d) above shall be deemed OCV’s approval of Ascent’s proposed
switch to a New

 

9

--------------------------------------------------------------------------------

 

Satellite subject, however, to Ascent’s compliance with the terms of Section
4.3.8.

 

4.4                               Service Level Terms and Conditions.  Ascent
agrees to provide the services described in the Service Level Terms and
Conditions, attached as Exhibit B and incorporated into this Agreement.

 

4.5                               Content Preparation Services.  Ascent agrees
to provide the services described in the Content Preparation Services Agreement
as attached as Exhibit A to this Agreement.

 

Section 5.  OCV Obligations.

 

OCV agrees that it shall comply with the responsibilities set forth in this
Section at its sole cost and expense.  To the extent Ascent is unable to perform
its obligations due to OCV’s failure to perform its obligations, Ascent’s
failure to perform shall be excused until such time as OCV performs its
obligations.

 

5.1                               Licensed Rights.  OCV shall obtain all
Licensed Rights in accordance with Section 10.3.1 of the Agreement.

 

5.2                               Facilitate Flow of Information.  OCV shall
facilitate the flow of all information required by Ascent to perform the Content
Distribution Services including, without limitation, access to appropriate OCV
staff.

 

5.3                               Facilitate Access to Upgrades.  OCV shall
facilitate the access to any future OCX hardware and software upgrades to ensure
performance and reliability benchmarks.

 

5.4                               Vendor Relationships.  If required for Ascent
to perform its obligations, OCV will facilitate the relationship between OCV’s
vendors or system integrators (such as DVA) with Ascent, such that Ascent
receives information or assistance required for it to perform services under
this Agreement.

 

5.5                               Equipment.  Subject to Section 11
(Intellectual Property), OCV will install, maintain, service and upgrade (as
needed) Equipment on Ascent’s premises.

 

5.6                               Service Level Terms and Conditions.  OCV shall
fulfill its obligations under the Service Level Terms and Conditions attached as
Exhibit B to this Agreement.

 

5.7                               Receive Stations.  OCV shall purchase,
install, operate, monitor and maintain all Receive Stations.

 

5.8                               Compatibility.  OCV shall ensure that the
configuration of all Receive Stations are compatible with the Content
Distribution System, provided such Content Distribution System meets the
requirements specified in this Agreement.

 

10

--------------------------------------------------------------------------------

 

5.9                               Content Obligations.  OCV represents that it
is and will remain in compliance with all its obligations with respect to the
Content and the OCV VOD Offering, whether under contractual arrangement or by
Law, and that OCV shall deliver Content to Ascent for use pursuant to this
Agreement that is encrypted, not corrupt and in a condition in which Ascent is
able to perform the Services.

 

Section 6.    OCV Rights.

 

6.1                               Offering to End Customers of OCV.  OCV has
sole control and discretion over the Content offered to its end customers,
including, without limitation, all aspects of scheduling, and all title and
rights for Content, and availability of Content.  OCV has sole control and
discretion over consumer branding and promotion for its end customers.

 

6.2                               Licensed Rights.  OCV has sole control and
discretion over the terms of the Licensed Rights; provided that such Licensed
Rights shall include, at a minimum, those rights that are required for Ascent to
perform its obligations under this Agreement.

 

6.3                               Technology.  OCV has sole control and
discretion over Technology used by OCV for its Equipment, servers and related
applications, subject to Section 5.8.

 

Section 7.  Quality Assurance; Security.

 

7.1                               Project Managers; Meetings.  Each Party shall
designate one employee with decision-making authority to serve as the principal
technical contact for such Party during the term of this Agreement (each a
“Project Manager”).  The Project Managers shall work together to ensure that the
Services proceed in a timely manner.  Either Party may change its Project
Manager at any time and from time to time by giving the other Party written
notice.  Both Parties agree that the respective Project Managers shall hold
phone calls or meetings on a regular basis, at times and locations mutually
agreed upon, to discuss any matters arising under this Agreement.

 

7.2                               Inspections.  Ascent shall provide OCV and
OCV’s designated representatives access to Ascent’s facilities involved in
providing the Services to conduct progress reviews, “walk-throughs” and
discussions with personnel and management of Ascent regarding the status and
conduct of Ascent’s performance of its obligations under this Agreement so long
as OCV and OCV’s designated representatives are accompanied by an authorized
representative of Ascent and such access is (i) during Business Hours, (ii)
scheduled upon reasonable advanced notice, (iii) does not disrupt the conduct of
Ascent’s normal business, (iv) complies with all Ascent access control and
security requirements, (v) does not violate any Law or MPAA guideline, and (vi)
is reasonable in time, scope and frequency.

 

11

--------------------------------------------------------------------------------

 

7.3                               Notice and Reporting to OCV.  Subject to any
limitations based on Section 4.3.5 of this Agreement and during Business Hours,
Ascent agrees to (i) promptly notify and provide details about any expected or
likely delays, resource shortages or other issues that could affect its ability
to provide timely and/or conforming deliveries and services under the Agreement
and (ii) respond to reasonable requests for information regarding the matters
contemplated in this Agreement by OCV.

 

7.4                               Time of the Essence.  Ascent acknowledges and
agrees that time is of the essence in the performance of its obligations
hereunder.  This provision shall not impose any additional time constraints on
matters that have been expressly agreed to hereunder.

 

7.5                               Restricted Access.  Ascent shall allow only
those employees and authorized agents and independent contractors (collectively,
“Ascent Personnel”) actually providing services under this Agreement to access
the Content and/or Packages, and such Content and/or Packages shall be accessed
only to the extent needed by Ascent Personnel to perform their
responsibilities.  Ascent agrees that (i) Content and/or Packages shall not
leave Ascent’s possession or control, except to transfer to OCV or distribute
Content in accordance with OCV’s instructions as contemplated under this
Agreement; and (ii) Ascent shall use Ascent Personnel to effect any transfer of
Content and/or Packages within Ascent’s facilities.

 

7.6                               Notice of Security Issues.  Ascent shall
provide prompt notice with supporting details to OCV if it becomes aware of any
of the following: (i) any failure to conform to the MPAA security guidelines or
the requirements in the Agreement relating to security of Content, Packages, the
Uplink Facility or any part of the Content Distribution System, whether or not
such failure results in any actual unauthorized use or a breach of security;
(ii) any unauthorized use of the Content, Packages or OCV’s Confidential
Information; or (iii) any breach of security relating to storage facilities at
Ascent.

 

Section 8.    Link Budget.

 

8.1                               Obligations.  With respect to obligations
regarding the Link Budget, the Parties agree that Ascent (i) shall be
responsible only for complying with uplink configuration matters discussed in
the Link Budget, (ii) shall take all reasonable measures to have the Satellite
Provider comply with the space segment matters discussed in the Link Budget, and
(iii) shall not be responsible for complying with Receive Station matters
discussed in the Link Budget.

 

8.2                               Acceptability of Link Budget.  OCV
acknowledges that the Link Budget is acceptable for use by it and Ascent in
performing their respective obligations under this Agreement.

 

12

--------------------------------------------------------------------------------

 

Section 9.  Payment and Fees.

 

9.1                               Fee Schedule.  In consideration of the
Services to be performed by Ascent, OCV shall pay to Ascent the amounts
described below, as adjusted in accordance with Section 9.2 and offset by any
Service Credits.  All Monthly Fees (as defined in Exhibit F) shall be due and
payable 30 days after receipt of an invoice for completed services.  All other
fees shall be due and payable within 30 days after receipt by OCV of an invoice
for completed services or authorized expense reimbursable by OCV, if applicable.

 

9.1.1                     Content Distribution Services Fees.  The fees for
Content Distribution Services shall be provided in Exhibit F and incorporated
herein by reference.

 

9.1.2                     Content Preparation Services Fees.  The fees for
Content Preparation Services shall be provided in Exhibit A.

 

9.1.3                     Payments.  Payments to Ascent shall be made in U.S.
Dollars via check or wire transfer to the following account:

 

If mailed by U.S. Mail:

Ascent Media Group, Inc.

 

Dept 2146

 

Los Angeles, CA 90084-2146

 

 

If mailed by courier:

Ascent Media Group, Inc.

 

2255 North Ontario Street, Suite 350

 

Burbank, CA 91504

Wire Transfer:

 

Bank:

Wells Fargo Bank, N.A.

Address

San Francisco, CA, USA

ABA No.:

121000248

Acct No.:

4122834229

Account Name:

Ascent Media Group

Contact:

Rebecca Clute, Vice President

 

Wells Fargo Bank, N.A.

 

6001 Topanga Canyon Blvd. #205

 

Woodland Hills, CA 91367

 

(818)716-3248

Swift #

WFBIUS6S

 

9.2                               Late Payment.  Undisputed past due payments
shall incur a late payment charge of one and one-half percent (1.5%) thereof per
month (or the maximum rate permitted by law, if less).  A payment shall be
deemed past due thirty-one (31) days after such payment is due and payable (the
“Payment Past Due Date”).  Billing disputes shall be submitted in writing
(including confirmed e-mail

 

13

--------------------------------------------------------------------------------

 

transmission) to Ascent within 30 days after OCV discovers the billing issue,
but in no case later than 90 days after the date of the invoice.

 

9.3                               Fees Exclusive of Taxes.  All amounts payable
under the Agreement are exclusive of any taxes or other government charges,
incurred by Ascent as a result of provision of the Services, equipment and
facilities by Ascent pursuant to the Agreement.  OCV will pay any and all (a)
sales, use, excise or other taxes (other than taxes measured on the income of
Ascent), and (b) regulatory fees or surcharges of all Governmental Authorities,
applicable to the Services to be provided by Ascent to OCV.  If OCV is exempt
from such taxes, it shall provide Ascent with a tax-exempt certificate.

 

9.4                               Additional Payment Terms.  The parties agree
to the Additional Payment Terms defined in Exhibit F.

 

Section 10.            Representations and Warranties.

 

10.1                        Mutual Representations and Warranties.  Each Party
represents and warrants to the other that:

 

10.1.1              It has the right, power and authority to enter into and to
fully perform its obligations under this Agreement.

 

10.1.2              When executed and delivered, this Agreement shall constitute
a valid and binding obligation of such Party.

 

10.1.3              It has not entered and shall not enter into any agreement or
arrangement that could reasonably be expected to limit the performance of its
obligations, or diminish or impair the rights of the other Party, hereunder.

 

10.1.4              There are no liens, encumbrances, actions, suits or
proceedings pending before any Governmental Authority or, to the knowledge of
such Party, threatened against it, that could reasonably be expected to
materially limit the performance of its obligations, or to materially impair the
rights of the other Party, hereunder.

 

10.1.5              No approvals, consents, authorizations, permissions,
licenses, certificates or permits of any third party, other than the Licensed
Rights, are needed for the performance of its obligations hereunder that have
not been obtained and that do not remain in full force and effect as of the
execution hereof.

 

10.1.6              As of the date of this Agreement, (a) it has neither sought
nor has any intention voluntarily to seek the protection of any bankruptcy law;
(b) it has no reason to believe that any of its creditors has caused or intends
to cause it to become the subject of any proceedings under any bankruptcy law;
and (c) it has no knowledge of any state of facts which, if known to its
creditors, (i) would cause it voluntarily to seek the protection of any

 

14

--------------------------------------------------------------------------------

 

bankruptcy law, or (ii) might reasonably cause any such creditor to cause it to
become the subject of any proceeding under any bankruptcy law.

 

10.1.7              In the performance of its obligations hereunder, it shall
comply with all applicable laws, rules, regulations, statutes and ordinances of
all governmental entities including local, state, federal or international, now
or hereafter enacted (“Laws”).

 

10.2                        Ascent Representations and Warranties.

 

10.2.1              Performance; Productivity.  Ascent represents and warrants
that Ascent shall perform all services under this Agreement in a professional
manner consistent with industry standards and the terms and conditions of this
Agreement.

 

10.2.2              Non-Infringement.  Ascent represents and warrants that, to
the best of its knowledge and belief, the Content Distribution System and the
equipment used by Ascent in connection with the performance of its obligations
hereunder do not infringe upon or misappropriate any Intellectual Property Right
of any third party.

 

10.2.3              No Additional Warranties.  THE WARRANTIES AND
REPRESENTATIONS CONTAINED IN THIS AGREEMENT ARE THE ONLY WARRANTIES AND
REPRESENTATIONS MADE BY ASCENT AND CAN BE AMENDED ONLY BY A WRITTEN INSTRUMENT
SIGNED BY AN OFFICER OF ASCENT.  ASCENT EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

10.3                        OCV Representations and Warranties.  OCV represents
and warrants that:

 

10.3.1              Licensed Rights.  OCV has obtained and will maintain
throughout the time in which Ascent uses the Content pursuant to this Agreement,
all Licensed Rights for Ascent to receive, store and transmit Packages in
accordance with the terms of this Agreement and otherwise perform its
obligations under this Agreement.

 

10.3.2              Own Use.  The services to be performed by Ascent are for
OCV’s own use to conduct its business and in no event shall OCV be permitted to
resell the Content Distribution Services, in whole or in part, to any other
person or entity.

 

10.3.3              Lawful Purpose.  OCV shall use the Content Distribution
Services only for lawful purposes and in compliance with all Laws.

 

15

--------------------------------------------------------------------------------

 

10.3.4              Non-Infringement.  To the best of its knowledge and belief,
the Equipment does not infringe upon or misappropriate any Intellectual Property
Right of any third party.

 

10.4                        Insurance.  Each Party shall obtain and maintain
during the Term and for one (1) year thereafter (i) Errors and Omissions
Insurance, on a claims made basis, with minimum limits of Ten Million Dollars
($10,000,000), protecting it and the other Party and its affiliates (its
“Affiliates”) from any errors and omissions of itself under this Agreement, and
(ii) Media Liability Insurance, on an occurrence form basis, with minimum limits
of Ten Million Dollars ($10,000,000), protecting it and the other Party and its
Affiliates from any claims based on the Content.  The foregoing insurance
coverage may not be reduced or canceled without thirty (30) days prior written
notice to the other Party.  All insurance shall be primary and not contributory
with regard to any other available insurance held by the other Party or its
Affiliates.  All insurance shall be written by companies with a BEST Guide
rating of A- or better.  Certificates of insurance shall be promptly furnished
to the other Party at its request, and such policies shall include the other
Party and its Affiliates as additional insureds, if the other Party is not
already named as a primary insured on the policies.

 

Section 11.                                   Intellectual Property.

 

11.1                        OCV License.  OCV grants Ascent a non-exclusive and
non-transferable license to use the Packages and Equipment supplied by or on
behalf of OCV under this Agreement during the Term solely for the purpose of
performing Content Distribution Services for OCV in accordance with this
Agreement.  Upon termination or expiration of this Agreement for any reason, all
Packages and Equipment still in Ascent’s possession shall be immediately
returned to OCV.

 

11.2                        OCV Property.  Subject to the license set forth in
Section 11.1 above, Ascent shall have no right, title or interest in the
Equipment and Packages, or any Intellectual Property Rights embodied therein.

 

11.3                        Ascent Property.  Ascent, in connection with the
performance and preparation of the work to be performed hereunder may utilize,
invent, make or develop Technology to achieve a particular or desired result in
the course of performing the Services, and Ascent shall retain all Intellectual
Property Rights embodied therein.

 

16

--------------------------------------------------------------------------------

 

Section 12.                                   Force Majeure.

 

Subject to Ascent’s performance of its obligations, if any, relating to or
arising out of the Force Majeure Event (as defined below), Ascent is not liable,
either wholly or in part, for nonperformance or a delay in performance due to
force majeure or contingencies or causes beyond the reasonable control of
Ascent, including but not limited to shortage of labor, fuel, raw material or
machinery, or fire, flood, Law, political action, acts of War, acts of terrorism
or acts of God (“Force Majeure Event”).  To the extent Ascent claims an
inability to perform based on a Force Majeure Event, including Satellite or
Satellite Transponder failure, the Monthly Fee shall be reduced pro rata by the
number of days during which Ascent has claimed an inability to perform.  If
Ascent claims an inability to perform as a result of any Force Majeure event for
a period of thirty (30) consecutive days, then OCV may terminate the Agreement
pursuant to Section 14.5(ii).

 

Section 13.                                   Dispute Resolution.

 

13.1                        Informal Dispute Resolution.  Prior to the
initiation of any formal proceeding, the Parties shall first attempt to resolve
any dispute informally pursuant to this Section 13.1.  Upon the written request
of a Party, the other Party shall appoint a designated representative who does
not devote substantially all of his or her time to performance under this
Agreement, whose task it will be to meet for the purpose of endeavoring to
resolve such dispute.   The following guidelines shall apply:

 

13.1.1              The designated representatives shall meet as often as the
Parties reasonably deem necessary in order to gather and furnish to the other
all information with respect to the matter in issue which the Parties believe to
be appropriate and germane in connection with its resolution.  The
representatives shall discuss the problem and attempt to resolve the dispute
without the necessity of any formal proceeding.

 

13.1.2              During the course of discussion, all reasonable requests
made by one Party to another for non-privileged information, reasonably related
to this Agreement, shall be honored in order that each of the Parties may be
fully advised of the other’s position.

 

13.1.3              The specific format for the discussions shall be left to the
discretion of the designated representatives.

 

13.1.4              If the designated representatives fail to resolve the
dispute, the Parties agree to escalate the dispute resolution process up to a
higher executive level, and then to the CEO level, provided that the dispute
shall not be escalated to any person that has a conflict of interest between the
Parties.  Each level of informal dispute resolution will be allowed no more than
fifteen (15) days, unless otherwise mutually agreed by the Parties.

 

13.2                        Formal Dispute Resolution.  If the informal dispute
resolution procedures described in the foregoing section do not resolve the
dispute, the Parties shall be free to seek a resolution of the dispute through a
court of competent jurisdiction or

 

17

--------------------------------------------------------------------------------

 

other manner consistent with the terms and conditions with this Agreement,
subject to Section 13.3 below.

 

13.3                        Obligation to Continue Performing.  At OCV’s option,
Ascent shall continue to perform services under this Agreement pending
resolution of the dispute, provided that (i) Ascent shall not be obligated to
provide services for more than a period of sixty (60) days after Ascent provides
OCV with notice that it believes it is entitled or that it intends to terminate
this Agreement pursuant to Section 14; and (ii) OCV is current and continues to
timely pay Ascent for all services under this Agreement pursuant to Section 9,
except that all amounts disputed under Section 9.2 shall also be paid as if
undisputed, provided that Ascent shall return to OCV such disputed amounts that
are later determined by a court of competent jurisdiction to be due and payable
to OCV.

 

Section 14.                                   Termination.

 

14.1                        Termination for Cause.  Either Party may terminate
this Agreement in whole but not in part (a) upon thirty (30) days prior written
notice, if the other Party commits a material breach of this Agreement and, in
the case of a breach capable of being cured, fails to cure such breach within
such thirty day-period after receiving written notice detailing the particulars
of such breach, or (b) upon prior written notice by the terminating Party if (i)
the other Party files a petition in bankruptcy or if such a petition is filed
against such Party, (ii) the other Party takes advantage of any insolvency law,
(iii) the other Party makes an assignment for the benefit of creditors, (iv) a
receiver, liquidator or trustee is appointed in respect of all or a substantial
portion of the other Party’s property or affairs, or (v) the other party
incurably breaches a material term of this Agreement.

 

14.2                        Termination for Failure to Pay.  Without limitation
of the provisions of Section 14.1, Ascent may terminate this Agreement, in whole
but not in part, upon written notice to OCV, if OCV fails to pay any amount due
and payable by the Payment Past Due Date after ten (10) days prior written
notice by Ascent.

 

14.3                        Termination without Cause.  Beginning one year from
the Effective Date, OCV may terminate the Agreement, in whole but not in part,
upon six (6) months prior written notice, for any reason.  OCV’s compliance with
Section 14.4 shall be its sole liability in connection with termination pursuant
to this Section 14.3.

 

14.4                        Effect of Termination.

 

14.4.1              Expiration or Termination.  Upon the expiration or
termination of this Agreement for any reason:

 

(a)                                  all licenses granted herein shall
immediately terminate;

 

(b)                                  each Party shall return to the other all
tangible materials embodying Confidential Information of the other in its
possession or control; and

 

18

--------------------------------------------------------------------------------

 

(c)                                  Ascent shall immediately comply with OCV’s
instructions with respect to the transfer of any Packages, Equipment, Content or
licensed software in Ascent’s possession.

 

14.4.2              Early Termination Fee.  The parties agree to the Early
Termination Fee provision attached as Exhibit H and incorporated herein by
reference.

 

Ascent shall use commercially reasonable efforts to mitigate its damages
(including utilizing a satellite broker or seeking a release from its
obligations under the Satellite Access Agreement) and OCV shall be entitled to a
reimbursement by Ascent of the Early Termination Fee paid (after taking into
account Ascent’s costs and expenses incurred in its mitigation efforts) to the
extent that Ascent receives any payments or release from payment obligations due
to its mitigation efforts.  Other than OCV’s third-party indemnification and
confidentiality obligations, payment by OCV pursuant to this subsection shall be
Ascent’s sole remedy and OCV’s sole liability for any breach or early
termination by OCV.

 

14.5                        Repeated Service Failures.  Notwithstanding any term
to the contrary, OCV may terminate this Agreement upon 30 days’ prior written
notice if any of the following circumstances occur: (i) in any consecutive two
month period, OCV is entitled to a Service Credit equal to 50% of the Monthly
Fee for each of the two months; or (ii) for any reason (including Satellite or
Satellite Transponder Failure or a Force Majeure Event), other than a reason
which is OCV’s fault, the Content Distribution System is not operational for a
period of 30 consecutive days.  If OCV terminates this Agreement pursuant to
this Section, then (x) OCV’s sole liability under this Agreement shall be
payment of all amounts owing to Ascent but unpaid through the date of
termination, (y) such termination shall be Ascent’s sole liability and OCV’s
sole remedy in connection with Ascent’s failure to meet its Content Distribution
Services obligations under this Agreement, and (z) both parties’ third-party
indemnification and confidentiality obligations shall survive such termination. 
Notwithstanding the foregoing, nothing in this subsection shall be construed,
upon the occurrence of the circumstances set forth above in 14.5(i), or (ii) to
(aa) require OCV to terminate this Agreement pursuant to this subsection, (bb)
limit OCV’s right to enforce the termination provision of its choice, or (cc)
limit OCV’s remedies if OCV does not terminate the Agreement pursuant to this
subsection.

 

14.6                        Duty of Cooperation.  Upon anticipated expiration or
termination of this Agreement for any reason, Ascent shall reasonably cooperate
in the transitioning of the Content Distribution Services provided under this
Agreement to another service provider.  Such cooperation shall include
reasonable telephonic assistance and transfer of any documents and files in
Ascent’s possession necessary for a new service provider to perform the Content
Distribution Services.  For assistance required after the effective date of
termination or expiration of this Agreement,

 

19

--------------------------------------------------------------------------------

 

OCV shall reimburse Ascent for its cost (as mutually agreed by the Parties) in
providing such assistance.

 

Section 15.                                   Indemnification.

 

15.1                        Mutual Indemnification.  Ascent and OCV agree to
indemnify, defend and hold the other Party, its parent and affiliated entities,
and the officers, directors, employees, partners, shareholders and agents of
each of the foregoing, harmless from and against any and all Losses arising out
of or caused by (i) the breach of this Agreement by such Party, and (ii) any
misrepresentation by such Party with respect to or in connection with the
Content or Services.

 

15.2                        Indemnification by OCV.  OCV agrees to indemnify,
defend and hold Ascent its parent and affiliated entities, and the officers,
directors, employees, partners, shareholders and agents of each of the
foregoing, harmless from and against any and all Losses (a) arising out of or
caused by the Content or Equipment, including, without limitation, the alleged
infringement or violation of the Content of any Law or of the rights of any
third party, including, but not limited to, breach of contract, defamation,
obscenity and indecency laws, civil right, property right, right of privacy,
right of publicity, copyright, trademark right, or other right of any person,
firm or corporation, and (b) associated with a claim by any owner or other
provider of any of the Content, by any Equipment owner or by any subscriber or
end customer of OCV against Ascent that relates to or arises out of Ascent’s
provision of the Services in compliance with this Agreement.

 

15.3                        Exclusion.  Neither Party shall have an obligation
to indemnify the other Party, which seeks indemnification (the “Indemnified
Party”), for any Losses claimed by the Indemnified Party arising out of, or that
would not have arisen but for the Indemnified Party’s: (i) breach of the
Agreement; or (ii) negligence or willful misconduct.

 

15.4                        Indemnification by Ascent.  Ascent agrees to
indemnify, defend and hold OCV its parent and affiliated entities, and the
officers, directors, employees, partners, shareholders and agents of each of the
foregoing, harmless from and against any and all Losses arising out of the
alleged infringement of an Intellectual Property Right of a third party by the
equipment (other than the Equipment) used by Ascent to provide the Services.

 

15.5                        Notice.  Promptly after receipt of any notice of the
commencement or threatened commencement of any civil, criminal, administrative,
or investigative action or proceeding involving a claim in respect of which the
Indemnified Party will seek indemnification pursuant to this Agreement from the
other Party (“Indemnifying Party”), such Party shall notify the Indemnifying
Party of such claim in writing.  No failure to so notify the Indemnifying Party
shall relieve it of its obligations under this Agreement except to the extent
that it can demonstrate actual damages attributable to such failure.   The
Indemnifying Party may, at its option, undertake the defense of any such claim
and permit the Indemnified Party to participate

 

20

--------------------------------------------------------------------------------

 

therein at its own expense.  The settlement of any such claim by the Indemnified
Party without the Indemnifying Party’s prior written consent (which shall not be
unreasonably withheld) shall release the Indemnifying Party from its obligations
hereunder with respect to the claim so settled.

 

Section 16.                                   Disclaimer of Damages.

 

16.1                        Limitation of Liability.  The parties agree to the
Limitation of Liability provision attached hereto as Exhibit G and incorporated
herein by reference.

 

16.2                        Ascent Disclaimer.  Provided that Ascent has
complied with its obligations under this Agreement, Ascent shall not be liable
or responsible for (i) any interception, or damages caused by interception of a
scrambled signal, and (ii) any Content outside the points where such signal
enters into or departs from Ascent’s Content Distribution System.

 

Section 17.                                   Confidentiality.

 

The Parties agree that they are bound by the terms of the Mutual Nondisclosure
Agreement, dated August 23, 2002, by and between Ascent (under its former name,
Liberty Livewire Corporation) and On Command Corporation attached hereto as
Exhibit D (the “NDA”). The Parties agree that the terms and conditions of the
NDA shall be incorporated by reference and form part of this Agreement. If there
is a conflict between this Agreement and the NDA, the NDA shall take priority
with regard to the creation, maintenance, use and protection of Confidential
Information (as defined in the NDA) to the extent of the conflict.
Notwithstanding the foregoing, the Parties agree that the term of the NDA shall
automatically extend through the Term of this Agreement.

 

Section 18.                                   General Provisions

 

18.1                        Survival.  Sections 1 (Definitions), 11
(Intellectual Property), 10.4 (Insurance), 14.4 (Effect of Termination), 15
(Indemnification), 16 (Disclaimer of Damages), 17 (Confidentiality), and 18
(General Provisions) shall survive the expiration or termination of this
Agreement for any reason.

 

18.2                        Assignment.  This Agreement shall not be assignable
without the consent of the other Party (such consent not to be unreasonably
withheld or delayed), except that no consent shall be required in connection
with assignment of the Agreement to any entity controlling, controlled by or
under common control with such party or in connection with the merger,
consolidation, sale, or other transfer of all or substantially all the business
and/or assets of OCV or of that part of the OCV’s business used in the
performance of this Agreement.  Unauthorized assignment shall be void.  This
Agreement shall be binding upon and shall inure to the benefit of the Parties’
authorized successors and assigns.  Except as expressly provided herein or upon
OCV’s prior written consent, Ascent may not subcontract any portion of the
Services.

 

21

--------------------------------------------------------------------------------

 

18.3                        Release Of Information.  Neither Ascent nor OCV
shall publicly announce or disclose the terms and conditions of this Agreement,
or advertise or release any publicity regarding this Agreement, without the
prior written consent of the other Party, except that either Party may disclose
the terms of this Agreement to bona fide potential investors who have executed
an agreement with such Party prohibiting further disclosure or use of any such
disclosed terms in connection with evaluating an investment in such Party.  This
provision shall survive the expiration, termination or cancellation of this
Agreement.  Notwithstanding the foregoing, the Parties shall use commercially
reasonable efforts to issue a joint press release regarding the services
provided hereunder immediately after the execution of this Agreement, and after
such joint press release, either Party may state, in the normal course of its
business, that it does business with the other Party and the general nature of
such business and that the Parties have entered into this Agreement and the
nature of the services.

 

18.4                        Modification.  No representations or statements of
any kind made by a representative of a Party, which are not stated herein, shall
be binding on the Party unless made in writing and signed by a duly authorized
representative of such Party.

 

18.5                        Relationship of Parties.  The Parties are
independent contractors and nothing in this Agreement shall be construed as
creating any agency, partnership, or other form of joint enterprise between the
Parties.  Neither Party will have the authority to act or create any binding
obligation on behalf of the other Party.

 

18.6                        Notices.  All notices required or permitted under
this Agreement will be in writing and will be deemed delivered (a) when actually
delivered if delivered in person, (b) one (1) day after being deposited in a
recognized express, overnight delivery service, (c) when actually received if
received by confirmed facsimile and such facsimile transmission is followed by a
mailed copy, or (d) three (3) days after being deposited in the United States
mail service, postage prepaid, addressed to the Party as follows:

 

22

--------------------------------------------------------------------------------

 

 

If to OCV:

On Command Corporation

4610 S. Ulster
6th Floor
Denver, CO 80237

Facsimile: 720-873-3433
Attention: Tom Lambrecht

with a copy to:

On Command Corporation
4610 S. Ulster
6th Floor
Denver, CO 80237
Facsimile 720-873-3397
Attention: Pamela Strauss, Esq.

 

If to Ascent:

Ascent Media Group, Inc.
520 Broadway, 5th Floor
Santa Monica, CA  90401
Facsimile:  310-434-7006
Attention:  José A. Royo

with a copy to:

Ascent Media Group, Inc.
520 Broadway, 5th Floor
Santa Monica, CA  90401
Facsimile:  310-434-7005
Attention:  Legal Department

 

Either Party may change its address for notice purposes by notifying the other
Party in accordance with this Section 18.6.

 

18.7                        Governing Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of California, without
reference to its conflict of laws principles.

 

18.8                        Entire Agreement.  This Agreement, including its
Exhibits, constitutes the entire agreement between the Parties with respect to
the subject matter hereof, and supersedes any prior or contemporaneous written
or oral agreements or understandings between the Parties with respect to the
subject matter hereof.  No amendment or modification to this Agreement will be
effective unless made in writing and signed by both Parties.  In the event of
any conflict between the terms hereof and those in any exhibits (except for
Exhibit A, which is a stand-alone agreement and is not incorporated herein)
hereto, the terms of this Agreement shall control unless expressly stated
otherwise in this Agreement.

 

18.9                        Waiver.  Failure by either Party to exercise any
rights under this Agreement in any one or more instances will not constitute a
waiver of such rights in any other instance.  Waiver by a Party of any default
under this Agreement will not be deemed a waiver of any other default.

 

18.10                 Severability.  If any provision of this Agreement shall be
declared illegal, invalid or unenforceable, in whole or in part, by a court of
competent jurisdiction, all other provisions of this Agreement shall remain in
full force and effect.

 

23

--------------------------------------------------------------------------------

 

18.11                 Laws.  Nothing contained in this Agreement shall be
construed so as to require the commission of any act contrary to Law, and
wherever there is any conflict between any provision of this Agreement and any
Law, such Law shall prevail; provided, however, that in such event the
provision(s) of this Agreement so affected shall be curtailed and limited only
to the extent necessary to permit compliance with the minimum legal requirement,
no other provisions of this Agreement shall be affected thereby and all of such
other provisions shall continue in full force and effect.

 

18.12                 No Third Party Beneficiaries.  The provisions of this
Agreement are only for the benefit of the Parties hereto, and no third party may
seek to enforce or benefit from such provisions.

 

18.13                 Costs.  Any costs incurred by either Party in enforcing
this Agreement shall be borne by the nonprevailing party.

 

18.14                 Headings.  Headings used in this Agreement are for
convenience of reference only and shall not be used to interpret any aspect of
this Agreement.

 

18.15                 Counterparts. This Agreement may be executed in
counterparts, each of which will be considered an original, and all of which
together will constitute one and the same instrument.

 

18.16                 Drafting.  Neither Party shall be deemed to be the drafter
of this Agreement, so that this Agreement shall not be construed against either
Party on the basis that such Party was the drafter thereof.

 

24

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, duly authorized representatives of the undersigned Parties
have executed this Agreement, to be effective as of the Effective Date.

 

 

 

Ascent Media Group, Inc.

 

 

 

 

 

 

 

By:

 

/s/ Richard C. Fickle

 

 

Richard C. Fickle

 

 

Executive Vice President

 

 

 

 

 

 

 

On Command Video Corporation

 

 

 

 

 

 

 

By:

 

/s/ Laurence M. Smith

 

 

Laurence M. Smith

 

 

Senior Vice President,

 

 

Sales and Distribution

 

25

--------------------------------------------------------------------------------