Portions of this exhibit have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment. The redacted portions are identified by brackets with the character
"*" indicating deleted information.
[*] CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.52
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
FAMILY CHANNEL AFFILIATION AGREEMENT
THIS AGREEMENT, dated as of December 28, 1989 is by and between The Family
Channel, a division of International Family Entertainment, Inc., a Delaware
corporation, ("FAM"), and SATELLITE SERVICES, INC., a Delaware corporation
("Affiliate"), 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
FOR AND IN CONSIDERATION of the mutual covenants and conditions hereinafter
set forth, the parties agree as follows:
1. SUPERSESSION
------------
This Agreement supersedes the CBN CABLE NETWORK, Affiliation Agreement
dated as of January 1, 1987, which Agreement is terminated this date.
2. DEFINITIONS.
------------
As used in this Agreement, the following terms shall have the respective
meanings indicated below:
(a) Systems: Cable television systems listed on the attached Schedule I,
-------
as Affiliate may add to or delete from pursuant to the terms of this Agreement,
[*]. Each of the Systems presently listed on Schedule I satisfies and any System
added thereto, will satisfy the control or interest criteria contained in
Exhibit A.
(b) Affiliate's Subscribers: Any person or entity to whom, at the time in
-----------------------
question, any System provides television service; provided that with respect to
--------
any multiple dwelling unit building or clustered living facility which has a
monthly bulk billing rate, the number of Subscribers each month shall be
calculated by dividing such monthly bulk billing rate by the rate for Basic
Service (as hereinafter defined) in the applicable System; [*]
[*] CONFIDENTIAL TREATMENT REQUESTED
(c) Basic Service: The television service package which is received by all
-------------
of Affiliate's Subscribers to the Systems in question and may be purchased by
any such Subscriber without additional obligation to purchase any other service
package.
(d) Expanded Basic Service: A television service package, excluding any
----------------------
subscription or other premium pay service, for which a charge is imposed in
addition to or in excess of the charge for Basic Service, and which is received
by the second greatest number of Affiliate's Subscribers.
(e) FAM Service: Positive value family programming typically including but
-----------
not limited to westerns, game shows, movies, inspirational programs and
specials, comedies, newscasts and news specials, sports series and specials,
original programming, documentaries and talk shows, as exemplified by the
program schedule for the month of December, 1989, attached hereto as Exhibit B.
(f) Territory: Any area served by the Affiliate's Cable Television
---------
Systems, and as to Non-Cable Distribution Systems, any non-franchised areas
within the counties served by the Systems or any non-franchised areas in
counties adjacent thereto.
(g) Marks: The service marks, trademarks, trade names and logos to the
-----
extent they are expressly being licensed herein for use in connection with the
distribution, promotion, marketing and sales of the FAM Service, or any other
service xxxx, trademark, trade name or log used by FAM from time to time in
connection with the FAM Service and furnished by FAM to Affiliate in facsimile
form.
3. GRANT OF RIGHTS.
---------------
(a) FAM hereby grants to Affiliate, and Affiliate hereby accepts, the non-
exclusive right to exhibit and distribute the FAM Service over the Systems for
reception by each such System's customers, in its Territory as defined in
Paragraph 1(f). [*]
2
[*] CONFIDENTIAL TREATMENT REQUESTED
Affiliate agrees to make available the FAM service on Systems, 24 hours per day,
7 days per week, during the term hereof, except for those Systems which did not
carry the FAM Service full-time on the date hereof provided, Affiliate shall use
reasonable efforts to change the FAM Service to a full-time basis on any such
System which is not full-time on the date hereof. Each System carrying the FAM
Service shall be listed in Schedule 1 attached hereto. Affiliate shall give
thirty (30) days written notice to FAM of its addition of any such System.
Subject to the thirty (30) days notice requirement, upon certification by an
authorized officer of Affiliate that a System meets the criteria set forth in
Exhibit A, said System shall be automatically included in this Agreement. The
terms of any and all agreements between FAM and such System which meets the
criteria set forth in Exhibit A shall become null and void and of no further
effect, effective upon the date such System is added to this Agreement.
Affiliate may at any time or from time to time delete Systems from this
Agreement and may amend Schedule 1 from time to time to reflect the addition or
deletion of Systems, provided it gives FAM a minimum of ninety (90) days prior
written notice of such deletion and upon the request of FAM an opportunity to
meet with representatives of Affiliate. Notwithstanding the foregoing, [*]
3
[*] CONFIDENTIAL TREATMENT REQUESTED
(b) FAM hereby grants to Affiliate a non-exclusive license to use the
marks solely in connection with the distribution, promotion, marketing and sale
of the FAM Service.
4. TERM.
----
(a) The term of this Agreement shall be for approximately eleven (11)
years and four (4) months commencing as of the date of Closing under the
Subscription Agreement defined in Paragraph 17(i) hereof, and ending on May 1,
2001, but shall be automatically reviewed for successive one (1) year terms
unless either party gives the other party written notice of cancellation, as
follows. The notice shall be given no less than one year prior to the end of the
initial term and no less than ninety (90) days prior to the end of any renewal
term, [*]
In event of expiration of the original or any renewal term, if no new
4
[*] CONFIDENTIAL TREATMENT REQUESTED
agreement has been reached, either FAM or Affiliate may discontinue the delivery
of the FAM Service to Affiliate upon three hundred sixty-five (365) days prior
written notice.
5. TRANSMISSION BY FAM AND DISTRIBUTION BY AFFILIATE OF THE FAM SERVICE.
--------------------------------------------------------------------
(a) FAM shall arrange and pay at its expense for transmission of the FAM
Service to each System by means of a domestic primary cable communications
satellite. Affiliate shall, at its own expense, obtain and install one or more
earth stations and/or any other equipment necessary to receive and distribute
the FAM Service throughout each System. Affiliate shall, at its own expense,
obtain and install one or more earth stations and/or any other equipment
necessary to receive and distribute the FAM Service throughout each System.
Affiliate shall receive the FAM Service at each earth station (or such other
receiving equipment which may be utilized by Affiliate) and, except as otherwise
expressly provided herein, shall distribute the Programming transmitted by FAM
to and throughout each such System exactly as transmitted by FAM, without delay,
addition, deletion, alteration, editing or any amendment thereof.
(b) The FAM Service shall be included in Basic Service on each of the
Systems receiving the FAM Service, [*]
(c) The FAM Service is presently delivered on Galaxy I, Transponder 11,
and Satcom F1-R. FAM also contemplates delivering the FAM Service on GE
Americom's C-3 and C-4 satellites, when available. Affiliate shall receive and
distribute The FAM Service designated the e "East Coast Feed" in all systems in
the Eastern, Central and Mountain Time Zones, and the "West Coast Feed" for
systems in the Pacific Time Zone. Those Systems located in the Pacific Time Zone
may carry the East Coast Feed of the FAM Service if they do not have or cannot
install the equipment necessary to
5
receive the West Coast Feed, provided FAM shall have the option to make
available to such Affiliates the necessary equipment, in which event such
Affiliate shall thereafter carry the West Coast Feed. Notwithstanding the
foregoing, in the event cable operators representing eighty-five percent (85%)
or more of the subscribers in any DMA located in the Mountain or Pacific Time
Zones desire to carry a Feed other than as provided in the previous two
sentences, they may carry such other Feed. FAM acknowledges that Affiliate is
not responsible for monitoring compliance with respect to which Feed a System is
carrying and FAM will notify Affiliate if any System is not complying with the
foregoing three sentences and such non-compliance shall not be considered a
breach of this Agreement. FAM reserves the right to change the satellite or
transponder carrying the FAM signal upon notification to Affiliate, except in
case of force majeure, at least ninety (90) days prior to such change; provided,
--------
however, that such satellite or transponder must be commonly used in the cable
-------
television industry. In the event a System is not capable of receiving such
satellite without incurring material additional cost, this Agreement shall no
longer apply to such System (including the guarantee in Paragraph 3(a)). Such
notice of change of satellite or transponder shall also contain a temporary
suspension of the distribution provisions in this Agreement for such minimum
reasonable time as is necessary for Affiliate to accomplish the reorientation of
earth stations and Affiliate to accomplish the reorientation of earth stations
and other equipment necessary to receive the FAM Service signal. Anything in
this Agreement to the contrary notwithstanding, FAM shall not be liable to
Affiliate, any Subscriber of Affiliate, or any third party, as a result of such
temporary suspension.
(d) FAM shall credit Affiliate for any temporary suspension or for any
continuous interruption of service of twenty-four (24) hours or longer; such
interruption being measured from the time Affiliate notifies FAM of the
interruption or from the time a major outage is known to FAM. Credit is given
to Affiliate on that portion of the service which is affected by the
interruption in an amount equal to the proportionate part of the Service Fee in
twenty-four (24) hour multiples for each twenty-four (24) hour outage or
interruption. No credit will be allowed for any interruption caused by
negligence of Affiliate or the Systems.
(e) FAM and Affiliate shall each use their respective reasonable efforts
to maintain for the FAM Service a high quality of signal transmission, reception
and delivery.
(f) Affiliate shall insure that each Cable Television System shall
acquire, install and maintain equipment capable of descrambling the satellite
signal of the FAM Service (which equipment shall be compatible with that
acquired to descramble other basic cable services) for uninterrupted service.
(g) Affiliate will use reasonable precautionary efforts to prevent
unauthorized reception and use of the FAM Service, and will
6
[*] CONFIDENTIAL TREATMENT REQUESTED
use reasonable efforts to notify FAM as soon as possible of any unauthorized use
or copying of the FAM Service of which it has knowledge, and further will
cooperate fully with FAM in any legal proceeding commenced by FAM in connection
therewith (but Affiliate shall not be required to incur any legal or other
expense unless it so elects). The foregoing shall not be deemed to prohibit home
taping by Affiliate's subscribers for their private use. Further, FAM
acknowledges that Affiliate may undertake as part of its business the connection
of Affiliate's Subscribers' videotape recorders, VCRs or other devices intended
for the duplication of video programming for home viewing; and the provisions of
this Agreement shall not restrict nor contemplate the restriction of Affiliate,
nor shall Affiliate be restricted, in regard to said undertaking.
(h) FAM agrees that signal distribution beyond traditional television
video and audio (including stereo), including, but not limited to the use of the
Vertical Blanking Interval ("VBI"), is not essential to, nor a part of, the
transmission of the FAM Service, and thus, all rights in and to signal
distribution beyond traditional television video and audio (including stereo),
including but not limited to the use of VBI, are retained by and reserved to
Affiliate, and nothing herein shall preclude Affiliate from exercising and
exploiting such rights by means and in any locations, concurrently herewith
freely and without restrictions, provided that Affiliate indemnify and hold FAM
harmless from all costs, liability, damages and expenses related thereto.
6. CONTENT OF THE SERVICE.
----------------------
(a) Subject to the following Paragraphs, FAM shall have the sole right and
privilege to determine the format of and the programming to be included in the
FAM Service and any and all changes in such format and in the selection,
scheduling, substitution and withdrawal of any programs therein or therefrom
shall be at the sole discretion of FAM.
(b) The FAM Service shall center on positive value family programming
typically including but not limited to westerns, game shows, movies,
inspirational programs and specials, comedies, newscasts and news specials,
sports series and specials, original programming, documentaries and talk shows.
FAM shall generally endeavor to include in the FAM Service programming similar
in nature, quality and quantity to the programming outlined in the attached
program schedule (Exhibit B). [*]
7
[*] CONFIDENTIAL TREATMENT REQUESTED
[*]
7. SERVICE FEES.
------------
(a) Affiliate shall quarterly pay to FAM at X.X. Xxx 0000, Xxxxxxx,
Xxxxxxxx 00000 monthly service fees calculated and scheduled as follows:
(i) For each Affiliate Subscriber to the FAM Service, Affiliate shall
pay a Service Fee in an amount equal to [*]
8
[*] CONFIDENTIAL TREATMENT REQUESTED
(b) Affiliate shall pay to FAM monthly Subscriber Fees (as set forth
above) for each of Affiliate's Subscribers to the FAM Service within [*]. No
adjustment shall be made for part-time carriage, even if such carriage is
permitted by FAM.
(c) If in any audit period Affiliate pays FAM an amount more than [*]
less than the amount required under the provisions of this Agreement, Affiliate
shall be liable to FAM for FAM's reasonable costs in determining and collecting
the additional payment due, including, without limitation, reasonable counsel
fees and including the costs of any inspection or audit pursuant to this
Agreement.
(d) [*]
9
[*] CONFIDENTIAL TREATMENT REQUESTED
For purposes of calculating the number of Subscribers in the first month, the
number of Subscribers, shall be prorated as follows:
Subscribers x number of days Service is carried in month
------------------------------------------
total number of days in month
(e) If Affiliate fails to make any [*] when due. Affiliate
shall also be liable for a late payment charge equal to [*] (or, if less, the
maximum lawful rate of interest) per month thereon, such charge to be prorated
for any delinquency period of less than one month.
(f) [*]
(g) [*]
8. REPORTS AND RECORDS.
-------------------
(a) [*]
(b) Within 105 days following the end of each of Affiliate's fiscal years
during any portion of which this Agreement is in effect, Affiliate shall deliver
to FAM a letter addressed to FAM
10
[*] CONFIDENTIAL TREATMENT REQUESTED
signed by an executive officer of Affiliate certifying as to the completeness
and accuracy of the statements delivered by Affiliate with respect to the number
of Affiliate's Subscribers in such fiscal year, and such other information as
FAM may reasonably request. Affiliate's obligation to supply such letters shall
continue after the termination of this Agreement until FAM receives full payment
of all amounts due and owing.
(c) Affiliate shall keep accurate and complete records and accounts of
xxxxxxxx, subscribers and all other matters which pertain to Affiliate's FAM
Subscribers. Upon not less than five (5) business days prior notice to
Affiliate, all such records and accounts shall be available for inspection,
audit and photocopying by FAM or its representatives, during normal business
hours at any time during the term of this Agreement and for one (1) year
thereafter, but not more than twice during any 365 day period. Prior to such
audit, FAM, or its agent, shall execute a non-disclosure agreement with respect
to Affiliate's books and records in a form reasonably satisfactory to Affiliate
and FAM. Neither FAM's acceptance of any information or payment nor FAM's
inspection or audit of Affiliate's records or accounts will prevent FAM from
later disputing the accuracy or completeness of any payment made or information
supplied by Affiliate, provided, however, that FAM may not examine books and
records except with respect to payments due in the then current or previous
calendar year, nor dispute payment by Affiliate for any time prior to such
period, except that FAM may dispute any issue raised during such period beyond
the expiration of the audit period.
9. COMMERCIAL AVAILABILITIES.
-------------------------
(a) FAM shall make available to Affiliate not less than [*] each day or an
average of [*] in every hour for commercial availabilities for Affiliate's
cablecast over Affiliate's Systems, to be used at Affiliate's option and
control. The schedule of such commercial availabilities shall be supplied by FAM
in a timely manner. Commercial availabilities shall be one or two minutes in
length, and shall be substantially comparable to the Schedule attached as
Exhibit D hereto.
(b) Affiliate shall comply with the following standards:
Commercials shall be consistent with FAM's role in providing wholesome
family-oriented programming and upholding traditional Judeo-Christian
values. Specifically prohibited is advertising or programming that promotes
or contains desirable connotations in reference to alcohol, tobacco
products, narcotics, gambling, contraceptives, sexual promiscuity, the
occult, astrology, horoscopes, feminine hygiene products of a personal
nature and "X" rated movies. In the event of
11
repeated violations of this provision by a System, Affiliate will take
reasonable steps to prevent any continued violation by such System.
(c) FAM reserves the right to occasionally alter Affiliate's schedule or
to preempt Affiliate's commercial availabilities, without liability to
Affiliate, for FAM programming, or to provide coverage of an event of public
interest or importance, in which event FAM shall provide equally valuable good
time to Affiliate as soon as practicable.
10. PROMOTION AND RESEARCH.
----------------------
(a) Affiliate shall use reasonable efforts, in accordance with this
Agreement, to promote an awareness of the FAM Service among Affiliate's
Subscribers and potential subscribers. FAM shall provide promotional and
marketing advice and information and shall make available to Affiliate, from
time to time, such sales and promotional materials (including, but not limited
to, print and video materials) for purposes of marketing and promotion of the
FAM Service, as FAM and Affiliate may mutually deem appropriate.
(b) Affiliate has the non-exclusive right to package, price (to the
subscriber) and market the FAM Service to any potential or actual Affiliate's
SMATV Subscribers within the Territory, provided the FAM Service shall not be
packaged with any service featuring "X" rated films, or any other material
deemed offensive to FAM unless FAM is also offered without such packaging.
(c) FAM may, from time to time, undertake marketing tests and surveys,
rating polls and other research in connection with the FAM Service. Affiliate
shall have the right to approve any tests, surveys or other research which apply
specifically to the Systems, and shall cooperate with FAM in such approved
research by providing FAM with information which FAM reasonably requests. FAM
shall provide Affiliate with the results of such research to the extent it
applies to the Cable Television Systems.
(d) Affiliate agrees that unless notified to the contrary by FAM, in all
trade references, advertising, promotion and for all other purposes, FAM shall
be referred to exclusively as "The Family Channel."
(e) Affiliate acknowledges that the names and Marks of and all rights and
title in the programming and all Marks, materials, format s and concepts
relating to FAM shall belong to FAM, and Affiliate has not and will not acquire
any property of FAM and that Affiliate has not and will not acquire any
proprietary or other rights or interests therein by reason of this Agreement.
11. REPRESENTATIONS AND WARRANTIES.
------------------------------
12
[*] CONFIDENTIAL TREATMENT REQUESTED
(a) FAM represents and warrants to Affiliate that (i) The Family Channel
is a division of International Family Entertainment, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware; (ii) FAM
has the corporate power and authority to enter into this Agreement and to fully
perform its obligations hereunder; and (iii) FAM is under no contractual or
other legal obligation which shall in any way interfere with its full, prompt
and complete performance hereunder.
(b) Affiliate represents and warrants to FAM that (i) Affiliate is a
corporation duly organized and validly existing under the laws of the State of
Delaware; (ii) Affiliate has the corporate power and authority to enter into
this Agreement and to fully perform its obligations hereunder; (iii) Affiliate
is under no contractual or other legal obligation which shall in any way
interfere with its full, prompt and complete performance hereunder; and (iv)
Affiliate is authorized to act on behalf of each Cable Television System.
12. [*]
13. INDEMNITY AND DISCLAIMERS.
-------------------------
(a) Affiliate and FAM shall each indemnify and forever hold harmless the
other, the other's affiliate companies and their respective officers, directors,
employees and agents from all liabilities, claims, costs, damages and expenses
(including, without limitation, reasonable counsel fees) arising out of any
breach of any representation contained in or any of its obligations pursuant to
this Agreement.
(b) FAM will indemnify Affiliate from and against any and all claims,
liabilities, costs and expenses arising out of the distribution, pursuant to
this Agreement, of the FAM Service to the extent that such claims, damages,
liabilities, costs and expenses are: (i) based upon alleged libel, slander,
defamation,
13
invasion of the right of privacy, or violation or infringement of copyright or
literary or dramatic rights arising out of the content of the FAM Service
(except for alleged violation of music performance rights as covered below);
(ii) based upon the distribution of programs as furnished by FAM without any
deletions by Affiliate except as required by FAM; and (iii) not based upon any
material added by Affiliate to such programs (as to which deletions and added
material Affiliate shall, to the like extent, indemnify FAM, all network
advertisers, if any, on such programs, and the advertising agencies of such
advertisers). The foregoing notwithstanding, FAM shall indemnify Affiliate as to
music performance rights for any alleged performance form FAM to the headend,
but FAM shall not be obligated to indemnify Affiliate with regard to any claims
based upon the failure to obtain any musical performance license related to the
distribution of the FAM Service from headend to Subscriber, provided that FAM
shall use its diligent efforts to obtain a single license fee for transmission
of the FAM Service to Affiliate's Systems for distribution to Affiliate's
Subscribers of copyrighted musical work. FAM makes no warranty that the music
contained in its Service may be performed without a music performance license.
(c) Each party shall so indemnify the other only if such other party gives
the indemnifying party prompt notice of any claim or litigation to which its
indemnity applies; it being agreed that the indemnifying party shall have the
right to assume the defense of any or all claims or litigation to which its
indemnity applies and that the indemnified party will cooperate fully with the
indemnifying party in such defense and in the settlement of such claim or
litigation. In the event the indemnitor elects to assume the defense of any such
claim or litigation, the indemnitor's obligations with respect thereto shall be
limited to holding the indemnified party harmless from and against any loss or
damage or costs caused by or arising out of any judgment or any settlement
approved by the indemnitor in connection with any such claim or litigation. If
the indemnitor does not assume the defense of any such claim or litigation, any
settlement thereof which might affect the indemnitor's rights shall be subject
to the indemnitor's prior approval, which approval shall not be unreasonably
withheld.
(d) Except as herein provided to the contrary, neither Affiliate nor FMA
shall have any rights against the other party hereto for claims by third persons
or for the nonoperation of facilities or the nonfurnishing of the FAM Service if
such nonoperation or nonfurnishing is due to Acts of God, inevitable accident,
fire, lockout, strike or other labor dispute, riot or civil commotion, act of
government or government instrumentality (whether federal, state or local),
illness or incapacity of any important performer, failure in whole or in part of
transmission facilities (including, but not limited to production, satellite
transmissions, "uplinking," "downlinking," or other distribution) or other cause
beyond such party's reasonable control. If the FAM
14
Service is not delivered as a result of any of the above-referenced causes, the
Service Fees, pursuant to Paragraph 5(d), shall be suspended during such time,
in the same manner as provided in Paragraph 5d, Affiliate may terminate the
Agreement if the interruption exceeds ninety (90) days, provided that Affiliate
shall have first used its reasonable efforts to cure such interruption if such
cure is an obligation of Affiliate under another provision of this Agreement.
14. CONFIDENTIALITY.
---------------
(a) Neither Affiliate nor FAM shall disclose to any third party (other
than its respective employees, in their capacity as such), any information,
including any press releases, with respect to the terms and provisions of this
Agreement, and FAM shall not disclose any information obtained in any inspection
and/or audit of Affiliate's books and records, except: (i) to the extent
necessary to comply with law or the valid order of a court of competent
jurisdiction, in which event the party making such disclosure shall so notify
the other as promptly as practicable (and, if possible, prior to making such
disclosure) and shall seek confidential treatment of such information; (ii) as
part of its normal reporting or review procedure to its parent company, its
auditors, appraisers, and attorneys agree to be bound by the provisions of this
Section; (iii) in order to enforce its rights pursuant to this Agreement; (iv)
to investment banks, and financial institutions (provided such investment bank
and financial institutions agree to be bound by this confidentiality provision)
and (v) if mutually agreed by Affiliate and FAM in advance in writing.
(b) FAM shall comply with all provisions of the Cable Communications
Policy Act of 1984 as it relates to FAM including without limitation the
prohibition against disclosure to a third party of certain information regarding
cable subscribers, to the extent such prohibition is a requirement of the
version of the Cable Act which is then in effect.
15. TERMINATION.
-----------
In the event of any material breach or default hereof by either party to
this Agreement, then the non-breaching and/or non-defaulting party may terminate
this Agreement upon sixty (60) days' written notice to the other party if such
other party defaults in the performance of any material obligation of such other
party hereunder (which default shall be specified in such notice) and such
default is not cured within such sixty (60) day period.
16. NOTICE.
------
15
All notices and communications given hereunder shall, unless otherwise
specifically provided, be in writing by personal delivery to the President of
Affiliate, and to the President of FAM or by certified mail, telegram, or Telex
or Facsimile at the following addresses of Affiliate and FAM, unless either
party at any time or times designates another address for itself by notifying
the other party thereof by certified mail, in which case all notices to such
party shall thereafter be given at its most recently so designated address.
Notice shall be deemed given seven (7) days after mailing.
If to Affiliate: Satellite Services, Inc.
Regency Plaza One
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Copy to: Legal Department
If to FAM: The Family Channel
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attn: President
Copy to: Office of General Counsel
The Family Channel
World Outreach Support Center
CBN Center
Xxxxxxxx Xxxxx, XX 00000
17. GENERAL.
-------
(a) Entire Agreement: This Agreement together with the Exhibits and
----------------
schedules attached hereto and incorporated by reference herein contains the
entire understanding of the parties hereto relating to the subject matter hereof
and can be amended, modified or terminated only by a writing signed by both
parties. Any waiver must be in writing and signed by the party whose rights are
being waived and no waiver by either Affiliate or FAM of any breach of any
provision hereof shall be or be deemed to be a waiver of any preceding or
subsequent breach of the same or any other provision of this Agreement.
(b) Governing Law: The obligations of Affiliate under this Agreement are
-------------
subject to all applicable federal, state and local laws, rules and regulations
(including but not limited to the Cable Communications Policy Act of 1984 as
amended from time to time, the Communications Act of 1934 as amended and the
rules and regulations of the Federal Communications Commission) and this
Agreement and all matters or issues collateral hereto shall be governed by the
16
laws of the State of Virginia applicable to contracts performed entirely
therein.
(c) Relationship of Parties: Neither Affiliate nor FAM shall be or hold
-----------------------
itself out as the agent of the other under this Agreement. None of Affiliate's
Subscribers shall be deemed to have any privity of contract or direct
contractual or other relationship with FAM by virtue of this Agreement or FAM's
delivery of the FAM Service to Affiliate hereunder. Nothing contained herein
shall be deemed to create, and the parties do not intend to create, any
relationship of partners of joint venturers as between Affiliate and FAM by
virtue of this Agreement, and neither party is authorized to or shall act toward
third parties or the public in any manner which would indicate any such
relationships with the other. FAM disclaims any present or future right,
interest or estate in or to the transmission facilities of Affiliates or the
parent, subsidiaries, partnerships or joint ventures controlling the Cable
Television System on which the programming signals delivered by Affiliate are
transmitted, such disclaimer being to acknowledge that neither Affiliate nor the
transmission facilities of the Cable Television Systems (and the owners thereof)
are common carriers. FAM agrees that, except as otherwise provided herein,
Affiliate has and will continue to have complete authority and power to control
and to designate the channel or channels over which such programming is to be
carried by Affiliate in any market in accordance with the terms of this
Agreement.
(d) Assignment: This Agreement including both its obligations and benefits
----------
shall pass to and be binding on the respective transferees and successors of the
parties, except that neither this Agreement nor either party's rights or
obligations hereunder with respect to any Cable Television System shall be
assigned or transferred by either party without the prior written consent of the
other party, and that in no event shall the per subscriber rates set forth in
this Agreement be assignable or transferable. Notwithstanding the foregoing, no
consent shall be required if either party shall assign this Agreement to any
entity controlled by or affiliated with it, or which acquires substantially all
of its assets.
(e) Headings: The headings and captions of the sections of this Agreement
--------
are for convenience only and shall not in any way affect the interpretation of
this Agreement.
(f) Severability: If any provision of this Agreement or the application
------------
thereof to any person or circumstance shall to any extent be held in any
proceeding to be invalid or unenforceable, the remainder of this Agreement,
shall not be affect thereby; provided, however, that both parties shall
negotiate in good faith with respect to an equitable modification of the
provisions, or applications thereof, held to be invalid. In the event that
volume discounts or differentiated rates are declared null and void by
17
[*] CONFIDENTIAL TREATMENT REQUESTED
legislative enactment and Affiliate is required to pay a higher effective rate
as a result or if any other legislation is enacted which materially deprives
Affiliate of the overall economic benefits of this Agreement, if the parties
fail to reach an Agreement within 90 days after good faith negotiations with
respect to an equitable modification of this Agreement, Affiliate may terminate
this Agreement subject to the provisions of Paragraph 4(a).
(g) All rights not specifically and expressly granted Affiliate herein are
reserved by FAM.
(h) [*] In the event Affiliate cancels this Agreement or terminates
carriage of the FAM Service in any System, provided FAM receives ninety (90)
days prior written notice of such fact [*]
(i) This Agreement shall become effective upon the date of the Closing of
the IFE Subscription and Shareholder Agreement dated as of December 11, 1989, by
and among X.X. Xxxxxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxxxxxx Broadcasting Network,
Inc., TCI Development Corporation, Tele-Communications, Inc. and International
Family Entertainment, Inc. In the event the IFE Subscription and Shareholder
Agreement does not close on or before January 31, 1990, this Agreement shall be
null and void.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SATELLITE SERVICES, INC. THE FAMILY CHANNEL
NAME /s/ Xxxx Xxxxxx BY: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- --------------------------
Xxxxxxx X. Xxxxxxxxx
TITLE President President
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18
[*] CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
TO FAMILY CHANNEL
AFFILIATION AGREEMENT
SYSTEM QUALIFICATIONS
---------------------
1. Affiliate represents and warrants the following regarding each System
listed in Appendix I hereof:
a. that Tele-Communications, Inc. ("TCI") or a corporation, partnership,
or joint venture in which TCI owns, directly or indirectly, at least a [*]
equity interest, [*] or that TCI, directly or indirectly, owns a [*] equity
interest in such System or has an interest in or obligation of such System under
which TCI has the right to convert into or acquire at least the required
interest. An "indirect" ownership is an interest resulting from ownership
through any number of subsidiaries. The following are examples:
(i) A System is [*] owned by a subsidiary of TCI, [*] of the
outstanding capital stock of which subsidiary is owned by a wholly-owned
subsidiary of TCI; or
(ii) A System is [*] owned by a corporation or by a joint venture or
partnership, in which a wholly-owned subsidiary of TCI owns at least [*] of the
outstanding capital stock of such corporation or: if a general or limited
partnership or a joint venture, a direct or indirect wholly-owned subsidiary of
TCI is a partner which owns at least [*] of the outstanding partnership or joint
venture interests.
b. that Affiliate has been authorized, pursuant to a valid written
agreement in full force and effect to make and execute decisions on behalf of
each such System with respect to the Service, including but not limited to
billing and collection of fees, and Affiliate continues to exercise such
authority with respect to matters affecting the distribution of the Service by
such System;
c. that a valid franchise is in effect through the term of this Agreement
or franchisee has held a valid cable television franchise and continues to
operate in the franchise area under a claim of right or it is otherwise lawfully
operating or franchisee has held a valid cable franchise and is continuing to
operate while diligently pursuing, in good faith, its available judicial
remedies. For the above purposes, in the event franchise expires before the end
of the term of the Agreement, such franchise shall be deemed valid for so long
as franchisee is negotiating in good faith with the franchising authority for
the franchise renewal.
d. TCI is not sub-distributing and will not in the future sub-distribute,
nor does it claim to be authorized to sub-distribute, the Service throughout any
cable television System which does not satisfy the requirements set forth above.
19
[*] CONFIDENTIAL TREATMENT REQUESTED
2. [*]
20
