EXHIBIT 10.62
TRANSPONDER LEASE AGREEMENT
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This TRANSPONDER LEASE AGREEMENT (the "Agreement") is made and entered into
this 19/th/ day of March, 2001 (the "Effective Date"), by and between
INTERNATIONAL FAMILY ENTERTAINMENT, INC., a Delaware corporation ("IFE"), and
ARC HOLDINGS, LTD., a Delaware company ("Fox") (each, a "Party" and
collectively, the "Parties").
WHEREAS, a wholly-owned subsidiary of IFE (which subsidiary and IFE are
hereinafter referred to collectively as "IFE") and GE American Communications,
Inc. ("GE") previously entered into the C-3/C-4 Satellite Transponder Sales
Agreement, dated as of July 7, 1989 (the "IFE/GE Agreement"), a partially
redacted copy of which agreement is attached hereto and by this reference is
incorporated herein (capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the IFE/GE Agreement), pursuant to which
IFE owns the Fully Protected Transponder on the C-3 communications satellite
operated by GE the "Satellite") designated as C-Band transponder #1 (the
"Transponder"), and has the right to lease such Transponder to third parties;
WHEREAS, Fox has agreed to lease from IFE all of the capacity (with the
sole exception of the capacity currently being used by IFE for the transmission
of Fox Family Channel West (the "IFE Capacity")) on the Transponder (the
"Transponder Capacity"), which Fox has been using to provide service since
January 1, 2001 (the "Commencement Date"); and
WHEREAS, the Parties now desire to set forth, in this Agreement, the
definitive terms and conditions pursuant to which Fox will lease the Transponder
Capacity from IFE.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the Parties agree as follows:
ARTICLE 1
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LEASE OF TRANSPONDER CAPACITY
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1.1 Lease. IFE agrees to lease to Fox, and Fox agrees to lease from IFE,
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the Transponder Capacity in accordance with the terms and conditions hereinafter
set forth.
1.2 Lease Term. The Parties acknowledge that the term of Fox's lease of
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the Transponder Capacity (i.e., "Lease Term") commenced on the Commencement
Date, and, unless previously terminated in accordance with the provisions of
this Agreement, shall expire at the End-of-Life of the Satellite.
1.3 Use of Transponder Capacity. Fox acknowledges and agrees that the
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Transponder Capacity may be used solely in accordance with, and subject to, the
provisions and restrictions in Section 9(A) and 9(C) of the IFE/GE Agreement.
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
1.4 Right of First Refusal. Fox acknowledges and agrees that it will not
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take any action that would deprive IFE of the right to peaceful and quite use
and enjoyment of the IFE Capacity, provided, however, that in no event shall
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IFE's or any third party's use of the IFE Capacity interfere in any manner with
Fox's use of the Transponder Capacity in accordance with this Agreement.
1.5 Right of First Refusal. If at any time during the Lease Term IFE
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desires to lease or otherwise assign the IFE Capacity to a third party, IFE
shall, by written notice to Fox, first offer such IFE Capacity to Fox in
accordance with the payment terms set forth in Section 2.4 hereof and the
remaining terms of this Agreement. If Fox does not accept such offer within
thirty (30) days of such written notice, IFE shall be entitled to lease or
assign the IFE Capacity to the third party at IFE's sole discretion, provided,
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however, that such third party shall be subject to obligations and restrictions
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that are no more favorable and that are no less restrictive than those that
apply to IFE pursuant to this Agreement.
1.6 Option for Successor Satellite Company. If, pursuant to Section 25 of
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the IFE/GE Agreement, IFE enters into an agreement with GE for the purchase or
lease of one or more transponders on a Successor Satellite (the "IFE/GE
Successor Agreement"), Fox shall have the option to lease from IFE a pro rata
portion of such transponder on the Successor Satellite (the "Option"),
reflecting the current ratio between the Transponder Capacity and the total
transponder capacity available to IFE on the Satellite. Within thirty (30) days
after the initialization of the negotiation of the IFE/GE Successor Agreement,
IFE shall provide Fox with written notice of such negotiation, and Fox shall
have up to 180 days after the execution of the IFE/GE Successor Agreement to
exercise the Option, in which event the Parties shall negotiate in good faith an
agreement for the lease by Fox of the applicable capacity on the Successor
Satellite (the "Fox/IFE Successor Agreement") on substantially the same terms
and conditions as the IFE/GE Successor Agreement, including, without limitation
(a) the granting to Fox of rights, remedies and obligations vis-a-vis IFE that
are no more or less favorable than the rights, remedies and obligations of IFE
vis-a-vis GE; and (b) a monthly payment to be made by Fox to IFE that does not
exceed a pro rata portion of the total payment made or to be made by IFE to GE
for the transponder capacity leased or purchased by IFE on the Successor
Satellite, reflecting the ratio between the transponder capacity leased or
purchased by Fox and the total transponder capacity available to IFE on the
Successor Satellite. Neither party shall have any further obligation with
respect to the Fox/IFE Successor Agreement in the event that IFE does not enter
into the IFE/GE Successor Agreement, provided, however, that, if IFE chooses not
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to negotiate, or does not enter into, the IFE/GE Successor Agreement, it shall
assign to Fox the right to enter into similar negotiations with GE on Fox's own
behalf, to the extent permissible under the HWGE Agreement.
ARTICLE 2
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LEASE PAYMENTS
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2.1 Monthly Payments. Fox shall pay a monthly fee to IFE in the amount of
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* * * United States Dollars (U.S.$ * * *) (the "Monthly Payment"), which payment
shall cover the
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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lease of the Transponder Capacity and TT&C Services and In-Orbit Protection with
respect to said Transponder Capacity. Each Monthly Payment shall be made in
advance, with the initial payment due on the Effective Date, and each payment
hereafter due on or before the first day of each calendar month, until the end
of the Lease Term. The initial payment, due on the Effective Date, shall consist
of * * * United Stated Dollars (U.S.$ * * *), representing an amount equivalent
to Monthly Payments for the period from the Commencement Date through the last
day of the month in which the Effective Date occurs. In the event that, for any
reason other than those listed in Section 5.2 hereof, this Agreement terminates
prior to the end of a month for which the Monthly Payment has been paid, Fox
shall receive a refund for the remaining days of said month, calculated at a
daily rate of one-thirtieth (1/30th) of the Monthly Payment (the "Daily Rate").
2.2 Manner of Payment. The Monthly Payment shall be deemed to be made only
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upon receipt by IFE of collected funds, and shall be made by bank wire transfer
to bank account as IFE may designate by notice to Fox, or by cashier's or
certified check from a United States bank, or unless any such previously made
payment is returned for nonpayment, by check drawn from a United States bank,
delivered to a location designate by IFE.
2.3 Late Payment. In the event that the Monthly Payment for any month is
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received by IFE on or before the date on which such Monthly Payment is due
hereunder, such Monthly Payment shall be subject to a late charge at the rate of
* * * percent (* * * %) per month on such overdue amount, compounding monthly,
from the date such Monthly Payment is due until it is actually received by IFE.
Fox acknowledges and agrees that such late charge is reasonable under all of the
circumstances existing as of the date hereof.
2.4 Lease of IFE Channel. If Fox elects to lease the IFE Channel pursuant
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to an offer by IFE in accordance with Section 1.5 hereof, the Monthly Payment
shall be increased to the amount of * * * United States Dollars (U.S.$ * * *).
2.5 Taxes. Fox shall be responsible for, and shall indemnify IFE against,
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any and all taxes accruing after the Commencement Date that may be asserted with
respect to the Transponder Capacity, including without limitation, taxes
resulting from the lease of the Transponder Capacity and/or Fox's use of the
Transponder Capacity (except for income taxes associated with payments received
by IFE from Fox for such lease), and taxes that are imposed on IFE with respect
to its ownership of the Transponder pursuant to the IFE/GE Agreement. IFE shall
pay such taxes as they become due and shall provide Fox with reasonable notice
of such payments; Fox shall, within thirty (30) days of receiving each such
notice, reimburse IFE for all such amounts, provided, however, that IFE shall be
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responsible for, and shall indemnify Fox against, any penalties and fees that
may be asserted as a result of IFE's non-payment of an such taxes. For purposes
of this Agreement, "taxes" shall mean all foreign, federal, state, provincial,
and local income, franchise, sales, use, receipts, value added, transfer,
profits, excise, stamp, withholding and property taxes, duties or assessments
and governmental charge of any kind whatsoever (including interest, penalties
and additions with respect thereto).
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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ARTICLE 3
TRANSPONDER FAILURE, PROTECTION
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3.1 Performance Specifications. IFE MAKES NO WARRANTY WHATSOEVER TO FOX,
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WHETHER STATUTORY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THOSE OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO ANY
GOODS, SERVICES OR EQUIPMENT PROVIDED HEREUNDER, INCLUDING, WITHOUT LIMITATION,
WITH RESPECT TO WHETHER THE TRANSPONDER MEETS OR WILL MEET THE TRANSPONDER
PERFORMANCE SPECIFICATIONS SET FORTH IN ATTACHMENT A TO THE IFE/GE AGREEMENT. In
the event, however, that the Transponder fails to meet such Transponder
Performance Specifications, IFE shall seek to enforce any warranty or remedy
that IFE may have with respect to the Transponder pursuant to the IFE/GE
Agreement, including, without limitation, enforcing any rights reasonably
believed by Fox (as detailed in a written notice to IFE) to be possessed by IFE
pursuant to said agreement, and shall provide to Fox the benefit of any remedy
actually provided to IFE by GE. IFE shall exert the same effort on Fox's behalf
as it would exert on its own behalf in pursuing its own rights and remedies
under the IFE/GE Agreement, and in no event less than those efforts that would
be considered standard industry practice. Fox shall reasonably cooperate with
and aid IFE in enforcing any such warranty or remedy, and in taking any action
that IFE is required or reasonably elects to take, pursuant to the IFE/GE
Agreement, to rectify such failure, including, without limitation, increasing
the power and/or changing other parameters of Fox's transmission to the
Satellite, or discontinuing or suspending Fox's use of the Transponder Capacity,
to the extent that any such action is required by GE.
3.2 Transponder or Satellite Failure. In the event that the Transponder
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becomes unavailable for use by Fox as a result of the Transponder's becoming a
Failed Transponder or the Satellite's becoming a Failed Satellite, and GE
provides IFE with the use of a Protection Transponder, a transponder on a
Protection Satellite, or another transponder, as a replacement for the
Transponder pursuant to the IFE/GE Agreement (any of the foregoing, an
"Alternative Transponder"), IFE shall provide such Alternative Transponder for
use by Fox in accordance with the terms and conditions hereof as if such
Alternative Transponder were the Transponder, subject to the requirements,
limitations and conditions imposed on IFE pursuant to the IFE/GE Agreement with
respect to the use of such Alternative Transponder, including, without
limitation, all requirements with respect to priority of usage and
preemptibility with respect to such Alternative Transponder.
3.3 Refunds. In the event that, pursuant to Article 7 of the IFE/GE
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Agreement, as a result of a Transponder Failure with respect to the Transponder
or a Satellite Failure with respect to the Satellite, GE provides a refund to
IFE instead of an Alternative Transponder, then IFE shall, upon receiving such
refund, provide a credit (the "Failure Credit") to FOX with respect to such
failure. The amount of the Failure Credit, as determined by IFE in a notice to
Fox, shall be credited against the next due Monthly Payment after IFE sends such
notice; in the event no further Monthly Payments are due, such amount shall be
refunded to Fox within thirty (30) days
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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of IFE's receipt of the refund from GE. The Failure Credit with respect to any
month for which the Monthly Payment has been made by Fox shall be calculated
based on the following formula:
Failure Credit equals:
N divided by H multiplied by P;
where,
N = the number of hours (or portion thereat) in each month
during which there was a Transponder Failure or Satellite
failure as to which IFE has received a refund from GE,
H = the total number of hours in such month, and
P = the Monthly Payment
For the avoidance of doubt, in no event shall the Failure Credit paid to
Fox exceed the pro rata portion of any refund that IFE receives from GE pursuant
to Article 7 of the IFE/GE Agreement applicable to the Transponder Capacity
being leased by Fox hereunder.
ARTICLE 4
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OPERATING PROCEDURES
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4.1 Service Requirements. Fox shall abide by and adhere to the Spacecraft
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Service Requirements and procedures set forth in Attachment B to the IFE/GE
Agreement, as such may be amended from time to time pursuant to such agreement
(IFE shall provide notice to Fox of any such amendment). In the event of any
material failure of Fox to comply with such operating procedures, and if such
failure interferes with other satellites, transponders or services owned or
offered by GE or IFE, Fox shall discontinue such interfering operation
immediately upon discovering, or receiving notice from IFE or GE of, the
interference. In the event that Fox fails to discontinue such operation, IFE may
take any action that is reasonable and necessary under the circumstances to
eliminate such interference, including, without limitation, suspending Fox's use
of the Transponder Capacity, without any liability for loss or damage
whatsoever, until such time as Fox is able to operate in a non-interfering
manner.
4.2 Illumination. When signals are being transmitted from a Fox-provided
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Earth Station, Fox shall be responsible for proper illumination of the
Transponder. If improper illumination is detected by IFE or GE, Fox shall be
notified and shall take immediate corrective action.
4.3 Earth Stations. Any Earth Station and other equipment furnished by Fox
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shall be constructed, maintained and operated in accordance with the
requirements, standards and specifications set forth in Section 15(C)-(D) of the
IFE/GE Agreement (as if such Fox-furnished Earth Station equipment were an Earth
Station or equipment furnished by IFE pursuant to such
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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Section 15(C)-(D)). Fox's obligations pursuant thereto shall include, but are
not limited to, providing IFE or GE with necessary equipment for signal
monitoring (such as descrambling or encoding devices), and, prior to Fox's first
transmission to the Satellite from a Fox-provided Earth Station and after any
period of non-use, demonstrating the appropriate GE or IFE technician Fox's
ability to perform in accordance with then-current access specifications. In the
event that GE provides IFE with Satellite access specifications that are
different from those in Attachment B of the IFE/GE Agreement IFE shall provide
such specifications to Fox, and Fox shall conform its uplink Earth Station
transmissions to such standards.
4.4 Telephone Notices. For the purpose of receiving notices from IFE or GE
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with respect to preemption, interference or other technical issues in connection
with the Transponder, including any Transponder Failure, Satellite Failure, or
restoration, Fox shall maintain at each Earth Station which transmits signals to
the Satellite a telephone that is continuously staffed at all times during which
transmissions are made to the Satellite, and an automatic facsimile machine in
operation and capable of receiving messages from IFE at all times. Those persons
staffing the Earth Station, for the purpose of receiving such messages from IFE,
shall have the technical capability and absolute authority to, and shall,
terminate or modify immediately Fox's transmission to the Satellite if and as
notified by IFE or GE.
ARTICLE 5
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TERMINATION
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5.1 Termination By Either Party. Either party may terminate this Agreement
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within ninety (90) days after it acquires knowledge of the occurrence of any
event listed in Section 24(A) of the IFE/GE Agreement and upon ten (10) days'
prior written notice of intent to terminate to the other Party.
5.2 Termination By IFE
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5.2.1 IFE may terminate this Agreement upon notice and thirty (30)
days' opportunity to cure to Fox if:
(a) Fox fails to make payment of any amount due hereunder and such
amount remains unpaid thirty (30) days after the due date for such payment;
(b) On three (3) or more separate occasions, Fox fails to make
payment of any amount within ten (10) days after the due date for such payment;
(c) Within ten (10) days of receipt of notice from IFE that an
activity (other than one relating to payment or one covered by Article 4 hereof)
violates a material provision or requirement of this Agreement, Fox fails to
cease such offending activity to the reasonable satisfaction of IFE; or
(d) Immediately upon receipt of notice from IFE or GE with respect
to an activity covered by Article 4 hereof, the performance of which is a
material requirement for the
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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safe and/or effective operation of the Satellite or the Transponder or to comply
with the IFE/GE Agreement, Fox fails to cease such activity or otherwise fails
to take any action required by such notice, provided, however, that Fox shall
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not be required to cease any such activity or take any such action any sooner
than IFE would be required to cease similar activity or take the action required
by a similar notice from GE pursuant to the IFE/GE Agreement.
5.2.2 In the event that IFE terminates this Agreement in accordance
with Section 5.2.1 hereof, then, in addition to and notwithstanding IFE's
remedies at law or in equity, (i) IFE may declare immediately due and payable
the remaining Monthly Payments for the lease of the Transponder Capacity
otherwise due in absence of termination, based on the then-predicted End-of-Life
of The Satellite, as determined by IFE in its sole discretion (which remedy GE
acknowledges and agrees is reasonable under thc circumstances existing as of the
date hereof); (ii) Fox shall not be entitled to any legal or equitable relief
with respect to the use of the Transponder Capacity or any refund of amounts
paid to IFE, except in the event Fox pays the full amount of such remaining
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Monthly Payments; and (iii) IFE's rights with respect to the Transponder shall
be unrestricted.
5.2.3 In the event of termination of this Agreement in accordance
with Section 5.2.1 hereof, IFE shall use reasonable efforts to lease the
Transponder Capacity to a third party for the remaining life of the Satellite,
and, in the event that IFE enters into such a lease, IFE shall, without
exceeding the amount actually received by IFE pursuant to such lease, refund to
Fox on an annual basis the amount of the accelerated Monthly Payments paid by
Fox pursuant to Section 5.2.2 hereof, minus all direct, out-of-pocket costs and
expenses incurred by IFE in negotiating and entering into such lease, and minus
the amount corresponding to the period following termination of this Agreement
and preceding the execution of such lease.
5.3 Termination by Fox. Fox may terminate this Agreement on thirty (30)
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days' notice and opportunity to cure to IFE if IFE breaches a material provision
of this Agreement and IFE fails to cure such breach to the reasonable
satisfaction of Fox within such 30-day period.
5.4 Automatic Termination. This Agreement shall automatically terminate
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upon the termination for any reason of the IFE/GE Agreement in accordance with
the terms of such IFE/GE Agreement. In the event that such termination of the
IFE/GE Agreement is caused by activity referred to in Section 5.2.1 hereof, or
some other activity of Fox in violation of this Agreement, then the provisions
of Section 5.2.2 hereof shall apply to the termination of this Agreement as if
it were a termination by IFE. In the event that the IFE/GE Agreement terminates
for any other reason, and GE provides any refund to IFE with respect to the
purchase price previously paid by IFE for the Transponder, then IFE shall
provide to Fox a partial, prorated refund of any amount previously paid by Fox
to IFE for the lease of the Transponder Capacity during a period after such
termination.
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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ARTICLE 6
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LIMITATION OF LIABILITY
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6.1 Exclusivity Of Remedies. The remedies of each Party set forth in this
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Agreement are exclusive, and neither Party shall have any liability to the other
for damages or losses arising out of mistakes, omissions, interruptions, delays,
errors or defects of any kind with respect to this Agreement, or the use of the
Satellite, the Transponder, or other satellites, transponders, facilities,
services or equipment furnished by GE or IFE, including but not limited to TT&C
facilities or services, or anything done in connection therewith, whether
arising out of statute, contract, negligence, strict, liability in tort, or
under any warranty, or otherwise, except as expressly set forth herein.
6.2 Failure To Provide. Except as expressly provided in this Agreement,
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(i) IFE shall have no liability for damages or loss arising out of its failure
or inability to provide the Satellite, the Transponder, or other satellites,
transponders, facilities, services and equipment in accordance with this
Agreement, regardless of whether occasioned by IFE's or GE's negligence, and
(ii) in no event shall IFE have any responsibility or obligation to Fox by any
such failure or inability unless, and (if so) only to the extent that, GE is
liable, and provides a remedy, to IFE with respect to such failure or inability.
6.3 Special Damages. Neither Party shall in any event be liable, in
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connection with this Agreement or the arrangements contemplated hereby, for any
indirect, incidental, consequential, special or other damages, whether in
contract or tort, including but not limited to damages resulting from loss of
actual or anticipated revenues or profits, or loss of business, customers or
good will.
6.4 Liability of Others. IFE shall not be liable for any act or omission
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of GE or of any other entity furnishing satellites, transponders, facilities,
services or equipment to Fox that may be used in conjunction with the Satellite
or the Transponder, or IFE's other satellites, transponders, facilities,
services or equipment; nor shall either Party be liable for any damages or
losses due to the fault or negligence of the other Party or of any third party
(including, without limitation, GE) except to the extent that the performance of
the other Party or the third party is taken at the direction of or under the
supervision of the first party.
6.5 Consideration. It is agreed and understood that the Monthly Payment
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paid by Fox to IFE for the lease of the Transponder Capacity is a consideration
in limiting IFE's liability.
6.6 Force Majeure. Notwithstanding any other provision hereof, neither
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party shall be liable to the other for any failure of or delay in performance
hereunder caused by any event listed in Section 20(A) of the IFE/GE Agreement.
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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ARTICLE 7
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INDEMNIFICATION
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7.1 Indemnification by Fox. Fox shall indemnify and hold harmless IFE, its
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officers, employees, agents and representatives, or any of them from and against
any loss, damage, liability or expense (including any amounts to be paid by IFE
to GE as a result of IFE's indemnification of GE pursuant to the IFE/GE
Agreement), including reasonable outside counsel fees, for damage to tangible
personal property and injuries and death to persons, including, but not limited
to, employees of both Parties, arising from any negligent or intentional act or
omission of Fox in connection with this Agreement.
7.2 Indemnification by IFE. IFE shall indemnify and hold harmless Fox, its
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officers employees, agents and representatives, or any of them, from and against
any loss, damage, liability or expense, including reasonable outside counsel
fees, for damage to tangible personal property (other than the Satellite, the
Transponder, or GE's and IFE's other satellites, transponders, facilities or
equipment) and injuries and death to persons, including, but not limited to,
employees of both Parties, arising from any negligent or intentional act or
omission of IFE in connection with this Agreement.
7.3 Indemnification by Fox for Content. Because Fox has control of the
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content of the communications Fox transmits over the Transponder Capacity, Fox
shall indemnify and hold harmless IFE, its officers, employees, agents and
representatives, or any of them from and against all loss, liability, damage and
expense (including any amounts to be paid by IFE to GE as a result of IFE's
indemnification of GE pursuant to the IFE/GE Agreement), including reasonable
counsel fees, due to:
(a) Claims for libel, slander, infringement of copyright or other
intellectual property rights arising from the material transmitted over the
Transponder Capacity by Fox, by its customers or by any third party authorized
by Fox to use the Transponder Capacity; and
(b) Any other claim relating to the use of, or the content placed on,
the Transponder Capacity resulting from any act or omission of Fox or of
customers of Fox or of any third party authorized by Fox to use the Transponder
Capacity.
7.4 Indemnification by IFE for Content. Because IFE has control of the
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content of the communications IFE transmits over the IFE Capacity, IFE shall
indemnify and hold harmless Fox, its officers, employees, agents and
representatives, or any of them from and against all loss, liability, damage and
expense, including reasonable counsel fees, due to:
(a) Claims for libel, slander, infringement of copyright or other
intellectual property rights arising from the material transmitted over the IFE
Capacity by IFE, by its customers or by any third Party authorized by IFE to use
the IFE Capacity; and
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
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(b) Any other claim relating to the use of, or the content placed on,
the IFE Capacity resulting from any act or omission of IFE or of customers of
any or of any third party authorized by IFE to use the IFE Capacity.
7.5 Duties. The respective duties of the indemnifying Party and the
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indemnified Party pursuant to this Article 7 shall be allocated as set forth in
the Section 17(d) of the IFE/GE Agreement.
ARTICLE 8
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SUBLEASE AND ASSIGNMENT
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8.1 Property Interest. This Agreement is a lease contract and does not
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grant, and Fox shall not assert, any right, title, interest, or line upon the
property or assets of IFE, including the Transponder or any related equipment
which IFE may provide to Fox hereunder.
8.2 IFE's Right to Assign: Subject to Section 1.5 hereof, IFE may assign
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its rights and interests under this Agreement, including its right to receive
any or all sums due or to become due hereunder, in whole or in part, to an
assignee for any reason, provided, however, that, unless Fox consents in writing
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to such assignment, which consent shall not be unreasonably withheld, IFE shall
remain liable for its obligations hereunder. Upon receipt of notice from IFE of
such assignment, Fox shall perform all of its obligations directly for the
benefit of the assignee and shall pay all sums due or to become due directly to
the assignee, if so directed. Upon receipt of notice of such assignment, Fox
shall execute and deliver to IFE such documentation as assignee may reasonably
require from IFE.
8.3 Sublease and Assignment by Fox. Fox may not assign or sublease its
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rights and interests under this Agreement, either in whole or in part, to any
third party, provided, however, that Fox may assign its rights under this
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Agreement in whole (but not in part) to a subsidiary majority-owned by Fox, or
to an entity acquiring substantially all of the assets of Fox, and only if the
following conditions are satisfied: (a) the proposed assignee in writing assumes
all of Fox's obligations with respect to this Agreement and agrees to be treated
as fox for all purposes under this agreement; and (b) such written undertaking
is delivered to IFE at lease thirty (30) days in advance of the assignment.
Without limitation, any assignee shall be required to use the Transponder
Capacity in accordance with all provisions of this Agreement. As used in this
Article 8, "assign" shall mean to grant, sell, assign, encumber, otherwise
convey, license, lease, or permit the utilization of, directly or indirectly, in
whole or in part.
8.4 Successors. Subject to the provisions above with respect to
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assignments, this Agreement shall be binding on and shall inure to the benefit
of any successors and assignees of the Parties. The foregoing notwithstanding,
no assignment of this agreement shall relieve either Party of its obligations to
the other Party hereunder, without the express written consent of the other
Party, which consent shall not be unreasonably withheld. Any purported
assignment by either Party not in compliance with the provisions of this
Agreement shall be null and void and of no force and effect.
***Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ('SEC") and have been
filed separately with the SEC.
10
ARTICLE 9
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REPRESENTATIONS AND COVENANTS
-----------------------------
9.1 Representations of IFE. IFE represents and covenants to Fox as
----------------------
follows:
(a) The execution, delivery and performance of this Agreement do not
and will not, as of the date hereof, violate any provision of the Certificate of
Incorporation or Bylaws of IFE, any provision of any material agreement to which
IFE is a party or by which IFE is bound, or any statute or law, or any writ,
judgment, decree, order, regulation, or rule of any court or governmental
authority to which IFE is a party or which is applicable to IFE.
(b) No consent, order, permit or other authorization, approval, or
similar action is required from any governmental authority, agency or court for
IFE to execute and deliver this Agreement, and to perform its obligations under
this Agreement or to perform the transaction contemplated herein.
(c) IFE is in compliance in all respects with all applicable laws,
ordinances, regulations, rules and governmental orders, a violation of which
would have a material adverse effect on its ability to perform its obligations
under this Agreement.
9.2 Representations of Fox. Fox represents and covenants to IFE as
----------------------
follows:
(a) The execution, delivery and; performance of this Agreement do not
and will not, as of the date hereof, violate any provision of the Certificate of
Incorporation or Bylaws of Fox, any provision of any material agreement to which
Fox is a party or by which Fox is bound, or any statute or law, or any writ,
judgment, decree, order, regulation, or rule of any court or governmental
authority to which Fox is a party or which is applicable to Fox.
(b) Fox is in compliance in all material respects with all applicable
laws, ordinances, regulations, rules and governmental orders, a material
violation of which would have a material adverse effect on its ability to
perform its obligations under this Agreement.
(c) The execution, delivery and performance of this Agreement have
been duly and validly authorized by all necessary action on the part of Fox. Fox
has or will have available to it sufficient funding to meet its financial
commitments under this Agreement.
ARTICLE 10
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CONFIDENTIALITY AND NON-DISCLOSURE
----------------------------------
10.1 Non-Disclosure. Each Party shall hold in strict confidence, and not
--------------
disclose to third parties, any and all information contained in this Agreement
(including the IFE/GE Agreement and the information contained therein) and any
information marked proprietary in accordance with Section 10.3 below, without
the prior written consent of the other Party. which consent shall not be
unreasonably withheld. This restriction on disclosure to third parties shall
apply to each Party and to its parent, subsidiaries and affiliates (including
their respective
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
11
employees, agents, representatives, independent auditors, prospective lenders or
legal counsel) unless such parent, subsidiary or affiliate agrees in writing to
hold the information provided pursuant to the provisions hereof confidential in
accordance with the terms of this Article 10.
10.2 Satellite Information. Fox hereby acknowledges that all information
---------------------
provided to Fox related to design and performance, characteristics of the
Satellite, and any subsystems or components thereof, including the Transponder,
is confidential and proprietary and is not to be disclosed to third persons,
without the prior written consent of IFE.
10.3 Identifying Proprietary Information. To the extent that either Party
-----------------------------------
discloses to the other any other information pertaining to this Agreement which
it considers proprietary, the disclosing Party shall identify such information
as proprietary when disclosing it to the other Party by marking it clearly and
conspicuously as proprietary information. Any proprietary disclosure to either
Party, if made orally, shall be promptly confirmed in writing and identified as
proprietary information, if the disclosing Party wishes to keep such information
proprietary under the provisions hereof. Any such information disclosed under
the provisions hereof shall be used by the recipient thereof only in its
performance under this Agreement. Neither Party shall be liable for disclosure
or use of such information marked as proprietary information as provided above
which:
(a) becomes available to the public from a source other than the
receiving Party before, during or after the period of this Agreement;
(b) is released without restrictions in writing by the disclosing
Party;
(c) lawfully obtained by the receiving Party from a third party or
parties;
(d) is known by the receiving Party prior to such disclosure; or
(e) is at any time developed by the receiving Party completely
independently of any such disclosure or disclosures from the disclosing Party.
10.4 Accident Disclosure. Neither Party shall be liable for the
-------------------
inadvertent or accidental disclosure of such information marked as proprietary,
if such disclosure occurs despite the exercising of the same degree of care as
the receiving Party normally takes to preserve and safeguard its own proprietary
information.
10.5 Judicial Action. Neither Party shall be liable for the disclosure
---------------
of any information which it receives under this Agreement pursuant to judicial
action or decree, or pursuant to any requirement at of any Government or any
agency or department thereof, having jurisdiction over such Party, provided that
such Party shall have received a written confirmation of counsel that at such
disclosure is required, and provided further that such Party shall have given
the other Party notice prior to such disclosure.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
12
10.6 No License. No license to the other Party, under any patents, is
----------
granted or implied by conveying proprietary information or other information to
that Party and none of such information which may be transmitted or exchanged by
the respective Parties shall constitute any representation, warranty, assurance,
guaranty, or inducement by either Party to the other with respect to the
infringement of patents or other rights of others.
10.7 Public Notice. Neither Party shall issue a public notice or a news
-------------
release concerning this Agreement and the transactions contemplated hereby
without the prior approval of the other, which approval shall include the right
to approve the form, content and timing of any such u lease, and which approval
shall not: unreasonably be withheld.
ARTICLE 11
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MISCELLANEOUS
-------------
11.1 Applicable Law. This Agreement shall be construed and enforced in
--------------
accordance with the substantive laws of the State of California.
11.2 Entire Agreement/Amendment. This Agreement constitutes the entire
--------------------------
agreement between the Parties and supersedes all previous oral or written
understandings, agreements, commitment, or representations concerning the
subject matter hereof. This Agreement may not be amended or modified in any
way, and none of its provisions may be waived, except by a prior writing signed
by an authorized officer of each Party.
11.3 Severability; Reconstitution. If any provision of this Agreement
----------------------------
shall be invalid or unenforceable, the provisions of this Agreement so affected
shall be curtailed and limited only to the extent necessary to permit compliance
with the minimum legal requirements; provided that, if the effect is such that
the economic relationships or benefits and burdens contemplated under the
Agreement are substantially affected, the Parties shall seek and use all
reasonable efforts to reconstitute this Agreement so as best possible to restore
each Party to the economic position contemplated in this Agreement.
11.4 No Third Party Beneficiary. The provisions of this Agreement are
--------------------------
for the benefit only of Fox and IFE, and no third party may seek to enforce or
benefit from these provisions.
11.5 Waiver of Breach. Either Party may specifically waive any breach of
----------------
this Agreement by the other Party, provided that no such waiver shall be binding
or effective unless in writing and no such waiver shall constitute a continuing
waiver of similar of other breaches. A waiving Party may at any time, upon
notice given in writing to the breaching Party, direct future compliance with
the waived term or terms of this Agreement, in which event the breaching Party
shall comply as directed from such time forward. Neither the waiver by either of
the Parties of a breach or default under any of the provisions of this
Agreement, nor the failure of either of the parties, on one or more occasions,
to enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall thereafter be construed as a
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
13
waiver of any other contemporaneous or subsequent breach or default of a similar
or different nature, or as a waiver of any of such provisions, rights, or
privileges hereunder.
11.6 Notices. All notices, demands, requests, or other communications
-------
which may be or are required to be given, served, or sent by one Party to the
other Party pursuant to this Agreement (except as otherwise specifically
provided in this Agreement) shall be in writing and shall be mailed by first-
class; registered or certified mail, return receipt requested, postage prepaid,
or sent by messenger or a recognized courier or overnight delivery service (such
as Federal Express or DHL) or by confirmed telecopier transmission, addressed as
follows:
11.6.1 If to IFE:
---------
▇▇▇▇▇▇ ▇. Setos
Senior Vice President
Broadcast Operations and Engineering
Fox Television
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
--------------
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Esq.
Vice President, Business and Legal Affairs
International Family Entertainment, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax. (▇▇▇) ▇▇▇-▇▇▇▇
If to Fox:
---------
▇▇▇▇▇▇ ▇. Setos
Senior Vice President
Broadcast Operations and Engineering
Fox Television
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax. (▇▇▇) ▇▇▇-▇▇▇▇
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
14
11.6.2 Either Party may designate by notice in writing a new address
to which any notice, demand, request or communication made thereafter shall be
so given, served or sent.
11.6.3 Each notice, demand, request, or communication which shall be
delivered in a manner described in this Section 11.6, shall be deemed
sufficiently given, served, sent or received for all purposes at such time as it
is delivered to the addressee first named above as to each Party (with the
return receipt or the delivery receipt being deemed conclusive evidence of such
delivery), or at such time as delivery is refused by the addressee upon
presentation.
11.7 No Joint Venture. By leasing the Transponder Capacity to Fox, IFE is
----------------
not hereby establishing any joint undertaking, joint venture or partnership with
Fox, its agents, or contractors. Each Party shall be deemed to be an
independent contractor, and shall act solely for its own account.
11.8 Counterparts/Facsimile. To facilitate execution, this Agreement may
----------------------
be executed in as many counterparts as may be required, and it shall not be
necessary that the signatures of, or on behalf of, each Party, or that the
signatures of all persons required to bind any Party, appear on each
counterpart; but it shall be sufficient that the signatures of, or on behalf of,
each Party, or that the signatures of the persons required to bind any Party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the Parties
hereto. This Agreement may also be executed via facsimile.
11.9 Headings. Section headings and tables of contents contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose; and shall not in any way define or
affect the meaning, construction, or scope of any of the terms or provisions
hereof.
IN WITNESS WHEREOF, IFE and Fox have duly executed and delivered this
binding Transponder Lease Agreement as of the day and year first above written.
INTERNATIONAL FAMILY ARC HOLDINGS, LTD.
ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. Setos
-------------------------- -----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. Setos
Title: Vice President/Secretary Title: Senior Vice President
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
15