EXHIBIT 10.2
NBC SATELLITE SYSTEM
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SERVICE CONTRACT AMENDMENT
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DATED JULY 26, 1999
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This Amendment to the Service Contract between the National Broadcasting
Company, Inc. ("NBC") and Ascent Network Services, a division of Ascent
Entertainment Group, Inc. ("ANS") (the successor in interest to COMSAT General
Corporation) dated as of September 15, 1983, as amended (the "NBC Agreement") is
by and between NBC and ANS. This Amendment sets forth certain agreements and
understandings between NBC and ANS. Any capitalized term not defined herein
shall have the meaning ascribed to such term in the NBC Agreement.
1. CONTRACT EXTENSION PERIOD: JANUARY 1, 2000 - DECEMBER 31, 2002
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(a) The NBC Agreement is hereby extended for the period beginning
January 1, 2000 and ending December 31, 2002. During this extension,
the payments for Satellite Transmission System ("STS") service and
maintenance shall be as follows:
(1) Service: The service charge shall be $2,500,000 per year for
the years 2000, 2001 and 2002, for a total value of $7,500,000,
payable in 36 equal monthly installments.
(2) Maintenance: The maintenance charge shall be $10,225,000 per
year for the years 2000, 2001 and 2002, for a total value of
$30,675,000, payable in 36 equal monthly installments.
Total Service and Maintenance = $38,175,000
(b) On or before September 30, 1999, NBC, or an affiliated NBC entity,
will enter into a three year extension of the Portable Uplink Package
Service Contract dated July 8, 1987, as amended, by and between NBC and
ANS, with payment by NBC to ANS under such agreement of $456,000 per
year for service and $1,166,000 per year for maintenance (with no
escalation in either case). If such contract is not extended by
September 30, 1999, then beginning January 1, 2000, in addition to the
amounts described in (a) above, NBC will pay ANS an additional $800,000
per year through December 31, 2002.
2. NBC END OF TERM OPTIONS AND BUY-OUT RIGHTS
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The parties agree to delete Section 2(B)(1) of the NBC Satellite System
Service Contract Amendment dated September 1, 1992 between COMSAT General
Corporation and National Broadcasting Company, Inc. and Article XVIII -
TERMINATION, Subparagraphs D.1, D.2 and D.3 of the NBC Agreement, and agree
to the following:
(a) Rent or Lease
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After December 31, 2002, NBC may rent or lease the equipment described on
Annex A attached hereto related to the STS system, provided NBC has given
written notice to ANS of its intention to do so prior to Sept. 1, 2002,
(which lease or rental shall not entitle NBC to any of the following:
transponders, maintenance, spare parts, PUPS and administrative services) on
a year-to-year basis, for a charge negotiated in good faith by NBC and ANS,
which shall in no event exceed $2.5 million per year. As desired by NBC and
ANS, any extension after December 31, 2002 related to maintenance,
administrative, PUPS or other services (other than certain service,
maintenance and equipment obligations related to MSNBC, which currently
extend to 2006) shall be separately negotiated in good faith.
(b) Purchase Rights
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As an alternative to option (a)above, NBC may purchase all or any part of
the equipment as described in Annex A attached hereto at a price to be
negotiated in good faith by the parties, but in no event to exceed the then
"fair market value" as determined by an independent third party appraiser
who shall be acceptable to both parties.
(c) Walk-Away
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As a third option, NBC may choose to walk-away from the Agreement without
any further liability or obligation, and ANS, its successors or assignees,
shall be responsible for all costs associated with the removal and
disposition of all installations and equipment included under this
agreement, and shall restore the sites of such installations accordingly.
3. ANS RIGHT OF FIRST REFUSAL
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At any time, including, if NBC exercises any of its rights under Section 2
above, ANS shall be afforded the opportunity to bid on satellite
transmission service,
maintenance or equipment or any related service, maintenance or equipment,
digital or otherwise, in connection with NBC's delivery of network
television to its affiliates, provided that ANS, its successors or assignees
are then in the business of providing such service, maintenance or equipment
as referenced above. If ANS chooses to submit a proposal related to such
service, maintenance or equipment, ANS shall be afforded an opportunity to
meet the best overall competitive offer extended to NBC for the same service
maintenance and/or equipment. Any and all contract awards resulting from
proposals solicited and received by NBC, shall be made based on the detailed
analysis of all technical, operational and business factors, and shall be
made solely at the discretion of NBC; provided, however, that if, pursuant
to its right in the immediately preceding sentence, ANS has met in all
respects (as determined by NBC in its sole discretion) the terms of the best
overall competitive offer extended to NBC for the same maintenance and/or
equipment (with such terms determined and defined solely by NBC), then NBC
agrees to award the contract therefor to ANS. NBC shall at all times retain
the right to accept or reject any and all offers.
In circumstances where ANS is not selected as the service, maintenance or
equipment vendor, ANS shall be paid separately by NBC for any requested
analysis, testing and integration of any new service, maintenance or
equipment into the NBC STS network (or any successor network.)
In connection with the foregoing, NBC and ANS shall separately negotiate all
appropriate terms for any service, maintenance or equipment changes made to
the NBC STS network by ANS as requested by NBC.
4. EXTRAORDINARY EVENT PROTECTION
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If an extraordinary event occurs that is beyond either party's control
(including, but not limited to, any extraordinary increase in FCC tariff
fees incurred by ANS in connection with its provision of the services
delivered pursuant to the NBC Agreement) or ANS' future ability to procure
STS system equipment parts is materially impaired, ANS will notify NBC of
such event or impairment and NBC and ANS will negotiate in good faith
regarding reimbursement to ANS by NBC of any additional costs associated
with such event or impairment incurred by ANS in order to maintain the then
current operating and performance levels of the STS system. ANS and NBC
further agree that any such
additional costs are required to be reimbursed by NBC on a "pass-through"
basis with no xxxx-up by ANS.
5. Y2K REPRESENTATIONS AND WARRANTIES
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(a) Each of NBC and ANS covenant and agree that it will not permit a Year
2000 problem in computer systems, software (for the purposes of this
section, SNMS software shall be considered the obligation of NBC,
notwithstanding any express or implied grant by NBC to ANS of a license
to use such software in connection with the NBC Agreement) or equipment
owned, leased or licensed by it, its affiliates or subsidiaries to
interfere with its performance under the NBC Agreement. Each party
further agrees to request, from those of its suppliers whose
performance may materially affect that party's performance hereunder,
that each such supplier undertake the same obligation with respect to
such material performance. The parties will use reasonable commercial
efforts to cooperate and share information to further comply with this
Section 5, and to minimize the impact of any Year 2000 problem on
performance of the NBC Agreement. Each party will inform the other
party of any circumstance indicating a possible obstacle to such
compliance, and the steps being taken to avoid or overcome the
obstacle.
(b) Provided a party complies with section (a) above, it will not be liable
to the other party for any failure to perform obligations under the NBC
Agreement to the extent that such failure arises from a Year 2000
problem (1) affecting one of the nonperforming party's suppliers or (2)
beyond that party's reasonable control (such as, a Year 2000 problem
affecting a governmental entity). IN PARTICULAR, SUCH PARTY SHALL HAVE
NO LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT, INDIRECT, INCIDENTAL,
SPECIAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES.
(c) A "Year 2000 problem" means a date-handling problem relating to the
Year 2000 date change that would cause a computer system, software or
equipment to fail to correctly perform, process and handle date-related
data for the dates within and between the twentieth and twenty-first
centuries.
6. ASSIGNMENT
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ANS shall not assign, mortgage, pledge, encumber or otherwise transfer this
Contract, in whole or in part, or any interest hereunder, or any of its
rights, duties or obligations hereunder, whether voluntarily, involuntarily,
or by operation of law, to any person, natural or legal, without the prior
express written approval of NBC, which approval may be granted or withheld
in NBC's sole discretion, but based only upon NBC's reasonable determination
whether or not the assignee has the financial and business ability to
perform the assignor's obligations at least as well as the assignor. Any
assignment, mortgage, pledge, encumbrance, transfer or sublease not in
accordance with this Article shall, at NBC's option, be voidable and
constitute a default under this Contract. If ANS is a corporation, any
merger, consolidation, or other reorganization of ANS, or the sale or other
transfer of twenty-five percent (25%) or more of the direct or indirect
ownership interest of ANS, shall be deemed an assignment of this Contract by
ANS. If ANS is a partnership, a withdrawal or change, voluntary, involuntary
or by operation of law of any partner or partners owning directly or
indirectly a total of twenty-five percent (25%) or more of the partnership,
or the dissolution of the partnership, shall be deemed an assignment of this
Contract by ANS. If ANS consists of more than one person, a purported
assignment, voluntary, involuntary or by operation of law, by any one of the
persons executing this Contract shall be deemed a voluntary assignment of
this Contract by ANS.
7. SUPERSEDURE
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This Amendment together with the original Service Agreement and all prior
Amendments and modifications incorporated either by formal amendment or
letters between the parties, constitutes the entire understanding between
NBC and ANS with respect to the foregoing agreements and understandings and
supersedes any and all prior communications, representations and agreements
between them with respect to such agreements and understandings. No
subsequent amendment to the NBC Agreement shall be effective unless it is
agreed to in writing and signed by both NBC and ANS.
Except as specifically modified herein, all terms and conditions of the
original Service Agreement, as previously amended, shall remain in full
force and effect. To the extent there is a conflict or inconsistency between
this Amendment and the original
NBC Agreement as previously amended, the terms of this Amendment shall
govern.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed and accepted by their duly authorized representatives effective as
of August 1, 1999.
ASCENT NETWORK SERVICES,
a division of Ascent Entertainment Group, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Vice President, Network Operations
NATIONAL BROADCASTING COMPANY
By: /s/ Xxxx X. Xxx
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Name: Xxxx X. Xxx
Title: President, Broadcast & Network Operations
THIS RIDER IS INTENTIONALLY DELETED IN ITS ENTIRETY
