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EXHIBIT 4.1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
FOR SPECIFIED PORTIONS OF THIS DOCUMENT
INDEX OF OMITTED INFORMATION FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
1. In Section 1, titled "Carriage Guarantee," the omitted
information for which confidential treatment has been
requested, and that has been replaced by an asterisk, are
numerical percentage values.
2. In Section 3, titled "Content Restrictions," the omitted
information for which confidential treatment has been
requested, and that has been replaced by an asterisk, are
specific programming content restrictions to which the parties
to the Agreement have agreed.
THE SPECIFIED MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
IN CONNECTION WITH AN APPLICATION FOR CONFIDENTIAL TREATMENT.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
June 11, 1997
VIA FACSIMILE
Xxxxx X. Xxxxxxx, Esq.
Senior Vice President and General Counsel
International Family Entertainment, Inc.
P. O. Xxx 0000
Xxxxxxxx Xxxxx, XX 00000-0000
Re: Affiliation Agreement dated as of December 28, 1989 (the
"Agreement"), by and between Satellite Services, Inc.
("Affiliate") and The Family Channel ("FAM"), a division of
International Family Entertainment, Inc. ("IFE"), as amended
by an Amendment dated as of January 1, 1994 (the "First
Amendment") and a Letter of Amendment dated May 16, 1996 (the
"Second Amendment")
Dear Xxx:
This Letter of Amendment (the "Third Amendment") shall amend the
above-referenced Agreement. Terms not defined in this Third Amendment shall have
the definitions given to them in the Agreement or the Second Amendment, as
appropriate. In consideration of the mutual promises herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, FAM and Affiliate agree as follows:
1. Carriage Guarantee. Section 3(a) of the Agreement is hereby amended
by deleting the language that begins with the words "Notwithstanding the
foregoing. . ." and continuing through the end of Section 3(a) as it appears in
the Agreement (but not deleting the language added to Section 3(a) by means of
the Second Amendment) and adding in lieu thereof the following:
Notwithstanding the foregoing and Section 7(g) hereof, during the Term,
Affiliate shall meet the following penetration requirements for
carriage of the FAM Service:
(1) The total of FAM Subscribers shall be no less than *
% of the number of Basic Subscribers (as defined
below) in cable television systems that meet, as of
the time compliance is tested, the System
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
qualifications of Exhibit A hereto and either: (A)
are carrying the FAM Service on the date hereof; or
(B) are acquired by Affiliate or
an affiliate of Affiliate after the date hereof and
are carrying the FAM Service on the date of
acquisition. "Basic Subscribers" shall mean, with
respect to each System, the total number of
subscribers receiving video programming services in
such System, excluding any subscriber receiving
solely the "lifeline" level of service and/or pay or
pay-per-view services. "Lifeline" shall have the
definition set forth in Exhibit B to the Second
Amendment. Affiliate may exclude from the foregoing
calculation any System that is sold or divested by
Affiliate or an affiliate of Affiliate after the date
hereof or ceases to meet the System Qualifications of
Exhibit A hereto.
(2) The penetration of the FAM Service in any System that
meets the System qualifications of Exhibit A hereto
and is carrying the FAM Service shall, during the
Term, be no less than * % of the number of Basic
Subscribers in such System; provided, however, that
if the penetration of the FAM Service in any System
is less than *% on the date hereof, Affiliate shall
not be obligated to reposition the FAM Service in
such System during the Term. In addition, if the
penetration of the FAM Service in any System
hereafter acquired by Affiliate or an affiliate of
Affiliate is less than *%, Affiliate shall not be
obligated to reposition the FAM Service in such
System during the Term, and such System will be
excluded from *% calculation set forth in
subparagraph (1) above.
(3) Notwithstanding the foregoing, nothing herein shall
obligate Affiliate or any affiliate of Affiliate to
launch or carry the FAM Service in any System that
fails, now or in the future, to meet the System
qualifications of Exhibit A hereto, or that meets the
System qualifications of Exhibit A hereto and is not
carrying the FAM Service on the later of the date
hereof or the date of acquisition of the System.
(4) The Systems shall distribute the FAM Service on a
full-time basis only; provided, however, that any
System which distributes the FAM Service on a
part-time basis as of the date hereof or on the date
of acquisition of such System, whichever is later,
shall have
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF
THIS DOCUMENT
the right to continue distributing the Service on a
part-time basis during the Term of this Agreement.
2. Combining Satellite and Cable Distribution. Section 3(c) of the
Agreement shall be amended by adding at the end thereof the following:
FAM and Affiliate expressly agree that, notwithstanding any other
provision of this Agreement to the contrary, Affiliate may deliver the
FAM Service to its Subscribers by any of the technologies provided for
herein and/or in more than one such technology. Without limiting the
foregoing and notwithstanding the second sentence of Section 2(a)
hereof, Affiliate is expressly authorized to distribute the FAM
Service to customers who receive the FAM Service and other video
programming services from a combination of satellite and terrestrial
distribution modalities. The Fees set forth in Section 7(a)(I) hereof
shall apply to any such FAM Subscriber and Affiliate shall be required
to pay only one Fee for any FAM Subscriber, even if that FAM
Subscriber receives the FAM Service via more than one technology.
Notwithstanding the foregoing, if a subscriber receives the FAM
Service via a distribution modality for which the subscriber pays a
separate fee from any fee paid to a distribution modality affiliated
with Affiliate, the foregoing provision shall not eliminate
Affiliate's obligation to pay Fees for such subscriber under this
Agreement.
3. Content Restrictions. The words "sports series and specials," shall
be deleted from Section 2(e) and Section 6(b) of the Agreement and a new Section
6(d) shall be added to the Agreement, as follows:
(d) Notwithstanding any other provision hereof, in particular
Section 2(e) hereof and the foregoing provisions of this Section 6, the
FAM Service shall not contain *
4. Effective Date. This Agreement shall be effective on the earlier to
occur of (i) the Closing of the Contribution under the Contribution and Exchange
Agreement by and among Liberty Media Corporation, Liberty IFE, Inc., and Fox
Kids Worldwide, Inc., dated June 6, 1997, and (ii) the Effective Time of the
Merger (as defined in the Merger Agreement by and among For Kids Worldwide,
Inc., Fox Kids Merger Corporation, and International Family Entertainment, Inc.,
dated June 6, 1997.) If not effective prior to such time, this Amendment shall
terminate upon the expiration or termination of the Merger Agreement in
Accordance with its terms.
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
If the foregoing accurately reflects your understanding, please so
indicate by executing this Third Amendment in the space indicated and returning
it to me.
Very truly yours,
/s/ Xxxx X. Xxxxxx
President, Satellite Services, Inc.
ACCEPTED AND AGREED TO
FOR THE FAMILY CHANNEL AND FOR
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
THIS 11th DAY OF MAY, 1997:
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: President and CEO
