EXECUTION
COPY
THIRD
AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT
This
THIRD AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT (this “Agreement”) is
entered into as of January 22, 2009 by and between Televisa, S.A. de C.V., a
Mexican corporation, as successor in interest to Televisa Internacional, S.A. de
C.V. (hereinafter “Licensor”) and Univision Communications Inc., a Delaware
corporation (“Licensee” or “UCI”), and amends and restates that certain SECOND
AMENDED AND RESTATED PROGRAM LICENSE AGREEMENT (the “Second Amended and Restated
Program License Agreement”) made as of the 19th day of December, 2001 by and
between Televisa Internacional, S.A. de C.V. and Licensee.
WHEREAS,
Licensor has or will have rights in the United States of America, including all
territories and possessions thereof including Puerto Rico (the “Territory”), to
license certain television programs in the Spanish language or with Spanish
subtitles produced by and to be produced by Licensor and other entities
controlled by Grupo Televisa, S.A.B. (“GT”) (GT and all of the companies it
controls, including Licensor, being hereinafter referred to collectively as
“Televisa”).
WHEREAS,
Licensee operates the Networks and the Stations.
WHEREAS,
Licensee desires to acquire the right to broadcast in the Territory over the
Networks, programs produced, to be produced or otherwise marketed by Televisa
and Licensor is willing to grant such a license upon the terms, provisions and
conditions herein set forth.
WHEREAS,
Venevision International Corporation (“Venevision”) previously entered into a
Second Amended and Restated Program License Agreement, dated as of December 19,
2001 (the “Venevision Agreement”), with the Licensee to license certain
television programming for broadcast in the Territory, and nothing herein is
intended to, or does, alter or limit any rights or obligations of Venevision or
Univision (as between it and Venevision) under the Venevision Agreement or the
Participation Agreement, dated October 2, 1996, by and among Licensee, A.
Jerrold Perenchio, GT, Gustavo A. Cisneros, Ricardo J. Cisneros and Corporacion
Venezolana de Television (Venevision) C.A. (to the extent still in
effect).
WHEREAS,
Licensor acknowledges that Licensee has agreed to provide certain benefits in
this Agreement in consideration of the releases provided in the Mutual Release
and Settlement Agreement, as of even date herewith, by and among Licensee,
Licensor and Telefutura Network.
NOW,
THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
1. License of
Programming.
(a) Pursuant
to the terms and conditions hereof, Licensor hereby grants Licensee and its
subsidiaries the exclusive license to broadcast in the Territory all Programs
throughout the Term on the Networks.
(b) Licensee
shall not broadcast any first-run Program (other than news) on any of the
Networks between the hours of 1:00 a.m. and 9:00 a.m. unless Licensee reasonably
believes that it is commercially reasonable to broadcast such Program during
such period.
1.2 For
purposes of this Agreement only:
(a) “Programs”
means
(i) programs
initially produced in the Spanish language or programs with Spanish subtitles,
produced by third parties or co-produced by Televisa with third parties to which
Televisa owns sole television broadcast rights in the Territory (and which is
not a Co-Produced Program (as defined below));
(ii) except
as otherwise expressly provided in this Agreement, all programs initially
produced in the Spanish language or programs with Spanish subtitles, previously
produced directly or indirectly by or for Televisa and to be produced directly
or indirectly by or for Televisa for broadcast at any time to which Televisa
owns television broadcast rights in the Territory and which are available for
broadcast including, without limitation, in the following
categories: novelas, musicals, variety shows, situation comedies,
game shows, talk shows, children’s shows, news shows, cultural and educational
programs, and sports programs; and
(iii) movies
produced by Televisa or third parties or co-produced by Televisa and a third
party(ies) (in the case of movies produced by third parties or co-produced by
Televisa and a third party(ies), only if Televisa has obtained from such third
parties (and did not previously have) the rights to such movies in the Territory
after the date hereof) and for which Televisa owns the television broadcast
rights in the Territory, from and after the time that such movies become
available for free television broadcast in the Territory.
If
Licensor only owns such television broadcast rights to a Program in a portion of
the Territory and not some other portion (e.g., Puerto Rico, Guam, etc.), the
license granted under Section 1.1 shall be limited to only that portion of the
Territory as to which Licensor holds such rights for such time as Licensor holds
rights only in a portion of the Territory.
Each
Program shall be available for license to Licensee in the Territory pursuant to
the terms of this Agreement upon the first to occur of (x) the date when such
Program is initially broadcast by Televisa or (y) the date when such Program is
first made available for broadcast by any third party.
Except as
provided in Section 1.2(a)(iv), if Licensor or Televisa shall produce directly
or indirectly any Spanish Language or Spanish subtitled programming for
broadcast in the Territory it shall be deemed a Program subject to the terms and
conditions of this Agreement.
(iv) The
term “Programs” does not include Special Programs (other than Televisa Produced
U.S. Special Programs) or Co-Produced Programs (each as defined below) or soccer
games played by teams in the Mexican Soccer League.
(b) “Co-Produced
Programs” means programs originally produced for broadcast in the Spanish
language or with Spanish subtitles, previously produced, or to be produced, by
Televisa for broadcast pursuant to co-production agreements with unaffiliated
third parties or produced by unaffiliated third parties (in each case, other
than any co-production agreements directly or indirectly with any broadcaster in
and to the Territory):
(i) under
which Televisa does not own the right to permit the broadcast of such program in
the Territory and/or
(ii) under
which Televisa is required to share with such third parties the revenue derived
from the broadcast of such program in the Territory.
No
program that would otherwise be a Program under Section 1.2(a)(ii) shall become
a Co-Produced Program solely because Televisa licenses or sells distribution
rights in the Territory prior to or during production of such program and
Televisa shall not enter into any agreement to the contrary.
In order
for a program to be a Co-Produced Program, some material property right
underlying such program must be provided by such unaffiliated third party
described above and such unaffiliated third party must participate in the
development and production of the program in exchange for such third party’s
distribution rights in the Territory or participation in distribution revenues
from the Territory.
If
Televisa intends to enter into an agreement or arrangement with respect to a
program that it believes will be a Co-Produced Program under this Agreement,
Televisa will provide UCI with written notification of such intention at least
20 days prior to entering into any such agreement or arrangement, along with the
basis for Televisa’s belief that such program should be characterized as a
Co-Produced Program solely for the purpose of permitting UCI to monitor
compliance by Televisa with the provisions contained herein relating to
Co-Produced Programs, it being agreed that UCI and its Affiliates shall keep
confidential such notice information contained therein, shall not use such
notice or information for its own account and shall not contact or engage in
discussions with any Person other than Televisa with respect to such agreement
or arrangement.
Subject
to the following paragraph, nothing contained in this Agreement shall prevent
Licensor or Televisa from licensing broadcast rights (in exchange for cash or
other in-kind services or property other than Programs) for territories other
than the Territory to programs initially produced in the Spanish language or
programs with Spanish language subtitles that are developed and produced in the
Territory by unaffiliated third party producers located in the Territory,
including broadcasters, provided that neither Licensor nor Televisa has
participated in any way in the development or production of any such
program.
In the
case of novelas, if Licensor or any of its Affiliates, (a) enters into an
agreement or arrangement with respect to the co-production of a novela or (b)
sells or transfers a novela script or format to any third party, and (x)
Licensor or any Affiliate owns or obtains Mexican broadcast rights to such
novela during the Term and (y) broadcast rights in the Territory exist during
the Term, then Licensor must cause such novela to be a Program
hereunder.
Televisa
agrees that it will use good faith efforts not to structure arrangements or
agreements with respect to programs in a manner intended to cause such programs
not to be considered Programs hereunder.
(c) “Affiliate”
of a person means any person that directly or indirectly controls, is controlled
by, or is under common control with the person in question. For the
purposes of this Agreement, “control”, when used with respect to any person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise. Affiliate shall not mean (i) any television station
that has entered into an affiliation agreement with the Networks but is
otherwise not an Affiliate of UCI, (ii) any Person that controls GT, (iii) any
person under common control with, but not directly or indirectly controlled by,
GT, (iv) any one of the investor groups that own the equity interests in
Broadcast Media Partners Holdings, Inc. or any person that controls any one of
such investor groups, or (v) any person controlled by any of such investor
groups other than (x) Broadcasting Media Partners, Inc., Broadcast Media
Partners Holdings, Inc. or UCI, (y) any subsidiary of or other person directly
or indirectly controlled by Broadcasting Media Partners, Inc., Broadcast Media
Partners Holdings, Inc. or UCI or (z) any person formed by such investor groups
to own a direct or indirect interest in UCI.
(d) “broadcast”
means all electronic forms or other means now known or hereafter developed of
transmission and re-transmission, including but not limited to over-the-air
television, cable television, low power television, multi-point distribution
systems, wire, fiber optics, microwave, and satellite, except for purposes of
delivery of the Programs pursuant to Section 3.
(e) “Galavision
Network” means the Galavision Spanish language television network of affiliated
cable television systems and other affiliated broadcast outlets broadcasting the
Galavision Network in the Territory.
(f) “Networks”
means the Univision Network, the Galavision Network, the Telefutura Network, and
any Spanish language television network of affiliated television broadcast
stations, cable systems and other affiliated broadcast outlets broadcasting over
the Stations in Puerto Rico as set forth in clause (ii) of the definition of
“Stations” (in each case, for so long as it is owned by Licensee or any of its
subsidiaries).
(g) “Stations”
means, without duplication, (i) those television broadcast stations, cable
television systems and other broadcast outlets affiliated with the Networks that
are now or hereafter directly or indirectly majority owned and operated by UCI
or a direct or indirect subsidiary of UCI or with respect to which UCI or a
direct or indirect subsidiary of UCI has the right to designate a majority of
the board or similar governing body, and in each case, which broadcast in the
Spanish language format; and (ii) WLII and WSUR in Puerto Rico.
(h) “Telefutura
Network” means the Telefutura Spanish language television network of affiliated
television broadcast stations, cable systems and other affiliated broadcast
outlets broadcasting the Telefutura Network in the Territory.
(i) “Univision
Network” means the Univision Spanish language television network of affiliated
television broadcast stations, cable systems and other affiliated broadcast
outlets broadcasting the Univision Network in the Territory.
1.3 Licensor
and its Affiliates shall have the right and ability to, and to permit others
to:
(a) transmit
or retransmit via satellite which receives its signal from any earth station or
other facility in Mexico (or any substitute or back haul facility outside of
Mexico but serving Mexico, so long as such signal is encrypted) to any
television station in or cable system serving Mexico, any Programs which may
also be covered by this Agreement, notwithstanding the fact that such
transmissions or retransmissions may be incidentally viewed in the
Territory;
(b) transmit
or retransmit from any television station located in Mexico any Programs which
may also be covered by this Agreement, notwithstanding the fact that such
transmissions or re-transmissions may be incidentally viewed in the
Territory;
(c) transmit
via satellite to any direct-to-home subscribers located outside the Territory,
any Programs which may also be covered by this Agreement, notwithstanding the
fact that such transmissions may be intercepted by unauthorized recipients in
the Territory;
(d) transmit
via the Internet (x) Licensor’s national network evening news broadcast and up
to a 15 minute sports program, both of which in the aggregate last no more than
one hour per day, (y) religious service telecasts, and (z) charitable and
non-commercial specials (e.g., telethons and presidential
speeches).
Notwithstanding the foregoing
exceptions, neither Licensor nor its Affiliates shall consent to, and each shall
use its commercially reasonable efforts to prohibit,
(i) The
transmission or retransmission of such Programs by
(x) any
television station in the Territory,
(y) any
cable system in the Territory that is located beyond 35 miles from the community
of license of any transmitting television station in Mexico transmitting the
Programs (any such cable transmission or re-transmission within such 35 mile
limit being hereby expressly permitted) or
(z) any
other means of broadcasting in or into the Territory, and
(ii) the
sale of any direct-to-home or similar services, or any mechanical device,
authorization code or other access devices, to persons located in the Territory
for the purpose of receiving Programs in contravention of this Section
1.3.
To the
extent that Licensor has the right to transmit or retransmit under clause (b)
and (d) above, Licensor shall have the right to market and promote and otherwise
generate revenues (including, but not limited to, the sale of advertising time)
attributable to the ability of viewers in the Territory to receive Programs
contained in such transmissions. Licensor and Licensee acknowledge
and agree that this Section 1.3 is intended solely to insure that Licensor will
not be in violation of this Agreement merely because transmissions or
retransmissions from stations located in Mexico or transmissions or
retransmissions from satellite signals intended for television stations, cable
systems or direct-to-home subscribers outside the Territory, and over the
Internet as provided above, may be incidentally viewed by unauthorized
recipients in the Territory, and is not intended to give Licensor any right to
broadcast, or license others to broadcast, Programs intended for viewing or
which may be viewed in the Territory other than in accordance with the other
provisions of this Agreement. The Program License Agreement, dated as of May 31,
2005, by and between GT and Licensee is hereby terminated and shall have no
further force or effect.
2. Notification, Acceptance and
Licensing of Programming. Not less than once in each calendar
quarter during the term of this Agreement, Licensor will deliver a written
notice (an “Availability Notice”) to Licensee specifying all Programs which (a)
have become available for license by Licensee since the delivery of the
preceding Availability Notice or (b) may no longer be available to Licensee for
license hereunder. Upon the request of Licensee, Licensor shall
deliver to Licensee whatever materials are reasonably available with respect to
any Program available for license, at Licensee’s expense to the extent Licensee
requests more than a videotape pilot or representative episode with respect to a
new Program. If Licensee desires to license any Programs, it shall
notify Licensor of its acceptance in writing (an “Acceptance”) at any
time. Such Acceptance shall specify the name of the Accepted Program
and such other information as may reasonably be requested by
Licensor. An Acceptance shall constitute the acceptance of the
license by Licensee of the Program(s) and upon receipt by Licensor of such
Acceptance, the Program(s) covered by each such Acceptance shall without further
action be automatically licensed to Licensee on the terms and conditions of this
Agreement and be an “Accepted Program.”
3. Delivery, Expenses And Use
Of Programs.
3.1 Following
Licensee’s sending an Acceptance with respect to a Program pursuant to Section 2
of this Agreement, Licensor shall deliver to Licensee, at Licensee’s expense, a
visual and aural reproduction of each such Program either (at Licensee’s
election and subject to Licensor’s reasonable ability to comply with such
election) via satellite (at Licensee’s risk of loss if delivery via satellite is
requested less than 48 hours in advance of scheduled broadcast) or on such form
of videotape, disc or other device as reasonably requested by Licensee,
formatted and suitable for broadcast in the Territory as reasonably requested by
Licensee in accordance with its broadcast standards and practices, as soon as
available. Programs will be deemed delivered by Licensor when
transmitted to the satellite, when actually received if shipped by freight, or
when made available through permission to re-transmit the signal of an affiliate
of Licensee. Licensee shall inform Licensor when it intends to
undertake up-conversion of Programs to HD or down-conversion of Programs from
HD, and will specify the HD format and up-conversion and/or down-conversion
methods and standards that it intends to use. In the event Licensee
uses as a basis for converting programs to HD format the standards determined,
from time to time, by the National Television System Committee or Advanced
Television System Committee (or one of their successors), Licensee shall not
require approval from Licensor for the up-conversion or down-conversion
described in this paragraph; otherwise, Licensee shall require approval from
Licensor, which shall not be unreasonably withheld or delayed. Once
format(s) and conversion method(s) have been established by the procedure set
forth in the immediately preceding sentence, Licensee may use such format(s) and
conversion method(s) to up-convert or down-convert Programs.
3.2 Licensee
agrees that as soon as practicable following receipt of delivery of any Program
via satellite or on video tape, disc or other device, it will examine such
delivery to determine whether it is physically suitable for broadcast and notify
Licensor immediately upon detecting any defect rendering such delivery
unsuitable for broadcast. In such cases, Licensor shall promptly
re-deliver such Program at its own expense either (at Licensee’s election) via
satellite or on a physically suitable videotape, disc or other device designated
by Licensee.
3.3 Licensee
agrees to return to Licensor each video tape, disc or other device of a Program
delivered by Licensor on the reels and in the containers in which it was
shipped, in the same condition as received, reasonable wear and tear through
proper use excepted, as soon as practicable after Licensee and its subsidiaries
has made all broadcasts of such Program that it plans to make within the next 12
months. Licensee shall pay all costs of returning the videotapes,
discs or other devices to Licensor. Should Licensor request that the
video tape, disc or other device be sent to a location other than Licensor’s
warehouse, Licensor will bear responsibility for shipping costs above those
which would have been applicable for shipping to Licensor’s
warehouse. Licensor agrees to re-deliver to Licensee any Program
previously returned to Licensor that Licensee or any subsidiary of Licensee
desires to re-broadcast during the Term.
3.4 The
videotapes, discs or other devices shall at all times remain the property of
Licensor subject to Licensee’s rights as herein provided. The risk of
loss, damage, destruction or disappearance of any tape shall be borne by
Licensee from the time of delivery to Licensee until the return thereof to
Licensor or Licensor’s designee and as to any video tape, disc or other device
or part thereof lost, stolen, destroyed or damaged after delivery to Licensee
and before the return thereof, Licensee shall pay Licensor the cost of
replacement thereof, which payment shall be limited to the cost of replacing the
raw video tape, disc or other device.
3.5 Except
as provided herein, Licensee will not, and will not authorize others to copy,
duplicate or re-license any Program unless necessary for Licensee’s or its
Affiliates own exploitation of broadcast rights as permitted
hereunder. Any duplicate or copy of any part of the Program
(including trailers) made by Licensee for its own purposes will be erased
following all anticipated broadcasts as permitted hereunder of the Program
within the next 12 months. Upon receipt of written request from
Licensor, an officer of Licensee shall certify in writing the destruction of all
such copies.
3.6 Licensor
will furnish to Licensee glossy prints of still photos, synopses, cast lists and
all other promotional material for the promotion and exploitation of the
Programs, if available. Licensor grants (and will cause its
Affiliates to grant) to Licensee and its Affiliates the right to use and license
others to use Licensor’s name and, unless Licensee is advised by Licensor that
rights of Licensor are limited (in which case, to the extent not limited), to
use and license others to use the name and likeness of, and biographical
material concerning, each star, featured performer, writer, director and
producer in the Programs and the titles of each Program and fictitious persons
and locales therein, for advertising and publicity, of the Programs, and any
broadcaster or sponsor thereof, but not for direct endorsement of any product or
service, provided that any such use will protect the copyrights of
Licensor. To the extent available to Licensor or its Affiliates after
reasonable efforts, Licensor will furnish Licensee with music cue sheets for the
Programs and the information necessary for administration of rights payments and
compliance with Section 507 of the Federal Communications Act of 1934, as
amended concerning broadcast matter and disclosures required thereunder, insofar
as that Section applies to Persons furnishing program material for television
broadcasting (“Section 507”). Subject to the foregoing and subject to
Licensor’s reasonable prior approval, Licensee shall have the right to produce
its own promotional material for or from the Programs. Televisa shall
permit Televisa’s proprietary artists to appear on or for Licensee or its
Affiliates for promotional or programming purposes at mutually agreeable times
(which agreement shall not be unreasonably withheld), at Licensee’s expense, it
being agreed that Televisa may not be able to require an artist to appear, all
requests to and contacts with artists shall be made through a Televisa
representative designated by Televisa (provided that if the designated
representative of Licensee for these purposes has requested in writing to the
designated representative of Televisa for these purposes to be informed as to
whether an artist is under contract with Televisa and Televisa has not responded
to Licensee within seven days of receipt of such request, Licensee may try to
contact such artist without going through Televisa), and Televisa shall not be
required to approve any appearance which would interfere in any material respect
with Televisa’s operations or productions.
3.7 Except
as provided in Section 3.8 below, Licensee agrees to include in its broadcast of
Programs all copyright notices and all credits made part of each Program
including but not limited to stars, directors, producers and
writers.
3.8 (a) When
requested by Licensee, Licensor in consultation with Licensee shall edit
episodes of Programs in order to (i) end novelas by creating recaps on a limited
basis to cause the final episode to be broadcast at strategically competitive
times (i.e., Thursday and Friday) and (ii) reduce the length of credits so that
the opening credits are no longer than 90 seconds in length and closing credits
are no longer than 30 seconds in length.
(b) Licensee
shall have the right to edit and make changes, additions and deletions to
Programs in order to (i) eliminate internal credits when episodes of a Program
air back-to-back, (ii) adjust Program length to standard U.S. format lengths
(i.e., 30-60-90-120 minute lengths) by changing starts or finishes (with other
desired edits for such purpose to be provided under paragraph (a) above), (iii)
insert commercials during natural breaks in the Program and (iii) comply with
applicable government rules and regulations, including FCC regulations and
Licensee’s broadcast standards and practices from time to time in
effect.
(c) When
requested by Licensee, Licensor in consultation with Licensee may (in its
discretion which must be reasonably exercised) edit episodes of Programs in
order to (i) eliminate or consolidate episodes that contain more than 15 minutes
of recap material, (ii) eliminate any material that is not relevant to U.S.
Hispanic audiences (i.e., phone numbers, addresses, contest rules, etc.), and
(iii) facilitate wind-up of cancelled Programs.
(d) When
requested by Licensee, Licensor in consultation with Licensee may (in Licensor’s
sole discretion) edit episodes of Programs in order to (i) eliminate storylines
and segments in good faith deemed by Licensee to be undesirable or unacceptable
to U.S. audiences (e.g., strong sexual content) and (ii) reformat Programs to a
maximum of 2 hours per episode.
The
editing rights hereunder shall be subject to applicable law and applicable
contractual rights of unaffiliated third parties of which Licensor informs
Licensee in writing at the time of delivery to Licensee of such Program
(provided that Licensor agrees to use (and to cause its Affiliates to use) good
faith efforts not to permit to exist any such contractual
restrictions). Licensee will pay for editing performed by Licensor at
Licensor’s incremental cost.
3.9 a) Licensor
and Licensee intend to cooperate effectively in order to exploit reasonable
opportunities for product placement and integration in Programs to be broadcast
in the Territory.
(b) Each
of Licensor and Licensee shall appoint a single person to act as point of
contact for such efforts. Such persons shall cooperate to make each
party aware of commercial opportunities for product placement or integration in
Programs to be broadcast in the Territory.
(c) The
parties will work together so that, to the extent technologically feasible,
Licensee, with prior approval of Licensor (which may be withheld in its sole
discretion), may substitute products sold by Licensee in exchange for products
placed by Licensor in recorded Programs, so long as such substituted placement
does not adversely affect in any way, as determined by Licensor in its sole
discretion, the artistic quality and/or integrity of the Program. By
way of example and not in limitation, Licensor may determine not to approve such
substitutions in the relevant recorded Programs if any person or entity,
including but not limited to any director, producer or actor in or of such
recorded Program, in his, her or its sole and absolute discretion does not want
the substitution, or if Licensor believes that proposing such substitution would
harm its relationship with such director, producer or actor. For the
avoidance of doubt, none of Licensee or its Affiliates shall substitute products
in Programs aired simultaneously, by Licensor and Licensee. An
Affiliate of Licensor which is capable of effecting such substitution will have
the right of first offer to perform such substitution. For the
avoidance of doubt, revenues with respect to substitution as provided in this
paragraph shall be included in the Royalty Base.
(d) Licensor
will consider in good faith requests of Licensee, made from time to time, to
effectuate product placement and/or integration by Licensee’s advertisers in
Programs during their production and/or post-production
stage. However, Licensor shall have no obligation to effectuate such
product placement and/or integration and Licensor shall make the determination
as to whether to comply with such requests in good faith. By way of
example and not in limitation, Licensor may determine not to comply with such
requests if any person or entity participating during the production and/or
post-production of the Program in question, including without limitation, any
director, producer or actor in or of such Programs, in his, her, or its sole and
absolute discretion does not want the product placement and/or integration, or
if Licensor believes that proposing the product placement and/or integration
would harm its relationship with such director, producer or actor. In
the event that Licensor does effectuate product placement and/or integration
during production or post-production of any Programs by Licensee’s advertisers,
Licensee will pay the costs for such placement and/or integration (which such
costs will need to be agreed between Licensee and Licensor prior to effectuation
of the product placement and/or integration) upon provision by Licensor of
appropriate documentation evidencing such costs. For the avoidance of doubt,
revenues with respect to placement and/or integration as provided in this
paragraph shall be included in the Royalty Base.
3.10 Subject
to Section 7.1 and Licensee’s remedies for a breach thereof, Licensor may, at
its sole and absolute discretion, withdraw any Program and terminate any license
with respect to such Program if Licensor reasonably determines that the
broadcast thereof is likely to: (i) infringe the rights of third
parties, (ii) violate any law, court order, governmental regulation or ruling of
any governmental agency, (iii) otherwise subject the Licensor to any material
liability. In addition Licensor reserves the right to withdraw any
Program prior to the conclusion of the applicable Broadcast Period if, for any
reason, the Program is no longer being produced by or available to Televisa,
provided that, Licensor may not withdraw such Program pursuant to this sentence
to the extent it has already been produced in its entirety (on an
episode-by-episode or season-by-season basis, as applicable). In the
event of any such withdrawal or termination, Licensor shall give Licensee as
much notice as possible, and the parties shall have no obligations to each other
with regard to Programs not produced, subject to Section 7.1 and Licensee’s
remedies for a breach thereof.
3.11 Notwithstanding
anything herein to the contrary, any incremental cost or expense of Licensor
relating to this Section 3 that would not have been applicable prior to December
19, 2001, shall be borne by Licensee.
4. Royalties and License
Fees.
4.1 (a) Licensee
shall pay Licensor henceforth (and retroactively between January 1, 2009 and the
date hereof) a royalty (the “Royalty”) in cash in an aggregate amount equal
to
(i) 9.36%
of the Royalty Base, plus
(ii) 2.02%
of the excess, if any, of the Royalty Base over $1,548,500,000.
(b) Licensee
will, and will cause its Affiliates to, ensure that the pricing of vignettes and
other similar short-form programs included in the Royalty Base is expressly
identified and set forth in a written agreement or invoice with the applicable
advertiser or sponsor.
(c) Licensee
agrees that it will, and will cause its Affiliates to, use good faith efforts
not to structure arrangements or agreements in a manner intended to cause
revenues of transactions or series of related transactions that would otherwise
be included in the Royalty Base not to be included in the Royalty Base and will
ensure that each of the Packaged Sales Transaction Process, Vignettes
Transaction Process, and Allocations are made at arm’s length and in good
faith.
(d) For
purposes of this Agreement only:
(i) “Allocations”
means allocations made by Licensee or its Affiliates of revenues from
transactions, or series of related transactions, that are both (A) excluded in
part from the definition of the Royalty Base; and (B) included in part in the
definition of the Royalty Base.
(ii) “Audience
Deficiency” means the failure of Licensee or its subsidiaries to deliver the
total number of rating points, thousands of viewers and/or impressions
guaranteed to an advertiser by Licensee or its subsidiaries, determined on an
Excluded Match by Excluded Match basis (but not a game by game basis) and
advertiser by advertiser basis by deducting the actual audience delivered (based
on the audience demographic specified in the related advertising contract) for
the Excluded Matches, as determined by Nielsen or a similar independent rating
service from the audience guaranteed for the Excluded Matches (based on the
audience demographic specified in the related advertising
contract).
(iii) “Audience
Deficiency Units” means advertising spots aired by Licensee or its subsidiaries
on the Networks or (to the extent Licensee is subject to contractual obligations
to provide such spots on Stations and Licensee has a system to track such
obligations) Stations to satisfy, make up or compensate for an Audience
Deficiency.
(iv) “Duration”
shall be the airtime used (calculated based on seconds) for exhibiting a
commercial, sponsored promotional material or any other type of advertising
(other than up to an aggregate of 10 seconds of a billboard or bumper for which
such 10 seconds Licensee or its Affiliates do not charge and which is part of
commercial advertising time for which Licensee or its Affiliates do charge with
respect to at least 30 seconds in the aggregate).
(v) “Excluded
Matches” means (a) the World Cup, Copa Oro and Copa America soccer games
(including the opening and closing ceremonies of each of the foregoing) and
programming immediately preceding, immediately following, or during half-times
or other scheduled breaks of such games and (b) the World Cup Draw Ceremony
(provided that, for the avoidance of doubt, an Excluded Match may include less
than a full soccer game if the broadcast of the game is interrupted for other
broadcasting, including another game, for no more than 45 minutes or
the airing of the game commences no more than 45 minutes after
commencement of the actual game, in each case so long as such broadcast is
initially intended to run through completion of such game, and clips or
vignettes are not Excluded Matches).
(vi) “Excluded
Matches Advertising Revenue” means all revenues (whether or not such sources of
revenue are now or hereafter in existence) billed or billable by or on behalf of
Licensee to any third party in relation, directly or indirectly, to any type of
sale of advertising (including, but not limited to, revenue from times sales for
advertising, product placements or integration, in-program sponsorships and
similar revenue) contained in any broadcast, rebroadcast, use, transmission,
delivery or other distribution (whether such broadcast, rebroadcast, use,
transmission, delivery or other distribution is on an advertising basis,
subscription basis, or otherwise and by whatever name, categorization or
characterization thereof) of the Excluded Matches substantially in full (as
described in the definition of “Excluded Matches”) on the Networks and the
Stations, less advertising agency commissions, volume discounts, and prompt pay
discounts actually paid to or retained by third parties or incurred and deducted
by third parties. It is agreed that Excluded Matches
Advertising Revenue shall not include any advertising revenue derived from any
programming other than the Excluded Matches, such as but not limited to, (A) any
advertising time provided as an incentive or inducement for any third
party to purchase time during Excluded Matches, (B) any advertising time or
vignettes sold as a package with advertising on Excluded Matches but to be aired
during any programming other than the Excluded Matches, or (C) any Audience
Deficiency Units arising out of the exhibition of Excluded
Matches. The calculation of any advertising revenue referenced
in the immediately preceding sentence will be based on the Unit Rate and
Duration of the applicable advertising, and determined on an Excluded
Match-by-Excluded Match basis (but not a game-by-game basis) and
advertiser-by-advertiser basis. For the sake of clarity, any Audience
Deficiency Units that are provided due to an Audience Deficiency with respect to
an Excluded Match other than an Audience Deficiency Unit provided in an Excluded
Match shall be included in the calculation of the Royalty Base. For
purposes of calculating “Excluded Matches Advertising Revenue,” media for media
barter shall be valued at 100% of fair value determined by reference to the Unit
Rate, and all other barter transactions will be included at 100% of fair value
of the goods or services received by Licensee in consideration for the
advertising time.
(vii) “Grandfathered
Programs” has the meaning given to such term in the Amended and Restated
International Program Rights Agreement, dated as of December 19, 2001, by and
between Licensee, GT, and Venevision.
(viii) “JSA
Income” means income received by any of Licensee and its subsidiaries under
joint marketing and sales agreements for stations owned, but not operated, by
Licensee or any of its subsidiaries, and affiliated with one of the
Networks.
(ix) “National
Representation Commissions” means fees charged by any of Licensee and its
subsidiaries to their non-owned and non-operated affiliates for acting as a
national television advertising sales representative.
(x) “Net
Advertising Revenue” means all revenues (whether or not such sources of revenue
are now or hereafter in existence) billed or billable by or on behalf of any of
Licensee and its Affiliates to any third party in relation, directly or
indirectly, to any type of sale of advertising (including, but not limited to,
revenue from times sales for advertising, product placements or integration
(including, but not limited to, product placements or integration as
contemplated by Section 3.9), in-program sponsorships and similar revenue)
attributable to the contemporaneous or delayed viewing (by whatever name,
categorization or characterization thereof) of any program (including without
limitation Programs, Special Programs, Co-Produced Programs, Grandfathered
Programs and/or other programs) on the Networks and/or Stations, less advertising
agency commissions, volume discounts, and prompt pay discounts actually paid to
or retained by third parties or incurred and deducted by third parties; provided that for
purposes of calculating Net Advertising Revenue, media for media barter shall be
valued at 100% of fair value determined by reference to the average unit price
for advertising sold for cash to third parties in the programs in which the
barter is aired and all other barter transactions will be included at 100% of
fair value of the goods or services received by any of Licensee and its
subsidiaries in consideration for the advertising time; provided, further, that for the
avoidance of doubt, the use of unsold inventory by Licensee or its subsidiaries
or Licensor as provided in Section 6 or by Venevision shall not be considered
advertising revenue for the purpose of or be included in calculating Net
Advertising Revenue. Notwithstanding the foregoing, if Licensee or
its subsidiaries sells or acquires a business or assets to or from a third party
(that is not a subsidiary of Licensee) in which Network or Station advertising
time is committed to such third party in the case of a sale or all or a portion
of the consideration is advertising time in the case of an acquisition, Licensee
will provide Licensor with its reasonable determination of the relative fair
value (as such concept is described in Emerging Issues Task Force Issue 00-21 or
any successor issue or standard) of such advertising time and the basis of such
determination. If Licensor disagrees with Licensee’s determination,
Licensor may require Licensee to engage a nationally recognized appraisal firm
to determine the relative fair value of such advertising time; provided that
Licensee will not be required to engage such an appraisal firm if its
determination in the immediately preceding sentence had been based on an
appraisal of such a nationally recognized appraisal firm. The value
of such advertising time as calculated pursuant to the two preceding sentences
shall be included in the calculation of the Royalty Base. Nothing in
this definition is intended to or shall be deemed to modify Section 1.1(a)
hereof or the license granted pursuant thereto or to in any way permit any use
of Programs other than the broadcast of Programs during the Term on the
Networks.
(xi) “Net
Subscriber Fee Revenue” means all revenues (whether or not such sources of
revenue are now or hereafter in existence) billed or billable by or on behalf of
any of Licensee and its subsidiaries in relation, directly or indirectly,
to the distribution of any of the Networks, Stations, Programs,
Special Programs (other than Special Programs produced by Licensee and Special
Programs produced by a third party the rights for which were obtained by
Licensee without any assistance or efforts by Licensor and/or its Affiliates),
Co-Produced Programs and/or Grandfathered Programs (whether such distribution is
advertising-based, subscription-based, or otherwise and by whatever name,
categorization or characterization thereof, including, but not limited to,
payments from multiple systems operators characterized as a fee for insertion of
commercials in the Networks, Stations, Programs, Special Programs (other than
Special Programs produced by Licensee and Special Programs produced by a third
party the rights for which were obtained by Licensee without any assistance or
efforts by Licensor and/or its Affiliates), Co-Produced Programs and/or
Grandfathered Programs, including, but not limited to, cable, fixed telephone
line, satellite, and other distributor and telecommunications subscriber fees or
similar fees related to distribution of any of the Networks, Stations, Programs,
Special Programs (other than Special Programs produced by Licensee and Special
Programs produced by a third party the rights for which were obtained by
Licensee without any assistance or efforts by Licensor and/or its Affiliates),
Co-Produced Programs and/or Grandfathered Programs, and retransmission rights
fees, but excluding revenues from the distribution of any networks or stations
that do not include the Networks, Stations, Programs, Special Programs (other
than Special Programs produced by Licensee and Special Programs produced by a
third party the rights for which were obtained by Licensee without any
assistance or efforts by Licensor and/or its Affiliates), Co-Produced Programs
and/or Grandfathered Programs and any advertising revenue related to any
Licensee media outlet other than the Networks and Stations up to the amount set
forth in Schedule 4.1(d)(xi), which shall be agreed by the parties as soon as
possible following the date hereof less any holdbacks
and obligatory costs imposed on Licensee or its subsidiaries by third parties
(including any amounts which would otherwise constitute “Net Subscriber Fee
Revenue” to the extent such amounts are actually paid to non-owned and
non-operated affiliates of the Networks) and actually paid by Licensee or its
subsidiaries to, or actually retained by, third parties (and which shall not
include the value of unsold inventory which Licensee or its subsidiaries has
made available to third parties as part of the arrangement to carry any of the
Networks, Stations, Programs, Special Programs (other than Special Programs
produced by Licensee and Special Programs produced by a third party the rights
for which were obtained by Licensee without any assistance or efforts by
Licensor and/or its Affiliates), Co-Produced Programs and/or Grandfathered
Programs, and in such case, such unsold inventory shall be valued at $0 for
purposes of the Royalty Base) such as cable, fixed telephone line and satellite
companies and other distributors or telecommunications companies in connection
with retransmission consents and expanded cable, fixed telephony or satellite,
or other distribution which are related to such subscriber fees and other fees
of a similar nature imposed by third parties. Nothing in this
definition is intended to or shall be deemed to modify Section 1.1(a) hereof or
the license granted pursuant thereto or to in any way permit any use of Programs
other than the broadcast of Programs during the Term on the
Networks.
(xii)
“Packaged Sales” means sales to an advertiser in a single transaction or a
series of related transactions1 of both (A) advertising
(by whatever name, categorization or characterization thereof) whose revenues
are included in the Royalty Base; and (B) advertising (by whatever name,
categorization or characterization thereof) whose revenues are excluded from the
Royalty Base.
_________________________
1 By way of example, a series
of related transactions would include, without limitation, (i) negotiations
which occur simultaneously/concurrently across multiple platforms based on
an advertiser's expressed spending commitment by platform during those
negotiations; or (ii) an advertiser, after making a network television-only
upfront purchase specifically requesting to reduce that commitment to network
and direct the reduced amount to another platform either locally or
nationally. By way of example, an unrelated series of transactions
would include, without limitation, discrete transactions resulting from multiple
negotiations which take place throughout the year across different platforms as
directed by the advertiser and/or its agent.
(xiii) “Packaged
Sales Transaction Process” means the full sales and negotiations process and
final result of each transaction, including the original proposed pricing and
final pricing, of Packaged Sales.
(xiv) “Royalty
Base” means the sum, calculated on an accrual basis, of (A) Net Advertising
Revenue, (B) Net Subscriber Fee Revenue, (C) National Representation
Commissions, (D) JSA Income, and (E) all other revenues (whether or not such
sources of revenue are now or hereafter in existence) directly or indirectly
relating to, based on or derived from any Program, Special Program (other than
Special Programs produced by Licensee and Special Programs produced by a third
party the rights for which were obtained by Licensee without any assistance or
efforts by Licensor and/or its Affiliates) , Co-Produced Program or
Grandfathered Program in whole or in any part, less Excluded Matches Advertising
Revenue. For the avoidance of doubt, in the event that any amounts
are covered by more than one of the items listed in clauses (A)-(E) above, for
the purposes of calculating the Royalty Base, any such amounts will be included
only once (i.e. no double-counting). The calculation of the Royalty
Base shall be consistent with the calculation attached as Schedule 4.1(d)(xiv)
hereto, which shows the calculation of the Royalty Base for the years 2002 to
2007. Nothing in this definition is intended to or shall be deemed to
modify Section 1.1(a) hereof or the license granted pursuant thereto or to in
any way permit any use of Programs other than the broadcast of Programs during
the Term on the Networks.
(xv) “Unit
Rate” means the average unit price (excluding zero dollar spots and direct
response spots) for advertising sold in the applicable programming and/or time
slot.
(xvi) “Vignettes
Transaction Process” means the full sales and negotiations process and final
result of each transaction, including the original proposed pricing and final
pricing (documented as required by Section 4.1(c)), of vignettes and other
similar short-form sponsored programs.
4.2 The
Royalties shall be paid by Licensee to Licensor currently on a monthly basis on
the twelfth business day after the end of each month in a single payment, based
upon Licensee’s good faith best estimate at such time of the amounts
accrued. Appropriate adjustments (the “Adjustments”) will be made to
Royalties on a quarterly basis within 45 days after the end of each quarter, the
full amount of which shall be paid by Licensee or credited in Licensee’s favor
against future payments by Licensee, as the case may be, with the next monthly
payment of Royalties for any difference between the amounts so paid and those
finally determined to have accrued. In all cases, the calculation of
the Adjustments will be made by Licensee as promptly as practicable, but in any
case in time to be delivered to Licensor with such payment.
4.3 All
payments made pursuant to this section shall be in cash in U.S. currency and
shall be accompanied by a royalty calculation, calculated regardless of the
amount of Programs licensed hereunder or whether such Programs are broadcast,
detailing, by Network, each of the components of the Royalty Base, and setting
forth the amount of royalty payable based on the monthly financial information
prepared for Licensee’s internal reporting purposes which are estimates and
subject to the more formal closing procedures performed quarterly and
annually. Within 45 days after each quarter end, Licensee will
provide a royalty calculation including the same categories of information as
the monthly royalty statements, showing the calculation of the Royalty Base as
reported in its quarterly financial statements, and truing up the monthly
financial information to the quarterly financial information. Prior
to delivery to Licensor, all royalty calculations (whether monthly, quarterly,
annual or otherwise) shall be reviewed and approved by the highest-ranking
accounting officer of Licensee or the executive officer to whom such senior
accounting officer reports. Each of Licensee and Licensor will
appoint a contact person who is knowledgeable of the calculation of the Royalty
Base to coordinate with each other, and Licensee’s contact person will provide
to Licensor further information and documentation as reasonably requested, which
may include worksheets and workpapers used for or underlying such
calculation. Starting with its 2009 financial statements, Licensee
will include in the segment footnote to its audited financial statements
(including those filed with the Securities and Exchange Commission (“SEC”), if
any) a line item in the television segment, which will be defined in such
footnote, to include only the Royalty Base, except for a reconciling item to
adjust barter revenues to fair value to the extent needed.
4.4 The
computation of the annual Royalty Base will be reviewed within 90 days of the
end of each fiscal year by Licensee’s independent certified public accounting
firm. By the 180th day of each fiscal year, such accounting firm will
deliver a certificate to Licensor attesting to the accuracy of the Royalty Base
computation, including any Allocations contained therein, and the amount of the
royalty payable to Licensor, in all respects material to such Royalty Base;
provided, however, that Licensee shall not be in breach of this obligation if a
change in the rules governing such accounting firm’s profession results in the
issuance of the certificate being prohibited for reasons outside Licensee’s
control. Within the same time period, the chief financial officer of
Licensee will deliver a certificate to Televisa attesting to the accuracy of the
Royalty Base computation and the amount of the royalty payable to Licensor, in
each case in all respects material to such Royalty Base, and the highest-ranking
sales officer of Licensee will deliver a certificate to Televisa attesting that
the Packaged Sales Transaction Process and Vignettes Transaction Process have
been made at arm’s-length and in good faith in all respects material to the
Royalty Base. Licensee shall pay for the preparation of such
certificates and their delivery to Licensor.
4.5 In
connection with the audit rights contained herein, Licensor may request
additional certificates and services either from Licensee’s accounting firm or
from a firm of certified public accountants chosen by Licensor. The
fees and expenses of the certified public accountants providing such additional
certificates and performing such additional services pursuant to this Section
4.5 shall be paid by Licensor, unless such verification results in an adjustment
in Licensor’s favor equal or greater than 5% of the annual amount originally
computed by Licensee, in which case such fees and expenses shall be paid by
Licensee. Following delivery of any of the certificates described in
Section 4.4, Licensor may, at its election, initiate an audit by an independent
auditor (which shall be a firm of certified public accountants) designated by
Licensor of the computation of the Royalty Base, the Packaged Sales Transaction
Process, the Vignettes Transaction Process and/or Allocations having been made
at arm’s-length and in good faith; provided, that with respect to any year, if
any certificate is not provided within the time frame set forth in Section 4.4,
or if Licensee fails to file its annual report by the time required under the
rules of the SEC (assuming for these purposes that it is a publicly reporting
company), Licensor may initiate an audit with respect to any time period at any
time and from time to time thereafter, until all certificates set forth in
Section 4.4 are timely provided and (if required) Licensee’s annual report is
timely filed for a subsequent year; provided that such provision and filing
shall not terminate any audit then in progress. Licensee agrees to
provide any such certified public accountants with access to all business,
financial and accounting records of Licensee and its divisions and subsidiaries
that are relevant to determine whether the Royalty Base has been properly
computed and/or whether Allocations, Packaged Sales Transaction Process and/or
Vignettes Transaction Process have been made at arm’s-length and in good faith,
including without limitation agreements described in Section 4.1(b), and to
provide reasonable access to relevant personnel of Licensee or any of its
Affiliates. If Licensor’s accountants notify Licensor of a finding
that Licensor believes is likely to constitute a breach of this Agreement,
Licensor will notify Licensee within 15 days of such notification and will
thereafter permit Licensee to meet at a reasonable time and place with such
accountants to discuss such finding.
4.6 With
respect to Packaged Sales, Licensee shall meet with Licensor each July and
January to discuss detailed information, which will be provided reasonably in
advance of such meeting, as to the Packaged Sales made in the prior January-June
and July-December periods, respectively, by the top fifty advertisers (by dollar
amount). Such information will include a schedule of such top fifty
advertisers’ involvement in Packaged Sales, including but not limited to, for
each such advertiser, the dollar amount sold and/or allocated by Licensee or its
subsidiaries to each media platform or, if applicable, each portion of a media
platform or other revenue category to the extent revenues of a media platform or
revenue category (or portion of a media platform) may include advertising
described in both clauses (A) and (B) of the definition of “Packaged Sales,” and
rates, discounts (if applicable), and terms of sales. For Packaged
Sales involving Allocations, the information shall include the dollar amount
allocated to each media platform and the allocation methodology
used. For Packaged Sales not involving Allocations, the information
shall include final price information for the amount sold in each media
platform. Following each such meeting, Licensor will be entitled to
reasonably request additional information of the same type with respect to up to
five (5) additional advertisers and their respective sales which are not among
such top fifty advertisers, and Licensee agrees to provide such information
within six weeks after such request. Licensor will provide its
requests no later than fifteen business days after the conclusion of each such
meeting.
4.7 Licensee
will provide to Licensor a report within 45 days following the end of the fiscal
quarter that included the last game of each Excluded Match that will include a
breakdown of the calculation of Excluded Matches Advertising
Revenue. The report shall include, among other things, detailed
information of any advertising sold in connection with the Excluded Match that
was aired other than during the Excluded Matches, including but not limited to
any advertising referenced in the second sentence of the definition of “Excluded
Matches Advertising Revenue.”
4.8 Any
and all sums payable on account of sales, use or other similar taxes arising out
of or relating to the licensing or exhibition by Licensee of the Programs,
Special Programs or Co-Produced Programs, in addition to any personal property
or other tax assessed or levied by any governmental unit arising out of or
relating to the storage or possession of the Programs thereof by Licensee shall
be paid by Licensee.
4.9 Licensee
may deduct and withhold from any payment to or for the account of Licensor with
respect to the Royalties, such amounts as it in good faith determines it is
required to withhold with respect to such payment under applicable United States
and state tax withholding laws, and shall promptly remit such amounts to the
appropriate taxing authority. Within 30 days of any such remittance,
Licensee shall furnish to Licensor the original or certified copy of a receipt
evidencing payment, or other evidence of payment reasonably satisfactory to
Licensor. If Licensor has timely filed with Licensee a duly completed
Form 4224, 1001, W-8 or W-9, of the Internal Revenue Service (or successor form
thereto) or has complied with applicable procedures under state law, entitling
it to exemption from, or a reduced rate of, withholding under the applicable law
or regulations, the amount withheld shall be accordingly
limited. Licensee shall cooperate in any reasonable manner requested
by Licensor to minimize Licensor’s withholding tax liability.
4.10 Licensor
agrees not to provide any notice pursuant to Section 4.2 of the Venevision
Agreement in such a manner that will result in an increase of the “Program
Royalty” (as defined in the Venevision Agreement) payable to Venevision under
the Venevision Agreement.
4.11 If
Licensee is more than 30 days late in paying any amount due to Licensor under
this Section 4, such late amounts shall thereafter bear interest at a rate equal
to LIBOR plus 5%, plus any applicable withholding.
4.12 Except
as expressly consented to in writing by Televisa (which consent may be withheld
in Televisa’s sole and absolute discretion), Licensee shall not directly or
indirectly, including but not limited to through its respective subsidiaries or
any other Affiliates, enter into or consummate any arrangement to sell, transfer
or otherwise dispose of (including, but not limited to, by way of spin-off or
other similar transaction) any interest in any Network. Except as
expressly consented to in writing by Televisa (which consent may be withheld in
Televisa’s sole and absolute discretion), Licensee shall not directly or
indirectly, including but not limited to through its respective subsidiaries or
any other Affiliates, enter into or consummate any arrangement to sell, transfer
or otherwise dispose of (including, but not limited to, by way of spin-off or
other similar transaction) any interest in, transfer operational responsibility
for or disaffiliate from the Networks any of the Stations which broadcasts in
the Spanish language in any of the top 15 Hispanic markets in the United States
(or any Replacement Station thereof) (the “Specified Stations”), except that
Licensee shall be permitted to:
(a) sell
or dispose of a Specified Station so long as (i) one or more other station(s)
owned and operated by Univision and within the same market as such Specified
Station and affiliated with the same Network or Networks as the such Specified
Station (a “Replacement Station”) can replace the operations of the transferred
station through the operation of the Replacement Station which is reasonably
comparable to the Specified Station (including substantially comparable or
better coverage), (ii) the total revenues of the Replacement Station are greater
than or equal to the total revenues of such Specified Station as of the date of
the sale or disposition, and (iii) the Replacement Station shall be a Station
for purposes of the Royalty Base, with the national and local revenues of the
Replacement Station included in the Royalty Base;
(b) sell
or dispose of a Specified Station if (i) such Specified Station continues to be
affiliated with the Network(s) with which it was affiliated prior to such sale
or disposition for the Term, (ii) such Specified Station shall continue to be a
Station for purposes of the Royalty Base, with the national and local revenues
of such Specified Station included in the Royalty Base, and (iii) the acquirer
of such Specified Station agrees, in a writing to which Licensor is a party or a
beneficiary, to provide revenue information for the station to Licensee and to
be bound (and to require any successor acquirer to be bound) by the provisions
of this Section 4.12 as though it were a party hereto and such Specified Station
continued to be a Specified Station hereunder;
(c) transfer
operational responsibility for a Specified Station if (i) such Specified Station
continues to be affiliated with the Network(s) with which it was affiliated
prior to such sale or disposition for the Term, (ii) such Specified Station
shall continue to be a Station for purposes of the Royalty Base, with the
national and local revenues of such Specified Station included in the Royalty
Base, and (iii) the person assuming operational control of such Specified
Station agrees, in a writing to which Licensor is a party or a beneficiary, to
provide revenue information for the station to Licensee and to be bound (and to
require any successor operator to be bound) by the provisions of this Section
4.12 as though it were a party hereto and such Specified Station continued to be
a Specified Station hereunder;
(d) disaffiliate
a Specified Station from a Network if (i) such Specified Station continues to be
owned by Licensee and (ii) the average of the portion of the Royalty Base
attributable to such Specified Station for each of the preceding two years
continues to be included in the Royalty Base for the Term;
(e) sell,
transfer or otherwise dispose of WFTY-TV currently licensed to Smithtown,
NY;
(f) sell,
transfer or otherwise dispose of a Station, if a law, rule, regulation or final,
non-appealable binding order or decision of any governmental authority requires
the Licensee to sell such Station (or to lose the license for such Station in 12
or fewer months if such sale does not occur), provided that Licensee shall use
commercially reasonable efforts to replace such Station with a reasonably
comparable station as promptly as reasonably practical; and
(g) maintain
and/or extend the term of its existing joint marketing and sales agreements on
materially the same or better terms for Licensee as of the date
hereof.
Section
4.12 shall not restrict a sale of all or substantially all of the assets of
Broadcast Media Partners, Inc. in one or a series of related transactions, the
sale of shares of Broadcast Media Partners, Inc., or a merger of Broadcast Media
Partners, Inc.
The
agreement memorialized in the letter regarding “Disposition of Networks” from
Univision Communications Inc. to Alfonso de Angoitia, dated December 19, 2001,
is hereby terminated and shall have no further force or effect.
5. Special Programs,
Co-Produced Programs and Other Special License Matters.
5.1 For
purposes of this Agreement:
(a) “Special
Programs” means special programs such as the World Cup, other sporting events
(other than soccer games played by teams in the Mexican Soccer League),
political conventions, election coverage, parades, pageants, special variety
shows and other non-episodic and non-continuing shows.
(b) “Non-Televisa-Produced
Special Programs” means Special Programs not produced directly or indirectly by
or for Televisa.
(c) “Televisa-Produced
U.S. Special Programs” means Televisa-Produced Special Programs for which
Licensor has adequate rights to license such Special Programs to Licensee under
the terms of this Agreement.
(d) “Televisa-Produced
Non-U.S. Special Programs” means Televisa-Produced Special Programs for which
Licensor does not have adequate rights to license such Special Programs to
Licensee under the terms of this Agreement.
(e) “Televisa-Produced
Special Programs” means Special Programs directly or indirectly produced by or
for Televisa.
5.2 Licensor
shall use its best efforts, and shall cause its Affiliates to use their best
efforts, to coordinate its Non-Televisa-Produced Special Program acquisitions
with those of Licensee, so as to permit Licensee to participate therein and to
acquire rights in the Territory to such programs on an advantageous basis and on
terms satisfactory to Licensee; provided, however, that the
obligation to use “best efforts” shall not be interpreted to include any
obligation of Licensor or its Affiliates to expend additional money to permit
Licensee’s participation or to acquire rights on an advantageous
basis.
5.3 Televisa-Produced
U.S. Special Programs shall be “Programs” for all purposes of this
Agreement.
5.4 At
the request of Licensee, Licensor shall use its best efforts, and shall cause
its Affiliates to use their best efforts, to acquire broadcast rights in the
Territory on terms satisfactory to Licensee for Televisa-Produced Non-U.S.
Special Programs and any Co-Produced Program that falls within clause (i) (but
not clause (ii)) of the definition of “Co-Produced Programs” in Section 1.2(b);
provided, however, that the
obligation to use its “best efforts” shall not be interpreted to include any
obligation of Licensor to expend additional money, except to the extent
reimbursed by the “Special Event Fee” (as defined below). Such
programs accepted by Licensee shall be licensed hereunder to Licensee for a
license fee (such additional fee, the “Special Event Fee”) (which such Special
Event Fee shall be in addition to the inclusion of revenues attributable to such
programs in the Royalty Base) in the amount of the cost to Licensor of the
acquisition of broadcast rights in the Territory to such program, such costs to
be determined by the parties in good faith based on the portion of the total
amount paid by Licensor for broadcast rights that is reasonably allocated to the
acquisition of broadcast rights in the Territory.
5.5 Licensor
shall offer Licensee in accordance with all applicable provisions of this
Agreement all Co-Produced Programs that fall within clause (ii) of the
definition of “Co-Produced Program” in Section 1.2(b) for which program Licensor
has or can obtain adequate rights and licensing authority to offer such programs
to Licensee in compliance with the terms and conditions of this
Agreement. Compensation to Licensor for all Co-Produced Programs
accepted by Licensee under this Section 5.5 shall be in addition to the
inclusion of revenues attributable to such Co-Produced Programs in the Royalty
Base and shall be computed and paid in accordance with such terms as the parties
may mutually agree in writing. If the parties are unable to agree on
the royalty for any Co-Produced Program within 10 days after such program is
offered by Licensor, such program may be sold to others in the Territory, so
long as Licensor in good faith determines that the terms and conditions
applicable to such sale are more favorable to the Licensor than those offered by
the Licensee in writing within such 10-day period.
6. Unsold Advertising
Time.
6.1 Advertising
time on the Networks and Stations shall first be sold (including, but not
limited to, by any type of barter, including as part of a transfer of assets or
otherwise) to third party advertisers or used to make good on Audience
Deficiency Units. Subject to Section 6.2, advertising time that
remains unsold may be utilized by Licensee at no cost for its own use
(including, but not limited to, for public service announcements or for
obtaining satellite or cable carriage of the Networks and/or Stations), and for
use (a) by its divisions and controlled subsidiaries no matter the nature of
their business and (b) as part of the consideration to acquire or make an
investment in an unaffiliated third party in a strategic transaction in which
Licensee acquires an equity interest of 20% or more of such third party, if such
transaction (including the consideration) is approved by the board of Broadcast
Media Partners, Inc. and the unsold advertising time does not exceed a
reasonable amount as determined by the board of directors of Broadcasting Media
Partners, Inc. on a transaction by transaction basis; provided, that if any such
advertising time is used by Licensee for use by or promotion of any television
network and/or television station the revenues related to which are not
encompassed in the Royalty Base, then Licensor shall be entitled to twice the
number of spots on such network and/or station in the same
daypart. Subject to Section 6.8, thereafter and after giving effect
to Section 6.2, half of any remaining unsold inventory shall be provided to
Licensor for use by Licensor or its Affiliates at no cost for promotion of any
of their businesses; provided that Licensor and its Affiliates may not use such
unsold inventory for promotion of (i) any television network that competes with
a Network in the Territory or (ii) in the event that Programs (other than those
that are permitted
under Section 21(b)) are accessible in the Territory on a website, such
website (it being understood and agreed that use of such inventory by Licensor
or its Affiliates for any purposes other than those restricted by this proviso
shall be permitted, including without limitation promotion of any other
businesses that may be competitive with businesses of Licensee or its
Affiliates). The immediately preceding sentence is without prejudice
to Licensee’s position that Licensor does not have the right to transmit
Programs into the Territory over the Internet (other than as permitted under
Section 21(b)) and is without prejudice to Licensor’s position that it
does.
6.2 Taking
into account the settlement provided for in the Mutual Release and Settlement
Agreement, dated as of even date herewith, by and among Televisa, S.A. de C.V.,
GT, Licensee, and Telefutura Network, notwithstanding Section 6.1, and subject
to Section 6.3, Licensee guarantees that it will provide to Licensor an amount
of advertising for each calendar year commencing with 2009 (the “Televisa
Advertising”) with a gross value of not less than $59,000,000, subject to
adjustment as set forth below (with respect to each calendar year, the
“Guaranteed Base Advertising Amount”), and an additional amount of Televisa
Advertising with a gross value of not less than $7,500,000 (with respect to each
calendar year, the “Guaranteed Additional Advertising Amount” and, together with
the Guaranteed Base Amount, the “Guaranteed Advertising Amount”), for use by
Licensor or its Affiliates at no cost for promotion of any of their businesses;
provided that Licensor and its Affiliates may not use such unsold inventory for
promotion of (i) any television network that competes with a Network in the
Territory or (ii) in the event Programs (other than those that are permitted
under Section
21(b)) are accessible in the Territory on a website, such website (it
being understood and agreed that use of such inventory by Licensor or its
Affiliates for any purposes other than those restricted by this proviso shall be
permitted, including without limitation promotion of any other
businesses that may be competitive with businesses of Licensee or its
Affiliates) The immediately preceding sentence is without prejudice
to Licensee’s position that Licensor does not have the right to transmit
Programs into the Territory over the Internet (other than as permitted under
Section 21(b)) and is without prejudice to Licensor’s position that it
does. Starting on January 1, 2010, the Guaranteed Base Advertising
Amount will be adjusted on the first day of each fiscal year in the Term based
on the percentage increase from the prior fiscal year in the consumer price
index published by the U.S. Bureau of Labor Statistics. For example,
if such index increases by 3% during fiscal year 2009 and by another 3% during
fiscal year 2010, then the Guaranteed Base Advertising Amount shall be
$60,770,000 for 2010 and $62,593,100 for 2011. Licensee may be
required to satisfy this Guaranteed Advertising Amount by allowing Televisa to
use commercial time that Licensee or its subsidiaries would otherwise be
entitled to use for its own purposes or to sell to third parties under Section
6.1.
6.3 No
later than 10 business days before the beginning of a quarter, Licensor will
inform Licensee of the advertising campaigns that it wants to run during the
following quarter. In any quarter, Licensee shall air no less than
20% of the Guaranteed Advertising Amount nor more than 30% of the Guaranteed
Advertising Amount. In any annual period (including fiscal year 2009
but excluding the last annual period of the Term), Licensee shall air no less
than 95% of the Guaranteed Advertising Amount (excluding any make-up amount)
and, in the event that it airs less than 100% of the Guaranteed Advertising
Amount, shall make up for any such shortfall in the first quarter of the next
annual period. In the last annual period of the Term Licensee shall
air no less than 100% of the Guaranteed Advertising Amount (excluding any
make-up amount) and all make-up amounts.
6.4 Of
the Guaranteed Advertising Amount, no less than 60% will be made available on
the Networks and the remainder on the Stations. Licensor may request,
and Licensee will use best efforts to honor (and to cause the Stations and its
Affiliates to honor) such requests, a diverse Station mix; provided that
Licensee shall have no obligation to honor any specific request for any Station
that is in excess of 3% of the value of the local gross advertising revenue for
such Station during the prior year. Licensee shall provide Licensor
with an annual report within 90 days of the end of each fiscal year setting
forth all gross advertising revenue from local advertising.
6.5 Each
year during the upfront season, Licensee will provide Licensor with the annual
commercial ratings upfront rate card in effect for the four quarters of the
following broadcast year which is used to negotiate with third parties, gross of
any advertising agency or similar commissions. For the purpose of
calculating the amount of Televisa Advertising to be furnished to Licensor at no
cost in order to satisfy the Guaranteed Advertising Amount, all advertising on
the Network will be priced at 80% of the amount set forth on such upfront rate
card for such time slot, and all advertising on the Stations will be priced
based on the monthly average rate for all advertising for such Station for the
month of airing on a station by station and daypart by daypart basis, not
including direct response and zero dollar spots.
6.6 Airing
of the Televisa Advertising will be closely coordinated between Licensee and
Licensor with the intention that Televisa’s advertising will be provided a
reasonable advertising schedule, but recognizing that unaffiliated third party
paid advertising will take precedence, subject to the last sentence of Section
6.2. Licensee’s obligation to provide Licensor with the advertising
hereunder is based on availability on the terms described in this Section 6, but
in any event any Televisa Advertising would not air before 6:00 a.m. or after
1:00 a.m. within the applicable market. Four days before the
beginning of each week, Licensee will confirm to Licensor which network
advertising will air during the following week, and to the extent Licensee is
unable to confirm such week, it would attempt to confirm another week within the
same quarter. Licensee shall provide Licensor with pre-logs showing
the planned advertising schedule at least one day in advance of the airing of
any Televisa Advertising, and shall not permit any tampering with the tracking
codes of any Televisa Advertising. Within 90 days of the end of each
calendar year, an officer of Licensee will provide to Licensor a report setting
forth in reasonable detail the schedule and value of the Televisa Advertising
provided during such year. Licensee and Licensor shall each appoint a
single contact person for the coordination, orders and confirmations described
in this Section 6, which person (or his or her duly named substitute) shall be
knowledgeable of these requirements and, in the case of Licensee, the
availability of time on the Networks and Stations, and is able to provide
further information if needed.
6.7 Notwithstanding
anything to the contrary contained herein and in addition to any other
obligations of Licensee contained herein, at least two-thirds of the Guaranteed
Additional Advertising Amount shall be on a non-preemptable basis as would apply
to a non-preemptable upfront advertiser.
6.8 Televisa
and its Affiliates shall be permitted to purchase additional advertising time on
the Networks which cannot be preempted by Licensee or its Affiliates, which time
shall be sold for the lowest spot rate then being offered for a non-preemptable
spot in the program during which such time is sold.
6.9 Licensor
may not directly or indirectly make the advertising made available under this
Section 6 available to Persons other than its Affiliates. All
material provided for broadcast by Licensor and its Affiliates shall comply with
the quality standards for unaffiliated advertisers established by Licensee or
its subsidiaries from time to time. A copy of such standards will be
provided to Licensor at least one week prior to Licensor’s material becoming
subject thereto. The then-current standards may not be changed in
such a way as to intentionally and adversely impact the use by Televisa and its
Affiliates of advertising time under this Section 6.
7. Representations and
Warranties.
7.1 Licensor
hereby agrees, warrants and represents as follows:
(a) Licensor
is free to enter into and fully perform this Agreement;
(b) Licensor
has or will have the right to grant to Licensee the broadcast rights to the
Accepted Programs in the Territory set forth in this Agreement, including but
not limited to the necessary literary, artistic, technological and intellectual
property rights and has secured or will secure all necessary written consents,
permissions and approvals for incorporation into such Programs of the names,
trademarks, likenesses and or biographies of all persons, firms, products,
companies and organizations depicted or displayed in such Programs, and any
preexisting film or video footage produced by third parties;
(c) There
are no and will not be any pending claims, liens, charges, restrictions or
encumbrances on the Accepted Programs that conflict with the broadcast rights
granted hereunder to such Programs in the Territory;
(d) Licensor
has paid or will pay all compensation, residuals, reuse fees, synchronization
royalties, and other payments which must be made in connection with the Accepted
Programs and in connection with exploitation of the rights herein granted to
Licensee to any third parties including, but not limited to, musicians,
directors, writers, producers, announcers, publishers, composers, on-camera and
off-camera performers and other persons who participated in production of such
Programs, and to any applicable unions, guilds or other labor organizations;
provided, however, that
Licensor has not acquired performing rights for performance in the Territory of
the music contained in such Programs, which rights shall be obtained by
Licensee; provided, further, however, that
Licensor warrants and represents that all music is available for licensing
through ASCAP, BMI or SESAC (or any successor or similar entity in the United
States) or is in the public domain or is owned or controlled by Licensor to the
extent necessary to permit broadcasts hereunder in the Territory and no
additional clearance or payment is required for such broadcast;
(e) The
main and end titles of the Accepted Programs and all publicity, promotion,
advertising and packaging information and materials supplied by Licensor will
contain all necessary and proper credits for the actors, directors, writers and
all other persons appearing in or connected with the production of such Programs
who are entitled to receive credit and comply with all applicable contractual,
guild, union and statutory requirements and agreements;
(f) Exercise
of the broadcast rights to the Accepted Programs in the Territory will not
infringe on any rights of any third party, including but not limited to
copyright, patent, trademark, unfair competition, contract, property,
defamation, privacy, publicity or “moral rights” (to the extent such moral
rights are recognized by U.S. law);
(g) Except
to the extent expressly permitted by this Agreement, Licensor has not and will
not grant or license to others, and will not itself exercise, any rights to
broadcast any Program in or to the Territory, including, but not limited to, by
way of any broadcast over the radio of any audio portion of any Accepted Program
that is a novela in the Territory (other than spill-over from Licensor’s border
radio stations in Mexico).
(h) Each
and every one of the representations and warranties made by Licensor herein
shall survive the Broadcast Period for each Accepted Program;
(i) To
the extent Section 507 (as defined in Section 3.6 above) is applicable, no
Accepted Program includes or will include any matter for which any money,
service or other valuable consideration is directly or indirectly paid or
promised to Licensor by a third party, or accepted from or charged to a third
party by Licensor, unless such is disclosed in accordance with Section
507. Licensor shall exercise reasonable diligence to inform its
employees, and other persons with whom it deals directly in connection with such
programs, of the requirements of Section 507; provided, however, that no act
of any such employee or of any independent contractor connected with any of the
programs, in contravention of the provisions of Section 507, shall constitute a
breach of the provisions of this paragraph unless Licensor has actual notice
thereof and fails promptly to disclose such act to Licensee. As used
in this paragraph, the term “service or other valuable consideration” shall not
include any service or property furnished without charge or at a nominal charge
for use in, or in connection with, any of the programs “unless it is so
furnished in consideration for an identification in a broadcast of any person,
product, service, trademark or brand name beyond an identification which is
reasonably related to the use of such service or property on the broadcast,” as
such terms are used in Section 507. No inadvertent failure by
Licensor to comply with this paragraph shall be deemed a breach of this
Agreement; and
(i) For
purposes of this Section 6.1 only, “Accepted Programs” shall be
deemed to include Televisa Produced U.S. Special Programs to the extent
broadcast by Licensee.
7.2 Licensee
hereby agrees, warrants and represents that Licensee is free to enter into and
fully perform this Agreement.
7.3 Licensor
further agrees that, while it has no obligation to do so, if it secures a
producer’s (Errors and Omissions) liability policy covering the Programs, or any
part thereof, it will cause Licensee to be named as an additional insured on
such policy and will cause a certificate of insurance to be promptly furnished
to Licensee, provided, however, that the
inclusion of Licensee as an additional insured does not result in any additional
cost or expense to Licensor. Licensor will notify Licensee when such
insurance is obtained and, after obtained if cancelled. Any such
insurance as to which Licensee is an additional insured shall be primary as to
Licensee and not in excess of or contributory to any other insurance provided
for the benefit of or by Licensee.
8. Indemnification.
8.1 Licensor
agrees to hold Licensee, its partners, the partners of any partnership that is a
partner of Licensee, officers, employees, and agents and the shareholders,
officers, directors, employees and agents of the partners or any corporation or
partnership that is a partner of Licensee (collectively the “Licensee
Indemnitees”), harmless, from any claims, deficiencies, assessments,
liabilities, losses, damages, expenses (including, without limitation,
reasonable fees and expenses of counsel) (collectively, “Losses”) which any
Licensee Indemnitee may suffer by reason of Licensor’s breach of, or
non-compliance with, any covenant or provision herein contained or the
inaccuracy of any warranty or representation made in this Agreement and any such
damages shall be reduced by: (i) the amount of any net tax benefit
ultimately accruing to Licensee on account of Licensee’s payment of such claim;
(ii) insurance proceeds which Licensee has or will receive in connection with
such claim; and (iii) any recovery from third parties in connection with such
claim; provided, however, that
Licensor shall not delay payment of its indemnification obligations hereunder
pending resolution of any tax benefit or insurance or third party claim if
Licensee provides Licensor with an undertaking to reimburse Licensor for the
amount of any such claim ultimately received; and provided, further, that
Licensee shall have no obligation to obtain any such insurance proceeds or
recovery from third parties if and to the extent Licensor is subrogated (in form
and substance satisfactory to Licensor) to licensee claims in respect of such
insurance or third parties.
8.2 Licensee
agrees to indemnify Licensor, its direct and indirect shareholders and all
officers, directors, employees and agents of any of the foregoing (the “Licensor
Indemnitees”) against and hold the Licensor Indemnitees harmless from any and
all Losses incurred or suffered by any Licensor Indemnitee arising out of a
breach by Licensee of the representations, warranties, covenants or agreements
made or to be performed by it pursuant hereto, or arising out of any program or
commercial material (apart from the Programs) furnished by Licensee and any such
damages shall be reduced by: (i) the amount of any net tax benefit
ultimately accruing to Licensor on account of Licensor’s payment of such claim;
(ii) insurance proceeds which Licensor has or will receive in connection
with such claim; and (iii) any recovery from third parties in connection
with such claim; provided, however, that
Licensee shall not delay payment of its indemnification obligations hereunder
pending resolution of any tax benefit or insurance or third party claim if
Licensor provides Licensee with an undertaking to reimburse Licensee for the
amount of any such claim ultimately received; and provided, further, that
Licensor shall have no obligation to obtain any such insurance proceeds or
recovery from third parties if and to the extent Licensee is subrogated (in form
and substance satisfactory to Licensee) to Licensor claims in respect of such
insurance or third parties.
8.3 The
following procedures shall govern all claims for indemnification made under any
provision of this Agreement. A written notice (an “Indemnification
Notice”) with respect to any claim for indemnification shall be given by the
party seeking indemnification (the “Indemnitee”) to the party from which
indemnification is sought (the “Indemnitor”) within thirty (30) days of the
discovery by the indemnitee of such claim, which Indemnification Notice shall
set forth the facts relating to such claim then known to the Indemnitee (provided that failure
to give such Indemnification Notice as aforesaid shall not release the
Indemnitor from its indemnification obligations hereunder unless and to the
extent the Indemnitor has been prejudiced thereby). The party
receiving an Indemnification Notice shall send a written response to the party
seeking indemnification stating whether it agrees with or rejects such claim in
whole or in part. Failure to give such response within ninety (90)
days after receipt of the Indemnification Notice shall be conclusively deemed to
constitute acknowledgment of validity of such claim. If any such
claim shall arise by reason of any claim made by third parties, the Indemnitor
shall have the right, upon written notice to Indemnitee within 30 days after
receipt of the Indemnification Notice, to assume the defense of the matter
giving rise to the claim for indemnification through counsel of its selection
reasonably acceptable to Indemnitee, at Indemnitor’s expense, and the Indemnitee
shall have the right, at its own expense, to employ counsel to represent it;
provided, however, that if any
action shall include both the Indemnitor and the Indemnitee and there is a
conflict of interest because of the availability of different or additional
defenses to the Indemnitee, the Indemnitee shall have the right to select
separate counsel to participate in the defense of such action on its behalf, at
the Indemnitor’ s expense. The Indemnitee shall cooperate fully to
make available to the Indemnitor all pertinent information under the
Indemnitee’s control as to the claim and shall make appropriate personnel
available for any discovery, trial or appeal. If the Indemnitor does
not elect to undertake the defense as set forth above, the Indemnitee shall have
the right to assume the defense of such matter on behalf of and for the account
of the Indemnitor; provided, however, the
Indemnitee shall not settle or compromise any claim without the consent of the
Indemnitor, which consent shall not be unreasonably withheld. The
Indemnitor may settle any claim at any time at its expense, so long as such
settlement includes as an unconditional term thereof the giving by the claimant
of a release of the Indemnitee from all liability with respect to such
claim.
9. Term. The
term of this Agreement (the “Term”) shall be until December 19,
2017. Any license in effect for any Program at the end of the Term
shall continue through the Broadcast Period for such applicable Program with no
right of re-license or extension at the end thereof, and all of the rights and
obligations of the parties under this Agreement with respect to such license
will continue through the Broadcast Period for such Program, it being agreed
that the parties shall enter into mutually satisfactory royalty arrangements
with respect to the Broadcast Period following the termination of this Agreement
in order to compensate Licensor for the use of Programs during such period and,
if the parties are unable to agree upon such royalty arrangements, the amount
thereof shall be determined based on prevailing market
conditions. For Programs that commence broadcast on the Networks in
the final year of the Term, Licensee must commence the broadcast of the Program
on one of such Networks over at least 70% of such Network’s coverage (as
determined by the number of Hispanic television households potentially reached
by the applicable Network) and shall continue to broadcast the Program without
substantial interruption
over such minimum of 70% network coverage until the conclusion of the Broadcast
Period for such Program.
For
purposes of this Agreement only:
(a) “Broadcast
Period” means
(i) for
novelas or other Programs with a plot line continuing through more than one
episode, the time necessary to broadcast all episodes on a continuing basis
without substantial interruption and
(ii) for
all other programs (excluding one-program shows), (x) for weekly programs,
the time period necessary to broadcast 26 episodes of the Program without
substantial interruption, which under normal circumstances is expected to be 26
continuous weeks and (y) for daily programs (Monday through Friday), 26
weeks.
(b) “without
substantial interruption” means that the Programs will be scheduled and run on a
continuing periodic basis except for occasional network preemption to
accommodate one-time specials or programs which, because of their nature or
timeliness or because of FCC Rules, must in Licensee’s reasonable judgment be
broadcast in lieu of the regularly scheduled Program.
In
addition, this Agreement may be terminated by either party in the event that the
other party (i) materially breaches its obligations hereunder and fails to cure
such breach within 180 days of notice thereof (90 days for failure to pay the
Royalty when due) by the party seeking termination (which notice shall describe
the breach in reasonable detail); provided, however, that the inaccuracy of any
of Licensor’s representations and warranties contained in Section 7 hereof shall
not be deemed to be a breach of its obligations for purposes of this Section 9
to the extent that Licensor satisfies its indemnification obligations with
respect to such inaccuracy, or (ii) asserts Force Majeure under Section 10 as a
relief from substantially all of its obligations hereunder for a period in
excess of one year.
10. Force
Majeure. Neither party hereto shall be liable for or suffer
any penalty or termination of rights hereunder by reason of any failure or delay
in performing any of its obligations hereunder if such failure or delay is
occasioned by compliance with governmental regulation or order, or by
circumstances beyond the reasonable control of the party so failing or delaying,
including but not limited to acts of God, war, insurrection, fire, flood,
accident, strike or other labor disturbance, interruption of or delay in
transportation (a “Force Majeure Event”). Each party shall promptly
notify the other in writing of any such event of force majeure, the expected
duration thereof, and its anticipated effect on the party affected and make
reasonable efforts to remedy any such event, except that neither party shall be
under any obligation to settle a labor dispute. If Licensor is
prevented by a Force Majeure Event from delivering any Accepted Program to
Licensee, the running of the time period for purposes of computing the
applicable Broadcast Period for such Program shall be suspended and, if such
Force Majeure Event prevents Licensor from delivering any substitute Programs to
Licensee, then Licensee’s obligations to pay the Royalty under Section 4.1
hereof shall be reduced (but not below zero) for the time period or periods so
affected to the extent necessary to compensate Licensee for the cost of
obtaining substitute programming.
11. Modification. This
Agreement shall not be modified or waived in whole or in part except in writing
signed by an officer of the party to be bound by such modification or
waiver. In the event that Licensee’s fiscal year is changed so that
it is not on a calendar year, the parties shall make such modifications to this
Agreement as are necessary to reflect such change but as do not substantively
impact any of the parties’ rights or obligations hereunder.
12. Waiver of
Breach. A waiver by either party of any breach or default by
the other party shall not be construed as a waiver of any other breach or
default whether or not similar and whether or not occurring before or after the
subject breach.
13. Jurisdiction; Venue; Service
of Process. Each of the parties irrevocably submits to the
jurisdiction of any California State or United States Federal court sitting in
Los Angeles County in any action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, and irrevocably agrees
that any such action or proceeding may be heard and determined only in such
California State or Federal court. Each of the parties irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action or
proceeding. Each of the parties irrevocably appoints CT Corporation
System (the “Process Agent”), with an office on the date hereof at 818 West 7th
Street, Los Angeles, CA, 90017 as his or its agent to receive on behalf of him
or it and his or its property service of copies of the summons and complaint and
any other process which may be served in any such action or
proceeding. Such service may be made by delivering a copy of such
process to any of the parties in care of the Process Agent at the Process
Agent’s above address, and each of the parties irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternate method of service, each of the parties consents to the service of
copies of the summons and complaint and any other process which may be served in
any such action or proceeding by the mailing or delivery of a copy of such
process to such party at its address specified in or pursuant to Section
14. Each of the parties agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.
14. Notices. All
notices and other communications required or permitted hereunder shall be in
writing, shall be deemed duly given upon actual receipt, and shall be delivered
(a) in person, (b) by registered or certified mail (air mail if addressed to an
address outside of the country in which mailed), postage prepaid, return receipt
requested, (c) by a generally recognized overnight courier service which
provides written acknowledgment by the addressee of receipt, or (d) by facsimile
or other generally accepted means of electronic transmission (provided that a
copy of any notice delivered pursuant to this clause (d) shall also be sent
pursuant to clause (b)), addressed as set forth in Schedule 14 or to such other
addresses as may be specified by like notice to the other parties.
15. Assignments. Either
of the parties may assign its rights hereunder and delegate its duties
hereunder, in whole or in part, to an Affiliate capable to perform the
assignor’s obligations hereunder, and either of the parties may assign its
rights hereunder and delegate its duties hereunder to any person or entity to
which all or substantially all of such party’s businesses and assets are pledged
or transferred. No such assignment or delegation shall relieve any
party of its obligations hereunder. Any such assignment or delegation
authorized pursuant to this Section 15 shall be pursuant to a written agreement
in form and substance reasonably satisfactory to the parties. Except
as otherwise expressly provided herein, neither this Agreement nor any rights,
duties or obligations hereunder may be assigned or delegated by any of the
parties, in whole or in part, whether voluntarily, by operation of law or
otherwise; provided, however, that Licensor may assign, grant a security
interest in or otherwise transfer its rights to payment hereunder in connection
with one or more financings. Any attempted assignment or delegation
in violation of this prohibition shall be null and void. Subject to
the foregoing, all of the terms and provisions hereof shall be binding upon, and
inure to the benefit of, the successors and assigns of the
parties. Nothing contained herein, express or implied, is intended to
confer on any person other than the parties or their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
16. Governing
Law. This Agreement and the legal relations among the parties
shall be governed by and construed in accordance with the laws of the State of
California applicable to contracts between California parties made and performed
in that State, without regard to conflict of laws principles.
17. Further
Assurances. Each party hereto agrees to execute any and all
additional documents and do all things and perform all acts necessary or proper
to further effectuate or evidence this Agreement including any required filings
with the U.S. Copyright Office.
18. Counterparts. This
Agreement may be executed in counterparts, each of which shall be an original
instrument and all of which, when taken together, shall constitute one and the
same agreement.
19. Severability. If
any provision of this Agreement, or the application thereof, shall for any
reason or to any extent be invalid or unenforceable, then the remainder of this
Agreement and application of such provision to other persons or circumstances
shall continue in full force and effect and in no way be affected, impaired or
invalidated; provided that the aggregate of all such provisions found to be
invalid or unenforceable does not materially affect the benefits and obligations
of the parties of the Agreement taken as a whole.
20. Specific
Performance. The parties hereto agree that irreparable damage
may occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties may be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction pursuant to Section 13, this being in
addition to any other remedy to which they are entitled at law or in
equity.
21. Internet. Without
prejudice to the position of either party, the existing provisions of Section 24
of the Second Amended and Restated Program License Agreement shall remain
unchanged. Accordingly:
(a) Notwithstanding
anything to the contrary contained in this Agreement, for a period of five (5)
years from the Restatement Date (December 19, 2001), except to the extent
permitted by paragraphs (b) and (c) below, and after the fifth anniversary of
the Restatement Date (December 19, 2001), except to the extent permitted by
paragraphs (b) and (c) below, and except to the extent, if any, otherwise
permitted by this Agreement or the Memorandum of Agreement dated as of December
19, 2001 between Televisa and UCI relating to Pay Television or implementing
documents (i) Licensee may not broadcast or otherwise transmit, or permit others
to broadcast or otherwise transmit, any Program or any portion thereof over or
by means of the internet, or similar systems, now existing or hereafter
developed (“Internet”) and (ii) Licensor may not broadcast or otherwise
transmit, or permit others to broadcast or otherwise transmit, Programs covered
by this Agreement (or any portion thereof) over or by means of the
Internet.
(b) Licensor
shall have the right to broadcast or otherwise transmit, or permit others to
broadcast or otherwise transmit, over or by means of the Internet “clips” from
Programs covered by this Agreement so long as (i) in the case of novelas, clips
from any episode of a Program may not exceed 30 seconds in the aggregate in
duration and no clips may be used which are from any of the last 5 chapters of
any such novela or from any portion of any episode that reveals the resolution
of any plot or conflict (provided that such
restriction regarding final chapter clips and clips revealing plot or conflict
resolution with respect to any novela shall not be applicable before 6 months
prior to UCI’s broadcast of such novela and UCI will give Licensor reasonable
notice to enable Licensor to comply with this restriction), (ii) in the case of
Programs (other than novelas and sports events) clips from any episode of a
Program may not exceed 60 seconds in the aggregate in duration and (iii) in the
case of sports events, clips are (a) to be carried with at least a 5 minute
delay from the live event and (b) limited to highlights of such event of not
more than 2 minutes per highlight clip and 10 minutes in the
aggregate.
(c) To
the extent appropriate technology exists or is hereafter developed so that video
images through a streaming media or other similar application (hereinafter
“streaming video”) can be sold through the Internet on a subscription basis,
then Licensor and its Affiliates may exploit, or permit others to exploit,
outside the Territory the sale of Programs selected by Televisa (all such
Programs being referred to as “Televisa Internet Content”) via the Internet on a
subscription basis only; provided that
Televisa or such other person uses commercially reasonable efforts to prohibit
reception of such Televisa Internet Content in Territory.
(d) Effective
December 19, 2006, for the purposes of determining the rights of Licensor and
its Affiliates with respect to the Internet, Section 1.3 of this Agreement
reverted to the provisions of Section 1.3 as in effect immediately prior to
December 19, 2001 as set forth on Exhibit A hereto, and no presumption shall be
implied or created by the modification to Section 1.3 as of December 19, 2001,
or the agreements and transactions entered into by Licensor and Licensee and
their respective Affiliates as of December 19, 2001, it being acknowledged and
agreed that Licensor and Licensee disagree as to the rights of Licensor and its
Affiliates under Section 1.3 as in effect prior to the Restatement Date
(December 19, 2001) and Licensor and Licensee and their respective Affiliates
reserve all rights.
IN
WITNESS WHEREOF, the parties have set their hands as of the day and year first
above written.
| |
TELEVISA, S.A.
DE C.V. |
|
| |
|
|
|
|
|
By:
|
/s/ Alfonso de
Angoitia |
|
| |
|
Name:
Alfonso de Angoitia |
|
| |
|
Title: Attorney-In-Fact |
|
| |
|
|
|
| |
|
|
|
|
|
By:
|
/s/ Joaquín
Balcárcel |
|
| |
|
Name:
Joaquín
Balcárcel |
|
| |
|
Title:
Attorney-In-Fact |
| |
|
|
| |
|
|
|
|
UNIVISION COMMUNICATIONS,
INC. |
|
| |
|
|
|
|
|
By:
|
/s/ Douglas Kranwinkle |
|
| |
|
Name:
Douglas Kranwinkle |
|
| |
|
Title:
General Counsel |
Exhibit
A
1.3 Licensor
and its Affiliates shall have the right and ability to, and to permit others
to: (i) transmit or re-transmit in any electronic form or other
means, from any television station in Mexico, or via satellite which receives
its signal from any earth station or other facility in Mexico, any Programs
which may also be covered by this Agreement, notwithstanding the fact that such
transmissions or re-transmissions may be viewed in the Territory, provided that neither
Licensor nor its Affiliates consent to the retransmission of such Programs by
any television station in the Territory or by any cable system in the Territory
that is located beyond 35 miles from the community of license of any
transmitting television station in Mexico transmitting the Programs (any such
cable re-transmission within such 35 mile limit being hereby expressly
permitted); and (ii) market and promote and otherwise generate revenues
(including, but not limited to, the sale of advertising time) attributable to
the ability of viewers in the Territory to receive such Programs.