EXHIBIT 4.7
PROGRAM LICENSE AGREEMENT
This PROGRAM LICENSE AGREEMENT is entered into as of May 31, 2005
(the "Effective Date") by and between Grupo Televisa, S.A., a Mexican
corporation (hereinafter "Licensor") and Univision Communications Inc., a
Delaware corporation ("Licensee" or "UCI").
WHEREAS, Licensor has or will have rights in the Commonwealth of
Puerto Rico (the "Territory"), to license certain television programs in the
Spanish language or with Spanish subtitles produced by and to be produced by
Televisa, S.A. de C.V. or Grupo Televisa, S.A ("GT") (GT and all of the
companies it controls, including Televisa, S.A. de C.V., being hereinafter
referred to collectively as "Televisa").
WHEREAS, from time to time UCI will own or will otherwise have the
right or obligation to provided programming (whether through a time brokerage
agreement, local management agreement or otherwise) to certain television
stations which broadcast in the Spanish language format in and to the
Commonwealth of Puerto Rico (such stations as identified on Schedule 2 are
referred to herein as the "Puerto Rico Stations").
WHEREAS Licensee desires to acquire the right to broadcast in the
Territory over the Puerto Rico Stations, 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, Megavision, Inc. ("Venevision") is simultaneously herewith
entering into a Program License Agreement dated as of the date hereof (the
"Venevision Agreement") and an affiliate of UCI is simultaneously entering into
a Program License Agreement dated as of the date hereof (the "Univision
Agreement"), each with the Licensee (or an affiliate) to license certain
television programming for broadcast in the Territory.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto agree as follows:
1. License of Programming.
1.1
(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 Puerto Rico Stations.
(b) Licensee agrees that sales of advertising time on the
Puerto Rico Stations will be conducted and allocated on an arms-length basis
vis-a-vis one
another and vis-a-vis other networks, stations and other media owned by Licensee
and its Affiliates.
(c) Licensee shall not broadcast any First-Run Program (other
than news) on the Puerto Rico Stations 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) 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;
(iii) movies produced by Televisa 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; and
(iv) Grandfathered Programs, as defined in that certain
Amended and Restated International Program Rights Agreement, dated
as of December 19, 2001, between Univision Communications, Inc.,
Grupo Televisa, S.A., and Venevision International, Inc.
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 the following paragraph, 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.
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(b) The term "Programs" does not include Special Programs
(other than Televisa Produced Puerto Rico Special Programs) or Co-Produced
Programs (each as defined below).
(c) "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 or
Licensor licenses or sells distribution rights in the Territory prior to or
during production of such program and neither Televisa nor Licensor shall 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 10 business 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 and the 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, and that certain Second Amended
and Restated Program License Agreement dated as of December 19, 2001 between
Televisa Internacional S.A. de C.V. and UCI (the "Second Amended and Restated
Program License Agreement"), nothing contained in this Agreement shall prevent
Licensor or Televisa from licensing broadcast rights (in exchange for cash or
in-kind services or property other than Programs) for territories other than the
Territory to programs initially
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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.
(d) "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 definition, "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 any
television station that has entered into an affiliation agreement with the
Networks but is otherwise not an Affiliate of UCI, any Person that controls GT
or any person under common control with, but not directly or indirectly
controlled by, GT.
(e) "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.
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;
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(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.
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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 Notice 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 video tape, 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.
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
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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
the 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
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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., 00-00-00-000 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 (iv) 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 Puerto Rico 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 Puerto Rico 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 Subject to Section 6.1 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,
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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. 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 6.1 and Licensee's remedies for a breach thereof.
3.10 Notwithstanding anything herein to the contrary, any
incremental cost or expense of Licensor relating to this Section 3 shall be
borne by Licensee.
4. Royalties and License Fees.
4.1
(a) For each year of the Term, Licensee shall pay Licensor a
royalty (the "Program Royalty") in cash for the Programs offered to it an
aggregate amount equal to 12% of Puerto Rico Net Time Sales.
(i) "Puerto Rico Net Time Sales" means all time sales of
the Puerto Rico Stations, including barter and trade and television
subscription revenue (including, without limitation, satellite
subscription revenue), less, to the extent related to the Puerto
Rico Stations, (i) advertising commissions, (ii) music license fees,
(iii) outside affiliate compensation, and (iv) taxes (other than
withholding taxes) paid by Licensee, calculated in accordance with
U.S. generally accepted accounting principles ("GAAP"). Unless
otherwise agreed in writing by the parties, barter and trade sales
shall be valued at the fair market value of the goods or services
received by the Puerto Rico Stations.
4.2 Program Royalties shall be paid currently on a monthly basis on
the twelfth business day after the end of each month in a single payment to
Licensor based upon the parties' good faith best estimate at such time of the
amounts accrued. Appropriate adjustment (the "Adjustment") will be made to
Program Royalties on a quarterly basis within 45 days after the end of each
quarter, and the full amount thereof shall be paid or credited, as the case may
be, with the next monthly payment of Program Royalties for any difference
between the amounts so paid and those finally determined to have accrued. In all
cases, the calculation of the Adjustment will be made as promptly as practicable
by Licensee, and in the event of any disputes the determination shall be made by
a nationally recognized independent certified public accounting firm mutually
selected by Licensor and Licensee (or, if they fail to designate such a firm
within 10 days after written notice of a dispute, by such firm designated by the
President of the American Arbitration Association (or his designee)), whose
determination will be final and binding upon the parties. The fees and expenses
of such firm shall be paid one-half by Licensor and one-half by Licensee, unless
such firm determines it would be more equitable to
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otherwise allocate such fees and expenses.
4.3 All payments made pursuant to this section shall be in cash in
U.S. currency with accompanying back-up information in reasonable detail of
Puerto Rico Net Time Sales for the applicable period. In the case of the Program
Royalties such payments shall be calculated as provided above regardless of the
amount of Programs licensed hereunder or whether any such Programs are
broadcast. In order to assure compliance with the terms of this Agreement,
Licensor shall have the right to receive once each year a certificate from
Licensee's independent certified public accounting firm, which certificate shall
attest to the Puerto Rico Net Time Sales for the year. Licensee shall pay for
the preparation of such certificate and its delivery to Licensor. 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
4.3 shall be paid by Licensor, unless such verification results in an adjustment
in Licensor's favor equal or greater than 5% of the amount originally computed
by Licensee, in which case such fee will be paid by Licensee. Licensee agrees to
provide any certified public accountants designated by Licensor with access to
all business records of Licensor related to the computation of Puerto Rico Net
Time Sales. Licensor agrees to maintain the confidentiality of all information
learned from Licensee in connection with the performance of this Agreement,
other than information (i) which becomes public (unless it becomes public
because of a breach of this covenant by Licensor), (ii) which otherwise becomes
known to Licensor (unless Licensor knows that the information has been disclosed
in violation of a confidentiality agreement with Licensee), or (iii) which
Licensor is required by law, order or administrative law request or by stock
exchange rule or regulation to divulge.
4.4 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, 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.
4.5 Licensee may deduct and withhold from any payment to or for the
account of Licensor with respect to the Program 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 or territorial 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.
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4.6 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.
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, 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 Puerto Rico 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-Puerto Rico 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 Puerto Rico 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-Puerto Rico 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(c); 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
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be licensed hereunder to Licensee for the Program Royalty plus a license fee
(the "Special Event Fee") 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(c) 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, except that the Program Royalty specified in Section 4.1(a)
hereof shall not include the license fee for Co-Produced Programs. Compensation
to Licensor for all Co-Produced Programs accepted by Licensee 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. Representations and Warranties of Licensor.
6.1 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,
12
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 in Puerto Rico, as
applicable) 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 and Puerto Rican law, as applicable);
(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
13
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
(ii) For purposes of this Section 6.1 only, "Accepted
Programs" shall be deemed to include Televisa Produced Puerto Rico
Special Programs to the extent broadcast by Licensee.
6.2 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.
7. Indemnification.
7.1 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.
7.2 Licensee agrees to indemnify Licensor, its direct and indirect
14
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.
7.3 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 the 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
15
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.
8. Term. The term of this Agreement (the "Term") shall be until December
17, 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 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
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 Program 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 6 hereof shall not be deemed to be a breach of its obligations for
purposes of this Section 8 to the extent that Licensor satisfies its
indemnification obligations with respect to such inaccuracy, or (ii) asserts
Force Majeure under Section 9 as a relief from substantially all of its
obligations hereunder for a period in excess of one year.
16
9. 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 Program 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.
10. 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.
11. 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.
12. 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 000 Xxxx 0xx Xxxxxx, Xxx Xxxxxxx,
XX, 00000 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 delivering of a
copy of such process to such party at its address specified in or pursuant to
Section 13. 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
17
suit on the judgment or in any other manner provided by law.
13. 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 1 or to such other addresses as may be specified by like notice to the
other parties.
14. 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 14 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.
15. 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.
16. 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.
17. 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.
18
18. 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.
19. 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 12, this being in addition to any other
remedy to which they are entitled at law or in equity.
20. Participation Agreement. All the terms and conditions of this
Agreement shall at all times be subject to the terms and conditions of the
Participation Agreement dated as of October 2, 1996 by and among UCI, A. Xxxxxxx
Xxxxxxxxx, GT, Messrs. Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx and
Corporacion Venezolana de Television, C.A. (VENEVISION), and if there is any
inconsistency between any terms and conditions of this Agreement and the terms
and conditions of the Participation Agreement, the Participation Agreement shall
prevail.
21. Televisa Advertising.
(a) Advertising time on the Puerto Rico Stations which is not
sold to advertisers or used by Licensee or its subsidiaries for their own
purposes will be made available without charge to Televisa, Venevision and their
Affiliates. Other than as set forth in the following sentence, such time may be
used for promotion or direct sale (i.e., telemarketing) of products or services
now or hereafter owned or being provided by Televisa, Venevision or their
Affiliates (including, without limitation, theatrical motion pictures produced
or being distributed by any of them). Such time, however, will not be available
for any product or service that is marketed primarily by telemarketing that was
not owned or being provided by Televisa, Venevision or their Affiliates as of
December 17, 1992, and provided, further, that such time may be preempted by
Licensee or its subsidiaries to the extent that such time is to be sold to a
paying advertiser.
(b) Subject to the limitations set forth in paragraph 21(c)
below, (i) commencing as of January 1, 2006, Televisa and its Affiliates will
purchase an aggregate of $5,000,000 per year in non-preemptable advertising to
be used on (a) the Puerto Rico Stations and/or (b) the Stations, the Telefutura
Stations, the Networks and the Telefutura Network (each as defined in the Second
Amended and Restated Program License Agreement and; collectively with the Puerto
Rico Stations, the "Univision Stations and Networks"), and (ii) Televisa and its
Affiliates will purchase, during the calendar year 2006, an additional
$3,000,000 (the "Bonus Advertising Credit") in non-
19
preemptable advertising on the Univision Stations and the Networks provided that
the use of this advertising time may carry over throughout the Term until the
amount is fully used. Such advertising shall be sold to Televisa and its
Affiliates at the lowest rate for any spot aired in the same program on which
Licensor's spot is aired. For purposes of this paragraph, the "lowest rate" will
be net of advertising commissions (gross rate minus advertising commissions)
(e.g. the amount actually received by Licensee resulting from the application of
the relevant rate).
(c) The purchase by Televisa and its Affiliates of advertising
time on the Puerto Rico Stations (but not, for the avoidance of doubt, on the
Stations, the Telefutura Stations, the Networks or the Telefutura Network) under
paragraph (b) above shall be limited as follows: (i) Televisa and its Affiliates
may not acquire more than $750,000 in advertising on the Puerto Rico Stations in
any calendar quarter, (ii) Televisa and its Affiliates may not acquire
advertising on the Puerto Rico Stations in any calendar year in an amount higher
than the greater of (x) $2,500,000 or (y) 4% of Combined Puerto Rico Net Time
Sales for the immediately preceding calendar year, (iii) Televisa and its
Affiliates may not acquire more than two 30 second spots in any one broadcast
hour on the Puerto Rico Stations and (iv) Televisa and its Affiliates may not
use more than $750,000 of the Bonus Advertising Credit for advertising on the
Puerto Rico Stations. Licensee will guarantee the airing of non-preemptable
advertising time reserved and purchased by Televisa and its Affiliates pursuant
to Section 21(b) of this agreement and Section 22(b) of the Second Amended and
Restated Program License Agreement, provided that Licensor reserves such
non-preemptable advertising time at least 30 days prior to the commencement of
the calendar quarter in which such advertising will be aired, and provided
further that Licensee will guarantee the airing of non-preemptable advertising
time, in the event Licensor does not reserve such non-preemptable time within
the 30 day period, so long as such advertising time is available at the time
Licensee confirms of its availability.
(d) Televisa may not, however, directly or indirectly make
such free or purchased time available to Persons other than its Affiliates. All
material provided for broadcast by Televisa shall comply with the quality
standards for unaffiliated advertisers established by Licensee or its
subsidiaries from time to time. The Board of Directors of Licensee, by a vote
which includes, in addition to any other required vote of directors, the
affirmative vote of a majority of the Class T Director(s) (so long as a Class T
Voting Conversion (as defined in the Restated Certificate of Incorporation of
UCI) has not occurred) or a majority of the Class V Director(s) (so long as a
Class V Voting Conversion (as defined in the Restated Certificate of
Incorporation of UCI) has not occurred, may make such rules in connection with
the use of such time by Venevision and its Affiliates as it determines to be
appropriate, including, without limitation, rules for the fair allocation of
such time between Venevision and Televisa and their respective Affiliates.
22. Univision Advertising. Commencing as of January 1, 2006, Licensee and
its controlled Affiliates will (i) purchase an aggregate of $5,000,000 per year
in non-premptable advertising on Licensor's television networks, and (ii)
Licensee and its
20
controlled Affiliates will purchase, during the calendar year 2006, an
additional $3,000,000 (the "Univision Bonus Advertising Credit") in
non-preemptable advertising on Licensor's television networks. Such advertising
cannot be preempted by Licensor or its Affiliates and 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 provided that the use of such advertising time
may carry over throughout the Term until the amount is fully used. Licensee may
not, however, directly or indirectly make such free or purchased time available
to Persons other than its controlled Affiliates. All material provided for
broadcast by Licensee or its Affiliates shall comply with the quality standards
for unaffiliated advertisers established by Licensor or its Affiliates from time
to time. Televisa will guarantee the airing of non-preemptable advertising time
reserved and purchased by Licensee and its Affiliates pursuant to this Section
22, provided that Licensee reserves such non-preemptable advertising time at
least 30 days prior to the commencement of the calendar quarter in which such
advertising will be aired, and provided further that Televisa will guarantee the
airing of non-preemptable advertising time, in the event Licensee does not
reserve such non-preemptable time within the 30 day period, so long as such
advertising time is available at the time Televisa confirms of its availability.
23. Internet.
(a) Notwithstanding anything to the contrary contained in this
Agreement, until December 19, 2006, except to the extent permitted by paragraphs
(b) and (c) below, and after December 19, 2006, 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 the Puerto Rico Stations' 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
21
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) After December 19, 2006, unless the parties otherwise
agree in writing, for the purposes of determining the rights of Licensor and its
Affiliates with respect to the Internet, Section 1.3 of this Agreement shall
revert to the provisions of Section 1.3 as set forth on Exhibit A hereto, and no
presumption shall be implied or created by the modification to Section 1.3 as of
the date hereof, or the agreements and transactions entered into by Licensor and
Licensee and their respective Affiliates as of the date hereof, it being
acknowledged and agreed that Licensor and Licensee disagree as to the rights of
Licensor and its Affiliates under Section 1.3 as set forth on Exhibit A hereto,
Licensor and Licensee and their respective Affiliates reserve all rights.
24. Amendment of Venevision Agreement or Univision Agreement. Licensee
agrees that it shall not amend the Venevision Agreement or the Univision
Agreement without the prior written consent of Licensor, which consent shall not
be unreasonably withheld.
22
IN WITNESS WHEREOF, the parties have set their hands as of the day
and year first above written.
GRUPO TELEVISA, S.A.
By: /s/ Salvi Folch/Xxxxxxx Xxxxxxxxx
------------------------------------------
Name: Salvi Folch/Xxxxxxx Xxxxxxxxx
Title: Chief Financial Officer/General
Counsel
UNIVISION COMMUNICATIONS INC.
By: /s/ C. Xxxxxxx Xxxxxxxxxx
------------------------------------------
Name: C. Xxxxxxx Xxxxxxxxxx
Title: Executive Vice President
23
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.
24
Schedule 1
NOTICES
(i) If to Licensee:
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: C. Xxxxxxx Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
O'Melveny & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
XxxXxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
(ii) If to Licensor:
Grupo Televisa, S.A.
Xx. Xxxxx xx Xxxxxxx Xx. 0000
Xxxxxxxx X, Xxxx 0, Xxxxxxx Xxxxx Xx
00000, Xxxxxx, DF
Attention: Xxxxxxx xx Xxxx itia and Xxxxxxx Xxxxxxxxx
Telecopier: 011-52-555-261-2451
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
Telecopier: (000) 000-0000
25
SCHEDULE 2
FCC LICENSE AND STATION
CALL SIGN LOCATION
--------- --------
WLII(TV) Caguas, Xxxxxx Xxxx
XX00000 Xxxxxx Xxxx
XX00000 Xxxxxx Xxxx
XX0000 Xxxxxx Xxxx
XXX000 Xxxxxx Xxxx
XXX000 Puerto Rico
KRE81 Puerto Rico
WLE614 Puerto Rico
WLE618 Puerto Rico
WPNF900 Puerto Rico
WPNM766 Puerto Rico
WPNM767 Puerto Rico
WWX23 Puerto Rico
WPOT652 Puerto Rico
WPSP380 Puerto Rico
WSUR-TV Ponce, Puerto Rico
KC23137 Puerto Rico
XX0000 Xxxxxx Xxxx
XXX000 Xxxxxx Xxxx
XXX000 Puerto Rico
KPK448 Puerto Rico
KPK537 Puerto Rico
KPM520 Puerto Rico
KPM521 Puerto Rico
WBX283 Puerto Rico
WHA68 Puerto Rico
WPTD632 Puerto Rico
WPTD634 Puerto Rico
WRE43 Puerto Rico
WWU74 Puerto Rico
26
