▇▇▇ ▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇
▇▇▇▇ AFFILIATION AGREEMENT
This Affiliation Agreement (this "AGREEMENT") dated as of March 5, 2001
by and between TIME WARNER CABLE, a Division of Time Warner Entertainment
Company, L.P., a Delaware partnership ("AFFILIATE"), and Hispanic Television
Network Inc., the owner and operator of the Hispanic Television Network, a
Delaware corporation ("Network").
In consideration of the mutual covenants hereinafter set forth, Network
and Affiliate agree as follows:
1. GRANT OF RIGHTS.
(a) Network hereby grants to Affiliate the non-exclusive
right and license to exhibit and distribute the Service (as defined in Section
3(a)) (whether in its current analog format or in any other format now known
or hereafter devised, whether digitized, compressed, modified, replaced or
otherwise manipulated) by any means of transmission in the Operating Areas
including, without limitation, the right to sublicense to third party
distributors.
(b) As used herein, the following terms shall have the
meanings set forth herein:
(i) "OPERATING AREAS" shall mean, collectively, all of
those geographic areas in which, from time to time, a TWC System (as defined
in Section 1(b)(iii)) is authorized by the appropriate governmental agency,
authority or instrumentality (if required) to operate an audio or video
distribution facilities and in which such system is operating or is obligated
to operate or become operational, all counties containing any such geographic
areas or portion thereof and all counties adjacent thereto.
(ii) "TWC COMPANY" shall mean each of Affiliate, AOL
Time Warner Inc. ("TWI"), Time Warner Entertainment Company, L.P. ("TWE"),
Time Warner Entertainment-Advance/▇▇▇▇▇▇▇▇, ▇.▇. ("TWEAN"), TWI Cable Inc.
("TWIC") or Paragon Communications, or any other corporation, partnership,
joint venture, trust, joint stock company, association, unincorporated
organization (including a group acting in concert) or other entity of which
Affiliate, TWI, TWE, TWEAN, TWIC or Paragon Communications, directly or
indirectly, owns at least twenty five percent (25%) of the equity.
(iii) "TWC SYSTEM" shall mean a cable television
system or a group of cable television systems (whether designated as divisions
or otherwise) (A) which is managed by a Time Warner Company (as defined in
Section 1(b)(ii) or (B) of which Affiliate, TWI, TWE, TWEAN, TWIC or Paragon
Communications, directly or indirectly, owns or has the right to become an
owner of at least twenty five percent (25%) of the equity.
2. TERM. The term of this Agreement shall be ten (10) years
commencing on the
date hereof (the "INITIAL TERM"). This Agreement shall automatically renew for
additional one (1) year periods (each, a "RENEWAL TERM") thereafter unless
Affiliate notifies Network by certified or registered mail at least ninety
(90) days prior to the expiration of the Initial Term or, if applicable, the
then-current Renewal Term, that Affiliate desires to terminate this Agreement.
The Initial Term and each Renewal Term, if any, shall be collectively referred
to herein as the "TERM".
3. CONTENT OF THE SERVICE.
(a) THE SERVICE. The "SERVICE" is, and throughout the
Term, shall be, 24-hour a day, advertiser supported, satellite-delivered video
programming service known as "Hispanic Television Network" or "HTVN" which
shall at all times consist solely of general entertainment programming in the
Spanish language which is targeted to the Mexican and Latin American
audiences, and which shall include programs of the following types: movies,
variety shows, sports programming, news and talk shows, children's programs,
comedy and music programs. In no event shall the amount of the Service's
programming comprising any single category set forth in the foregoing sentence
dominate the Service to such extent that the Service would be characterized by
a reasonable third party as a service of a single category type (e.g., the
Service shall not be characterized as a "movie channel" or a "news service").
Not less than 50% of the Service programming shall previously have been
distributed to television audiences in the United States. The Service shall at
all times during the Term be similar (in terms of the nature, content, type,
quality of programs and the relative quantity of different types of programs)
in all material respects to the programming set forth in the cable television
program schedule attached hereto as Exhibit A. The Service shall not contain
any shop-at-home programming, "infomercials" or other paid programming, as
such terms are commonly understood in the cable television industry.
(b) VERTICAL BLANKING INTERVAL. Network represents and
covenants that all of the signal distribution capacity contained within the
analog bandwidth of the signal for the Service and the appropriate equivalent
portion of the digital signal for the Service (including, without limitation,
an MPEG private data stream) (other than traditional television video and
audio signals), including, without limitation, the vertical blanking interval
and audio subcarriers and any other portions of the bandwidth that may be
created or made useable as a result of the digitization or compression or
other non-analog formatting of the signal (collectively, "NON-TRADITIONAL AND
VBI SIGNALS"), is not essential to or a part of the Service or necessary for
the delivery or distribution of the Service. Network acknowledges and agrees
that any and all rights in and to any and all Non-Traditional and VBI Signals
and the use thereof are and will be held exclusively by Affiliate and the TWC
Systems and that nothing contained herein shall restrict Affiliate or the TWC
Systems from using any and all Non-Traditional and VBI Signals by any means or
for any purpose so long as such use does not materially degrade or interfere
with the quality of the video and audio signal for the Service.
Notwithstanding the foregoing, Affiliate agrees that, provided there is no
incremental cost to Affiliate, the TWC Systems or subscribers, Network may use
the Non-Traditional and VBI Signals for the purpose of providing, with respect
to current programming appearing on
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the Service, closed-captioning for the hearing-impaired and up to one (1)
second language audio feed to Affiliate's and or the TWC Systems' subscribers.
(c) NO EMBEDDING. Except as otherwise agreed in writing,
Affiliate shall not be obligated to distribute any material or information
contained or embedded in or around any portion of the feed (whether analog or
digital) provided to Affiliate (the "SIGNAL") for the Service that is not
essential to and a part of the Service programming. Network further agrees
that: (i) it shall not embed any material or information into or around any
portion of the Signal that cannot be removed and/or blocked by Affiliate or at
any TWC System head end (which is expressly permitted hereunder); and (ii) it
shall provide Affiliate with written notice of its intention to embed any
information in or around such Signal at least ninety (90) days prior to the
commencement of such embedding or at the time of execution of this Agreement
if it is presently intending to embed such information within ninety (90) days
following the date of such execution.
(d) Network represents, warrants and covenants that,
during the Term, it shall, at its sole expense, include as part of the signal
of the Service closed-captioning to the full extent required by law and to the
extent required to ensure that Affiliate and the TWC Systems are in compliance
with any and all laws requiring closed captioning regardless of whether such
law imposes the obligation to ensure the inclusion of closed captioning on
Network, Affiliate or a third party. Without limiting the foregoing, Network
shall ensure that the Service meets any and all benchmarks for captioning
programming as set forth in Part 79 of Federal Communications Commission
regulations. Network acknowledges and agrees that neither Affiliate, any TWC
System, nor any third party distributor hereunder shall have any liability in
connection with Network's failure to prepare, insert or include
closed-captioning in the Service as required by this Section 3(d)
4. CARRIAGE. Affiliate may carry the Service on any tier or
level of service.
5. DELIVERY OF SERVICE.
(a) TRANSMISSION AND RECEPTION. Network shall, at its sole
cost and expense, deliver an audio and video signal of the Service in a format
and manner acceptable to Affiliate (in its sole discretion) which signal is
fully encoded and scrambled utilizing technology, standards, practices and
procedures which are generally accepted throughout the cable television
industry. Network represents, warrants and covenants to Affiliate that no
facilities or equipment are necessary for the reception and distribution of
the Service by Affiliate as contemplated herein other than such facilities or
equipment presently utilized by Affiliate and at the TWC System head ends.
(b) SIGNAL QUALITY. Network shall deliver to Affiliate and
each TWC System an audio and video signal for the Service of a quality at
least as high as the quality of the audio and video signal delivered with
respect to widely distributed cable television programming services.
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(c) ALTERED SIGNAL. Network hereby grants Affiliate the
right to receive the signal of the Service, to digitize, compress, modify,
replace or otherwise technologically manipulate the signal, and to transmit
the signal as so altered (the "ALTERED SIGNAL") for redistribution to
terrestrial or other reception sites capable of receiving and utilizing the
Altered Signal; provided, that no such alteration, transmission,
redistribution, reception or other use will cause a material adverse change in
a viewer's perception of the principal video or principal audio presentation
of the Service. Network shall not change or otherwise deliver the signal of
the Service or any programming contained therein in such a way as to
technically or technologically defeat, or otherwise interfere with,
Affiliate's or the TWC Systems' rights under this Section. In the event that
Network interferes with or otherwise prevents receipt, digitization,
compression, modification, replacement, utilization or manipulation of the
signal of the Service by Affiliate or the TWC Systems pursuant to the terms of
this Section, then in addition to any other rights at law or equity Affiliate
shall have the right to immediately discontinue carriage of the Service
hereunder.
6. DISTRIBUTION OF THE SERVICE. Affiliate shall have no
obligation to commence offering the Service at any time or in any TWC System.
Affiliate may elect to distribute or exhibit the Service on a full time or
part time basis. Affiliate may cease carriage of the Service at any time and
in any or all TWC Systems upon sixty (60) days' prior written notice to
Network.
7. LICENSE FEES. Network agrees to provide each TWC System that
launches the Service a one-year free period from date of launch. Thereafter,
Affiliate shall pay Network license fees in accordance with Exhibit B attached
hereto and made a part of hereof. License fees shall be due within 45 days
after the end of the applicable month and payment of such fees shall be
accompanied by a report listing the TWC Systems that carry the Service and the
number of Service subscribers in each such TWC System.
8. PROMOTIONAL MATERIALS. Network shall provide to Affiliate
and the TWC Systems, upon request, reasonable quantities of Network's
then-available promotional, marketing and sales material with respect to the
Service. Affiliate shall have the right to use Network's names and marks in
routine promotional materials, such as printed and electronic program guides,
program listings, on web sites and ▇▇▇▇ stuffers. Network shall not use any of
the names or marks of Affiliate or any Time Warner Company without the prior
written consent of Affiliate.
9. NETWORK REPRESENTATIONS, WARRANTIES AND COVENANTS. Network
represents, warrants and covenants that it has and will have the right to
grant the licenses granted herein, free and clear of all liens, restrictions,
charges, claims and encumbrances, that it has obtained and will maintain all
licenses, permits, exemptions, authorizations and consents necessary to fully
perform this Agreement and that neither the Service nor any programming
contained therein: (i) is or will be libelous, slanderous, obscene, defamatory
or indecent; or (ii) violates or infringes or will violate or infringe the
civil or property rights, copyrights (including, without limitation, music
synchronization and performance rights and dramatic and non-dramatic music
rights), trademark rights, patent rights or rights of privacy of any person.
Without limiting the foregoing,
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Network represents, warrants and covenants that it has and will have a
"through-to-the-viewer license" (as such term is commonly understood in the
industry) with respect to music performance rights contained in the Service.
10. INSURANCE. Network represents, warrants and covenants that
(i) it has obtained broadcaster's errors and omissions insurance covering the
Service and all elements thereof from a nationally recognized insurance
carrier and in accordance with industry standards of no less than Five Million
Dollars ($5,000,000) per occurrence; (ii) such insurance shall remain in full
force and effect throughout the Term; (iii) Affiliate shall be named as an
additional insured and loss payee on the insurance policy and such policy
shall provide that the proceeds thereof shall be payable to Affiliate; (iv)
Network shall provide Affiliate with documentation to such effect upon the
execution hereof; (v) at least thirty (30) days prior to the expiration of
such policy Network shall provide Affiliate with appropriate proof of issuance
of a policy continuing in force and effect the insurance covered by the policy
so expiring; and (vi) Network shall provide Affiliate with thirty (30) days
written notice of any changes in such policy.
11. INDEMNIFICATION. Network shall indemnify Affiliate and each
TWC System, each of their direct and indirect owners, and each of their
respective affiliates (including controlling persons and related companies),
subdistributees, officers, directors, shareholders, employees and agents for,
and shall hold them harmless from and against, any and all losses,
settlements, claims, actions, suits, proceedings, investigations, judgments,
awards, damages and liabilities (collectively, "LOSSES" and, individually, a
"LOSS") which are sustained or incurred by or asserted against any of them and
which arise out of (i) any breach or alleged breach of this Agreement by
Network or (ii) the Service, the content thereof or programming contained
therein or the delivery or distribution thereof (including, without
limitation, any Loss arising out of libel, slander, defamation, indecency,
obscenity, invasion of right of privacy or infringement or violation of
copyrights, music synchronization or performance rights, dramatic or
non-dramatic music rights, trademark rights or patent rights) and shall
reimburse them for any and all legal, accounting and other fees, costs and
expenses (collectively, "EXPENSES") reasonably incurred by any of them in
connection with investigating, mitigating or defending any such Loss. The
provisions of this Section 11 shall apply, without limitation, to Losses
asserted by Affiliate against Network.
12. ALTERNATE DISTRIBUTION. Without Affiliate's prior written
consent, Network shall not exhibit or distribute, and shall not permit any
third party to exhibit or distribute, all or any portion of the Service, or
any programming comprising a portion of the Service: (i) via the "Internet" or
over any local or wide area computer network (unless such computer network is
maintained by Network or another party for use in producing or distributing
the relevant Service), whether for a fee or otherwise, including in
multimedia, interactive, three-dimensional or other augmented or enhanced
format; or (ii) via any broadcast or cable programming service other than the
relevant Service, whether simulcast, time-shifted, repackaged or distributed
through any "video on demand" mechanism; PROVIDED, HOWEVER, that nothing
contained herein shall prevent Network from exhibiting or distributing, or
granting any third party the right to exhibit or distribute, segments of the
Service or segments of programming comprising a portion of the Service in the
above manner so long as (x) no such segment is of a duration greater than ten
(10) minutes), (y) no more than two (2) of such segments exhibited or
distributed during any
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calendar day are taken from the same program, and (z) the total duration of
all such segments exhibited or distributed during any calendar day does not
exceed sixty (60) minutes per day.
13. MOST FAVORED NATIONS. (a) If Network has agreed to provide,
at any time agrees to provide or at any time provides the Service, directly or
indirectly, pursuant to any Agreement, understanding or arrangement (whether
oral or written, whether formal or informal, whether on a short or long term
basis) to any third party at any time during the Term under any term or
condition which is more favorable than set forth in this Agreement (each a
"MORE FAVORABLE TERM"), Network shall give written notice thereof to Affiliate
and, at Affiliate's election, this Agreement shall be deemed to have been
modified so that Affiliate receives any such More Favorable Term from the date
on which first provided to such third party (or, if now being provided, from
the date hereof) and thereafter for so long as any such More Favorable Term
continues to be provided to such third party.
(b) On each anniversary date of the date of this
Agreement, Network shall provide to Affiliate a written statement certifying
that Network has complied with its obligations set forth in Paragraph 13(a)
which statement shall be signed by its CEO and General Counsel (or outside
counsel (as applicable).
14. MISCELLANEOUS.
(a) GOVERNING LAW. The validity, interpretation,
performance and enforcement of this Agreement shall be governed by the laws of
the State of New York. The respective obligations of the parties under this
Agreement are subject to all applicable federal, state and local laws, rules
and regulations (including, without limitation, the Communications Act of
1934, as amended, the Cable Communications Policy Act of 1984, as amended, and
the rules and regulations of the Federal Communications Commission thereunder).
(b) JURISDICTION/SERVICE OF PROCESS. Each party agrees
that any proceeding arising out of or relating to this Agreement or the breach
or threatened breach of this Agreement may be commenced and prosecuted
exclusively in any federal or state court located in the City of New York,
State of New York. Each party consents and submits to the personal
jurisdiction of any such court in respect of any such proceeding. Each party
hereby consents to service of process upon it with respect to any such
proceeding by registered mail, return receipt requested, and by any other
means permitted by applicable laws and rules. Each party waives any objection
that it may now or hereafter have to the laying of venue of any such
proceeding in any state or federal court in the City of New York and any claim
that it may now or hereafter have that any such proceeding in any such court
has been brought in an inconvenient forum. Each party waives trial by jury in
any such proceeding.
(c) ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains
the entire understanding of the parties relating to the subject matter hereof.
No modification or amendment of, or waiver under, this Agreement shall be
binding upon a party unless set forth in a written instrument executed and
delivered on behalf of each party by, in the case of Network, an officer of
Network and, in the case of Affiliate, by its Senior Vice President,
Programming, Senior
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Executive Vice President, President or Chairman (each an "AUTHORIZED PERSON");
PROVIDED, HOWEVER, that any Authorized Person may, by written authorization,
designate another person to execute and deliver such an instrument. Unless
authorized in writing pursuant to the preceding proviso, the employees and
officers of Affiliate's regional divisions and TWC Systems are not Authorized
Persons.
(d) FORCE MAJEURE. Neither party shall have any liability
to the other party for any failure to perform hereunder, if such failure is
due to: an act of God; inevitable accident; fire; lockout; strike or other
labor dispute; riot or civil commotion; act of government or government
instrumentality (whether federal, state or local); act of terrorism; failure
of performance by a common carrier; failure in whole or in part of technical
facilities; or other cause (excluding financial inability or difficulty of any
kind) beyond such party's reasonable control.
(e) NOTICES. All notices required to be given hereunder
shall be in writing to the appropriate party at its address set forth herein
or at such other address as may be given by notice hereunder.
(f) SURVIVAL. Each of the representations and warranties
set forth herein and the provisions of Sections 11 and 14 shall survive the
expiration or termination of this Agreement.
(G) COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which (when executed and delivered) shall
constitute an original instrument, but all of which together shall constitute
one and the same instrument.
(H) CONSEQUENTIAL DAMAGES. Affiliate shall not be liable
to Network or any third party for any special, indirect, incidental, punitive
or consequential damages or for loss of profits, revenues, data or services,
regardless of whether such damage or loss was foreseeable.
15. ADVERTISING AVAILS. Network may include a total of no more
than 14 minutes of commercial announcement availabilities, promotional
announcements, public service announcements and other non-programming material
(collectively "Commercial Announcement Time") in each hour of the Service
programming. Network shall make available to Affiliate for its use not less
than 2 minutes per hour of such Commercial Announcement Time, equally
distributed throughout each hour of the Service and in time blocks of one
minute or two minutes each. Network shall properly tone switch via inaudible
signals all Affiliate's Commercial Announcement Time to enable Affiliate to
insert its Commercial Announcement Time using then standard cable television
industry equipment.
16. LOCAL PROGRAMMING. Notwithstanding anything contained in
this Agreement to the contrary, Affiliate shall have the right to preempt up
to one 1/2 block per day of the Service and to insert in its place a daily
topical locally-produced program which may consist of news,
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sports, information, business, financial, feature or public affairs
programming derived from local or regional events of general interest to the
local or regional Hispanic community.
17. TERMINATION. In addition to its other rights at law or in
equity, a party may terminate this Agreement on written notice to the other
party if: (i) the other party breaches any material term of this Agreement,
but if the breach is curable, then the non-breaching party may not exercise
its termination right unless the breach remains uncured within thirty (30)
days of the notice of termination; (ii) the other party becomes insolvent,
files a petition in bankruptcy or seeks relief under any similar law related
to its financial condition; or (iii) any person files an involuntary petition
in bankruptcy against the other party, or seeks relief under any similar law
related to the other party's financial condition, unless the involuntary
petition is dismissed or relief is denied within thirty (30) days after it has
been filed or sought.
18. Nothing contained herein shall prohibit Affiliate from
providing subscribers with VCR-like functionality in respect of the Service
programming, such as the ability to "time-shift" store, pause or rewind
programming, via set top boxes, other equipment or via Affiliate's physical
plant, each of which is expressly permitted hereunder.
HISPANIC TELEVISION NETWORK, INC. TIME WARNER CABLE, a Division of
Time Warner Entertainment Company, L.P.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: Name:
Title: Title:
Address for Notice: Address for Notice:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: PRESIDENT Attn: Senior Vice President, Programming
& Senior Vice President/General Counsel
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EXHIBIT A
SERVICE PROGRAM SCHEDULE
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EXHIBIT B
MONTHLY LICENSE FEES. Affiliate shall pay (except as set forth
below) monthly license fees per Service subscriber as follows:
(a) If a System carries the Service on the BST or CPST level of
Service, the following license fees shall apply:
Calendar Year Rate
------------- -----
2001 Free
2002 .03
2003 .04
2004 .05
2005 .05
2006 .05
2007 .05
2008 .05
2009 .05
2010 .05
2011 .05
(b) If a System carries Service on a tier or level of Service that
is less highly penetrated then the CPST, the following license fees shall apply:
Calendar Year Rate
------------- -----
2001 .08
2002 .085
2003 .09
2004 .095
2005 .10
10
2006 .105
2007 .11
2008 .11
2009 .11
2010 .11
2011 .11
(c) VOLUME DISCOUNT. The license fees set forth above shall be
reduced by the volume discount formula set forth below:
IF THE AGGREGATE NUMBER OF SERVICE THEN THE % DISCOUNT FROM
---------------------------------- ------------------------
SUBSCRIBER IS: THE APPLICABLE LICENSE FEE SHALL BE:
-------------- ------------------------------------
0 - LESS THAN 5 Million (0.00%)
.5 Million - LESS THAN 1 Million (2.5%)
1 Million - LESS THAN 1.5 Million (5%)
2 Million - LESS THAN 2 Million (7.5%)
2.5 Million - LESS THAN 3 Million (10%)
3 Million - LESS THAN 3.5 Million (12.5%)
3.5 Million - LESS THAN 4 Million (17.5%)
4 Million - LESS THAN 4.5 Million (20.00%)
4.5 Million - LESS THAN 5 Million (21.25%)
5 Million - LESS THAN 5.5 Million (22.50%)
5.5 Million - LESS THAN 6 Million (23.75%)
6 Million - LESS THAN 6.5 Million (25.00%)
6.5 Million - LESS THAN 7 Million (26.25%)
7 Million - LESS THAN 7.5% Million (27.50%)
7.5 Million - LESS THAN 8 Million (28.75%)
8 Million - LESS THAN 8.5 Million (30.00%)
8.5 Million - LESS THAN 9 Million (31.25%)
9 Million - LESS THAN 9.5 Million (32.50%)
9.5 Million - LESS THAN 10 Million (33.75%)
10 Million + (35.00%)
The above discount rate shall become effective for all Service subscribers
during the month the aggregate Service subscriber count totals the number of
Service subscribers indicated.
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