AFFILIATION AGREEMENT
THIS AGREEMENT, made as of the ____ day of _________, is by
and between Firestone Communications, Inc., a Delaware Corporation ("Network"),
and ___________________________________, a ____________ ("Affiliate"), regarding
the cable television programming service currently known as "SORPRESA" (whether
in its current format and/or in any other format) (the "Service"). The parties
hereby mutually agree as follows:
1. DEFINITIONS:
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As used throughout this Agreement, capitalized terms used and not
otherwise defined herein shall have the meanings set forth in this Section 1:
"Affiliate Group" has the meaning set forth in Exhibit A.
"Affiliate Indemnitees" means Affiliate, its affiliated companies and
each of their respective present and former officers, shareholders, directors,
employees, partners and agents.
"Affiliated Entity" means any entity that Affiliate elects to add to
this Agreement, provided that such entity meets the requirements of Paragraph
I.1 of Exhibit A, assuming, for this purpose, that such entity is a video
distribution system or enterprise.
"Alternative Applications Right(s)" has the meaning set forth in
Section 5(g).
"Affiliate Group" has the meaning set forth in Exhibit A.
"Blackout" means the refraining from the distribution of a particular
program due to Programming Restrictions that prohibits the distribution of such
program in certain areas of the Territory.
"Children's Television Regulations" means the commercial matter
limitations of the Children's Television Act of 1990, Public Law 101-437
(October 18, 1990) and the regulations of the FCC promulgated thereunder from
time-to-time.
"Closed-Captioning Regulations" means the benchmark requirements for
captioning and video description of video programming imposed by Part 79 of the
FCC's regulations, as the same may be amended from time to time.
"Control" means the power to direct the management and policies of an
entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Control Group" has the meaning set forth in Exhibit A.
"Costs" means all losses, liabilities, claims, costs, damages and
reasonable expenses, including fines, forfeitures, reasonable attorneys' fees,
disbursements and court or administrative costs.
"Cross Promotions" has the meaning set forth in Section 8(b).
"Direct On-Air Sales Programming" means any programming that includes
the direct on-air marketing, offering for sale and/or sales of products and/or
services, including home shopping, and direct response advertising, regardless
of the length of such programming, except that direct on-air sales programming
shall not include Network's regularly scheduled commercial announcement time
(i.e., the commercial announcements distributed throughout the Service during
other programming that are generally ____ (__) seconds or less in length and
primarily used for promotional announcements or third party advertising of
products and services that are not directly sold to the viewer during such
commercial announcements).
"FCC" means the Federal Communications Commission.
"Fees" has the meaning set forth in Section 6(a).
"Financial News Service" means a service that carries more than ___
(__) minutes per hour of regularly scheduled business and/or financial news in
any hour during the period beginning at 8:00 a.m. and ending at 6:00 p.m.,
Eastern Time, on any business day; provided that a service may carry up to one
(1) full hour of regularly scheduled financial and/or business news per day
(between 8:00 a.m. and 6:00 p.m., Eastern Time) without being considered a
Financial News Service.
"Force Majeure Event" means an act of God or other cause (financial
inability excepted) beyond a party's reasonable control.
"High Definition Feed" means any feed of the Service containing any
programming with a resolution exceeding 480p when transmitted by Network or any
entity authorized by Network to transmit the Service.
"Infomercial Programming" means programming comprised of the marketing,
offering for sale, product demonstration and/or testimonials, and/or sale of
products and/or services for which Network is compensated by a provider based on
the time sold to such provider.
"Initial Term" has the meaning set forth in Section 3(a).
"ISO" means the Insurance Services Office.
"More Favorable Provision" has the meaning set forth in Section
13(f)(i).
"More Favorable Provision Obligation" has the meaning set forth in
Section 7(b).
"Net Sales" means gross sales less taxes, fees, returns and allowances,
freight out and cash discounts.
"Network Indemnitees" means Network, its affiliated companies and each
of their respective present and former officers, shareholders, directors,
employees, partners and agents.
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"Non-Essential Bandwidth" has the meaning set forth in Section 5(d)(i).
"Origination Cablecasting Regulations" means the origination
cablecasting regulations of the FCC, as the same may be amended from time to
time.
"Programming Restrictions" means bona fide generally-applicable and
universally applied rights, programming, scheduling, or other restrictions
contained in written agreements with third party suppliers, provided that any
such restrictions were negotiated in good faith in an arms-length transaction
and not for the purpose of restricting Affiliate's rights hereunder.
"Qualifying System" means any system or enterprise that meets the
System Qualifications.
"Renewal Fees" has the meaning set forth in Section 6(d).
"Renewal Term" has the meaning set forth in Section 3(b).
"Required Materials" means (i) closed-captioning for the hearing
impaired, (ii) video description (to the full extent required by law, if at all)
and data for the identification and rating of video programming that contains
sexual, violent or other indecent material in accordance with applicable law,
and/or (iii) data or information that the FCC or other applicable law or
regulation requires either Network or Affiliate to transmit at any time within
the bandwidth of the signal of the Service (which use of such bandwidth shall be
limited to the minimum bandwidth necessary to comply with applicable law).
"Service Subscriber(s)" means each location that Affiliate, pursuant to
this Agreement, intentionally authorizes the Service directly, through an
affiliate, or through the subdistribution of the Service to an unaffiliated
third party, including each occupied residential or commercial location where
the Service is intentionally authorized by Affiliate. For purposes of the
payment of Fees, Service Subscriber shall not include (i) employees of Affiliate
or any of its affiliates who are not charged for the Service, (ii) public
officials, administrative personnel or public buildings within the Territory
that are not charged for the Service, or (iii) subscribers who have not paid
their monthly rate for a given month and are subsequently disconnected;
provided, however, that, for purposes of payment of Fees, the aggregate number
of Service Subscribers excluded pursuant to this clause (iii) in any given
calendar month shall not exceed ________ percent (____%) of the aggregate number
of Service Subscribers for such month but for the provisions of such clause.
"System(s)" means any system or enterprise that meets the System
Qualifications and by which or to which Affiliate has distribution rights
pursuant to this Agreement and that Affiliate elects to include under this
Agreement, as set forth on Schedule 1, as such Schedule 1 may be deleted from,
or added to, from time-to-time pursuant to the terms of this Agreement.
"System Qualifications" has the meaning set forth in Exhibit A.
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"Term" has the meaning set forth in Section 3(a).
"Territory" means the fifty (50) states of the United States, the
commonwealths, territories and possessions of the United States and the District
of Columbia.
2. RIGHTS:
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(a) Grant of Rights. Network hereby grants to Affiliate and any
affiliates of Affiliate, the non-exclusive right, but not the obligation, to
distribute and subdistribute the Service by any distribution technology(ies) or
platform(s), whether now existing or developed in the future, for which Network
holds or hereafter obtains the pertinent rights. The rights granted to Affiliate
in this Section 2(a) and elsewhere in this Agreement are also granted hereby to
any Affiliated Entity. Without limiting the foregoing, Affiliate shall have the
right to distribute the Service on a video-on-demand basis pursuant to the terms
and conditions set forth on Schedule 2.
(b) Add and Delete Rights. Affiliate shall have the right, upon written
notice to Network within thirty (30) days thereof, to elect to include under
this Agreement and to distribute the Service to, any Qualifying System by which
or to which Affiliate has distribution rights pursuant to this Agreement. Upon
the addition of a Qualifying System to this Agreement, any then-existing
agreement between or among Network and any one or more third parties applicable
to such Qualifying System for distribution of the Service shall terminate and
cease to be effective and, if there are no Qualifying Systems remaining under
any such then-existing agreement, then such agreement shall be terminated in its
entirety and of no further force and effect. The parties acknowledge and agree
that in no event shall the addition of a Qualifying System to this Agreement be
prohibited or impeded notwithstanding any provisions or conditions of any such
other then-existing agreement that may conflict with the terms of this
Agreement. Affiliate shall have the right, in its sole discretion, to delete the
Service from any or all Systems, by providing Network with written notice within
___ (___) days after such deletion. Notwithstanding anything in the immediately
preceding sentence to the contrary, Affiliate shall not be deemed to be in
breach of this Section 2(b) (or incur any liability in relation thereof) in the
event Network does not timely receive notice from Affiliate of any deletion.
Without limiting the foregoing, Affiliate shall have the right to delete from
this Agreement any System that is divested or otherwise ceases to be a
Qualifying System.
3. TERM; EARLY TERMINATION:
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(a) Initial Term. Unless earlier terminated pursuant to the terms of
this Agreement, the "Term" of this Agreement shall consist of, collectively, the
Initial Term and any number of Renewal Terms. The "Initial Term" of this
Agreement shall be for ___ (__) years, commencing as of the date hereof.
(b) Renewal Terms. This Agreement shall automatically renew for
successive ___ (__- year periods (each a "Renewal Term") after the expiration of
the Initial Term, and each Renewal Term, unless either (i) this Agreement is
terminated earlier in accordance with the terms hereof, or (ii) Affiliate
provides written notice to Network of its intent to terminate this Agreement a
minimum of______ (___) days prior to the end of the Initial Term or any Renewal
Term.
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(c) Network's Right of Early Termination. Network may, by notifying
Affiliate, terminate this Agreement prior to the expiration of the Term: (i) if
Affiliate is in material breach of this Agreement, provided that if such breach
is of the type that is curable, then Affiliate shall have _____ (___) days from
Network's notice of such breach to cure such breach; provided, however, if such
breach is confined to a System or to a limited number of Systems, Network shall
have the right to terminate this Agreement only as to such System or Systems;
(ii) if Affiliate has filed a petition in bankruptcy, is insolvent, or has
sought relief under any law related to Affiliate's financial condition or its
ability to meet its payment obligations; or (iii) if any involuntary petition in
bankruptcy has been filed against Affiliate, or any relief under any such law
has been sought by any creditor(s) of Affiliate, unless such involuntary
petition is dismissed, or such relief is denied, within _____ (__) days after it
has been filed or sought.
(d) Affiliate's Right of Early Termination. In addition to Affiliate's
other rights to terminate this Agreement, Affiliate may, by notifying Network,
terminate this Agreement prior to the expiration of the Term: (i) if Network is
in material breach of this Agreement, provided that if such breach is of the
type that is curable, then Network shall have ______ (___) days from Affiliate's
notice of such breach to cure such breach, unless a shorter cure period is
specified elsewhere in this Agreement for a specific breach, in which case such
shorter cure period will apply; (ii) if Network has filed a petition in
bankruptcy, is insolvent or has sought relief under any law related to Network's
financial condition or its ability to meet its payment obligations; (iii) if any
involuntary petition in bankruptcy has been filed against Network, or any relief
under any such law has been sought by any creditor(s) of Network, unless such
involuntary petition is dismissed, or such relief is denied, within ______ (__)
days after it has been filed or sought; or (iv) on at least _____ (__) days'
notice in the event that delivery of the Service is discontinued or interrupted
for a continuous period of ______ (___) days.
4. CONTENT OF THE SERVICE:
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(a) Service Content. Throughout the Term, the Service shall be a
professionally-produced, twenty-four (24)-hour per day, seven (7)-day per week,
programming service consisting of no less than fifteen (15) hours of children's
programming and no more than six (6) hours of family programming each day,
whereby all of the Service programming shall be targeted towards children
between the ages of 6-11 years, and limited amounts of programming for children
of the pre-school and "tweens" ages of 13-14 years, as well as teenagers between
the ages of 14-19 years. For purposes hereof, "Children's programming" consists
of animation, pre-school series, variety, comedy/drama, documentaries and
special events geared towards children. The programming on the Service in the
evenings shall target young adults with movies, game shows, music and variety
programs and talk shows. All programming on the Service will be featured in
Spanish language with occasional bilingual or English programming. All
programming will target U.S. Hispanics of various Latin cultures. The
programming shall be similar to the programming on the program schedule attached
hereto as Exhibit B. During each month of the Term, Network shall send a copy of
its monthly program schedule to Affiliate, in care of: Programming Department.
Network agrees that the Service (including any advertisements or promotions
contained therein) will not contain (i) programming that has received, or had it
been rated would have received, an MPAA "X" or "NC-17" rating; (ii) a sufficient
quantity of religious programming such that the
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Service could be characterized as a religious programming service; provided,
however, that in no event shall the Service contain religious programming of a
proselytizing nature or religious programming that includes any solicitation or
request for donations, contributions or payments of any kind, whether monetary
or otherwise; (iii) a sufficient quantity of music videos such that the Service
could be characterized as a music video service; (iv) a sufficient quantity of
programming such that the Service could be characterized as an English-language
children's programming service; (v) live or taped excerpts or entire portions of
actual courtroom trials, hearings or other similar proceedings as a substantial
component of the programming; (vi) pay-per-view movies or events; (vii) a
sufficient quantity of financial news such that the Service could be
characterized as a Financial News Service; (viii) Blackouts; (ix) surcharges;
(x) promotion or marketing of "800," "888," "900," or "976" telephone services,
or other similar services that ▇▇▇▇ a caller for placing or confirming the call
(other than for the telephone company's cost of the call), that relates directly
or indirectly to gambling, the occult, or sexual activities or other adults-only
services, or that is directed at children; or (xi) Direct On-Air Sales
Programming in excess of _____ (__) hours in any one (1) calendar day, which may
only occur between the hours of 12:00 a.m. and 6:00 a.m., prevailing Eastern
Time with respect to the east coast feed of the Service and prevailing Pacific
Time with respect to the west coast feed of the Service, if any (each feed shall
be referred to hereinafter as a "Feed"). Any Direct On-Air Sales Programming
included in the Service shall be subject to preemption upon at least _____ (___)
days' notice to Network. If Direct On-Air Sales Programming is preempted by any
System(s), Affiliate shall have the right in such System(s) to insert
programming and advertisements of its choice on the channel otherwise identified
with the Service during the period that the Service contains any Direct On-Air
Sales Programming.
(b) Commercial Announcement Time. Network shall make available to
Affiliate not less than ______ (__) minutes of commercial announcement time per
hour of the Service, to be used at Affiliate's option and control. All
commercial announcement time provided to Affiliate hereunder shall be equally
distributed throughout each and every hour of the Service and shall not occur
between the actual or apparent end of one program and the actual or apparent
beginning of another program. If Network increases the total amount of
commercial announcement time on the Service to more than ______ (___) minutes
per hour, then Affiliate shall receive _____ percent (___%) of such increase and
every increase thereafter. Network shall "tone-switch," using
industry-recognized equipment, all of Affiliate's commercial announcement time.
Affiliate and Network shall each have the right to retain for itself all of the
proceeds derived from the sale of its commercial announcement time.
(c) Remedy for Content Deviation. If for any reason, Affiliate, in good
faith, determines that the Service includes programming prohibited in Section
4(a) and/or includes programming that deviates from the content as required in
Section 4(a) and as referenced in Exhibit B, Affiliate shall have the right to
(i) discontinue distribution of the Service on any or all Systems; (ii)
immediately preempt the deviating and/or the prohibited programming; and/or
(iii) receive credit against the Fees or Renewal Fees in the proportion that the
hours of prohibited and/or deviating programming each day bears to the total
hours the Service is transmitted each day, such credit to be applied against the
Fees or Renewal Fees in any month.
(d) Service in its Entirety. During the Term, the programming on the
Service, as received by any Service Subscriber at a given point in time, shall
be the same as the programming
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received by all other subscribers to the Service at such point in time, except
to account for time-shifted Feeds with identical programming line-ups. If it is
not, then Affiliate shall have the unconditional right to receive and
distribute, at no extra cost whatsoever, the programming included in the Service
as provided to Affiliate and/or such other programming, or those portions of
such other programming as elected by Affiliate. Affiliate shall have the right,
at no additional cost whatsoever, to distribute any and all additional feeds of
the Service (including any additional time zone feed or any SAP feed) on any
tier or level of service permitted herein. For the avoidance of doubt, any
High-Definition Feed of the Service, whether now existing or developed in the
future, shall be treated the same as the primary feed of the Service for
purposes hereof (i.e., Affiliate shall have the right to distribute any
High-Definition Feed and Affiliate shall not be required to pay any additional
fee or charge whatsoever for the receipt and distribution of such
High-Definition Feed).
(e) Closed-Captioning; Compliance with Other Laws. Network agrees that
at all times during the Term it shall, at its sole expense, include as part of
the signal of the Service, closed-captioning and/or video description to the
full extent required by law and to the extent required to ensure that Affiliate
is in compliance with any and all laws requiring closed-captioning and/or video
description (including any and all Closed-Captioning Regulations) regardless of
whether such law imposes the obligation to include closed-captioning and/or
video description on Network, Affiliate or a third party. Without limiting the
foregoing, if any programming exhibited on the Service shall be among the type
of programming that is regulated by federal, state or local law or regulation as
the same may apply to Affiliate, then (i) Network shall, at its expense, include
as part of such programming those elements required (or otherwise modify the
programming) to enable Affiliate to be in compliance with any and all of such
laws and regulations, and (ii) Network shall provide Affiliate with all
documents reasonably necessary for Affiliate to demonstrate compliance with such
laws and regulations in a timely manner. Network acknowledges and agrees that,
except as set forth in Section 5(d)(ii) with respect to the delivery of the
Required Materials to Service Subscribers, neither Affiliate, any Affiliated
Entity, any System nor any other system or enterprise distributing the Service
hereunder shall have any liability in connection with Network's failure to
prepare, insert or include closed-captioning and/or video description in the
Service as required by this Section 4(e). Accordingly, Network shall indemnify,
defend and forever hold harmless Affiliate, and any Affiliated Entity for any
breach of this Section 4(e) by Network.
(f) Prohibited Exhibitions.
(i) Network agrees that in no event will it authorize the
broadcast television exhibition of the Service, any portion thereof or
any programming derived therefrom in the area served by any System.
Notwithstanding the foregoing, through _______________ only, Network
shall have the right to authorize a maximum of _____ (__) hours per
day of Service programming per broadcast television station in the
area served by any System.
(ii) In the event that, during the Term, Network grants to any
third party the right to exhibit or distribute, in the Territory for
delivery to residential customers, the Service or a substantial
portion of the programming comprising the Service via the "Internet",
any other web-based Internet protocol distribution means or any local
or wide area computer network (unless such computer network is
maintained by
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Network for its own employees), in any format, then Network will
notify Affiliate of such an arrangement in writing and agrees that, at
Affiliate's request, it will enter into good-faith negotiations for
similar rights, terms and conditions, each one of which is at least as
favorable as that offered or granted to any such third party;
provided, that any such terms and conditions must relate solely to the
exercise of the pertinent right. In addition, Network shall not,
during the Term, directly or indirectly sell or exhibit to consumers
in the Territory for delivery to residential customers, the Service or
programming in excess of ______ hours of the programming on the
Service airing in the same calendar month via the "Internet", any
other web-based Internet protocol distribution means or any local or
wide area computer network (unless such computer network is maintained
by Network for its own employees), in any format. Notwithstanding the
foregoing sentence, Network may exhibit or distribute via the Internet
(A) programming of a similar nature and content to the Service,
provided that such programming does not in any way or manner
constitute a video simulcast or retransmission of the Service itself,
including but not limited to time-shifting; (B) programming in excess
of ____ (___) hours of the programming on the Service(s) airing in the
same calendar month and comprising a portion of the Service, provided
any such programming (1) represents only a limited duration
promotional or marketing "stunt" simulcasting a live special event
limited to one per calendar quarter, or (2) is comprised only of video
clips or short-form streaming video elements of ________ minutes or
less designed to increase or improve viewership of the Service.
(g) Embedding Prohibitions. Network shall not embed any material, data,
images, sounds, features or services, other than Required Materials
(collectively, the "Prohibited Material") into line 21 of the vertical blanking
interval ("VBI") and, as to any remaining bandwidth in the signal of the
Service, shall not embed any Prohibited Material into or around any portion of
such signal that cannot be removed, deleted and/or blocked at any system headend
without impeding with the principal video and accompanying audio signals of the
Service or any of the Required Materials, or degrading the function of any
hardware, software, firmware or any other equipment or devices then in use by
Affiliate. In the event Affiliate is required to block-out, remove or delete any
Prohibited Material from the signal at the System headend(s) (which blockage,
removal or deletion is expressly permitted hereunder and, in respect of which,
Network agrees to provide Affiliate such reasonable assistance and information
as Affiliate may request), Network shall incur any and all costs associated with
such block-out, removal or deletion, or reimburse Affiliate for any and all
costs incurred by Affiliate as a result of such block-out, removal or deletion,
within _______ (___) days of notice to Network from Affiliate of such costs.
Network represents and warrants that, other than the Required Materials, it is
not currently engaged in any such embedding with respect to the Service and
agrees that it shall provide to Affiliate (i) ______ (___) days' prior written
notice of its intention to embed any Prohibited Material into or around the
signal of the Service prior to the commencement of such embedding; (ii) prompt
written notice of its actual embedding of any Prohibited Material into or around
the signal of the Service; and (iii) prompt written notice of its relocation of
any information already embedded in the signal of the Service, which notice
shall describe with specificity the information Network intends to so embed, has
embedded or has relocated, as the case may be, and the technical placement of
such information within the signal of the Service. Network further represents
and warrants that it is not using, and
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covenants and agrees that during the Term it shall not use, any part
of Affiliate's or any System's physical plant for a return path for
any reason whatsoever, including for any "trigger" or signal related
to such embedded information. Without limiting the foregoing, Network
acknowledges that Affiliate has no obligation to transmit through to
its Service subscribers any Prohibited Material contained or embedded
in or around any portion of the signal of the Service (whether analog
or digital) provided to Affiliate that is not Required Material or
part of the principal video and accompanying audio signals for the
Service.
5. DELIVERY AND DISTRIBUTION OF THE SERVICE:
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(a) Delivery. During the Term, Network, at its expense, (i) shall
deliver a signal of the Service to each System and to each subscriber receiving
the Service by satellite hereunder in its discretion, by transmitting such
signal via a domestic satellite commonly used for transmission of cable
television programming, and (ii) by no later than __________________________,
shall fully encrypt the satellite signal of the Service utilizing encryption
technology commonly used in the domestic cable television industry. Except as
otherwise provided in this Section 5(a), Affiliate shall, at its own expense,
furnish all other facilities necessary for the receipt of such satellite
transmission and the delivery of such signal of the Service to Service
Subscribers. In addition to, and without limitation of Affiliate's right of
deletion under Section 2(b), in the event Network changes the satellite or
encryption technology or otherwise modifies the signal or format of the Service
in such a manner that it cannot be received or utilized by a System or Systems
utilizing then-installed equipment, then, with respect to any and all of the
foregoing, Network shall either promptly reimburse Affiliate for all costs
incurred to purchase, or shall supply to Affiliate at no charge and in a timely
fashion, all equipment necessary for each affected System to continue to receive
and distribute the signal of the Service without interruption, disruption, or
other adverse degradation; provided, however, that with respect to new equipment
made necessary by a satellite or other such change, which equipment may be used
to receive the signals of other cable television services, Network shall be
obligated to reimburse Affiliate only for Network's pro-rata share of the cost
of such equipment (based on the total number of cable television services being
received by such affected System and utilizing such new equipment as of the
_______ (___th) day after the effective date of such change). Notwithstanding
the foregoing, if either physical space does not exist at the then-existing
headend or earth station site to accommodate the necessary equipment or
then-current zoning and other restrictions do not permit such additional
equipment, then Affiliate shall have the right to discontinue carriage of the
Service, immediately, in any such System or Systems and to delete, immediately,
such System or Systems from Schedule 1 hereto. If reasonably practicable,
Network agrees to provide Affiliate with at least _________ (____) days' prior
written notice, but in no event less than ______ (___) days' prior written
notice, of a satellite or technology change unless such change is due to a Force
Majeure Event, in which case Network shall provide written notice as is
commercially reasonable. Affiliate may utilize either the signal of the Service
delivered pursuant to Section 5(a) or the signal of the Service delivered by any
other entity authorized by Network to distribute the Service.
(b) Quality of Signal. Network shall deliver, pursuant to Section 5(a),
to each System and to each subscriber receiving the Service by satellite
hereunder a video and accompanying audio signal of the Service of a technical
quality at least comparable to the technical quality of audio and video signals
delivered by other cable television programming services. Each
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System, if any, will deliver to its Service Subscribers a principal video and
accompanying audio signal for the Service of a technical quality at least
comparable to the quality of other cable television programming services
delivered by such System to its subscribers in the same format as the Service,
but in no event shall such System be required to deliver such signals of a
technical quality higher than the technical quality of the video and
accompanying audio signal of the Service as delivered by Network hereunder.
(c) Distribution. Each System or other video distribution system or
enterprise may distribute the Service full-time or part-time using an analog,
digital or any other format (or combination of formats). Except as otherwise
provided herein, the Systems, if any, will distribute the Service during the
hours it is distributed without alteration, editing or delay.
(d) Rights in Signal Distribution Capacity.
(i) Reservation of Bandwidth. Network retains and reserves any
and all rights in and to all signal distribution capacity contained
within the bandwidth of the signal of the Service, including, without
limitation, the VBI, audio sub-carriers, and any and all other
portions of the bandwidth which exist or which may be created from the
signal, between Network's uplink facilities and the Systems or
Affiliate's other first downlink facilities. Network represents that
(A) the primary audio and primary video feed of the signal of the
Service, and (B) the minimum amount of bandwidth contained within the
signal of the Service reasonably necessary for Network to transmit
closed captioning for the hearing impaired, advertising tone cues and
any other ancillary service to the extent required by law
(collectively referred to as "Necessary Bandwidth"), are the only
portions of the bandwidth that are integral parts of the Service or
are necessary for the delivery of the Service. Network further
represents that except for the Necessary Bandwidth, all distribution
capacity contained within the bandwidth of the signal for the Service,
including, without limitation, the VBI, audio sub-carriers 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, "Excess Bandwidth"), is not
essential to or an integral part of the Service, as such is not
necessary for the delivery or distribution of the Service. Network
acknowledges and agrees that Affiliate owns and reserves any and all
interest in and to the bandwidth, including but not limited to, the
VBI, audio sub-carriers, distribution capacity and any and all other
portions of the bandwidth, which exist or which may be created from
the signal, at the point of reception of the signal from the Network
at each System headend(s) through to its subscribers. Additionally,
Affiliate owns and reserves any and all rights in and to the Excess
Bandwidth and any use thereof is and shall be held exclusively by
Affiliate and its' System(s). Nothing contained herein shall restrict
Affiliate or its System(s) from using the Excess Bandwidth by any
means or for any purpose so long as such use does not materially
degrade or adversely interfere with the quality of the primary video
and primary audio signal of the Service. Without limiting the
foregoing, Network acknowledges that Affiliate may digitize or
redigitize the signal of the Service utilizing certain technology,
including MPEG-4, the effect of which may be to reduce the data rate
and/or
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resolution related to the Service, and that the implementation of any
such technology is permitted by this Agreement.
(ii) Delivery of Required Materials. If Network transmits any
Required Materials, then Affiliate shall transmit such Required
Materials to Service Subscribers, so long as (A) Network delivers the
same to Affiliate in a format reasonably specified by Affiliate, and
(B) Network does not transmit any other information together with and
inseparable from any Required Material; provided that, in each case,
there shall be no fee or other consideration due from Service
Subscribers, Affiliate or any System in respect of the Required
Materials other than the Fees.
(iii) No Promotion. In the event that Network uses the signal
distribution capacity contained within the bandwidth of the signal of
the Service for the transmission of any other service or product,
Network shall not promote such service or product on the Service
without the prior written consent of Affiliate.
(e) Packaging. Each System or other video distribution system or
enterprise may carry the Service on the basic level of service, on any tier, in
a package or packages of other services, a la carte, or in any combination
thereof.
(f) Copying Prohibitions. Except as otherwise permitted herein,
Affiliate shall not itself, and shall not authorize others to, tape or otherwise
reproduce any part of the Service without Network's prior written consent.
Affiliate shall not be responsible for home recording, copying, or storage by
anyone viewing the Service and Affiliate may promote home recording or storage
as part of Affiliate's marketing efforts. Network acknowledges that this Section
5(f) does not restrict Affiliate's practice of (i) connecting or assisting in
the connection of its subscribers' videocassette recorders, or other devices
susceptible to use for home duplication or storage of video programming, to the
facilities of a System; or (ii) providing to subscribers personal video recorder
functionality (whether as part of Affiliate's set-top box technology, provision
of programming on a video-on-demand basis, or otherwise).
(g) Alternative Applications Rights. Network agrees that if it grants
or has granted (including any grant by Network's acquiescence in a third party's
exercise of rights not expressly granted to it) to any third party distributing
the Service within the Territory, (including an affiliate of Network): (i) the
right to distribute a three-dimensional or other augmented or enhanced version
of the Service or the Service programming, (ii) the right to distribute a
multimedia, interactive and/or computer application(s) related to or based on
the Service or the Service programming, or (iii) the right to copy, tape or
reproduce any portion of the Service programming and to exhibit, distribute and
sell such portions of the Service programming, via a file server or any other
technology, at times other than the time of original transmission by Network
(subsections (i), (ii) and (iii) of this Section 5(g) are individually and
collectively referred to herein as "Alternative Applications Right(s)"), then
Network shall promptly offer such Alternative Applications Right(s) to Affiliate
on terms and conditions, each one of which is at least as favorable as that
offered or granted to any such third party, provided, that any such terms and
conditions must relate solely to the exercise of the pertinent Alternative
Application Right.
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(h) Digitization; Compression. Affiliate shall have the right to
digitize, compress and/or reuplink the Service for distribution to Systems and
Service Subscribers. Network shall not interfere with Affiliate's (or its
affiliates') ability to digitize and compress the Service, so long as the
exercise of such rights does not materially adversely interfere with the
principal video and accompanying audio signals for the Service.
6. FEES:
(a) Fees. In consideration of the terms and conditions set forth
herein, Affiliate shall pay Network fees as provided for in this Section 6
("Fee(s)"). For each calendar month during the Initial Term Affiliate shall pay
a Fee for each Service Subscriber who receives the Service hereunder. The amount
of the Fee shall be as follows:
(i) The Fee for each calendar month during the Term shall be as
set forth below; provided, however, Network shall waive the Fees for
each System during the _______ month period immediately following such
System's initial launch of the Service.
--------------------------------------------------------------
ANALOG FEE:
--------------------------------------------------------------
Calendar Year(s) Fee
------------------------------ -------------------------------
------------------------------ -------------------------------
------------------------------ -------------------------------
--------------------------------------------------------------
DIGITAL FEE:
--------------------------------------------------------------
Calendar Year(s) Fee
------------------------------ -------------------------------
------------------------------ -------------------------------
------------------------------ -------------------------------
The "CPI Adjusted Fee" shall be the Fee for the immediately preceding
calendar year increased by the lesser of (x) the CPI for such year or
(y) ___________ percent (_____%). "CPI" shall mean the percentage
increase (if any) in the Consumer Price Index - U.S. City Average (all
items), as published by the Department of Labor, Bureau of Labor
Statistics, using the annual increase in the Consumer Price Index
published in October of the year immediately preceding twelve- (12-)
month period for which the increase is being determined. The "Analog
Fee" shall apply to each Service Subscriber who receives the Service
in an analog format. The "Digital Fee" shall apply to each Service
Subscriber who receives the Service in a digital format.
Notwithstanding the foregoing, the Fee for each Service Subscriber who
pays a separate charge specifically for receipt of the Service ("A La
Carte Subscriber") in any System in any month shall be equal to
________ percent (____%) of the retail price paid by such A La Carte
Subscriber for the Service for such month, net
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applicable taxes, franchise fees or other charges, levies or
assessments, imposed by governmental entities.
(ii) Volume Discounts. Notwithstanding the foregoing provisions,
Affiliate shall receive a volume discount for the Fees as set forth
below:
----------------------------------------- --------------------------------------
If The Aggregate Number Of Service Then The Discount From The Applicable
Subscribers For the Month Is (Millions): Fee Shall Be (%):
----------------------------------------- --------------------------------------
0.0 < 0.5
----------------------------------------- --------------------------------------
0.5 < 1.0
----------------------------------------- --------------------------------------
1.0 < 1.5
----------------------------------------- --------------------------------------
1.5 < 2.0
----------------------------------------- --------------------------------------
2.0 < 2.5
----------------------------------------- --------------------------------------
2.5 < 3.0
----------------------------------------- --------------------------------------
3.0 < 3.5
----------------------------------------- --------------------------------------
3.5 < 4.0
----------------------------------------- --------------------------------------
4.0< 4.5
----------------------------------------- --------------------------------------
4.5 < 5.0
----------------------------------------- --------------------------------------
5.0 < 5.5
----------------------------------------- --------------------------------------
5.5 < 6.0
----------------------------------------- --------------------------------------
6.0 < 6.5
----------------------------------------- --------------------------------------
6.5 < 7.0
----------------------------------------- --------------------------------------
7.0 < 7.5
----------------------------------------- --------------------------------------
7.5 < 8.0
----------------------------------------- --------------------------------------
(b) Bulk Rates. If Affiliate provides the Service to multiple unit
complexes on a bulk-rate basis, then the number of Service Subscribers
attributable to each such bulk-rate subscriber shall be equal to the total
monthly retail rate the complex is charged for the Service or for the level or
package of services in which the Service is distributed, divided by the standard
monthly retail rate a non-bulk rate subscriber is charged for the Service or for
such level or package of services; provided, however, in no event will the
number of Service Subscribers calculated for any such complex exceed the actual
number of occupied dwelling units receiving the Service in such complex.
(c) Calculation of Service Subscribers. For purposes of the payment of
Fees or Renewal Fees, the number of Service Subscribers shall be equal to the
average of the actual number of Service Subscribers as of the last day of the
month preceding the month at issue and the actual number of Service Subscribers
as of the last day of the month at issue. Any subscriber who receives the
Service in more than one (1) package of services, on more than one (1) basis
from any System(s), or via more than one (1) distribution technology from
Affiliate and/or any affiliate of Affiliate, shall be included in the Service
Subscriber count as only one (1) Service Subscriber.
- 13 -
(d) Renegotiation of Fees on Renewal. Network shall have the right to
negotiate the Fee(s) applicable to any Renewal Term ("Renewal Fees"). The Fees
in effect for the last year of the Initial Term, or any Renewal Term for which
Renewal Fees were agreed to by the parties, shall remain in effect until the
parties agree on the new Renewal Fees. In the event that at least ______ (___)
days prior to the expiration of the Initial Term or any Renewal Term, Affiliate
and Network have failed to agree on the Renewal Fees and either party notifies
the other party that it chooses to cease negotiations of the Renewal Fees, then
Network shall give Affiliate notice of the rates to be paid per Service
Subscriber and such rate shall be deemed the Renewal Fee per Service Subscriber
to be paid during the succeeding Renewal Term. Affiliate shall then have the
right, but not the obligation, in its sole discretion, to terminate this
Agreement or to continue to provide the Service pursuant to this Agreement,
except that Affiliate shall have unlimited packaging flexibility notwithstanding
the restrictions, if any, contained in Section 5(e).
(e) Previews. In order to determine subscriber preferences, Each
Qualifying System shall have the right to preview the Service to non-Service
Subscribers, free of any obligation to pay Fees therefor, for a period of up to
____ (__) month each calendar year.
7. REPORTS:
-------
(a) Reports. No later than_________ (___) days after the end of each
calendar month for which Fees or Renewal Fees are payable, Affiliate shall send
Network a mutually acceptable statement setting forth the total number of
Service Subscribers and any other information that is necessary to compute the
amount due to Network for such calendar month. No later than ________ (___) days
after the end of each calendar month for which Network is required to make a
payment to Affiliate hereunder, if any, Network shall send to Affiliate a
mutually acceptable statement setting forth all information necessary to compute
the amount due to Affiliate for such calendar month. Affiliate and Network shall
deliver their respective statements to the other prior to or along with the
amount payable as herein provided. If a payment of the Fees due hereunder for
any month has been made and, the amount of such payment exceeds the amount of
the Fees which were actually due hereunder for such month (regardless of when
such adjustment is made), then Affiliate shall have the right to set off against
any amounts then or thereafter due to Network (or, upon demand, Network shall
pay to Affiliate) an amount equal to such excess.
(b) Audit Rights. In order to verify the compliance with or determine
whether full effect has been given to the provisions of this Agreement
(including the provisions of Section 13(f) hereof ("More Favorable Provision
Obligation"), Network and Affiliate shall, during the Term and for one (1) year
thereafter, each have the respective audit rights set forth below.
(i) Network's Audit Rights. Upon reasonable prior written notice
to Affiliate and during normal business hours, Network, at its
expense, shall have the right to inspect and audit at the offices of
Affiliate all relevant books and records directly related to the
payment of Fees and/or Renewal Fees by Affiliate hereunder. Network's
right to perform such audit shall be limited to once in any
consecutive ______ (__)-month period. Any audit with respect to such
payment of Fees or Renewal Fees by Affiliate hereunder shall be
limited to an audit with respect to amounts to be paid in the current
calendar year and immediately preceding calendar
- 14 -
year only. Any claim with respect to such amounts (which must relate to
the then-current calendar year or the immediately preceding calendar
year) must be made within the earlier of (A) ______ (__) months after
Network leaves Affiliate's offices, or (B) _________ (___) months after
the close of the earliest month that is the subject of a claim, or
Network will be deemed to have waived its right, whether known or
unknown, to collect any shortfalls from Affiliate for the period(s)
audited.
(ii) Affiliate's Audit Rights. Upon reasonable prior written
notice to Network and during normal business hours, Affiliate, at its
expense, shall have the right to inspect and audit at the offices of
Network all relevant books and records of Network. Affiliate's right
to perform such audit shall be limited to once in any consecutive
_______ (__)-month period. Any audit with respect to amounts payable
hereunder by Network, if any, shall be limited to an audit with
respect to amounts to be paid in the current calendar year and
immediately preceding calendar year only. Any claim with respect to
such amounts (which must relate to the then-current calendar year or
the immediately preceding calendar year) must be made within the
earlier of (A) ________ (__) months after Affiliate leaves Network's
offices, or (B) _________ (___) months after the close of the earliest
month that is the subject of a claim, or Affiliate will be deemed to
have waived its right, whether known or unknown, to collect any
shortfalls from Network for the period(s) audited, except that with
respect to an audit of the More Favorable Provision Obligation, this
sentence shall not apply. Notwithstanding the foregoing, any audit with
respect to the More Favorable Provision Obligation shall be conducted
by an independent public accounting firm or an independent auditing
firm selected by Affiliate (i.e., an accounting firm or auditing firm
that does not audit or otherwise provide services to Affiliate or
Network or any entity or person controlling, controlled by or under
common control with Affiliate or Network) ("Independent Auditor"). Any
such inspection shall be subject to the confidentiality provisions of
Section 12 hereof. If, as a result of an audit, the Independent Auditor
determines that Network has fully complied with the More Favorable
Provision Obligation, then the Independent Auditor shall provide
written notice to the parties stating only that Network has complied.
If, as a result of an audit, the Independent Auditor determines that
Network has failed to comply, then the Independent Auditor shall
commence good-faith discussions with Network regarding such
non-compliance. In the event that after such good-faith discussions,
the Independent Auditor concludes that Network, in fact, has complied
with the More Favorable Provision Obligation, then the Independent
Auditor shall provide written notice to the parties stating only that
Network has complied. In the event that after such good-faith
discussions, the Independent Auditor concludes that Network has not
complied with the More Favorable Provision Obligation, then Network
shall have the option, at Network's sole election, to either (1) grant
to Affiliate the provision which is the subject of the More Favorable
Provision Obligation, or (2) authorize the Independent Auditor to
provide to Affiliate only that limited information acquired during the
course of the audit as is necessary for Affiliate to pursue its claim
or claims related to Network's non-compliance; any information which is
not so necessary shall not be disclosed to Affiliate by the Independent
Auditor and shall remain strictly confidential. Under no
- 15 -
circumstances, other than the limited circumstance set forth in
subsection (2) above, shall any information acquired during the course
of the audit be disclosed to Affiliate by the Independent Auditor.
8. PROMOTION:
---------
(a) Promotional Segments; Affiliate's Logo. Except to the extent
prohibited by any of Network's agreements regarding distribution of the
programming on the Service, Affiliate, for the purpose of promoting the Service,
may create, edit, reproduce and exhibit promotional segments or clips of the
programming on the Service. Network shall use reasonable efforts to obtain all
the rights necessary for Affiliate to utilize the programming comprising the
Service in the manner set forth in this Section 8(a). Provided that Affiliate
has adopted the practice of superimposing a logo or other brand identifying
Affiliate on television programming services that are carried on the same level
or tier of service as the Service, Network agrees that Affiliate may
superimpose, on a limited, infrequent and discrete basis, a transparent logo or
"bug" on the viewing screen of the Service identifying Affiliate over the
programming of the Service; provided, that the size, form and placement of such
logo or "bug" shall be mutually agreed upon by Network and Affiliate prior to
such superimposition, and such logo or "bug" does not materially interfere with
any graphics on the Service.
(b) Marketing Prohibitions. Network may not undertake marketing tests,
surveys and/or other research in the Systems in connection with the Service
without Affiliate's prior written consent. Additionally, Network shall not
promote, market or advertise on the Service any other cable programming service
which is affiliated or associated with Network ("Cross Promotions") unless (i)
such other service is then being distributed by the Systems on which such Cross
Promotions are to appear, or (ii) such Cross Promotions are _______ (____) - or
______ (___)-second spots paid for at arm's-length rates by the relevant
service. The practice of "nesting" or "incubating" (whether or not for the
express purpose of inducing subscriptions) a cable programming service by
showcasing such service within an existing service shall be considered a means
to "promote, market or advertise" such service and are, accordingly, prohibited
hereunder. Network further agrees that the Service will not include any
promotional spot for any other programming service that is affiliated or
associated with Network (whether alone or in conjunction with any other person)
that indicates that any other method of video distribution offers a service that
is not available on the relevant System.
(c) Network Marks. Affiliate acknowledges that the names and marks
"Sorpresa!" and "America's First Hispanic Kid's Network" (and the names of
certain programs that appear in the Service) are the exclusive property of
Network and its suppliers and that Affiliate has not and will not acquire any
proprietary rights therein by reason of this Agreement. Network shall have the
right to approve any use of such names or marks by Affiliate in publicity about
Network or the products or programming included in the Service. Use of such
names and marks in routine promotional materials such as program guides, program
listings and ▇▇▇▇ stuffers shall be deemed approved unless Network specifically
notifies Affiliate to the contrary prior to such use by Affiliate.
(d) Affiliate Marks. Network acknowledges that the names and marks
_________________ and __________________________ and any other names or marks
associated
- 16 -
with Affiliate are the exclusive property of Affiliate and/or one or more
entities affiliated with Affiliate and that Network has not and will not acquire
any proprietary rights therein by reason of this Agreement. Network shall not
use any such names or marks without the prior written consent of Affiliate in
each instance.
(e) Non-Interference. Network and Affiliate hereby acknowledge that
Network could cause Affiliate significant harm by the nature of Network's
communications to Affiliate's subscribers, governmental entities or franchise or
licensing authorities whose opinions and actions could adversely affect
Affiliate. Therefore, Network shall not engage in any communications with
subscribers, governmental entities or franchise or licensing authorities in the
areas served by Affiliate or any Affiliated Entity without Affiliate's prior
written approval, if such communications could reasonably be expected to
adversely interfere with Affiliate's relations with the subscribers,
governmental entities or franchise or licensing authorities in such areas. This
provision shall not apply (i) to any national advertising by Network in
connection with the Service, (ii) to any proceeding before any judicial body, or
(iii) to communications with Congress or with any other branch or agency of the
federal government. Without limiting anything in this Section 8(e), in no event
shall the Service include any "calls to action" or similar messages. This
Section 8(e) shall survive the expiration or earlier termination of this
Agreement for ____ (__) year.
(f) Direct On-Air Sales Programming Revenue Share. If the Service
contains any Direct On-Air Sales Programming, then Network shall pay to
Affiliate (i) the then-prevailing industry average home shopping service rebate,
currently _____percent (__%), of the Net Sales on all products and services sold
to respondents in the zip code area of the Systems, and (ii) ____ percent (___%)
of the compensation received by Network from a third party for Infomercial
Programming. Network shall provide Affiliate with lists of the names and
addresses of respondents from within the zip code areas of the Systems who
respond to Direct On-Air Sales Programming, for use by Affiliate and its
affiliates.
9. WARRANTIES AND INDEMNITIES:
--------------------------
(a) Representations and Warranties. Each party represents and warrants
to the other that (i) it is duly organized, validly existing and in good
standing under the laws of the state or country under which it is organized;
(ii) it has the power and authority to enter into this Agreement and to perform
fully its obligations hereunder; (iii) it is under no contractual or other legal
obligation that shall in any way interfere with its full, prompt and complete
performance hereunder; (iv) the individual executing this Agreement on its
behalf has the authority to do so; and (v) the obligations created by this
Agreement, insofar as they purport to be binding on it, constitute legal, valid
and binding obligations enforceable in accordance with their terms.
(b) Network's Compliance with Laws. Network further represents,
warrants and covenants that the Service complies, and will continue to comply,
in all respects with (i) the Children's Television Regulations; (ii) the
Origination Cablecasting Regulations; and (iii) the Closed-Captioning
Regulations, and that Network shall provide Affiliate with all records necessary
for Affiliate to demonstrate its compliance with the Children's Television
Regulations and the benchmarks imposed by the Closed-Captioning Regulations, and
to meet its documentation and public file requirements under the Origination
Cablecasting Regulations, in a timely manner.
- 17 -
(c) Affiliate Indemnification. Affiliate shall indemnify, defend and
forever hold harmless the Network Indemnitees from and against any and all Costs
arising out of any breach of any term of this Agreement or any warranty,
covenant or representation contained herein by Affiliate.
(d) Network Indemnification. Network shall indemnify, defend and
forever hold harmless the Affiliate Indemnitees from and against any and all
Costs, arising directly or indirectly out of (i) any breach of any term of this
Agreement or any warranty, covenant or representation contained herein by
Network; (ii) the content of the Service (including advertising spots and music
performance rights through to Service Subscribers) or the use and delivery of
the Service hereunder, including any Costs based upon any suit, lien,
encumbrance, charge, lis pendens, administrative proceeding, governmental
investigation, or litigation pending or threatened (provided that Affiliate
shall, to like extent, indemnify Network Indemnitees for Costs arising from any
deletion or addition of content by Affiliate to the Service); (iii) the sale or
marketing of any products or services by, through or on the Service, including
claims related to product liability, patent, trademark, copyright infringement,
right of privacy or publicity, express or implied warranties, warranties
relating to compliance with any applicable governmental laws or regulations and
personal injuries (physical, economic or otherwise), to any person who may use,
consume or be affected by the products and services sold or marketed by, through
or on the Service; (iv) Network's failure to comply with all laws, rules,
regulations and court and administrative decrees to which it is subject or any
other failure on Network's part that causes Affiliate to violate any law, rule,
regulation or court or administrative decree; and (v) Network's failure to have
acquired at the pertinent time when all or part of the Service is made available
to Affiliate, good title to, and/or each and every property right or other right
necessary for it to satisfy the obligations imposed on it pursuant to this
Agreement.
(e) Notice of Claim for Indemnification. A party claiming indemnity
under this Section 9 must give the indemnifying party prompt notice of any
claim, and the indemnifying party shall have the right to assume the full
defense of any claims to which its indemnity applies. The indemnified party, at
the indemnifying party's cost, will cooperate fully with the indemnifying party
in such defense of any such claim. If the indemnified party compromises or
settles any such claim without the prior written consent of the indemnifying
party, then the indemnifying party shall be released from its indemnity
obligations with respect to the claim so settled.
(f) Insurance. Network represents, warrants and covenants that it has
procured and shall maintain during the Term, at its sole expense, the following
insurance coverage from a nationally-recognized insurance carrier and in
accordance with industry standards: (i) Commercial General Liability insurance,
on current standard forms as promulgated by the ISO, that, at a minimum, covers
Premises and Operations, Products and Completed Operations, Blanket Contractual
Liability for both Oral and Written Contracts and Broad Form Property Damage (as
such coverages are defined in the ISO) at liability limits of not less than
$_____________each occurrence for Bodily Injury and Property Damage,
$_____________ each occurrence and $______________ in the aggregate for Products
and Completed Operations, and $____________policy General Aggregate; and (ii)
Media Perils Liability insurance (Broadcasters' Liability/Errors and Omissions)
that, at a minimum, covers Network's media activities, including
- 18 -
production of programming, the Service and all elements thereof and all
programming distributed by Network pursuant to this Agreement (including
original programming, marketing activities, sales promotions and other
activities), with coverage for, at a minimum, the offenses of defamation of
character or reputation, invasion of privacy, infringement of trademark, title,
slogan, trade name or service ▇▇▇▇, infringement of copyright or
misappropriation of ideas, and at a liability limit of $____________ in any one
(1) policy period and a maximum self-insured retention of $_______ or such other
retention as agreed to by Affiliate in its sole and absolute discretion. Each
insurance policy required by this Section 9(f) shall be endorsed to provide that
(A) Affiliate is named as an additional insured, that the proceeds thereof are
payable to Affiliate and that the policy provides primary and non-contributory
coverage to Affiliate, irrespective of any insurance carried by Affiliate,
whether it be primary, excess, contingent or on any other basis; (B) the insurer
waives any rights of subrogation it may have against Affiliate; and (C) the
policy provides coverage on an "occurrence", and not a "claims-made", basis.
Network shall provide to Affiliate standard ▇▇▇▇▇ certificates of insurance as
evidence of maintenance of all insurance policies required by this Section 9(f)
prior to or contemporaneously with the execution hereof. Such certificates shall
indicate that the pertinent insurance policy shall not be canceled or modified
except upon delivery of thirty (30) days' prior written notice to Affiliate;
provided, however, that Network shall not make any revisions to any policy that
could adversely affect Affiliate's rights without Affiliate's prior written
consent. In addition, such certificates shall indicate coverage for the entire
Term, or Network shall provide to Affiliate, not later than _______ (___) days
prior to the expiration of any policy, a subsequent certificate of insurance as
evidence that the pertinent insurance continues in full force and effect.
(g) Survival. The representations, warranties and indemnities contained
in this Section 9 shall continue throughout the Term and the indemnities shall
survive the expiration or earlier termination of this Agreement.
10. FORCE MAJEURE:
-------------
Neither Affiliate nor Network shall have any rights against the other
party hereto for the non-operation of facilities or the non-furnishing of the
Service if such non-operation or non-furnishing is due to a Force Majeure Event.
If the Service is interrupted or discontinued as a result of a Force Majeure
Event, Affiliate shall have the right, immediately, to insert programming of its
choice on the channel otherwise identified with the Service until the Service is
fully operational again. Credit will be given to Affiliate on that portion of
the Service that is affected by any interruption during any month equal to the
product of (i) the Fees or any Renewal Fees that would be due for such month,
assuming no interruption of the Service during such month, multiplied by (ii) a
fraction, the numerator of which is the total number of hours that the Service
is interrupted during such month and the denominator of which is the total
number of hours that the Service would have been distributed absent such
interruption(s).
11. NOTICES:
-------
Any notice or report given under this Agreement shall be in writing,
shall be sent postage prepaid by certified mail, return receipt requested, or by
hand delivery, or by Federal Express or similar overnight delivery service, or
by facsimile transmission, to the other party, at
- 19 -
the following address (unless either party at any time or times designates
another address for itself by notifying the other party pursuant to the
provisions of this Section 11, in which case all notices to such party
thereafter shall be given at its most recently so designated address):
To Network: Firestone Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President, Affiliate Sales
To Affiliate: [ ]
Notice or report given by hand delivery shall be deemed received on
delivery. Notice or report given by mail shall be deemed received on the earlier
to occur of actual receipt or on the fifth day following mailing if sent in
accordance with the notice requirements of this Section 11. Notice or report
given by Federal Express or similar overnight delivery service shall be deemed
received on the next business day following delivery of the notice or report to
such service with instructions for overnight delivery. Notice or report given by
facsimile transmission shall be deemed received on the day of transmission if a
business day, or on the next business day after the day of transmission if not
transmitted on a business day.
Notwithstanding the foregoing, Network and Affiliate agree that (a)
either party may designate or substitute, whether verbally or in writing, one or
more addressees to whom all notices and reports should be sent, provided that
any verbal designation shall be followed by written notice (which may be given
pursuant to the provisions of this Section 11 or by postage prepaid mail) within
five (5) business days of such verbal designation; and (b) Affiliate may provide
notice of System acquisitions, divestitures and other changes to System
ownership or management, as well as notice of additions or deletions of the
Service, by means of electronic mail ("e-mail"). Each e-mail notice shall be
sent by Affiliate utilizing "confirmation of delivery" tracking and, if any
e-mail notice is returned as undeliverable, such notice shall be supplemented
with notice by any other means permissible under this Agreement.
12. CONFIDENTIALITY:
---------------
The terms and conditions, including the existence and duration, of this
Agreement shall be kept confidential, except for (a) disclosure as may be
required by law, regulation, court or government agency of competent
jurisdiction (redacted to the greatest extent possible); or (b) disclosure to
each party's respective officers, directors, employees and attorneys, in their
capacity as such, as well as an Independent Auditor. For the avoidance of doubt,
and without in any way limiting the provisions of this Section 12, Network shall
not issue any press release or any other public announcement concerning this
Agreement, including the existence of this Agreement, without the prior written
approval of Affiliate. This confidentiality provision shall survive the
expiration or earlier termination of this Agreement.
- 20 -
13. MISCELLANEOUS:
-------------
(a) Assignment; Binding Effect; Reorganization. This Agreement shall be
binding on the respective transferees and successors of the parties hereto,
except that neither this Agreement nor either party's rights or obligations
hereunder shall be assigned or transferred by either party without the prior
written consent of the other party; provided, however, no consent is necessary
in the event of an assignment to a successor entity resulting from a merger,
acquisition or consolidation by either party or assignment to an entity under
common Control, Controlled by or in Control of either party. In the event of a
change of Control or ownership of the Service or Network, this Agreement shall
continue but, upon the date of such change in Control, Affiliate, at its option,
may delete any or all Systems from Schedule 1 hereto.
(b) Service Combinations.
(i) Acquisitions or Mergers Without Service Combination. If
Network acquires control of any other programming service (an "Other
Service") or the owner of any Other Service (an "Other Network"), or
any Other Network acquires control of the Service or Network, or
Network merges with any Other Network, in each case without merging or
combining the Service or the Service programming with the Other
Service or the Other Service's programming, then Affiliate shall
continue to distribute the Service pursuant to the terms of this
Agreement.
(ii) Acquisitions or Mergers With Service Combination. If, as a
result of an acquisition or merger or for any other reason, the
Service or a Material Portion (as defined below) of the Service is
combined with, moved, migrated or transferred to, or duplicated on any
Other Service, or an Other Service or a Material Portion of an Other
Service is combined with, moved, migrated or transferred to, or
duplicated on the Service (the service or services that survive the
combination of the Service and the Other Service are referred to
herein as the "Combined Service(s)"), Affiliate shall have the option
to continue or commence distribution of any Combined Service(s) under
either this Agreement or under any other pertinent affiliation
agreement governing the Other Service; provided, that Affiliate shall
have no obligation to provide distribution for any Combined Service(s)
under this Agreement or any other affiliation agreement. For purposes
of this Section 13(b), a "Material Portion" of the Service or a
service means either (A) at least six (6) hours per week of
programming, or (B) any one or more "signature," "marquis" or "brand
identified" programs, shows or series appearing on a frequent or
regularly-scheduled basis.
(c) Entire Agreement; Amendments; Waivers; Cumulative Remedies. This
Agreement, including the Schedules and Exhibits attached hereto, contains the
entire understanding of the parties hereto and supersedes and abrogates all
contemporaneous and prior understandings of the parties, whether written or
oral, relating to the subject matter hereof. This Agreement may not be modified
except in a writing executed by both parties hereto. Any waiver of any provision
of this Agreement must be in writing and signed by the party whose rights are
being waived. No waiver of any breach of any provision hereof shall be or be
deemed to be a waiver of any preceding
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or subsequent breach of the same or any other provision of this Agreement. The
failure of Affiliate or Network to enforce or seek enforcement of the terms of
this Agreement following any breach shall not be construed as a waiver of such
breach. All remedies, whether at law, in equity or pursuant to this Agreement
shall be cumulative.
(d) Governing Law. The obligations of Affiliate and Network under this
Agreement are subject to all applicable federal, state and local laws, rules and
regulations, and this Agreement and all matters or issues collateral thereto
shall be governed by, and interpreted in accordance with, the laws of the State
of New York applicable to contracts made and to be fully performed therein.
(e) Relationship. Neither party shall be, or hold itself out as, the
agent of the other or as joint venturers under this Agreement. No subscriber of
Affiliate shall be deemed to have any privity of contract or direct contractual
or other relationship with Network and no supplier of advertising or programming
or anything else included in the Service by Network shall be deemed to have any
privity of contract or direct contractual or other relationship with Affiliate
by virtue of this Agreement. Network disclaims any present or future right,
interest or estate in or to the transmission facilities of Affiliate and its
affiliates, such disclaimer being to acknowledge that neither Affiliate nor the
transmission facilities of the Systems (nor the owners thereof) are common
carriers.
(f) Favorable Terms.
(i) More Favorable Provisions. Network agrees that if it grants
or has granted (including any grant by Network's acquiescence in a
third party's exercise of rights not expressly granted to it), to any
third party which has the right to distribute or subdistribute the
Service in the Territory (including an affiliate of Network) (A) a
lower net effective rate per subscriber for the Service than Affiliate
is paying per Service Subscriber hereunder, (B) any marketing or
advertising support or reimbursements, launch support or
reimbursements, free or discounted marketing materials or any other
support, credits, reimbursements, rebates, contributions, adjustments
or incentives related to the marketing of the Service, whether given
directly or indirectly to such third party, or (C) any other economic
or non-economic term, provision, covenant or consideration, that are
or is more favorable to such third party than Affiliate is receiving
hereunder ((A), (B) and (C) above, individually and collectively,
shall be referred to herein as "More Favorable Provision"), Network
will promptly offer such More Favorable Provision to Affiliate, in
writing (the "MFN Offer"), for the same amount of time that such More
Favorable Provision is was or will be available to such third party.
Each MFN Offer shall include the exact language of the More Favorable
Provision and, at Affiliate's election, this Agreement shall be deemed
to have been modified so that, from the date on which such More
Favorable Provision is first so provided (or, if such More Favorable
Provision is now being provided, from the date hereof) and thereafter
for so long as such More Favorable Provision continues to be so
provided, Affiliate shall receive such More Favorable Provision. If
any More Favorable Provision is made available to such third party
subject to one or more directly-related and logically-linked
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conditions that Affiliate would reasonably be expected to be able to
comply with, then Network shall offer such More Favorable Provision to
Affiliate with the exact language of such More Favorable Provision and
directly-related and logically-linked conditions which Affiliate will
have to fulfill in order to receive such More Favorable Provision.
Notwithstanding anything to the contrary contained above, if Affiliate
reasonably believes that one or more contingent terms or conditions
associated with a More Favorable Provision either: (1) is a term or
condition with which Affiliate is not reasonably capable of complying,
(2) is not directly related and logically linked to such More
Favorable Provision, and/or (3) is designed or intended to, or
operates to, frustrate or interfere with, or otherwise has the effect
of, discriminating against Affiliate or frustrating or circumventing
the application of this Section 13(f), then Affiliate shall notify
Network in writing of its reasonable objection to any such contingent
terms and conditions based on clauses (1) through (3) of this Section
13(f)(i). Network and Affiliate shall discuss, in good faith,
Affiliate's belief that one of more of clauses (1) through (3) of this
Section 13(f)(i) has been triggered. If, after good-faith discussions
Affiliate continues to reasonably believe that one or more of clauses
(1) through (3) of this Section 13(f)(i) has been triggered, then the
parties shall negotiate in good faith for comparable terms and
conditions to replace the terms and/or conditions objected to by
Affiliate. A "More Favorable Provision" shall include any pertinent
term, provision, covenant or consideration, regardless of whether
there is a term, provision, covenant or consideration concerning the
subject matter of such More Favorable Provision in this Agreement or
whether such term, provision, covenant or consideration relates to
such third party's entire subscriber base or less than the entire base
(e.g., a More Favorable Provision relating to a "test" or "sample"
group of subscribers or a More Favorable Provision relating to
multiple dwelling units).
(ii) Calculation of Net Effective Rate. For purposes of this
Section 13(f), the calculation of net effective rate shall include all
economic and non-economic terms and provisions of an agreement that
involve financial or other outlays (excluding contingent liabilities)
by either party for the benefit of the other or in direct or indirect
connection with the rates for the Service, or that involve direct or
indirect consideration paid by either party to the other, such as
discounts, credits, adjustments of any kind, including actual per
subscriber rates, volume or other discounts, reimbursements, channel
position fees, discounts, credits or rebates, pre-payment of loans,
deductions for uncollected accounts, incentives, cash payments
(whether conditional or not), sales or leases of equipment, studio
facility discounts, payment terms and other financing terms. In
determining "net effective rates," the actual number of subscribers to
the Service (rather than projected or expected subscribers or the
number of such third party's subscribers who are not actually
subscribers to the Service) will be considered.
(iii) Comparison of Rates for Common Delivery Systems. For
purposes of this Section 13(f), and for purposes of comparing the
actual rate per subscriber to the Service payable by Affiliate to the
actual rate per subscriber to the Service payable by a third party
that is distributing the Service via a common delivery
- 23 -
system through which multiple parties may distribute services (e.g.,
OVS providers), the calculation of the penetration of the Service for
such third party shall be based on the total number of customers
receiving programming services through such common delivery system,
regardless of the number of distributors providing services through
such common delivery system.
(iv) Comparison of Rates Based Upon Manner of Receipt of the
Service. For purposes of this Section 13(f), and for purposes of
comparing the net effective rate per subscriber to the Service payable
by Affiliate to the net effective rate per subscriber to the Service
payable by a third party, the net effective rate per subscriber for
subscribers receiving the Service from Affiliate on a particular basis
shall be compared to the net effective rate per subscriber for
subscribers receiving the Service from a third party on the same
basis, (e.g., the net effective rate per subscriber for subscribers
receiving the Service from Affiliate on an a la carte basis shall be
compared to the net effective rate per subscriber for subscribers
receiving the Service from a third party on an a la carte basis).
(v) Certification; Survival. Network agrees to provide to
Affiliate a written certification on each annual anniversary date of
this Agreement, signed by a duly authorized officer of Network,
stating that Network has satisfied its obligations under this Section
13(f). The provisions of this Section 13(f) shall survive the
expiration or earlier termination of this Agreement and, in the event
that Affiliate and Network enter into any renewal, extension or
modification hereof, or any other agreement for the distribution or
exhibition of the Service by Affiliate after the expiration or earlier
termination of this Agreement, the terms and conditions thereof shall
be subject to the provisions of this Section 13(f).
(g) Severability. The invalidity under applicable law of any provision
of this Agreement shall not affect the validity of any other provision of this
Agreement, and in the event that any provision hereof is determined to be
invalid or otherwise illegal, this Agreement shall remain effective and shall be
construed in accordance with its terms as if the invalid or illegal provision
were not contained herein.
(h) No Inference Against Author. Network and Affiliate each acknowledge
that this Agreement was fully negotiated by the parties. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
(i) No Third-Party Beneficiaries. The provisions of this Agreement are
for the exclusive benefit of the parties hereto and their permitted assigns, and
no third party shall be a beneficiary of, or have any rights by virtue of, this
Agreement.
(j) Headings. The titles and headings of the sections in this Agreement
are for convenience only and shall not in any way affect the interpretation of
this Agreement.
- 24 -
(k) Construction. Any reference in this Agreement to "Section" or
"Exhibit" shall, unless the context expressly requires otherwise, be a reference
to "Section" in or "Exhibit" to this Agreement. Forms of the word "include" mean
"including, without limitation;" and references to "herein," "hereunder,"
"hereof," or the like, refer to this Agreement. Terms used with initial capital
letters will have the meanings specified, applicable to singular and plural
forms, for all purposes of this Agreement. Reference to any gender will be
deemed to include all genders and the neutral form.
(l) Non-Recourse. Notwithstanding anything contained in this Agreement
to the contrary, it is expressly understood and agreed by the parties hereto
that each and every representation, warranty, covenant, undertaking and
agreement made in this Agreement was not made or intended to be made as a
personal representation, undertaking, warranty, covenant, or agreement on the
part of any individual, and any recourse, whether in common law, in equity, by
statute or otherwise, against any individual is hereby forever waived and
released.
(m) Withholding. To the extent required by applicable law, Affiliate
shall have the right to withhold any portion of any amounts payable by Affiliate
to Network and to pay any such amounts over to any appropriate governmental
authority. Network shall provide such assistance as is necessary to enable
Affiliate to discharge its obligation to withhold and/or pay taxes on Network's
behalf and shall indemnify Affiliate as provided in Section 9 from and against
any and all Costs arising directly or indirectly out of any tax or other amount
withheld, paid or otherwise collected by Affiliate on Network's behalf, or owed
or paid by Network to any governmental entity.
(n) No Reliance. The parties acknowledge that (i) nothing contained in
this Agreement or otherwise shall obligate the parties to enter into any further
business relationship or agreement, and (ii) neither party if relying on the
other party in operating and/or developing its respective businesses. Except as
expressly set forth in this Agreement, there shall be no obligation whatsoever
on the part of either party, unless agreed to in writing by the parties.
The parties hereto have executed this Agreement as of the date first above
written.
AFFILIATE: NETWORK:
By:_______________________________ By:________________________________
Title:____________________________ Title:_____________________________
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SCHEDULE 1
To Affiliation Agreement By and Between
Firestone Communications, Inc. and
----------------------------------------
Dated as of ___________, 200__
SYSTEMS
-------
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SCHEDULE 2
To Affiliation Agreement By and Between
Firestone Communications, Inc. and
----------------------------------
Dated as of ___________, 200__
VIDEO-ON-DEMAND
---------------
I. LICENSE
-------
A. Upon request by Affiliate, Network shall provide, at no cost to
Affiliate, portions of the Service (and any and all feeds of the Service) so
that Affiliate may distribute such portions on a video-on-demand, pay-per-view
or similar (collectively, "VOD") basis in Systems, to the extent that such
portions are either (i) owned or controlled by Network, or (ii) licensed by
Network at no significant additional cost to Network for distribution on a VOD
basis (collectively, the "VOD Content"). Network agrees that such VOD Content:
(a) Network shall deliver to Affiliate no less than an aggregate of _______
hours of branded Network programming each calendar quarter; and (b) Network
shall refresh no less than _______ (__%) of such VOD Content each calendar
quarter, commencing with the first quarter following the quarter in which such
programming was initially delivered to Affiliate by Network.
B. Notwithstanding anything to the contrary in Section 6 or otherwise
in this Agreement, Network acknowledges that any resulting grant of VOD rights
to Affiliate within the preceding sentence shall be without the imposition of
any fee or charge so long as (i) each Service Subscriber's access to VOD Content
is based upon a subscription to the Service, and (ii) Affiliate does not charge
Service Subscribers any fee or charge for receipt of the VOD Content on a VOD
basis (although Network specifically acknowledges that Affiliate may impose a
fee or charge for the provision of equipment, such as a digital set top box,
and/or related access fees). In the event Affiliate desires to impose a
supplemental or ancillary fee on Service Subscribers to receive VOD Content,
then Network and Affiliate shall negotiate in good faith to determine the
appropriate fees, if any, that Network will charge Affiliate for the provision
of such VOD Content to such Service Subscribers. Network and Affiliate agree to
use reasonable efforts within the first twenty-four (24) months following the
date hereof to enter into a formal agreement incorporating the terms of this
Schedule 2 and other customary terms concerning the distribution of VOD Content.
- 27 -
II. NETWORK DELIVERY SPECIFICATIONS
-------------------------------
A. Encoding Specifications
-----------------------
i. All VOD Content supplied by Network or Network's VOD
service provider must be encoded in compliance with
current CableLabs 1.1 encoding specifications. The
specifications can be found
at:_________________________________________________.
ii. If CableLabs updates such encoding specifications,
Affiliate may require Network or Network's VOD
service provider to promptly update its VOD Content
encoding accordingly or it may continue using
CableLabs 1.1 specifications.
iii. Network or Network's VOD service provider shall be
responsible for all VOD Content encoding costs.
iv. Affiliate reserves the right to certify the VOD
Content encoding to ensure that it meets CableLabs
1.1 and Affiliate's specification.
B. Metadata Specifications
-----------------------
i. Metadata must be created in compliance with CableLabs
1.1 metadata specifications. Specification can be
found at:_______________________.
ii. Affiliate retains sole discretion over the required
use of "optional" fields per the CableLabs 1.1
specification.
iii. Affiliate will have sole discretion over the value of
any field, unless explicitly prohibited in writing by
Network.
iv. If CableLabs updates its metadata specifications,
Affiliate may require Network to also update
accordingly. Affiliate may also decide to continue
using CableLabs 1.1 specifications.
v. Network shall be responsible for all metadata
creation and management costs, including making it
available to Affiliate.
C. Asset Management
----------------
i. No later than ____ days prior to a viewing start date
for VOD Content, Network shall provide to Affiliate's
Asset Management System a preliminary set of metadata
consisting of the following fields:
o All Package AMS tags
o All Title AMS tags
- 28 -
o All Content Asset AMS tags (one for each asset)
o Title
o Viewing start date
o Viewing end date
ii. Preliminary metadata should be provided in the
CableLabs XML document format.
iii. Prior to asset delivery, but no later than ___ weeks
prior to a viewing start date, Network will provide
to Affiliate a complete set of CableLabs metadata
including all fields required by Affiliate or
CableLabs. A complete set of metadata shall be
provided in the CableLabs XML document format.
iii. Affiliate retains the right to set the ingest
priority of all assets, and the date of ingest to the
VOD server.
D. Delivery
--------
i. The delivery methods used by the Network must adhere
to the specifications of Affiliate's Asset Management
system, including the possible integration to APIs
Application Program Interface). Such integration
requires providing real-time delivery status
notifications to Affiliate's Asset Management System.
ii. Network or Network's VOD service provider shall
deliver VOD Content using one of the following
satellite transport platforms, at Network's or
Network's VOD service provider's sole (including
bandwidth) cost; provided, that Network first
exercises commercially reasonable efforts to
implement the first delivery option below (titled
"3rd Party Aggregator").
o 3rd Party aggregator - Network may reach
agreement with an Affiliate-approved aggregator
to distribute VOD Content. Network acknowledges
that _______ is currently Affiliate's only
approved aggregator. In such case, delivery of
Network's VOD Content to an Affiliate location
will be dependent upon the location also
receiving VOD Content from such aggregator.
o Unless already provided by Network's VOD service
provider, Network shall supply "catcher" device
for each Affiliate location receiving VOD
Content.
- 29 -
EXHIBIT A
To Affiliation Agreement By and Between
Firestone Communications, Inc. and
----------------------------------------
Dated as of ___________, 200___
SYSTEM QUALIFICATIONS
---------------------
I. Affiliate represents and warrants the following regarding each System listed
on Schedule 1 hereof:
1. that: (a) either (i) Affiliate or any person or entity under common
control with, controlling or controlled by Affiliate (the "Control Group")
(Affiliate and the Control Group shall be hereinafter referred to as "Affiliate
Group"; any reference to ________ in this Exhibit A shall be deemed to be a
reference to either Affiliate Group or the Control Group or any combination
thereof as is necessary to qualify the greatest number of television
distribution facilities hereunder) or its nominee owns, directly or indirectly,
at least a ________ percent (___%) interest in the general manager of the System
pursuant to a valid written agreement in full force and effect; or (ii)
Affiliate Group or its nominee owns, directly or indirectly, a ______ percent
(___%) interest in such System or owns an interest or obligation by which
Affiliate Group, directly or indirectly, owns a right (whether conditional or
not) to convert into or acquire, directly or indirectly, an interest equal to at
least the required interest. An "indirect" ownership is an interest resulting
from ownership through any series of ownership interests, including
corporations, partnerships, joint ventures or other forms of business
organizations; an indirect interest shall be quantified in amount by a series of
percentage multiplications commencing with Affiliate Group's direct interest and
multiplying that by the next most proximate percentage interest and, then,
multiplying in turn each succeeding ownership interest in the order of their
progression away from Affiliate Group by the result of the immediately preceding
multiplication until the most distant percentage interest is multiplied; and (b)
either a franchise or license is not required or a valid franchise or license is
in effect through the Term or the franchisee or licensee has held a valid cable
television franchise or license and continues to operate in the franchise or
license area under a claim of right or is otherwise lawfully operating or
franchisee or licensee has held a valid cable franchise or license and is
continuing to operate while diligently pursuing, in good faith, its available
judicial remedies. For the above purposes, in the event a franchise or license
expires before the end of the Term, such franchise or license shall be deemed
valid for so long as franchisee or licensee is negotiating in good faith with
the franchising or licensing authority for a franchise or license renewal; and
2. that with respect to each System in which Affiliate Group or its
nominee owns, directly or indirectly, less than a ______ percent (___%)
interest, Affiliate or an agent has been authorized, pursuant to a valid written
agreement in full force and effect, to make and execute decisions on behalf of
each such System with respect to the Service, including billing
- 30 -
and collection of fees, and Affiliate continues throughout the Term to exercise
such authority with respect to matters affecting the distribution of the Service
by such System.
II. In the event Affiliate Group's direct or indirect equity interest in a
System or in the entity managing such System decreases below the level required
under Paragraph I, and provided Affiliate Group's interest does not decrease to
zero, such System shall continue to qualify under Paragraph I; provided,
however, Affiliate Group's interest in such System shall increase to the level
required under Paragraph I within _________ (___) months of the decrease.
III. In the event Affiliate, or any of the entities that owns or manages systems
or enterprises that qualify hereunder, effects a corporate separation,
reorganization or restructuring (including by a distribution of stock, or other
assets or rights, to its shareholders, partners or joint venturers), the systems
or enterprises of the entity resulting from such transaction (including all
interim and supporting entities) and/or all of such resulting entities, in the
aggregate, will qualify under Paragraph I, so as to continue to qualify to
distribute the Service under the terms and conditions hereof, as if such
separation, reorganization or other restructuring had not occurred.
- 31 -
EXHIBIT B
To Affiliation Agreement By and Between
Firestone Communications, Inc. and
---------------------------------------
Dated as of ___________, 200___
PROGRAM SCHEDULE
----------------
See Attached.
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