CHARTER AFFILIATE AFFILIATION AGREEMENT
THIS AGREEMENT, made as of the 15th day of April, 2005 (this
"AGREEMENT") to be effective as of April 1, 2005 ("EFFECTIVE DATE"), is by and
between The TUBE Music Network, Inc., a Florida corporation (the "NETWORK"), and
Raycom Media, Inc., a Delaware corporation ("AFFILIATE), regarding the
television programming service currently known as "The TUBE" (the "SERVICE").
The parties hereby mutually agree as follows:
1. DEFINITIONS:
In addition to any other defined terms in this Agreement, the
following terms shall have the following meanings when used in this Agreement:
"ACQUIRED STATION" means any Broadcast Television station that
is acquired or operated by Affiliate after the date hereof.
"AFFILIATE ADVERTISING SHARE" has the meaning set forth in
EXHIBIT D.
"AFFILIATE TRANSACTIONAL SHARE" has the meaning set forth in
EXHIBIT D.
"BROADCAST TELEVISION" means traditional, free, FCC-licensed,
over-the-air broadcast television.
"COSTS" means all losses, liabilities, claims, costs, damages
and expenses, including fines, forfeitures, reasonable attorneys' fees,
disbursements and court or administrative costs.
"CROSS-CHANNEL PROMOTIONAL SPOTS" has the meaning set forth in
Section 8(b).
"DESIGNATED MARKET AREA" or "DMA" means a particular market
area or classification to demarcate local television markets as defined by
Nielsen Media Research, Inc. from time-to-time, or, if DMA falls from general or
standardized usage, a replacement term to demarcate local television markets in
a substantially similar manner which shall be determined by the parties in good
faith.
"EVENT OF FORCE MAJEURE" has the meaning set forth in Section
13(e).
"LICENSED COMMUNITY" has the meaning set forth in Section
3(a).
"LOCAL ADVERTISING" has the meaning set forth in Section 8(c).
"MVPD" means a multichannel video program distributor as such
term is set forth in 47 C.F.R. ss.76.905(d) of the rules of the Federal
Communications Commission ("FCC").
"NETWORK" means The TUBE Music Network, Inc., or any affiliate
or subsidiary of The TUBE Music Network, Inc.
"NETWORK'S ADVERTISING REVENUE" means the gross dollar amount
of earned by Network, less uncollectible amounts, from the sale by Network of
commercial advertising time included in the Service, less actual agency
representative fees and sales commissions. For clarification, Network's
Advertising Revenue shall not include Network's Transactional Revenue.
"NETWORK'S TRANSACTIONAL REVENUE" means the gross dollar
amount of revenue actually received by Network (e.g., net of the cost of goods
and services and all fulfillment costs associated with the sale of such goods
and services) from (i) the sale of products and services by way of direct
response telephone orders from the toll-free number included on the Service, and
(ii) e-commerce sales of products and services on Network's website (i.e., url
www.thetubetv.com), including sales of products and services resulting from
links to Network's website from the website of any Station that broadcasts the
Service, in all cases, originating from within the Zip Codes in the DMA of such
Station(s).
"PRIMARY FEED" means the audio and video presentations of each
Station's primary one-way over-the-air television signal (which signal may be in
either standard definition or high definition television (as such term is
defined by the Advanced Television Systems Committee) format).
"SERVICE" means the television programming service provided by
Network as defined in the preamble to this Agreement.
"STATION(S)" means a Broadcast Television station owned and/or
operated by Affiliate and licensed by the FCC that provides or is capable of
providing the Service to the Licensed Community that it is licensed to serve.
"TV HOUSEHOLDS" means the number of television households in a
given DMA as determined by Nielsen Media Research, Inc. (which, as of the date
hereof, is published annually by Nielsen Research Media, Inc. as the Nielsen
Media Research Local Universe Estimates (US)) or, if Nielsen Media Research,
Inc. ceases to publish the number of television households in a DMA, a
replacement term to determine the number of television households in local
television markets in a substantially similar manner which shall be determined
by the parties in good faith.
"ZIP CODE(S)" means a specific geographic delivery area
defined by the United States Postal Service, which consists of a five (5)-digit
zip code plus a four (4)-digit add-on code.
2. TERM:
Unless terminated earlier in accordance with the terms of this
Agreement, the "TERM" of this Agreement shall consist of, collectively, the
Initial Term and, if applicable, the Renewal Term. The "INITIAL TERM" of this
Agreement shall commence upon the Effective Date and shall expire on March 31,
2010. Upon the mutual agreement of both parties hereto no later than September
30, 2009, the Term of this Agreement may be extended for one additional five
(5)-year period (the "RENEWAL TERM").
2
3. GRANT OF RIGHTS; ACQUIRED STATIONS:
(a) Subject to applicable law, Network hereby grants to
Affiliate the exclusive right, and Affiliate hereby accepts such exclusive right
and the obligation during the Term to broadcast the Service (i) over the
transmission facilities of each Station identified on EXHIBITS A-1 and A-2,
which is licensed by the FCC to serve the community for each such Station (the
"LICENSED COMMUNITY"), for receipt by TV Households in the DMA in which the
Licensed Community is located, as such DMA is identified on EXHIBITS A-1 and
A-2, and (ii) subject to subparagraph (b) below, over the transmission
facilities of any Acquired Station, except to the extent that, as of the date
Affiliate notifies Network in writing of the closing of the acquisition of such
Acquired System, Network is already committed to provide the Service to another
broadcast television station in the same DMA as the Acquired Station. Affiliate
shall telecast the Service solely from each Station's origination transmitter
and antenna for free over-the-air television reception. Notwithstanding the
foregoing, Affiliate shall have the right to permit, and agrees to use
commercially reasonable efforts to obtain, carriage of the Service's signal by
MVPDs in the DMA of each Station that transmits the Service. Affiliate shall
promptly notify Network of any MVPD that has agreed to retransmit the Service in
the Station's DMA. In the event Affiliate owns or operates more than one Station
in any single DMA, then Affiliate, at its option, shall have the right to
determine which of its Stations in such DMA shall broadcast the Service; it
being understood that Affiliate shall have no obligation to broadcast the
Service in more than one of its Stations in any particular DMA. In addition to
the foregoing, provided Affiliate is in compliance with its obligations
hereunder, including its distribution obligations, Affiliate shall have the
exclusive right to sublicense the Service to any MVPD for distribution in each
of the Station's DMAs, and Network shall not authorize any MVPD to distribute
the Service in any of the Station's DMAs during the Term.
(b) If, after the date hereof, Affiliate acquires an Acquired
Station that is transmitting the Service in the DMA in which such Acquired
Station is located at the time of such acquisition by Affiliate, then Affiliate
shall continue to transmit the Service and, as of the effective date of such
acquisition, the Acquired Station shall become a "Station" hereunder and any
existing agreement between or among Network and any one or more third parties
applicable to such Station for the transmission of the Service shall terminate
and cease to be effective. If, after the date hereof, Affiliate acquires an
Acquired Station in a DMA that is not at such time under license by Network to a
third party for transmission of the Service, then Affiliate, by notifying
Network within one hundred eighty (180) days of the effective date of
acquisition, may request that Network add such Acquired Station as a "Station"
to this Agreement and shall commence transmission of the Service within the DMA
of such Acquired Station within such one hundred eighty (180)-day period. Upon
receipt of such notice by Affiliate, the Acquired Station shall be added to this
Agreement unless, prior to receipt of Affiliate's add notice, Network has
committed to provide the Service to another Broadcast Television station or MVPD
in the same DMA as the Acquired Station. For purposes of clarification, if
Affiliate does not elect to add such Acquired Station to this Agreement within
such one hundred eighty (180)-day period, then Network shall thereafter have the
right to license the transmission of the Service to another broadcast television
station or MVPD in such DMA, including on an exclusive basis.
3
(c) Affiliate shall not have the right (i) to subdistribute or
otherwise sublicense the Service except to a MVPD for distribution in a
Station's DMA, or (ii) to transmit or otherwise distribute the Service by any
technology (other than Broadcast Television), or on an interactive,
time-delayed, "video-on-demand" or similar basis. For purposes hereof,
"VIDEO-ON-DEMAND" means the transmission of a television signal by means of a
point-to-point distribution system containing audiovisual programming chosen by
a viewer for reception on a viewer's television receiver, where the scheduling
of the exhibition of the programming is not predetermined by the distributor,
but rather is at the viewer's discretion.
(d) Provided that Affiliate is in compliance with its
obligations hereunder, including its distribution obligations, Network agrees
that, during the Term, Network shall not (i) provide or authorize the free,
over-the-air, terrestrial radio transmission of an audio-only signal comprised
of a programming service reasonably comparable to the Service; or (ii) simulcast
the Service in its entirety over the Internet, in each case within the Licensed
Community of any Station that is transmitting the Service pursuant to this
Agreement. For purposes of clarification, promotional or marketing "stunt"
simulcasting a live or special event, or programming designed to increase or
improve viewership of the Service shall not be prohibited by this Section 3(d).
(e) Network hereby grants Affiliate during the Term a
royalty-free, fully paid up, non-transferable, non-exclusive license to use the
Marks in any advertising and promotional materials undertaken in connection with
Affiliate's transmission of the Service, provided that such use complies with
the terms and conditions of Section 8(e).
(f) All licenses, rights and interest in, to and with respect
to the Service, the elements and parts thereof, and the media of exhibition not
specifically granted herein to Affiliate shall be entirely reserved to Network
and may be fully exploited and utilized by Network without limitation.
(g) Upon execution of this Agreement, Affiliate shall promptly
complete and deliver to Network a notice of launch (in the form attached hereto
in EXHIBIT B) for each Station ("LAUNCH NOTICE") and will use best efforts to
launch the Service on each Station within forty-five (45) days of the Effective
Date. The previous sentence notwithstanding, (i) in no event shall the Stations
listed on EXHIBIT A-1 be launched later than July 31, 2005; and (ii) in no event
shall the Stations listed on EXHIBIT A-2 be launched later than October 31, 2005
(in each case, a "LAUNCH DEADLINE"); provided that if the launch of any Station
is delayed as a result of a change by Network in the satellite used to deliver
the Service or the site used to originate the Service, or if the installation of
Receiving Equipment at a Station is delayed as a result of Network's action or
inaction, then, as to the affected Stations only, the Launch Deadline shall be
extended by the same number of days as the delay caused by Network.
Notwithstanding the foregoing, Affiliate will notify Network in writing on or
before July 31, 2005 if significant technical issues prevent the launch of the
Service on one or more Stations listed on EXHIBIT A-2. Upon receipt of such
notice, Affiliate may, at its option (i) terminate this Agreement as to such
Station(s); or (ii) negotiate with Network for an extension of the Launch
Deadline for such Station(s). In addition, Affiliate shall promptly complete a
Launch Notice for any Acquired Station that is subsequently added to this
Agreement.
4
4. CONTENT OF THE SERVICE:
(a) CONTENT. Throughout the Term, the Service shall be a
professionally produced, advertiser-supported television service with
programming generally consisting of music videos, related interstitial
programming, promotions and commercial advertising. Subject to the preceding
sentence, the selection, scheduling, renewal, substitution and withdrawal of any
content on the Service shall at all times remain within Network's sole
discretion and control.
(b) LOCAL PROGRAMMING. Subject to Network's policies and
procedures, Affiliate, at its own cost, shall be provided with up to thirty (30)
minutes per week on the Service for the insertion of locally produced
programming that is complimentary to the Service and designed specifically to
appeal to TV Households in the Licensed Community of the Station broadcasting
such programming ("LOCAL PROGRAMMING"); provided, however, that it is
anticipated that, at a future date to be mutually agreed upon by the parties,
Affiliate shall have the right to expand such Local Programming to one (1) hour
per week. Affiliate acknowledges and agrees that Local Programming shall be
broadcast in one block of time on the same day and at the same time each week,
such day and time to be selected by Network, in consultation with Affiliate, it
being agreed and acknowledged, however, that the length and placement of such
Local Programming within the Service must be uniform among all distributors of
the Service. Local Programming shall not consist of or contain (i) programming
that has received, or had it been rated would have received, an MPAA "X" or
"NC-17" rating, or that would otherwise be considered obscene, indecent,
profane, or excessively violent; or programming that would be patently offensive
as measured by the community standards of the Licensed Community in which is
displayed; (ii) pay-per-view movies or events; (iii) blackouts; (iv) surcharges;
(v) promotion or marketing of "800," "888," "900," or "976" telephone services,
or other similar services that bill a caller for placing or confirming the call
(other than for the telephone company's cost of the call); or (vi) infomercials,
home shopping, direct on-air sales programming or advertising. Affiliate shall
be solely responsible for the insertion of the Local Programming into the signal
of the Service at the Stations transmitting the Service on a timely basis and of
having a signal quality at least comparable to the signal quality of the Service
transmitted by Network.
(c) PREEMPTION. Affiliate shall retain the right to elect not
to transmit any programming on the Service over the broadcast facilities of a
Station if Affiliate reasonably believes in good faith that the transmission of
such programming is contrary to applicable rules and regulations of the FCC and
that such transmission would result in a penalty or forfeiture being imposed by
the FCC on Affiliate or such Station, provided that (i) Affiliate notifies
Network either before or as soon as reasonably practicable after Affiliate
exercises such right, and (ii) Affiliate does not exercise such right in a
manner intended to frustrate its obligations hereunder.
(d) CHILDREN'S PROGRAMMING.
(i) Network will provide as part of the Service an amount of
core educational and informational children's programming as
defined by FCC rules, including 47 C.F.R. ss.73.671, as the
same may be amended from time to time ("CORE CHILDREN'S
PROGRAMMING") sufficient to satisfy the minimum Core
Children's Programming hours required to meet the FCC's
benchmark for such programming incurred by Affiliate as result
5
of the broadcast by the Stations of the Service on each such
Station's free, over-the-air, multicast feed, provided that
this obligation shall apply to Network only if and for so long
as the same obligation is imposed on third parties using the
Stations' over-the-air multicast feeds to transmit
programming. In addition, Affiliate agrees to notify Network
in the event Affiliate elects to meet the Core Children's
Programming requirements resulting from its Stations' free,
over-the-air multicast feeds on a single free, over-the-air
multicast feed in which case Network's obligations shall
thereafter cease.
(ii) Network represents and warrants that if it supplies to
Affiliate any programming produced primarily for children 12
years old or younger, such programming shall comply with the
FCC's commercial limits, including 47 C.F.R. ss.73.670, as the
same may be amended from time to time, including limits on the
amount of commercial matter and the prohibition on certain
commercial matter in both the program material and commercial
material, provided that each Station passes through such
programming without alteration.
(iii) At the end of each calendar quarter, Network will
provide to Affiliate a certification indicating the amount of
Core Children's Programming made available to Affiliate during
the quarter and certifying that any programming produced
primarily for children 12 years old or younger, as provided by
Network, complied with the FCC's rules on commercial limits.
(e) ADVERTISING. Except for the Local Advertising, Network
shall have the exclusive right and authority to sell all of the advertising on
the Service and shall share a portion of Network's Advertising Revenue generated
from such sales with Affiliate in accordance with the terms of this Agreement.
(f) PROGRAM SERVICE INFORMATION. Network must provide to a
reputable program information services entity a program schedule for the
Service.
(g) CLOSED CAPTIONING. Network must provide closed captioning
for the Service if and solely to the extent required by applicable FCC rules and
regulations.
5. DELIVERY AND DISTRIBUTION OF THE SERVICE:
(a) During the Term, Network, at its expense, shall deliver a
signal of the Service by transmitting it via a domestic satellite commonly used
for transmission of television programming at Network's sole cost and expense on
a full-time basis 24 hours per day, 7 days per week, 365 days per year. The
signal of the Service, including any program-related data and enhancements,
shall be contained in no more than a 2.0 megabits-per-second ("MBPS") stream of
data within a six (6)-megahertz band and shall consist of a resolution of no
less than 480i to be considered a "good quality signal" in accordance with
industry standards. Subject to an Event of Force Majeure, any failure by Network
to deliver a signal meeting the requirements of this Section 5(a) for more than
six (6) hours in any consecutive thirty (30)-day period without the written
consent of Affiliate shall be considered a material breach of this Agreement.
6
(b) EXHIBIT C sets forth the specific equipment necessary for
each Station to receive the signal of the Service (the "RECEIVING EQUIPMENT").
Network shall furnish, at its expense, the Receiving Equipment to each Station
that transmits the Service, provided that the Receiving Equipment for all of the
Stations initially listed on EXHIBITS A-1 and A-2 shall not exceed, in the
aggregate, seventy thousand dollars ($70,000) (the "EQUIPMENT REIMBURSEMENT
CAP"); it being understood that the Equipment Reimbursement Cap shall not apply
to any Acquired Stations that transmit the signal of the Service pursuant to
Section 3 of this Agreement. In addition, in the event Network changes the
satellite technology in such a manner that the signal of the Service cannot be
received or utilized by a Station utilizing then-installed equipment, then, with
respect to such Station only, Network, at its option, shall either reimburse
Affiliate for costs incurred to purchase, or shall supply to Affiliate,
Receiving Equipment necessary for each affected Station to continue to receive
and distribute the signal of the Service, it being understood that the Equipment
Reimbursement Cap shall not apply to such situation. Affiliate, at its expense,
shall furnish all other equipment and facilities necessary for the receipt of
the satellite transmission of the signal of the Service and the delivery of such
signal to TV Households in each Station's DMA. In addition, each Station shall
be responsible, at its sole expense, for installing, maintaining or repairing
the Receiving Equipment during the Term. Affiliate shall cause each of the
Stations to maintain and repair the Receiving Equipment in good working
condition, at its sole cost, as necessary and appropriate to maintain the
ability of the Receiving Equipment to receive the signal of the Service without
interruption during the Term.
(c) Each Station transmitting the Service shall transmit a
principal video and audio signal of the Service of a technical quality
reasonably comparable to the higher of the quality of the Primary Feed or the
quality of any other multicast feed transmitted by such Station, but in no event
shall such Station be required to deliver a signal of a technical quality higher
than the technical quality of the video and audio signal of the Service as
delivered by Network hereunder.
(d) Each Station shall provide Network with up to 2.0 mbps to
transmit the Service on a full-time basis 24 hours per day, 7 days per week, 365
days per year, provided that any Station that provides less than 2.0 mbps to
transmit the Service at any time shall provide sufficient bandwith to deliver at
all times the signal of the Service as delivered by Network in a manner such
that the signal is not degraded in any manner perceptible by the average viewer.
Network acknowledges and agrees that Affiliate may employ statistically
multiplexing so long as such statistical multiplexing does not result in a
degradation of the Service signal that is perceptible by the average viewer.
Except for a Station's Local Advertising Time and Local Programming, each
Station shall transmit the Service without alteration, editing or delay. Except
as expressly provided herein, at no time during the Term may Affiliate cease to
transmit the Service as provided herein.
(e) 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 the program and system information protocol, audio
subcarriers and all other distribution capacity contained within the bandwidth
of the signal of the Service between Network's uplink facilities and each
Station's downlink facility(ies). In addition, Network shall have the right to
use, and Affiliate shall transmit, those portions of the Service signal that are
related to or enhance the Service programming as long as such related elements
or enhancements do not materially adversely interfere with the average viewer's
perception of the principal video and accompanying audio components of the
Service.
7
(f) Affiliate shall use commercially reasonable efforts to
require any MVPD in the DMA that is transmitting the signal of the Service to
make the Service available on such MVPD's most highly penetrated level of
digital service.
(g) Except as otherwise permitted herein, Affiliate shall not
itself, and shall not expressly authorize others to, tape or otherwise reproduce
any part of the Service without Network's prior written consent. Affiliate and
each Station shall take the same security measures to prevent the unauthorized
or otherwise unlawful copying or taping of the Service (or any portion thereof)
by others as it takes to protect the Primary Feed or any other multicast feed
transmitted by such Station. The foregoing shall not be deemed to prohibit home
taping, downloading or other copying by anyone viewing the Service; provided,
however, that Affiliate shall not promote home taping, downloading or other
copying of the Service. Affiliate shall not be liable for any copyright
infringement of any content contained in the Service (including any music, video
or other content) by any third party accessing the Service via Broadcast
Television, provided that the Stations pass through the content of the Service
without alteration.
(h) Each Station that transmits the Service may superimpose
over the programming on the Service, at the top of the hour, a transparent
station identification "bug" on the viewing screen of the Service identifying
the call letters of such Station in accordance with applicable federal law;
provided that the size, form and placement of such "bug" shall be mutually
agreed upon by Network and Affiliate prior to such superimposition, and such
"bug" does not materially interfere with any graphics or other data on the
Service.
(i) Affiliate and Network shall work cooperatively with one
another to seek distribution of the Service to TV Households with and through
broadcast television stations that are members of the Program Purchasing
Corporation within sixty (60) days of the execution of this Agreement by both
parties hereto.
6. NO FEES; REVENUE SHARE:
(a) Neither Affiliate nor any Station shall pay any fees to
Network for any rights granted under this Agreement.
8
(b) In consideration of the terms and conditions set forth
herein, Network shall pay Affiliate (i) the Affiliate Advertising Share, and
(ii) the Affiliate Transactional Share, each as provided in EXHIBIT D.
7. REPORTS; AUDITS:
(a) Network shall submit to Affiliate, within forty-five (45)
days of the end of each calendar quarter, a statement reporting for such
calendar quarter the following information: (i) Network's Advertising Revenue,
(ii) the Affiliate Advertising Share, (iii) Network's Transactional Revenue, and
(iv) the Affiliate Transactional Share. If this Agreement terminates on any date
other than at the end of a calendar quarter, Network shall supply such statement
as of the date of termination, within forty-five (45) days thereafter, and this
obligation shall survive the termination of this Agreement until Affiliate
receives such statement.
(b) No later than thirty (30) days following each calendar
quarter during the Term, Affiliate shall (i) provide Network with a list of all
MVPDs then retransmitting the Service in the DMA of each Station; and (ii) use
best efforts to obtain and provide to Network a certified report supplied by
each such MVPD stating the number of cable television households that receive
the Service from such MVPD in the DMA of a Station on average over such quarter.
(c) Affiliate shall submit to Network, within forty-five (45)
days of the end of each calendar quarter, affidavits with respect to the
Cross-Channel Promotional Spots aired by Affiliate during such calendar quarter,
setting forth the date and time each such Cross-Channel Promotional Spot aired
on the Primary Feed.
(d) AUDIT.
(i) During the Term and for one (1) year thereafter, Network
shall maintain accurate and complete books and records in
accordance with generally accepted accounting principles and
practices that shall contain sufficient information to enable
an auditor to verify, for the period under audit, Network's
Advertising Revenue, Network's Transactional Revenue, the
Affiliate Advertising Share, the Affiliate Transactional Share
and the accuracy of the amounts paid by Network to Affiliate
hereunder (collectively, the "REVENUE SHARE RECORDS"). Upon
not less than thirty (30) days' prior written notice and not
more than once in any calendar year, Affiliate shall have the
right, at its sole cost and expense, during the Term and for
one (1) year thereafter, to examine during normal business
hours the books and records of Network for up to the prior
calendar year and the then-current calendar year solely to the
extent necessary to verify the Revenue Share Records.
(ii) Any audit conducted pursuant to this Section 7(d) shall
be conducted by an independent public accounting firm or an
independent auditing firm designated by Affiliate ("AUDITOR").
Any such audit shall be subject to the confidentiality
provisions of Section 12, and the Auditor shall execute, in
advance, a confidentiality agreement that obligates it to
maintain the confidentiality of the terms of this Agreement
and the information acquired during the course of the audit.
(iii) If, as a result of an audit conducted pursuant to this
Section 7(d), the Auditor determines that Network has fully
complied with its obligations pertaining to the Revenue Share
Records provided by Network hereunder, then the Auditor shall
promptly provide written notice to the parties stating that
Network has so complied and shall not disclose any information
acquired during the course of the audit. If, as a result of an
audit, the Auditor determines that Network has failed to
comply with its obligations pertaining to the Revenue Share
9
Records, and which has caused an underpayment to Affiliate of
greater than 5% of the aggregate monies otherwise due
Affiliate hereunder, then the Auditor shall promptly provide
written notice to the parties stating that Network may not
have complied with all of its obligations. Once such notice is
received, the Network shall authorize the 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 perceived
non-compliance with its obligations pertaining to the Revenue
Share Records provided by Network hereunder. Under no
circumstances, other than the limited circumstance set forth
in the previous sentence, shall any information acquired
during the course of the audit be disclosed to Affiliate by
the Auditor. Any information disclosed to Affiliate by the
Auditor shall be subject to the confidentiality provisions
herein, shall not be disclosed to any parties other than those
that require the information in order to pursue claims as
described in this Section 7(d)(iii), and shall not be used for
any purpose other than the audit and Affiliate's pursuit of
its claims as described in this Section 7(d)(iii). Both
Network and Affiliate shall use good faith efforts to resolve
any claim or claims arising from an audit conducted pursuant
to this Section 7(d).
(iv) Any claim by Affiliate with respect to amounts owing by
Network, which must relate to the then-current calendar year
or the immediately preceding calendar year, must be made
within the earlier of three (3) months after the Auditor
provides Affiliate the results of the audit, or twelve (12)
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.
8. PROMOTION; AFFILIATE ADVERTISING:
(a) Affiliate shall use all good faith commercially reasonable
efforts to promote the Service within the DMA of each Station, including using
commercially reasonable efforts to have the Service listed in local print and
on-screen guides.
(b) Without limiting Section 8(a), during the Term, each
Station shall broadcast at least ten (10) cross-channel promotions per week
promoting Network and the Service ("CROSS-CHANNEL PROMOTIONAL SPOTS"). Network
shall have responsibility to produce and deliver the Cross-Channel Promotional
Spots to each Station at least two (2) weeks prior to the air date in a useable
format and broadcast-ready state. Affiliate shall have the right to approve the
creative for the Cross-Channel Promotion Spots prior to air, provided that
Affiliate shall be deemed to have accepted a Cross-Channel Promotional Spot
unless it notifies Network to the contrary no later than seventy-two (72) hours
after delivery. Each Station shall telecast the Cross-Channel Promotional Spots
in a run-of-schedule rotation during the time period between 5:00 a.m. and 1:00
a.m., prevailing local time. In addition, each Station shall use its best
efforts to promote the Service at local events in which such Station
participates.
(c) Network shall provide to each Station that transmits the
Service for local advertising sales or promotion one (1) minute of commercial
announcement time per hour on average during any consecutive thirty (30)-day
period ("LOCAL ADVERTISING"). Affiliate shall have the right to retain for
itself all the proceeds derived from the sale of Local Advertising. Affiliate's
and each Station's use of Local Advertising shall be subject to Network's
then-current standard advertising guidelines, provided that such guidelines are
reasonably communicated to Affiliate in advance of the sale by Affiliate or a
10
Station of Local Advertising. Without limiting the foregoing, neither Affiliate
nor any Station shall use the Local Advertising for advertising or promotion for
any direct competitor of Network. In the event Network, in its sole but
reasonable discretion, deems any Local Advertising to be with a direct
competitor of Network, Network shall notify Affiliate of same, and Affiliate
shall immediately cease such advertising or promotion. Affiliate shall be solely
responsible for all Local Advertising and all liabilities associated therewith,
including insertion, trafficking, billing and collection activities relating to
the Local Advertising and for the content of the material inserted into the
Local Advertising. Network shall properly "tone-switch," using
industry-recognized equipment, via audible or inaudible signals, all commercial
announcement minutes to enable each Station to insert its Local Advertising.
(d) Network, from time to time, may undertake marketing tests
and surveys, rating polls and other research in connection with the Service.
With respect to any tests, surveys or research that apply to any Station or DMA
for which Network seeks Affiliate's cooperation, Network shall notify Affiliate
of the nature and scope of each such project and Affiliate, to the extent
permitted by applicable law, shall cooperate in such research by rendering such
assistance as Network may reasonably request and which Affiliate can reasonably
provide.
(e) Affiliate acknowledges that the name and mark "The TUBE"
(and the names of certain programs that appear in the Service and any
subsequently selected names or marks for the Service and accompanying websites)
(collectively, the "MARKS") 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. Affiliate shall not directly or indirectly
question, attack, contest or in any other manner impugn the validity of the
Marks or Network's rights in and to the Marks. Affiliate shall at no time adopt
or use, without Network's prior written consent, any variation of the Marks or
any word or mark likely to be similar to or confused with the Marks. Any and all
goodwill arising from Affiliate's use of the Marks shall inure solely to the
benefit of Network. Affiliate shall submit to Network for prior written approval
any of Affiliate's promotional materials mentioning or using the Marks and
publicity about Network or the products or programming included in the Service
(other than materials provided by Network to Affiliate, if any). Uses of the
Marks in routine promotional materials such as program guides and program
listings, once approved by Network, shall be deemed approved for all subsequent
uses unless Network specifically notifies Affiliate to the contrary.
9. WARRANTIES AND INDEMNITIES:
(a) Network and Affiliate each represents and warrants to the
other that (i) it is duly organized, validly existing and in good standing under
the laws of the state 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.
11
(b) Network further represents and warrants to Affiliate that,
to the best of Network's knowledge, Network holds all necessary rights and
licenses in and to the materials transmitted to Affiliate as part of the Service
and such rights and licenses are sufficient to permit the transmission of the
Service in the DMA of each of the Stations without infringing the copyright or
other intellectual property rights of any person, provided that Affiliate and
each Station have transmitted the Service in accordance with the rights granted
to Affiliate pursuant to this Agreement.
(c) Affiliate further represents, warrants and covenants to
Network that (i) it has the power and authority to cause each Station, including
any Acquired Station, to perform fully its obligations hereunder; (ii) the
Stations are being and will continue to be operated in all material respects (A)
in accordance with the terms and specifications of their respective FCC licenses
and (B) in compliance with all applicable laws, rules and regulations; (iii)
Affiliate, to the best of its knowledge, holds and will continue to hold all
rights and licenses (A) as are necessary to operate the Stations and permit the
transmission of the Service in the DMA of each of the Stations without
infringing the patent or other intellectual property rights of another person
and (B) in and to the Local Programming and Local Advertising and such rights
and licenses are sufficient to permit the transmission of the Local Programming
and Local Advertising on each of the Stations without infringing the copyright
or other intellectual property rights of any person.
(d) Affiliate and Network shall each indemnify, defend and
forever hold harmless the other, the other's affiliated companies and each of
the other's (and the other's affiliated companies') respective present and
former officers, shareholders, directors, employees, partners and agents
("NETWORK INDEMNITEES" and "AFFILIATE INDEMNITEES," respectively), against and
from any and all Costs incurred as a result of third-party claims arising out of
any breach of any term of this Agreement or any warranty, covenant or
representation contained herein.
(e) Without limiting Section 9(d), Network shall indemnify,
defend and forever hold harmless the Affiliate Indemnitees from and against any
and all Costs arising directly or indirectly out of third-party claims that (i)
the transmission by Affiliate of the Service in the DMA of any of the Stations
infringes the copyright or other intellectual property rights of any person but
only if Affiliate and each Station have transmitted the Service in accordance
with the rights granted to Affiliate pursuant to this Agreement; and (ii) the
content of the Service or any other promotional material provided by Network to
Affiliate (including the Cross-Channel Promotional Spots), as furnished by
Network and transmitted by Affiliate and each Station in accordance with this
Agreement (i.e., not based upon any deletions, modifications or additions by
Affiliate or any Station), is obscene, libelous, or slanderous, or violates any
right of privacy or publicity, copyright, trademark or any other proprietary,
literary, or dramatic right of any person. Affiliate shall, to like extent,
indemnify, defend and forever hold harmless the Network Indemnitees for Costs
arising directly or indirectly out of third-party claims (A) that the operation
of one or more of the Stations infringes on the patent or other intellectual
property rights of another person; and (B) relating to any deletion or addition
of content, programming or other material by Affiliate to the Service, including
the Local Advertising and Local Programming.
12
(f) 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.
(g) The representations, warranties and indemnities contained
in this Section 9 shall continue throughout the Term and the indemnities shall
survive the termination of this Agreement, regardless of the reason for such
termination.
(h) Network has procured, and shall maintain during the Term,
at its sole expense, Commercial General Liability insurance at liability limits
of not less than $1,000,000 each occurrence and $2,000,000 in the aggregate.
Additionally, Network will procure on or before May 31, 2005, and shall maintain
during the Term, at its sole expense, Errors and Omissions insurance that covers
Network's media activities at a liability limit of $1,000,000 in any one (1)
policy period. Each insurance policy required by this Section 9 shall be
endorsed to provide that Affiliate is named as an additional insured. Network
shall provide to Affiliate standard certificates of insurance as evidence of
maintenance of all insurance policies required by this Section 9 as soon as
reasonably practicable, but in no event later than ninety (90) days following
the execution hereof.
10. EARLY TERMINATION RIGHTS:
(a) In addition to Network's other rights to terminate this
Agreement, Network may, by providing Affiliate with thirty (30) days' prior
notice, terminate this Agreement if Affiliate is in material breach of this
Agreement, provided that Affiliate shall have thirty (30) days from Network's
notice of such breach to cure such breach; provided, however, if such breach is
confined to a Station or to a limited number of Stations, then Network, at its
option, shall have the right to terminate this Agreement in its entirety or only
as to such Station or Stations. In addition, Network may, by providing Affiliate
with notice, terminate this Agreement as to each Station listed on EXHIBITS A-1
and/or A-2 that does not launch the Service in accordance with Section 3(g) of
this Agreement.
(b) In addition to Affiliate's other rights to terminate this
Agreement, Affiliate may, by providing Network with thirty (30) days' prior
notice, terminate this Agreement if Network is in material breach of this
Agreement, provided that Network shall have thirty (30) days from Affiliate's
notice of such breach to cure such breach, provided further, that if Network is
diligently pursuing a cure of such breach and such breach cannot reasonably be
cured within a thirty (30)-day cure period, then the cure period shall
automatically be extended for an additional sixty (60) days. Additionally, in
the event that Affiliate assigns or transfers the FCC license of a Station to an
entirely unaffiliated third-party, then Affiliate may terminate this Agreement
as to such Station only without any liability therefor to Network on at least
ninety (90) days' prior notice, provided by Affiliate to Network, of the FCC's
grant of consent to such assignment or transfer or upon consummation of such
assignment or transfer, whichever is later; provided, however, that in such an
event, Affiliate shall first provide written notice to Network within five (5)
calendar days of the filing of an assignment or transfer of control application
with the FCC and Affiliate's exclusivity as to the DMA of such Station shall
terminate upon Network's receipt of such notice from Affiliate. Upon Network's
request, Affiliate shall use commercially reasonable efforts to require such
13
third party assignee or transferee to negotiate in good faith with Network
regarding the terms for continued distribution of the Service. Any failure by
Affiliate (i) to give Network notice of (A) the filing of an assignment or
transfer of control application with the FCC; or (B) the FCC's grant of consent
to such assignment or transfer; each as required by this Section 10(b); or (ii)
to use commercially reasonable efforts to require any third party assignee or
transferee to negotiate in good faith with Network regarding the terms for
continued distribution of the Service, shall each be deemed a material breach of
this Agreement.
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, to the other party, at 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: The TUBE Network, Inc.
3200 Oakland Park Blvd.
Lauderdale Lakes, FL 33311
Attn: John W. Poling
cc: Les Garland
To Affiliate: Raycom Media, Inc.
201 Monroe Street RSA Tower, 20th Floor
Montgomery, AL 36104
Attn: Mr. Paul H. McTear, Jr.
cc: Rebecca S. Bryan
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.
Notwithstanding the foregoing, Affiliate may provide the
completed Launch Notice by means of electronic mail ("E-MAIL"). Each e-mail
notice shall be sent by Affiliate utilizing "confirmation of delivery" tracking
to the satellite coordinator at LINEFINDER_1999@YAHOO.COM or any successor email
address designated by Network in accordance with the provisions of this Section
11 from time-to-time, 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.
14
12. CONFIDENTIALITY:
Neither Affiliate nor Network shall disclose (whether orally
or in writing, or by press release or otherwise) to any third party (other than
their respective officers, directors and employees, in their capacity as such,
and their respective auditors, consultants, financial advisors, lenders,
potential investors and attorneys; provided, however, that the disclosing party
agrees to be responsible for any breach of the provisions of this Section 12 by
any of such parties) any information with respect to the terms and provisions of
this Agreement (other than the existence and Term hereof) except: (a) to the
Auditor as provided in Section 7(d); (b) to the extent necessary to comply with
the valid order of an administrative agency or a court of competent
jurisdiction, redacted to the greatest extent possible, in which event the party
making such disclosure shall so notify the other in writing prior to making such
disclosure, and shall seek an order of confidentiality from said agency or court
prior to disclosure of any materials contemplated under this Section 12; (c) in
order to enforce its rights pursuant to this Agreement; (d) to an independent
public accounting firm or an independent auditing firm selected by Network or by
a third party distributor of the Service (i.e., an accounting firm or auditing
firm that does not audit or otherwise provide services to Network or such third
party distributor), but only if such information relates directly to the audit
of an more favorable provision in a written agreement between Network and such
third party distributor; provided, however, that such independent public
accounting firm or independent auditing firm executes a written confidentiality
agreement acceptable to Affiliate; or (e) if mutually agreed by Affiliate and
Network, in advance of such disclosure, in writing. This Section 12 shall
survive the termination of this Agreement. The parties agree to issue a mutually
agreeable press release concerning this Agreement immediately upon execution of
this Agreement.
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, which consent shall not be
unreasonably withheld.
(b) ENTIRE AGREEMENT; AMENDMENTS; WAIVERS; CUMULATIVE
REMEDIES. This Agreement, including the 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 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.
15
(c) 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 the laws of the State of Delaware
applicable to contracts to be entirely performed therein.
(d) RELATIONSHIP. Neither party shall be, or hold itself out
as, the agent of the other or as joint venturers under this Agreement. Nothing
contained herein shall be deemed to create, and the parties do not intend to
create, any partnership, association, joint venture, fiduciary or agency
relationship between Affiliate and Network, and neither party is authorized to
or shall act toward third parties or the public in any manner which would
indicate any such relationship with the other.
(e) 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 an act of God; inevitable accident; fire; weather; lockout; strike or other
labor dispute; riot or civil commotion; act of government or governmental
instrumentality (whether federal, state or local); failure of performance by a
common or private carrier; material failure in whole or in part of technical
facilities which are material to the transmission of the Service; or other cause
beyond either party's reasonable control (financial inability is excepted) (each
of the foregoing, an "EVENT OF FORCE MAJEURE").
(f) SEVERABILITY. In the event of any order or decree of, or
any other action or determination by, an administrative agency or court of
competent jurisdiction, including any material change in or clarification of FCC
rules, policies or precedent that would cause one or more provisions of this
Agreement to be invalid or unenforceable, in whole or in part, or that would
violate applicable law in any respect, such invalidity, unenforceability or
violation shall not affect any other provision of this Agreement, and this
Agreement shall be construed as though such invalid and/or unenforceable
provision(s) or provision(s) that violate applicable law had never been
contained herein. Notwithstanding the foregoing, if such deletion constitutes a
substantial deviation from the general intent and purpose of the parties hereto,
then Network and Affiliate shall negotiate in good faith to modify this
Agreement to the extent necessary to render it valid, legal and enforceable
while preserving the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
(g) NO INFERENCE AGAINST AUTHOR. Network and Affiliate each
acknowledge that this Agreement was fully negotiated by the parties and,
therefore, no provision of this Agreement shall be interpreted against any party
because such party or its legal representative drafted such provision.
16
(h) 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.
(i) 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. Any reference in this Agreement to "Section"
or an "EXHIBIT" shall, unless the context expressly requires otherwise, be a
reference to "Section" in, or an "EXHIBIT" to, this Agreement. Forms of the word
"include" mean "including without limitation;" and references to "hereunder,"
"herein," "hereof," and the like, refer to this Agreement.
(j) 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.
(k) LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER
PROVISION IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER PARTY FOR INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES (INCLUDING LOSS
OF PROFITS OF REVENUES, OR DAMAGES TO OR LOSS OF PERSONAL PROPERTY) IN ANY CAUSE
OF ACTION ARISING OUT OF, RELATED TO, OR IN CONNECTION WITH A DEFAULT UNDER OR A
BREACH OF THIS AGREEMENT.
(l) TAXES. Network shall not be liable for, and Affiliate
shall pay and hold harmless Network from, any federal, state or local taxes,
surcharges, levies or any other charges which are based upon revenues derived by
operations of Affiliate or each Station.
(m) CHANGE IN OPERATIONS. Affiliate represents and warrants
that each Station is operating with facilities specified in its FCC license. In
the event that any Station's transmitter location, power, height of antenna,
Licensed Community, frequency, or hours of operation are materially reduced or
changed at any time so that such Station's value to Network as a telecaster of
the Service is less than as existed on the Effective Date, and such reduction or
change has not been cured by Affiliate within fifteen (15) days after such
occurrence, Network shall have the right to terminate this Agreement upon thirty
(30) days' prior written notice to Affiliate. Affiliate shall notify Network
immediately in writing if Affiliate applies to the FCC to modify any Station's
transmitter location, power, height of antenna, Licensed Community or frequency
or of any modification or proposed modification, for any reason, in such
Station's hours of operation.
(n) SPECIFIC PERFORMANCE. The parties agree that the services
to be provided by Affiliate hereunder are specific and unique in character and
furthermore that a failure by Affiliate to fulfill its commitments under this
Agreement will cause irreparable damage to Network which cannot be compensated
in monetary damages. Therefore, Affiliate agrees that Network shall be entitled
to obtain specific performance of Affiliate's obligations under this Agreement
as an appropriate remedy in the event of a material breach of the terms of this
Agreement by Affiliate.
17
(o) RIGHT OF FIRST REFUSAL. In the event Network decides to
offer any new television programming channels (the "NEW CHANNELS"), then
Affiliate shall have sixty (60) calendar days from Affiliate's receipt of
Network's comprehensive business plan for such New Channels to determine whether
Affiliate desires to amend this Agreement to include the New Channels. At the
expiration of the sixty (60)-day period, Affiliate's right of first refusal
shall expire. If, during said sixty (60)-day period, Affiliate notifies Network
in writing of its desire to add the New Channels to this Agreement, then both
parties shall work diligently together and in good faith to cause this Agreement
to be amended within sixty (60) days of such notice to include the terms and
conditions pursuant to which the New Channels may be distributed by Affiliate.
If, having used good faith diligent efforts, Affiliate and Network have failed
to amend this Agreement to reflect the New Channels within such sixty (60)-day
period, then neither party shall have an obligation to continue such
negotiations or amend this Agreement to include the New Channels.
The parties hereto have executed this Agreement to be effective as of
the Effective Date notwithstanding the actual date of execution.
AFFILIATE: NETWORK:
Raycom Media, Inc. The Tube Music Network, Inc.
By: _______________________________ By: ______________________________
Title: _____________________________ Title: ___________________________
18
EXHIBIT A-1
STATION IDENTIFICATION 1
Launch Deadline of July 31, 2005
DMA CALL LETTERS STREET ADDRESS
--- ------------ --------------
Albuquerque KASA 1377 University Blvd., N.E. - Albuquerque N.M. 87102
Albany WFXL 1201 Stuart Avenue - Albany, GA 31706-4050
Augusta WFXG 3933 Washington Road - Augusta, GA 30907
Cedar Rapids-Waterloo-Dubuque KWWL 500 East Fourth Street - Waterloo, IA 50703
Cincinnati 19 Broadcast Plaza - 635 West Seventh Street -
WXIX Cincinnati, OH 45203
Cleveland WOIO 1717 E. 12th Street - Cleveland, OH 44114
Cleveland WUAB 1717 E. 12th Street - Cleveland, OH 44114
Colorado Springs-Pueblo KXRM 560 Wooten Road - Colorado Springs, CO 80915
Columbia WACH 1400 Pickens Street - Suite 600 - Columbia, SC 29201
Columbus GA WTVM 1909 Wynnton Road - Columbus, GA 31906
*Columbus GA WSTX 1909 Wynnton Road - Columbus, GA 31906
Dothan WDFX 2221 Ross Clark Circle - Dothan, AL 36301
Hattiesburg/Laurel WDAM 2362 Highway 11 - Moselle, MS 39459
Honolulu KHNL 150 B Puuhale Road - Honolulu, HI 96819-2282
Honolulu KFVE 150 B Puuhale Road - Honolulu, HI 96819-2282
Huntsville WAFF 1414 N. Memorial Parkway - Huntsville, AL 35801
Knoxville 9000 Executive Park Drive - Corporate Square
WTNZ Bldg D / Suite 300 - Knoxville, TN 37923
Marquette WLUC 177 US 41 East - Negaunee, MI 49866
Memphis WMC 1960 Union Avenue - Memphis, TN 38104
Ottumwa/Kirksville KTVO Hwy 63 - North Kirksville, Missouri 63501
*Ottumwa/Kirksville KYOU 820 West Second Street - Ottumwa, IA 52501
Panama City WPGX 637 Luverne Avenue - Panama City, FL 32401
Richmond 3301 West Broad Street - P.O. Box 11064
WTVR Richmond, VA 23230
Savannah 11 The News Place - 1511 Chatham Center Drive
Savannah, GA 31405
WTOC Mail: PO Box 8086 - Savannah, GA 31412
Shreveport KSLA 1812 Fairfield Avenue - Shreveport, LA 71101
Toledo WNWO 300 South Byrne Road - Toledo, OH 43615-6298
Traverse City WPBN 8518 M72 West - Traverse City, MI 49685
Tucson KOLD 7831 N. Business Park Drive - Tucson, AZ 85743
FLX 4119 West Blue Heron Boulevard - West Palm Beach, FL
West Palm Beach W 33404
Wilmington WECT 322 Shipyard Boulevard - Wilmington, NC 28412
*Wilmington WSFX 322 Shipyard Boulevard - Wilmington, NC 28412
* Operatedby Raycom Media, Inc. per Shared Services Agreement
with license holder.
19
EXHIBIT A-2
STATION IDENTIFICATION 2
Launch Deadline of October 31, 2005
DMA CALL LETTERS STREET ADDRESS
--- ------------ --------------
Baton Rouge WAFB 844 Government Street - Baton Rouge, LA 70802
Paducah-Cape Girardeau KFVS 310 Broadway - Cape Girardeau, MO 63701
Syracuse WSTM 1030 James Street - Syracuse, NY 13203
20
EXHIBIT B
LAUNCH NOTICE
BROADCAST LAUNCH FORM
-------------------------------------------------------------- -----------------------------------------------
STATION NAME: STATION GROUP OWNER:
-------------------------------------------------------------- -----------------------------------------------
STATION MAILING ADDRESS:
--------------------------------------------------------------------------------------------------------------
PHONE NUMBER: FAX NUMBER:
-------------------------------------------------------------- -----------------------------------------------
GENERAL MANAGER: MARKETING CONTACT:
-------------------------------------------------------------- -----------------------------------------------
ENGINEER PHONE (IF DIFFERENT):
EMAIL ADDRESS:
-------------------------------------------------------------- -----------------------------------------------
AREAS SERVED (PLEASE INCLUDE ZIP CODES):
--------------------------------------------------------------------------------------------------------------
DMA:
--------------------------------------------------------------------------------------------------------------
FILL OUT THE LINE BELOW FOR ONE EARTH STATION RECEIVE SITE (EACH ADDITIONAL SITE REQUIRES A SEPARATE FORM)
--------------------------------------------------------------------------------------------------------------
Do you have an antenna capable of receiving a C band feed from Galaxy 3C
located at 95 degrees?
YES____ NO____
--------------------------------------------------------------------------------------------------------------
Do you have space for an additional antenna on your roof or in your antenna farm? YES____ NO____
--------------------------------------------------------------------------------------------------------------
Does this space have a good southern exposure looking at 95 degrees? YES____ NO____
--------------------------------------------------------------------------------------------------------------
Do you have the resources to install the antenna? YES____ NO____
--------------------------------------------------------------------------------------------------------------
STREET ADDRESS (Shipping Address):
-------------------------------------------------------------- -----------------------------------------------
CITY/STATE/ZIP: COUNTY:
-------------------------------------------------------------- -----------------------------------------------
LAUNCH DATE: __________________ CHANNEL NUMBER: __________________
-------------------------------------------------------------- -----------------------------------------------
SIGNATURE: TITLE: DATE:
------------------------------------------ ---------------------------------------- --------------------------
EMAIL COMPLETED FORM TO LINEFINDER_1999@YAHOO.COM
21
EXHIBIT C
RECEIVING EQUIPMENT
o C-Band Antenna, single port feed with digital-ready LNB
o 150 Feet of RG6 Coaxial Cable
o Integrated receiver/decoder
22
EXHIBIT D
REVENUE SHARE
Commencing on the Effective Date and thereafter throughout the Term,
Network shall pay to Affiliate the following amounts:
I. AFFILIATE ADVERTISING SHARE.
1. DETERMINING AFFILIATE ADVERTISING SHARE. Commencing on the
calendar quarter beginning with July 1, 2005 and for each
calendar quarter thereafter during the Term, Network shall pay
to Affiliate the Affiliate Advertising Share. For purposes
hereof, the "AFFILIATE ADVERTISING SHARE" shall be determined
by [XXXX]* for such calendar quarter by a fraction, the
numerator of which is the total number of Cable Subscriber
Households in the DMA of the Station(s) transmitting the
Service pursuant to this Agreement, and the denominator of
which is the total number of Cable Subscriber Households in
all of the DMAs in which Network has a broadcast television
station affiliate that is transmitting the Service. If a
Station commences transmitting the Service on other than the
first day of a calendar quarter, then the Affiliate
Advertising Share for such quarter shall be further prorated
based on the number of days in such quarter that such Station
transmitted the Service. For purposes of this EXHIBIT D, The
number of Cable Subscriber Households shall be determined by
the report supplied by each MVPD distributing the service,
described in Section 7(b) of the body of this Agreement. In
the event that such report is not received by Network with
respect to each and every MVPD that carries the Service, then,
for purposes of this EXHIBIT D, the number of Cable Subscriber
Households shall be equal to the number of cable TV households
served by the applicable Station in such Station's DMA as
published in the most recent TELEVISION & CABLE FACTBOOK
(Warren Publishing, Inc.) or, if an improved independent
source for determining the number of television households
that receive the Service through a subscription to cable
service hereafter becomes publicly available, the parties
agree to use such source in lieu of the foregoing.
2. PAYMENT. The Affiliate Advertising Share, if any, shall be
payable quarterly and shall be due no later than forty-five
(45) days following the end of each calendar quarter, for
which a payment is due.
II. AFFILIATE TRANSACTIONAL SHARE.
1. DETERMINING AFFILIATE TRANSACTIONAL SHARE. Commencing on the
calendar quarter beginning with July 1, 2005 and for each
calendar quarter thereafter during the Term, Network shall pay
to Affiliate the Affiliate Transactional Share. For purposes
hereof, the "AFFILIATE TRANSACTIONAL SHARE" means [XXXX]* for
the pertinent calendar quarter. If a Station commences
transmitting the Service on other than the first day of a
- ----------
* Filed under an application for confidential treatment.
23
calendar quarter, then the Affiliate Transactional Share for
such quarter shall be further prorated based on the number of
days in such quarter that such Station transmitted the
Service.
2. PAYMENT. The Affiliate Transactional Share, if any, shall be payable
quarterly and shall be due no later than forty-five (45) days following
the end of each calendar quarter, for which a payment is due.
24
EXHIBIT E
ADDITIONAL TERMS AND CONDITIONS
RIGHTS AND COPYRIGHT INDEMNIFICATION
Without limiting Network's indemnification obligations as set forth in the body
of this Agreement, Network agrees to indemnify the Affiliate Indemnitees against
any and all Costs arising out of any (i) third-party claims that Network's music
performance rights licenses with ASCAP, BMI and SESAC do not cover music
performances through to the viewers of the Service, or (ii) written agreement
between Affiliate and an MVPD for the retransmission of the Service (together
with the Primary Feed as provided in Section 3(a) of the body of the Agreement)
solely within the Station's DMA pursuant to which Affiliate is obligated to
indemnify such MVPD against any Incremental Copyright Cost (as defined below)
resulting directly from the retransmission of the Service by such MVPD in the
Station's DMA. For purposes hereof, "INCREMENTAL COPYRIGHT COST" shall mean the
difference, if any, between (A) the copyright royalties that would be payable by
the MVPD in the Station's DMA without carriage of the Service, and (B) the
copyright royalties that would be payable by such MVPD in such DMA with the
carriage of the Service.
25
April 15, 2005
Raycom Media, Inc.
201 Monroe Street RSA Tower, 20th Floor
Montgomery, AL 36104
Facsimile Number: (334) 206-1555
Attn: Mr. Paul McTear
Re: Charter Affiliate Affiliation Agreement dated as of April14, 2005
by and between The Tube Music Network, Inc., and Raycom Media, Inc.
(the "AGREEMENT")
Dear Mr. McTear:
As an inducement to Affiliate to enter into the Agreement, and in consideration
of Affiliate's obligations in the Agreement, including but not limited to, the
obligation to transmit the Service on all broadcast television stations
currently owned and/or operated by Affiliate, this letter shall confirm our
agreement respecting additional consideration to be provided by Network to
Affiliate. All capitalized terms used and not otherwise defined herein shall
have the meanings as set forth in the Agreement.
Network hereby agrees to provide Affiliate with the consideration set forth
below, all such consideration to be in addition to that consideration set forth
in the Agreement, including but not limited to as specified in EXHIBIT D
thereof.
1. Upon execution of the Agreement, Network shall cause AGU Entertainment Corp.,
the parent of Network ("AGU") to provide Affiliate with [XXXX]*.
2. Network shall cause AGU to provide Affiliate with [XXXX]* upon the following
occurrences:
(a) [XXXX]* for each [XXXX]* (or pro rata portion if less than [XXXX]*
or an increment of [XXXX]*) of the TV Households in the United States in the
DMAs rated eleven and higher based on the number of TV Households delivered to
and obtained by Network for transmission of the Service [XXXX]*, exclusive of
any DMAs served by Affiliate, affiliates of Affiliate or Program Purchasing
Corporation ("PPC") in DMAs eleven and higher;
(b) [XXXX]* for each [XXXX]* (or pro rata portion if less than [XXXX]*
or an increment of [XXXX]*) of the total TV Households in the United States in
the DMAs rated four through ten inclusive based on the number of TV Households
delivered to and obtained by Network for transmission of the Service [XXXX]*,
exclusive of any DMAs served by Affiliate, affiliates of Affiliate or PPC in
DMAs four through ten inclusive;
(c) [XXXX]* for each [XXXX]* (or pro rata portion if less than [XXXX]*
or an increment of [XXXX]*) of the total TV Households in the United States in
the DMAs rated one through three inclusive based on the number of TV Households
delivered to and obtained by Network for transmission of the Service [XXXX]*,
exclusive of any DMAs served by Affiliate, affiliates of Affiliate or PPC in the
DMAs one through three inclusive.
- ----------
* Filed under an application for confidential treatment.
26
3. AGU will maintain Network as a wholly-owned subsidiary, and maintain its
separate existence during the Term of the Agreement.
4. In the event Affiliate desires to make a financial investment in AGU, AGU
shall negotiate such investment opportunity on a good faith basis.
5. AGU will provide Affiliate with a [XXXX]* referenced in 3 above.
6. In consideration of, and subject to, Affiliate's distribution of the Service
on each of the Stations covered by the Agreement, and Affiliate's continued
transmission of the Service throughout the Term in accordance with the terms of
the Agreement, Network shall pay Affiliate a [XXXX]* each Contract Year (as
defined below) during the Term (the "[XXXX]*") based on the number of Cable
Subscriber Households in the DMA of the Station(s) transmitting the Service
pursuant to the Agreement; provided, however, that the [XXXX]* for the first
Contract Year shall be pro rated based on the nine-month period commencing July
1, 2005 and ending on March 31, 2006 (i.e., the [XXXX]* for the first Contract
Year shall be multiplied by three-quarters) and no payment shall be due or
payable for the calendar quarter commencing April 1, 2005. The [XXXX]*, if any,
shall be payable in equal quarterly installments as set forth below in this
paragraph 6, and for each Contract Year shall be determined by multiplying the
"MULTIPLIER" (as set forth opposite each such Contract Year in the table below)
by the number of Cable Subscriber Households (determined in accordance with
subparagraph 6(a) below) in the most recent MVPD report or independent
publication that exists at the beginning of each such Contract Year (i.e., the
number of Cable Subscriber Households is determined at the beginning of each
Contract Year based on then most recently available numbers and remains constant
thereafter for the remainder of such Contract Year). For purposes hereof,
"CONTRACT YEAR" means each twelve (12)-month period commencing on April 1.
- ------------------------------------------ -------------------------------------
CONTRACT YEAR MULTIPLIER
- ------------------------------------------ -------------------------------------
1 [XXXX]*
- ------------------------------------------ -------------------------------------
2 [XXXX]*
- ------------------------------------------ -------------------------------------
3 [XXXX]*
- ------------------------------------------ -------------------------------------
4 [XXXX]*
- ------------------------------------------ -------------------------------------
5 [XXXX]*
- ------------------------------------------ -------------------------------------
Renewal Term, if any [XXXX]*
- ------------------------------------------ -------------------------------------
(a) For purposes of calculating the [XXXX]*, the number of Cable
Subscriber Households in the DMA of each Station transmitting the
Service shall be as set forth in the certified report supplied by each
MVPD distributing the Service (as described in Section 7(b) of the
Agreement) in the DMA of a Station transmitting the Service. In the
event that such report is not available for any given MVPD distributing
the Service, then, for purposes of this paragraph 6, the number of
Cable Subscriber Households for such non-reporting MVPD shall be equal
to the number of digital cable subscribers served by such MVPD in the
applicable Station's DMA as published in the most recent TELEVISION &
CABLE FACTBOOK (Warren Publishing, Inc.) (the "FACTBOOK"). In the event
that neither of the calculation methods described in the previous two
sentences is available for any given MVPD distributing the Service in
the DMA of a Station transmitting the Service, then, for purposes of
this paragraph 6, the number of Cable Subscriber Households for such
MVPD shall be equal to the number of cable TV households served by such
MVPD in the applicable Station's DMA as published in the most recent
Factbook multiplied by the most recently reported cable digital
penetration rate for such MVPD, if available (and, if the cable digital
penetration rate is not available for such MVPD, then the national
- ----------
* Filed under an application for confidential treatment.
27
cable digital penetration rate), as reported by the Cable and
Telecommunications Association for Marketing in its annual tracking
study. In the event that a more accurate independent publicly available
source for determining the number of television households that receive
the Service through a subscription cable service hereafter becomes
available, the parties agree to use such source in lieu of the
foregoing.
(b) For each Contract Year, a running balance sheet of the [XXXX]* will
be maintained and reconciled on a quarterly basis as follows:
(i) If at the end of any calendar quarter during the Term, the sum of
the aggregate Affiliate Advertising Share and aggregate Affiliate
Transactional Share ("TOTAL REVENUE") for such calendar quarter equals
or exceeds the [XXXX]* due and payable for such calendar quarter, then
Network shall pay the Total Revenue in accordance with the provisions
of EXHIBIT D to the Agreement and shall not pay Affiliate any
additional amounts during such calendar quarter (i.e., no portion of
the [XXXX]* shall be due or payable for such quarter), provided that
Network may carry forward to subsequent calendar quarters during such
Contract Year the amount by which Total Revenue exceeds the portion of
the [XXXX]* that would otherwise have been payable for that or any
subsequent calendar quarter(s). The following table provides an
illustration of the carry-forward concept and assumes the [XXXX]* for
the Contract Year is [XXXX]* (payable in four equal [XXXX]*
installments over such Contract Year), and Total Revenue of [XXXX]* for
the first quarter, [XXXX]* for the second quarter, [XXXX]* for the
third quarter, and [XXXX]* for the fourth quarter.
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
QUARTER: [XXXX]* TOTAL REVENUE: AMOUNT PAID: CARRY FORWARD:
------- ------- ------------- ----------- -------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
4 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
*Not to be carried forward to the following Contract Year
(ii) If, at the end of any calendar quarter during the Term for which a
portion of the [XXXX]* is payable, the Total Revenue for such calendar
quarter is less than the [XXXX]*, then Network shall, in lieu of the
Total Revenue payment, pay the portion of the [XXXX]* due for such
quarter, provided that Network may recoup the [XXXX]* paid in such
quarter against subsequent calendar quarters during such Contract Year
- -----------
* Filed under an application for confidential treatment.
28
if the Total Revenue in future quarter(s) exceeds the [XXXX]* payable
for such quarter(s). The [XXXX]* for a quarter, if paid in lieu of the
Total Revenue Payment, shall be due and payable no later than
forty-five (45) days following the end of such quarter. The following
table provides an illustration of the recoupment concept and assumes
the [XXXX]* for the Contract Year is [XXXX]* (payable in four equal
[XXXX]* installments over such Contract Year), and Total Revenue of
[XXXX]* for the first quarter, [XXXX]* for the second quarter, [XXXX]*
for the third quarter, and [XXXX]* for the fourth quarter.
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
QUARTER: [XXXX]* TOTAL REVENUE: AMOUNT PAID: RECOUPMENT:
------- ------- ------------- ----------- ----------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
4 [XXXX]* [XXXX]* [XXXX]* [XXXX]*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
* Not to be carried forward to the following Contract Year
7. Network agrees that if, in relation to any third party that owns or operates
Broadcast Television stations in the United States and distributes the Service,
Network (A) grants a higher [XXXX]* per month for each Cable Subscriber
Household (determined for both Affiliate and such third party as set forth in
subparagraph 6(a) hereof), or (B) uses a percentage higher than fifteen percent
(15%) to calculate the Affiliate Advertising Share or Affiliate Transactional
Share (clauses (A) and (B), individually and collectively, shall be referred to
herein as a "MORE FAVORABLE PROVISION"), Network will promptly offer such More
Favorable Provision to Affiliate for the same amount of time that such More
Favorable Provision is available to such third party; provided, however, that if
the grant of such More Favorable Provision requires the performance by such
third party of any obligation, term or condition, then Affiliate shall perform
such obligation, term or condition in order to receive such More Favorable
Provision.
Please acknowledge your acceptance of the above terms, by signing where
indicated below.
Very truly yours,
AGU Entertainment Corp. The TUBE Music Network, Inc.
By:_______________________ By:_______________________
John W. Poling Name: ____________________
Executive Vice President & CFO Title: _____________________
ACKNOWLEDGED AND ACCEPTED BY:
Raycom Media, Inc.
By:______________________
Paul H. McTear, Jr.
President and Chief Executive Officer
- ------------
* Filed under an application for confidential treatment.
29