Exhibit 10.12
PROGRAMMING LICENSE AGREEMENT
THIS PROGRAMMING LICENSE AGREEMENT, dated as of June 27, 1996 (as
hereafter amended or modified from time to time, this "Agreement"), between
TEVECAP S.A., a Brazilian corporation ("Tevecap"), and TV FILME, INC., a
Delaware corporation ("TVF").
In consideration of the mutual covenants contained herein, the parties
hereto hereby agree as follows:
1. Television Programming License in the Existing Markets
(a) Tevecap hereby grants to TVF an exclusive license to transmit
programming available from Tevecap or its subsidiaries
(hereafter referred to collectively as "TVA Programming") by
means of multi-point, microwave distribution service ("MMDS")
in the Brazilian cities of Brasilia, Goiania and Belem
(referred to herein collectively as the "Existing Markets"),
in which TVF has established MMDS systems, and Tevecap hereby
agrees that, so long as this Agreement is effective, it will
not compete with TVF in MMDS in the Existing Markets.
(b) Regardless of whether TVF obtains licenses to operate hardwire
cable systems (collectively referred to herein as "cable") in
any of the Existing Markets after the date hereof, Tevecap
hereby agrees that it will not grant to any third party a
license to transmit TVA Programming by means of cable in the
Existing Markets. In the event that Tevacap obtains a license
to own and operate a cable system in any of the Existing
Markets, Tevecap hereby agrees that it will only develop such
a cable system in an Existing Market in a partnership or joint
venture with TVF. The terms of such partnership or joint
venture shall be mutually agreeable to both Tevecap and TVF.
2. Television Programming License in the Potential Markets
(a) Tevecap hereby agrees that it will grant a non-exclusive
programming license to TVF for the transmission of TVA
Programming in each of the 19 markets in Brazil where TVF has
filed applications with the Brazilian Ministry of
Communications to obtain licenses to operate MMDS systems
(collectively, the "Potential Markets") in which TVF obtains a
license to operate an MMDS or cable system, subject to the
provisions of paragraph (b) below.
(b) To the extent that Tevecap has, prior to the date hereof,
entered into any contractual or other binding arrangements
with third parties in any Potential Markets which grant
exclusivity to such parties with respect to TVA Programming,
Tevecap hereby agrees that it will use its best efforts to
renegotiate any such arrangements so that (i) no third party
enjoys exclusivity in respect of TVA Programming in any
Potential Market, and (ii) Tevecap can grant a non-exclusive
programming license to TVF in accordance with the terms of
paragraph (a) above or an exclusive programming license to TVF
in accordance with the terms of paragraph (c) below.
(c) In the event that:
(i) TVF obtains a license to operate an MMDS or cable system
in any Potential Market; and
(ii) TVF and Tevecap are able to successfully negotiate a
joint venture, partnership or other shared ownership
interest in such license or system (the capital
requirements of which will be funded by the parties
thereto pro rata in relation to their ownership
interest) for the purpose of developing such MMDS or
cable system, on terms that are mutually acceptable to
both TVF and Tevecap (or, alternatively, Tevecap informs
TVF that it has no interest in participating with TVF in
any such license or system),
then Tevecap hereby agrees that it will grant to such joint
venture or partnership, or to TVF, as the case may be, an
exclusive programming license to transmit TVA Programming by
means of MMDS and cable, subject, however, to the provisions
of paragraph (b) above.
(d) In the event TVF obtains an exclusive programming license from
Tevecap to transmit TVA Programming by means of MMDS and cable
in any Potential Market, TVF agrees that it will, upon the
request of Tevecap, consent to the grant of a license for the
transmission of TVA Programming to a third party that has
obtained a cable or MMDS license in such Potential Market (a
"New Licensee"), provided that TVF and such New
Licensee reach agreement, on terms mutually acceptable to both
parties, concerning the equity or other participation by TVF
in such New Licensee (or a subsidiary or affiliate thereof).
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(e) In addition to the foregoing provisions of this Section 2,
Tevecap hereby agrees with TVF that it will not, from and
after the date hereof, enter into, or agree to enter into, any
additional contractual or other binding arrangements with
third parties in any Potential Markets with respect to TVA
Programming without first notifying, and obtaining the written
approval of, TVF with respect to any such arrangements, which
approval will not be unreasonably withheld if the existence of
such additional arrangement will give Tevecap an overall
strategic benefit in improving Tevecap's overall presence in
the market and such additional arrangement will not involve
any harm to TVF, whether in an Existing or Potential Market.
3. Services Related to Direct-to-Home Satellite Systems ("DTH")
With regard to DTH, in both Ku-band and C-band transmission
frequencies, so long as TVF has obtained a license to operate an MMDS or cable
system in any relevant market, the parties hereto agree as follows:
(a) Existing Markets
With regard to C-band transmission in the Existing Markets,
Tevecap and TVF hereby agree to enter into a non-exclusive marketing
agreement, the terms and conditions of which will be negotiated in
good faith by the parties, recognizing that Tevecap cannot grant to
TVF any rights that conflict with or contravene existing
arrangements that Tevacap has with third parties. With regard to
Ku-band transmission of TVA Programming in Existing Markets, Tevecap
will use its best efforts to work together with TVF with a view
towards providing TVF with a non-exclusive sales and marketing
arrangement, in such markets, to the extent that existing
arrangements so permit.
(b) Potential Markets
In Potential Markets, in relation to Ku-band or C-band, the
parties agree to work together to reach a mutually satisfactory
arrangement that accommodates the interests of both parties, and any
restrictions to which Tevecap is subject.
4. The Terms of Tevecap's License of TVA Programming in Favor of TVF
The following terms and conditions shall apply to each programming
license granted by Tevecap to TVF hereunder with respect to TVA Programming:
(a) The parties hereto hereby agree that TVF will use 50% of TVF's
total channel capacity to broadcast TVA Programming, provided
that:
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(i) in TVF's reasonable opinion, the quality of TVA
Programming remains compatible with the taste and
standards of TVF's subscribers;
(ii) Tevecap continues to own, directly or indirectly, at
least 10% (ten percent) of the common stock of TVF;
(iii) Tevecap continues to be a subsidiary of Abril S.A.
(b) Tevecap's programming charges to TVF in Existing and Potential
Markets will not exceed:
(i) the minimum rates charged by Tevecap to other operators,
(ii) comparable rates for other programming of a similar
nature,
it being understood that such rates may change from time to
time, but at all times the provisions of clauses (i) and (ii)
above will be operative with respect to such rates.
(c) To the extent that TVA Programming licensed to TVF hereunder
includes programs that are acquired by Tevecap subject to
restrictions, then to the extent TVF accepts such programming,
it will abide by such restrictions, provided that such
restrictions are imposed by Tevecap on all other licensees of
such programs.
(d) The parties hereto acknowledge and agree that certain programs
and/or channels presently included in (and to be developed by
Tevecap in the future for inclusion in) TVA Programming are
(or will be ) identified as TVA-exclusive programs or channels
(hereinafter referred to collectively as "TVA Proprietary
Programming"). TVF hereby agrees that, to the extent that TVF
broadcasts any TVA Proprietary Programming in any Existing or
Potential Market, TVF will not broadcast in any such market
any programming acquired by TVF from Globo that is identified
as a Globo-exclusive program and is directly competitive with
such TVA Proprietary Programming.
(e) (i) If TVF has available channel capacity and does not
exercise its right to carry a particular Tevecap
channel, then Tevecap may offer that channel to other
pay television operators in the area, at a price not
more favorable than the price offered to TVF.
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(ii) If all of TVF's channels are carrying programming and
Tevecap offers a new channel, then if in TVF's opinion,
it is reasonably likely that TVF will have new channel
capacity in the near future, TVF may advise Tevecap that
it will exercise its right to carry the new channel on
an exclusive basis, when the new channel capacity is
available.
(f) In the event that
(i) TVF does not exercise its right to carry TVA
Programming, and
(ii) Tevecap expects to license such programming to a
competitor of TVF,
then Tevecap shall, at least sixty days prior to
the license of TVA Programming by Tevecap to a
competitor of TVF, advise TVF of its intention to
sell such programming to such competitor.
(g) Under no circumstances will TVF or any of its subsidiaries
be required to carry TVA Programming exclusively.
5. Term
The parties hereto agree that the terms of this Agreement
shall be effective upon the consummation of the initial public offering of
common stock of TVF and shall terminate on July 20, 2004; provided, however,
that with regard to Potential Markets, the provisions of Section 4(b) above
shall be effective for five years from the date hereof, and such provision shall
thereafter be subject to renewal on terms and conditions mutually acceptable to
the parties.
6. Headings
Section headings used in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.
7. Notices
All notices and other communications required or permitted to
be given or made hereunder shall be in writing and shall be personally delivered
or sent by registered or certified mail, postage prepaid, return receipt
requested, or by telecopier, and shall be deemed to be given on the date such
writing is delivered or sent in accordance with the provisions of this Section
7. Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions, notices and other communications in writing shall be
given or made upon the intended recipient at its address (or to its respective
telecopier number) indicated on the signature page hereof.
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8. Entire Agreement
This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior arrangements or understandings with respect thereto. This Agreement
supersedes in all respects Section 11 of the Investment Agreement dated July 20,
1994 as thereafter amended and modified, among TVF, Tevecap and the other
parties thereto.
9. Binding Effect; Assignment
This Agreement shall be binding upon, and inure to the benefit
of, Tevecap and TVF, and each of their respective successors, assigns,
subsidiaries and affiliates; provided, however, that neither Tevecap nor TVF may
assign its rights hereunder or in connection herewith or any interest herein
without the prior written consent of the other party hereto.
10. Counterparts
This Agreement may be executed in counterparts, both of which
shall be considered one and the same agreement and each of which shall be deemed
an original.
11. Governing Law; Submission to Jurisdiction
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard
to principles of conflicts of law.
(b) Any suit, action or proceeding against any party to this
Agreement arising out of or relating to this Agreement or any
transaction contemplated hereby may only be brought in any Federal
or State court located in the Borough of Manhattan, The City of New
York, and each such party hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action
or proceeding. Tevecap hereby appoints Xxxxx X. Xxxxxx, Esq. Xxxxx
Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
and TVF hereby appoints Xxxxxx Xxxxxx, Xxxxxxx Xxxx & Xxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent for service of
process in any such suit, action or proceeding. Each such party
irrevocably agrees not to assert any objection which it may ever
have to the laying of venue of any such suit, action or proceeding
in any Federal or State court located in the Borough of Manhattan,
the City of New York, and any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Programming License Agreement to be executed by its duly authorized officer as
of the day and year first above written.
TEVECAP S.A.
By: /s/ Xxxx Xxxxxxx Xxxxx Xxxxxxx
Name: Xxxx Xxxxxxx Xxxxx Xxxxxxx
Title:
Address for Notices:
Tevecap S.A.
Ruo do Xxxxx, 313
O4552-904 Sao Paulo
SP Brazil
Telecopier No.: 011-55-11-821-8770
Attention: Xxxxxxx Xxxxxx
President and CEO
with a copy to:
Xxxx Xxxxxxx Xxxxxxx
Executive Vice President
Abril S.A.
Xxxxxxx Xxxxxxxx Xxxxx xx Xxxx, 0000
CEP 02909-900 Sao Paulo
SP Brazil
Telecopier No.: 011-55-11-877-1840
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TV FILME, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
Address for Notices
TV Filme, Inc.
c/o ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadra 07-B1.A
Ed. Executive Tower
Sala 601
70.300-911 Brasilia-DF
Brazil
Telecopier No.: 011-55-61-323-5660
Attention: Hermano Studart Lins de Albuquerque
Chief Executive Officer
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