Preview of our top selling Latin America - Joint Venture Agreement
QVC Network - Joint Venture Agreement With Grupo Televisa Et Al.
ARTICLE I
ORGANIZATION OF THE COMPANY
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Section 1.1. Formation of the Company................................................................... 2 Section 1.2. Organizational Documents; Member Resolutions............................................... 2 Section 1.3. Purpose.................................................................................... 2 Section 1.4. Duration................................................................................... 3
ARTICLE II
CAPITAL SUBSCRIPTION Section 2.1. Initial Subscription for Company Social Parts.............................................. 3 Section 2.2. Additional Capital Contributions........................................................... 4 Section 2.3. Company Social Parts; Ownership Percentages................................................ 6
ARTICLE III
ADDITIONAL COMMITMENTS
Section 3.1. Provision of General Overhead.............................................................. 7 Section 3.2. Provision of Business Operations or Services............................................... 8 Section 3.3. Provision of GT Television Stations or GT Cable Systems.................................... 9 Section 3.4. Provision of QVC Product................................................................... 11
ARTICLE IV
GOVERNANCE
Section 4.1. Initial Board of Managers.................................................................. 12 Section 4.2. Election of the Board of Managers.......................................................... 13 Section 4.3. Removal and Replacement of Managers........................................................ 13 Section 4.4. Meetings of Board of Managers.............................................................. 14 Section 4.5. Officers................................................................................... 17 Section 4.6. Authority of the Board of Managers......................................................... 17 Section 4.7. Matters Requiring Unanimous Approval....................................................... 17 Section 4.8. Independent Public Accountant.............................................................. 21 Section 4.9. Fiscal Year; Financial Statements; Tax Information......................................... 21
ARTICLE V
TRANSFER PROVISIONS
Section 5.1. Prohibition on Transfers................................................................... 22
ARTICLE VI
COVENANTS CONCERNING COMPETITION
Section 6.1. Business; Territory........................................................................ 25 Section 6.2. First Opportunity.......................................................................... 25 Section 6.3. Certain Rights............................................................................. 28 Section 6.4. Termination................................................................................ 30
ARTICLE VII
EXPANSION BEYOND THE UNITED MEXICAN STATES
Section 7.1. Best Efforts............................................................................... 30 Section 7.2. United States Expansion.................................................................... 30
ARTICLE VIII
REPRESENTATION AND WARRANTIES
Section 8.1. Representations and Warranties............................................................. 31
ARTICLE IX
MISCELLANEOUS
Section 9.1. Entire Agreement........................................................................... 33 Section 9.2. Assignments................................................................................ 33 Section 9.3. Jurisdiction; Venue; Service of Process.................................................... 34 Section 9.4. Notification............................................................................... 34 Section 9.5. Indemnification............................................................................ 36 Section 9.6. Guarantee.................................................................................. 36 Section 9.7. Invalidity................................................................................. 37 Section 9.8. Amendments and Waivers..................................................................... 37 Section 9.9. Counterparts............................................................................... 37 Section 9.10. Further Actions............................................................................ 37 Section 9.11. Publicity.................................................................................. 37 Section 9.12. Specific Performance....................................................................... 38 Section 9.13. Section and Other Headings................................................................. 38 Section 9.14. Governing Law.............................................................................. 38 Section 9.15. Attorneys' Fees; Costs and Expenses........................................................ 38
EXHIBITS
Estatutos and Member Resolutions (Spanish and English versions)..................................... Exhibit A Initial Business Plan............................................................................... Exhibit B
Form of Representation Letter for Transfer of Minority Interest in Shareholder Equity Securities.... Exhibit C Infomercial Agreements with G Televisa or its Affiliates effective prior to ?????................... Exhibit D
SCHEDULES
Initial Capital Contributions -- Value Units....................................................... Schedule 1
EXECUTION COPY
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT, dated and effective as of November 8, 1993 (this 'Agreement'), by and among Grupo Televisa, S.A. de C.V., a limited liability company established under the laws of the United Mexican States ('G Televisa'), Television Independiente de Mexico, S.A. de C.V., a limited liability company established under the laws of the United Mexican States and an indirect wholly-owned subsidiary of G Televisa ('GT Sub'), QVC Network, Inc., a corporation organized under the laws of the State of Delaware ('QVC'), QVC Mexico, Inc., a corporation organized under the laws of the State of Delaware and an indirect wholly-owned subsidiary of QVC ('QVC Sub') and Telemercado Alameda, S. de R.L. de C.V., a limited liability company under the Sociedad de Responsabilidad Limitada, with variable capital form, under the laws of the United Mexican States (the 'Company'). GT Sub and QVC Sub are sometimes collectively referred to herein as 'Members' and individually as a 'Member'.
RECITALS:
WHEREAS, subject to the terms and conditions of this Agreement, G Televisa, as the owner and operator of television networks, television stations, cable networks, and cable systems in the United Mexican States, and QVC, as the owner and operator of a cable television network in the United States, desire to create and operate jointly a Television and Cable Shopping Business (as defined in Section 6.1 hereof), initially in the United Mexican States and thereafter in other Spanish-speaking (including Spain and the United States) and Portuguese-speaking markets (including Brazil);
WHEREAS, G Televisa and QVC desire to contribute certain expertise, facilities, assets and capital to a Television and Cable Shopping Business; and
WHEREAS, G Televisa (through GT Sub) and QVC (through QVC Sub) desire to organize, establish and capitalize the Company as a new limited liability company under the Sociedad de Responsabilidad Limitada, with variable capital corporate form under the laws of the United Mexican States (which will be named 'Telemercado Alameda, S. de R.L. de C.V.') through which the Television and Cable Shopping Business will be conducted in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, each of the parties hereto agrees as follows:
ARTICLE I
ORGANIZATION OF THE COMPANY
Section 1.1 Formation of the Company. As of the date hereof, the Members shall establish the Company as a limited liability company under the Sociedad de Responsabilidad Limitada, with variable capital corporate form, in accordance with the laws of the United Mexican States (the 'Law'). (The time that the Company shall be duly established under the Law shall be referred to herein as the 'Effective Time'.)
Section 1.2 Organizational Documents; Member Resolutions. (a) The Company's Estatutos immediately following the Effective Time shall be as set forth in Exhibit A attached to this Agreement, as they may be amended from time to time in accordance with clause (x) of paragraph (b) of Article Sixteenth thereof and Section 4.7(a)(x) hereof (the 'Estatutos'). Notwithstanding anything herein or in the Estatutos to the contrary, to the extent that any provision of the Estatutos conflicts with, or otherwise is inconsistent with, any provision of this Agreement with respect to any matter, or this
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Agreement covers any matter that is not covered in the Estatutos, the provisions of this Agreement with respect to such matter shall control and shall be binding upon each of the parties hereto.
(b) Simultaneously with the Effective Time, the Members shall cause a members meeting to be held in accordance with the Estatutos, and at such members meeting, each Member shall vote in favor of the resolutions in the form set forth in Exhibit A attached to this Agreement.
Section 1.3 Purpose. The purpose of the Company shall be to: (i) establish and operate, directly through the Company or indirectly through one or more Subsidiaries (as defined below) of the Company, a Television and Cable Shopping Business initially in the United Mexican States and thereafter in other Spanish-speaking markets (including, without limitation, Spain and, subject to the terms and conditions hereof, the United States) and Portuguese-speaking markets (including, without limitation, Brazil) in accordance with a business plan of the Company to be initially adopted by unanimous written approval of the Members as of the date hereof as set forth in Exhibit 8 attached to this Agreement (such initial business plan, as it may be amended from time to time in accordance with Section 4.7(a)(i) hereof, the 'Business Plan') and subject to the terms and conditions of this Agreement; and (ii) engage in any and all other conduct, activities or businesses which are consistent with, and directly or indirectly related to, the attainment of the purposes set forth in clause (i) hereof (including, without limitation, acquiring all intellectual property rights that are necessary for the Company and its Subsidiaries to conduct a Television and Cable Shopping Business consistent with the Business Plan). Notwithstanding anything herein to the contrary, neither the Company nor any of its Subsidiaries shall own or operate any means of broadcast or means or facilities of product distribution other than the Television and Cable Shopping
Business in the Territory. As used herein, the term 'Subsidiary' of any entity or person shall mean any corporation at least 50% of whose voting securities, or any partnership, joint venture or other entity at least 50% of whose total equity interest, is directly or indirectly owned by such entity or person.
Section 1.4 Duration. The duration of the Company shall be limited, subject to the terms and conditions of the Estatutos and this Agreement.
ARTICLE II
CAPITAL SUBSCRIPTION
Section 2.1 Initial Subscription for Company Social Parts. (a) GT Sub hereby agrees to subscribe for, purchase and accept such number of Value Units set forth on Schedule 1 attached hereto (as defined herein) that is the New Mexican peso equivalent of U.S.$3,550,000.00 at the time such payment is made representing a 100% undivided ownership interest in and to the Class A Social Part (the 'Class A Social Part'; the term 'Class A Social Part' shall refer herein to any Series 'A-I' fixed capital contribution to the Company and any Series 'A-II' variable capital contribution to the Company) of the Company at the Effective Time. QVC Sub hereby agrees to subscribe for, purchase and accept such number of Value Units set forth on Schedule 1 attached hereto that is the New Mexican peso equivalent of U.S.$3,550,000.00 at the time such payment is made representing a 100% undivided ownership interest in and to the Class B Social Part (the 'Class B Social Part'; the Class A Social Part and the Class B Social Part are sometimes individually referred to herein as the 'Company Social Part' and collectively as the 'Company Social Parts'; the term 'Class B Social Part' shall refer herein to any Series 'B-I' fixed capital contribution to the Company and any Series 'B-II' variable capital contribution to the Company), of the Company at the Effective Time. In consideration of the issuance of the Value Units in respect of each Company Social Part, each Member shall pay U.S.$3,550,000.00 in cash by delivering to the Company the amount of the aggregate subscription price for the Value Units in respect of each Company Social Part to be purchased hereby (which number of Value Units shall be based on NP$1.00 per Value Unit (the 'Initial Subscription Price')). As used herein, each 'Value Unit' shall represent each NP$1.00 of capital contributed by each Member to the Company in accordance with the terms and conditions of this Agreement and the Estatutos. Notwithstanding anything herein to the contrary, (i) each Value Unit held by a Member represents an undivided interest in the Company Social Part held by such Member equal to the quotient
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(expressed as a percentage) of NP$1.00 divided by the aggregate capital contributions made by such Member in accordance with terms of this Agreement and the Estatutos, (ii) for any purpose hereunder and the Estatutos, all distributions and other payments made in accordance with Section 4.7(a)(v) hereof or otherwise in respect of each Member's equity ownership interest in the Company shall be based on the percentage ownership held by such Member in the total outstanding Value Units, without regard to the Company Social Part to which any Value Unit may relate and (iii) each Member shall be entitled to cast one vote per Value Unit at any ordinary or extraordinary meeting of the Members.
(b) Each of GT Sub and QVC Sub represents and warrants to each other party
hereto that it is purchasing any Value Units in respect of any Company Social Part that it purchases pursuant to this Agreement or otherwise for investment purposes only and not with a view to the resale of such Value Units (or any part thereof or interest therein) in violation of any applicable securities laws.
Section 2.2 Additional Capital Contributions. (a) Each Member agrees to make equal contributions to the capital of the Company from time to time in accordance with a schedule (the 'Contribution Schedule') set forth in the Business Plan and identified therein as the 'Contribution Schedule' and at such other times as and when agreed upon and called for by the Board of Managers pursuant to Section 4.7(a)(vi) hereof and as otherwise in accordance with the Estatutos; provided, however, that neither Member shall be required to make contributions pursuant to this Section 2.2(a) unless the other Member shall concurrently be making its contribution pursuant to this Section 2.2(a). All capital contributions made pursuant to this Section 2.2(a) shall be in the form of cash unless otherwise authorized by the Board of Managers. Each Member shall cause the Board of Managers to take all such actions as are necessary or advisable to cause the additional capital contributions to be made in accordance with the Contribution Schedule to the extent set forth therein. The capital contributions required to be made pursuant to this Section 2.2(a) shall be made in the form of additional subscriptions for Value Units in respect of the Company Social Part held by such Member at such subscription price per Value Unit as set forth in the applicable resolutions authorizing any such additional subscriptions (or, if applicable, Section 2.2(b) hereof). Except as set forth in Section 2.2(b) hereof, GT Sub shall subscribe for Value Units in respect of the Class A Social Part and QVC Sub shall subscribe for Value Units in respect of the Class B Social Part. The subscription price for any Value Units in respect of any Company Social Part subscribed for and purchased pursuant to this Agreement shall be allocated between capital and surplus on the appropriate books and records of the Company as set forth in the applicable resolutions authorizing any such additional subscriptions.
(b) If at any time any Member shall fail to timely make any capital contribution to the Company which such Member is required to make under this Agreement (including, without limitation, Sections 2.1, 2.2(a) and 6.2(c) hereof) within the 15 day period provided in the Estatutos, such Member failing to make such capital contribution shall be deemed to be a 'Non-Contributing Member', the other Member of the Company shall be deemed to be a 'Contributing Member' and the Non-Contributing Member shall be deemed to have irrevocably waived its preferential rights under the Estatutos to subscribe for the additional Value Units in respect of its Company Social Part being offered to it pursuant to such capital subscription. In such event, the Contributing Member may, at its election, as a non-exclusive remedy of the Company and the Contributing Member for such failure, (A) notify the Secretary of the Board of Managers of the Company prior to the expiration of the additional 15 day period provided for in the Estatutos that it shall make the capital contribution required to be made by the Contributing Member (if not already contributed by the Contributing Member) and make the capital contribution required to be made by the Non-Contributing Member and receive an amount of Value Units in the Company Social Part corresponding to its class equal to the aggregate value of the aggregate capital contributed by such Contributing Member in respect of both such capital contributions, in each case at a subscription price per Value Unit equal to the Initial Subscription Price, (B) so long as such failure is continuing, make a loan ('Default Loan') to the Company in an amount equal to
all or any part of the amount which the Non-Contributing Member failed to contribute to the Company, plus the amount that the Contributing Member was required to contribute to the Company (which, if already paid, shall be deemed to be part of such Default Loan) or (C) not make any capital contribution or Default Loans. Any Default Loan shall bear interest from the date the proceeds of such
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Default Loan are advanced at a rate per annum equal to the prime rate publicly announced by Chase Manhattan Bank N.A. in the United States from time to time, plus 50% and shall be due on demand. The parties hereto agree that, in addition to recourse against the Company for the Default Loan and any other remedies available to the Contributing Member, the Contributing Member shall have direct recourse against the Non-Contributing Member for payment of, and such Non-Contributing Member hereby agrees to pay, the lesser of (1) the outstanding principal amount of, and accrued and unpaid interest on, such Default Loan from time to time, or (2) one-half of the original principal amount of, and accrued and unpaid interest on, such Default Loan. Any amounts paid to the Contributing Member on account of any Default Loan shall be applied first to pay accrued and unpaid interest on such Default Loan and then to the outstanding principal of such Default Loan. All costs and expenses (including reasonable attorney's fees and expenses) incurred by the Company or its Subsidiary or the Contributing Member or its Affiliates (as defined in Section 3.1 hereof) in connection with the making of any Default Loan (or the enforcement thereof) shall be reimbursed in full upon demand by the Non-Contributing Member.
(c) Except as expressly provided in Section 2.2(a) and Section 6.2(c) hereof, neither QVC, G Televisa, the Members nor any of their respective Affiliates shall have any obligation or commitment to make any further contributions to the capital of, or investment in, the Company, regardless of the needs of the Company.
Section 2.3 Company Social Parts; Ownership Percentages. (a) Except as expressly provided otherwise in the Estatutos or this Agreement (including, without limitation, the last sentence of Section 2.1(a) hereof), each of the Company Social Parts (including, without limitation, the Value Units in respect thereof) shall be identical and shall entitle the holders thereof to the same rights and privileges.
(b) Except as otherwise expressly agreed upon by each of the parties hereto or as expressly provided in Sections 2.2(b) and 5.1 hereof, at all times that the Company shall be in existence, (i) G Televisa, or a direct or indirect wholly-owned Subsidiary of G Televisa (a 'G Televisa Wholly-Owned Corporation'), shall beneficially own 100 of the Class A Social Part (including all of the Value Units in respect of the Class A Social Part) and (ii) QVC Sub shall beneficially own 100% of the outstanding Class B Social Part (including all of the Value Units in respect of the Class B Social Part). Each of the parties hereto shall not, and G Televisa and QVC each shall cause their respective Wholly-Owned Corporations (as defined below) not to, take any action or fail to take any action which would be inconsistent with the immediately preceding sentence. As used herein, (A) the term 'QVC Wholly-Owned Corporation' shall mean any direct or indirect wholly-owned Subsidiary of QVC and (B) the term
'Wholly-Owned Corporation' shall mean individually and collectively any G Televisa Wholly-Owned Corporation or any QVC Wholly-Owned Corporation.
ARTICLE III
ADDITIONAL COMMITMENTS
Section 3.1 Provision of General Overhead. (a) Subject to Section 3.1(b) hereof, in the event that the Board of Managers of the Company from time to time determines that G Televisa, QVC, or any of their respective Affiliates has fixed assets or other items that are included in the category of 'general overhead' (such fixed assets, other items or personnel are collectively referred to herein as 'Administrative Support Assets') which may be used by the Company or any of its Subsidiaries in a manner consistent with the Business Plan, G Televisa and QVC shall, and shall cause their respective Affiliates to, make available to the Company or any of its Subsidiaries such Administrative Support Assets for so long as the Board of Managers determines that the use by the Company or any of its Subsidiaries of such Administrative Support Assets is consistent with the Business Plan.
(b) G Televisa and QVC shall not, and shall cause their respective Affiliates not to, charge the Company or any of its Subsidiaries or otherwise demand payment from the Company as a result of the use by the Company or any of its Subsidiaries of any Administrative Support Assets in accordance with this Section 3.1; provided, however, if the use by the Company or any of its Subsidiaries of any
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Administrative Support Assets would require G Televisa, QVC or any of their respective Affiliates to incur any incremental out-of-pocket expense in order to satisfy the requirements of the Company or any of its Subsidiaries in its usage of such Administrative Support Assets, G Televisa, QVC and their respective Affiliates, as applicable, shall not have any obligation to make available to the Company or any of its Subsidiaries such Administrative Support Assets pursuant to Section 3.1(a) unless the Company has agreed previously to fully reimburse the entire amount of such incremental out-of-pocket expense, plus seven percent (7%) of such incremental out-of-pocket expense (it being agreed that such incremental out-of-pocket expenses shall not include any income or other taxes (including penalties), levies or other similar governmental charges (collectively, 'Taxes') imposed on or incurred by, G Televisa, QVC or any of their respective Affiliates in connection with the provision by any of them of Administrative Support Assets to the Company or any of its Subsidiaries). As used herein, the term Affiliate' of any person or entity shall mean any person or entity that is, directly or indirectly controlled by the person or entity in question, and for purposes of this definition of Affiliate, the term 'control', when used with respect to any person or entity, means the power to direct the management and policies of such person or entity, whether through the direct or indirect ownership of voting securities, by contract or otherwise.
Section 3.2 Provision of Business Operations or Services. In the event that the Board of Managers determines that G Televisa, QVC or any of their respective Affiliates have any business operations or services ('Business Operations or Services') that would be of value to the Company in conducting its
business activities (including, without limitation, inbound telemarketing or product fulfillment, but excluding any GT Television Station and GT Cable System (each as defined in Section 3.3(a) hereof) or any QVC Product (as defined in Section 3.4(b) hereof)) in a manner consistent with the Business Plan, G Televisa and QVC shall, and shall cause their respective Affiliates to, make available such Business Operations or Services to the Company or any of its Subsidiaries so that the Company or any of its Subsidiaries may utilize such Business Operations or Services as contemplated by the Board of Managers for so long as the Board of Managers of the Company considers such determination to continue to be correct; provided, however, G Televisa, QVC and their respective Affiliates shall not have any obligation to make available any Business Operations or Services, or receive any charges or payments therefor, unless the Company shall have previously agreed to pay G Televisa, QVC or such Affiliate, as applicable, the Charge Amount for such Business Operations or Services as provided below. With respect to any Business Operations or Services as to which the Company has entered into such an agreement, for each Calendar Month (as defined below), G Televisa and QVC shall, and shall cause their respective Affiliates to, charge the Company for its utilization of any Business Operations or Services an amount (the 'Charge Amount') equal to the lowest rate charged by G Televisa, QVC or any of their respective Affiliates, as the case may be, during such Calendar Month to any other customer or user of such Business Operation or Services that is not an Affiliate of G Televisa, QVC or any of their respective Affiliates, as the case may be; provided, however, that if there is no such other customer or user of such Business Operation or Services, the Charge Amount shall be the average actual per unit cost to G Televisa, QVC or any of their respective Affiliates, as the case may be, during such Calendar Month, plus seven percent (7%) of such average actual per unit cost to G Televisa, QVC or any of their respective Affiliates, as the case may be (it being agreed that the Charge Amount shall not include any Taxes imposed on, or incurred by, G Televisa, QVC or any of their respective Affiliates in connection with the provision by any of them of Business Services or Operations to the Company or any of its Subsidiaries). Within 10 days after the end of each calendar month (each such calendar month is herein referred to as a 'Calendar Month') commencing in respect of the Calendar Month ending November 30, 1993 (which for purposes hereof shall include the period from the Effective Time through November 30, 1993), G Televisa and QVC shall deliver to the Company an invoice setting forth the Charge Amount for such Calendar Month and specifying in reasonable detail the basis for calculating such Charge Amount, executed by a senior executive officer of G Televisa or QVC, as the case may be, and the Company shall pay to G Televisa, QVC, or their respective Affiliates, as the case may be (as designated in such invoice), the Charge Amount for such Calendar Month within 5 Business Days (as defined below) of its receipt of such invoice. As used herein, the term 'Business Day' shall mean a day other than
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Saturday, Sunday or other day on which commercial banks in New York City or Mexico City are authorized or required by law to close.
Section 3.3 Provision of GT Television Stations or GT Cable Systems. (a) Subject to the terms and conditions of this Section 3.3, the parties hereto contemplate that the Company shall provide at least one twenty-four hour schedule of shopping programs via satellite delivery initially
to GT Television Stations and GT Cable Systems made available to the Company or any of its Subsidiaries at G Televisa's sole selection and discretion. In the event that G Televisa consents in writing to the use by the Company or any of its Subsidiaries of any broadcast television station or cable system now or hereafter owned or operated by G Televisa or any of its Affiliates in the United Mexican States or elsewhere in the Territory (as defined in Section 6.1 hereof) (any such television station shall herein be referred to as a 'GT Television Station' and any such cable system shall herein be referred to as a 'GT Cable System'), to transmit any television shopping programs produced by the Company or any of its Subsidiaries, the Company shall be required to pay, as compensation for the use of such GT Television Station or GT Cable System by the Company or any of its Subsidiaries, an amount (the 'Compensation Amount') equal to five percent (5%) of Net Sales (as defined below); provided, however, such percentage of Net Sales shall be adjusted to an amount agreed upon in good faith between the Chief Executive Officer of G Televisa and the Chief Executive Officer of QVC if, after a period of one year following the Effective Time, the actual expense experience of the Company and its Subsidiaries in their conduct of a Television and Cable Shopping Business in the United Mexican States is substantially different from QVC's actual expense experience in its conduct of a Television and Cable Shopping Business in the United States. If the Company or any of its Subsidiaries agrees to transmit any television shopping programs produced by the Company or any of its Subsidiaries via any broadcast television station or cable system other than GT Television Station or a GT Cable System, it is acknowledged and agreed that the Company and its Subsidiaries shall be exclusively liable for the entire amount charged by such broadcast television station or cable system for such use by any of them. With respect to any Calendar Month or other period and any GT Television Station or GT Cable System, the term 'Net Sales' shall mean (A) the aggregate gross sales of the Company and its Subsidiaries for such Calendar Month or other period (which shall not include the aggregate actual shipping and handling costs charged by the Company and its Subsidiaries to their respective customers), less (B) the aggregate returns for such Calendar Month or other period of the Company and its Subsidiaries for such Calendar Month or other period, in the case of clauses (A) and (B) hereof, which are attributable to sales to the customers of the Company and its Subsidiaries through its television shopping programs residing in the coverage area served by such GT Television Station or GT Cable System, as applicable. Net Sales shall be determined on an accrual basis in accordance with generally accepted accounting principles in the United Mexican States ('Mexican GAAP'), consistently applied throughout the periods involved.
(b) With respect to each GT Television Station or GT Cable System used by the Company, the Company shall, within five Business Days after each Calendar Month, pay to G Televisa or its Affiliates, whichever owns or operates such GT Television Station or GT Cable System, the Compensation Amount for such Calendar Month applicable to such GT Television Station or GT Cable System, as the case may be.
(c) The Company shall deliver to G Televisa, no later than 60 days after each calendar year, a written report, prepared by the Independent Public Accountant (as defined in Section 4.8 hereof) in which the Independent Public Accountant confirms that the aggregate Compensation Amount paid by the Company pursuant to Section 3.3(b) hereof in respect of such calendar year complies with the requirements of Section 3.3(a) hereof.
(d) QVC and QVC Sub each hereby acknowledges and agrees that, notwithstanding anything in this Agreement to the contrary, (i) nothing in this Section 3.3 shall be construed as an obligation of, or a commitment by, G Televisa or any of its Affiliates to make available to the Company or any of its Subsidiaries any GT Television Station or GT Cable System, and (ii) whether or not G Televisa or any of its Affiliates will make available to the Company or any of its Subsidiaries, any GT Television Station or GT Cable System shall be at G Televisa's sole selection and discretion.
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Section 3.4 Provision of QVC Product. (a) If the Company or any of its Subsidiaries from time to time elects to purchase product for sale (the 'Sourced QVC Product') in its televised shopping program which is obtained from supply sources provided by, or made available to the Company or any of its Subsidiaries through QVC or any of its Affiliates, QVC shall, and shall cause its Affiliates to, cause such product to be sold to the Company or any of its Subsidiaries at the lowest price then being offered by the applicable supply source to QVC or any of its Affiliates and without any commission or other remuneration being paid or payable to QVC or any of its Affiliates in connection with, or as a result of, such sale to the Company or any of its Subsidiaries. QVC shall, and shall cause its Affiliates to, use their respective reasonable efforts to ensure that any QVC Sourced Product sold to the Company or any of its Subsidiaries pursuant to this Section 3.4(a) shall be of at least the same quality as the QVC Sourced Product purchased by QVC or its Affiliates and at no greater price than QVC or its Affiliates pay for such QVC Sourced Product.
(b) If the Company or any of its Subsidiaries from time to time elects to purchase product for sale (the 'Owned QVC Product', and collectively with Sourced QVC Product, the 'QVC Product') in its televised shopping program which is owned by QVC or any of its Affiliates, QVC shall, and shall cause its Affiliates to, charge the Company or any of its Subsidiaries for such Owned QVC Product an amount equal to (i) all shipping and handling costs and excise duties (but specifically excluding any other Taxes (including, without limitation, any income taxes) actually incurred by QVC or its Affiliates in connection with the delivery to the Company or its Subsidiaries by QVC or its Affiliates of such Owned QVC Product, plus (ii) an amount which shall be no greater than the price that QVC or such Affiliates, as the case may be, paid to the vendor for such Owned QVC Product, plus (iii) seven percent (7%) of the amount determined pursuant to clause (ii) hereof; Provided, however, that the Company and its Subsidiaries shall not have any obligation to pay to QVC or any of its Affiliates any amounts set forth in clause (i) hereof unless and until QVC shall have delivered to the Comp...
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