Form 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RG+kaOgbdb3ddiEvBVr7QTN6QeWpAcr4l3DUXhKa08xd84i6Dw+2hzSn4FHa7/M4 zHpJkrUQOtmBq+1x8nJd5A== 0001193125-04-083603.txt : 20040510 0001193125-04-083603.hdr.sgml : 20040510 20040510154820 ACCESSION NUMBER: 0001193125-04-083603 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTRAVISION COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001109116 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 954783236 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-15997 FILM NUMBER: 04793035 BUSINESS ADDRESS: STREET 1: 2425 OLYMPIC BLVD STREET 2: STE 6000 WEST CITY: SANTA MONICA STATE: CA ZIP: 90404 BUSINESS PHONE: 3104473870 MAIL ADDRESS: STREET 1: 2425 OLYMPIC BLVD STREET 2: STE 6000 WEST CITY: SANTA MONICA STATE: CA ZIP: 90404 10-Q 1 d10q.htm FORM 10-Q Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-15997

ENTRAVISION COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

95-4783236

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2425 Olympic Boulevard, Suite 6000 West

Santa Monica, California 90404

(Address of principal executive offices) (Zip Code)

(310) 447-3870

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES x NO ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨

As of May 5, 2004, there were 59,502,343 shares, $0.0001 par value per share, of the registrant’s Class A common stock outstanding and 27,678,533 shares, $0.0001 par value per share, of the registrant’s Class B common stock outstanding.

ENTRAVISION COMMUNICATIONS CORPORATION

TABLE OF CONTENTS


		Page Number

	PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

	CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2004 (UNAUDITED) AND DECEMBER 31, 2003	4

	CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003	5

	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003	6

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22

ITEM 4.	CONTROLS AND PROCEDURES	23

	PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	24

ITEM 2.	CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES	24

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	24

ITEM 5.	OTHER INFORMATION	24

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K	24

Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

•

risks related to our history of operating losses, our substantial indebtedness or our ability to raise capital;

•

provisions of the agreements governing our debt instruments that may restrict the operation of our business;

•

cancellations or reductions of advertising, whether due to a general economic downturn or otherwise;

•

our relationship with Univision Communications Inc.; and

•

industry-wide market factors and regulatory and other developments affecting our operations.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2003.

PART I

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	March 31, 2004			December 31, 2003
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	13,348		$	19,806
Trade receivables (including related parties of $575 and $795), net of allowance for doubtful
accounts of $5,114 and $4,749		42,245			49,518
Assets held for sale		33,662			34,683
Prepaid expenses and other current assets (including related parties of $1,061 and $1,650)		5,902			5,823

Total current assets		95,157			109,830
Property and equipment, net		161,885			170,624
Intangible assets subject to amortization, net		140,327			144,903
Intangible assets not subject to amortization		862,515			862,670
Goodwill		379,545			379,545
Other assets (including related parties of $259 and $277)		17,944			19,396

	$	1,657,373		$	1,686,968

LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	1,186		$	1,191
Advances payable, related parties		118			118
Accounts payable and accrued expenses (including related parties of $2,264 and $2,261)		21,856			26,568

Total current liabilities		23,160			27,877
Notes payable, less current maturities		358,392			376,424
Other long-term liabilities		687			397
Deferred taxes		121,689			124,000

Total liabilities		503,928			528,698

Commitments and contingencies
Series A mandatorily redeemable convertible preferred stock, $0.0001 par value, 11,000,000 shares authorized; shares issued and outstanding 2004 and 2003 5,865,102 (liquidation value of $121,390 and $118,865)		115,300			112,269

Stockholders’ equity
Preferred stock, $0.0001 par value, 39,000,000 shares authorized; shares issued and outstanding Series U convertible preferred stock, 2004 and 2003 369,266		—			—
Class A common stock, $0.0001 par value, 260,000,000 shares authorized; shares issued and outstanding 2004 59,487,943; 2003 59,434,048		6			6
Class B common stock, $0.0001 par value, 40,000,000 shares authorized; shares issued and outstanding 2004 and 2003 27,678,533		3			3
Class C common stock, $0.0001 par value, 25,000,000 shares authorized; no shares issued or outstanding 2004 and 2003		—			—
Additional paid-in capital		1,183,378			1,182,978
Accumulated deficit		(145,242	)		(136,986	)

		1,038,145			1,046,001
Treasury stock, Class A common stock, $0.0001 par value, 2004 and 2003 5,101 shares		—			—

Total stockholders’ equity		1,038,145			1,046,001

	$	1,657,373		$	1,686,968

See Notes to Consolidated Financial Statements

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)


	Three-Month Period Ended March 31,
	2004			2003
				(As reclassified Note 1)
Net revenue (including related parties of $262 and $303)	$	52,048		$	48,270

Expenses:
Direct operating expenses (including related parties of $2,260 and $2,298)		26,002			24,565
Selling, general and administrative expenses		12,658			11,817
Corporate expenses (including related party reimbursements of $0 and $1,500) (Note 2)		4,013			2,426
Gain on sale of assets		(1,004	)		—
Non-cash stock-based compensation (includes direct operating of $0 and $68; selling, general and administrative of $0 and $89; and corporate of $(40) and $145)		(40	)		302
Depreciation and amortization (includes direct operating of $9,346 and $9,075; selling, general and administrative of $1,158 and $1,434; and corporate of $283 and $345)		10,787			10,854

		52,416			49,964

Operating loss		(368	)		(1,694	)
Interest expense		(6,872	)		(6,311	)
Interest income		90			15

Loss before income taxes		(7,150	)		(7,990	)
Income tax benefit		2,036			1,652

Loss before equity in net loss of nonconsolidated affiliates		(5,114	)		(6,338	)
Equity in net loss of nonconsolidated affiliates		(111	)		(49	)

Loss before discontinued operations		(5,225	)		(6,387	)
Loss from discontinued operations, net of tax $0 and $8 (Note 3)		—			(265	)

Net loss		(5,225	)		(6,652	)
Accretion of preferred stock redemption value		(3,031	)		(2,724	)

Net loss applicable to common stockholders	$	(8,256	)	$	(9,376	)

Net loss per share from continuing operations applicable to common stockholders	$	(0.09	)	$	(0.08	)
Net income per share from discontinued operations		—			(0.00	)

Net loss per share applicable to common stockholders, basic and diluted	$	(0.09	)	$	(0.08	)

Weighted average common shares outstanding, basic and diluted		87,140,507			119,985,892

See Notes to Consolidated Financial Statements

ENTRAVISION COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Three-Month Period Ended March 31,
	2004			2003
				(As reclassified Note 1)
Cash flows from operating activities:
Net loss	$	(5,225	)	$	(6,652	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		10,787			10,854
Deferred income taxes		(2,311	)		(2,200	)
Amortization of debt issue costs		816			503
Amortization of syndication contracts		75			151
Equity in net loss of nonconsolidated affiliates		111			49
Non-cash stock-based compensation		(40	)		302
Gain on sale of media properties and other assets		(1,004	)		—
Changes in assets and liabilities, net of effect of acquisitions and dispositions:
Decrease in accounts receivable		7,319			3,542
Increase in prepaid expenses and other assets		(362	)		(965	)
Decrease in accounts payable, accrued expenses and other liabilities		(4,594	)		(4,767	)
Effect of discontinued operations		—			185

Net cash provided by operating activities		5,572			1,002

Cash flows from investing activities:
Proceeds from sale of property and equipment and intangibles		8,168			—
Purchases of property and equipment and intangibles		(3,396	)		(2,989	)
Distribution from nonconsolidated affiliate		300			—
Refunds (deposits) for acquisitions		501			(3,015	)

Net cash provided by (used in) investing activities		5,573			(6,004	)

Cash flows from financing activities:
Proceeds from issuance of common stock		442			432
Principal payments on notes payable		(52,036	)		(108	)
Proceeds from borrowing on notes payable		34,000			—
Payments of deferred debt and offering costs		(9	)		(8	)

Net cash provided by (used in) financing activities		(17,603	)		316

Net decrease in cash and cash equivalents		(6,458	)		(4,686	)
Cash and cash equivalents:
Beginning		19,806			12,201

Ending	$	13,348		$	7,515

Supplemental disclosures of cash flow information:
Cash payments for:
Interest	$	10,610		$	10,126

Income taxes	$	275		$	548

Supplemental disclosures of non-cash investing and financing activities:
Property and equipment acquired under capital lease obligations and included in accounts payable	$	285		$	156

See Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2004

1. BASIS OF PRESENTATION

Presentation

The condensed consolidated financial statements included herein have been prepared by Entravision Communications Corporation, or the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2003 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2004 or any other future period.

Reclassification of discontinued operations

On July 3, 2003, the Company sold substantially all of the assets and certain specified liabilities related to its publishing segment to CPK NYC, LLC for aggregate consideration of approximately $19.9 million. The Company’s consolidated financial statements for the three-months ended March 31, 2003 and related disclosures have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144 (see Note 3).

2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Related party

Univision Communications Inc. currently owns approximately 28% of the Company’s common stock on a fully converted basis. In connection with Univision’s merger with Hispanic Broadcasting Corporation, or HBC, in September 2003, Univision entered into an agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to sell enough of its holdings of the Company’s stock so that its ownership of the Company will not exceed 15% by March 26, 2006 and 10% by March 26, 2009.

Also pursuant to Univision’s agreement with DOJ, in September 2003 Univision exchanged all 36,926,623 of its shares of the Company’s Class A and Class C common stock that it previously owned (14,943,231 shares of Class A common stock and 21,983,392 shares of Class C common stock) for 369,266 shares of the Company’s new Series U preferred stock. This exchange did not change Univision’s overall equity interest in the Company, nor did it have any impact on the Company’s existing television station affiliation agreements with Univision. The Series U preferred stock has limited voting rights, does not include the right to elect directors and carries a nominal liquidation preference at its par value over common stockholders. Each share of Series U preferred stock is automatically convertible into 100 shares (subject to adjustment for stock splits, dividends or combinations) of the Company’s Class A common stock in connection with any transfer to a third party that is not an affiliate of Univision. The Series U preferred stock is also mandatorily convertible into common stock when and if the Company creates a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than the nominal liquidation preference). The Company currently anticipates creating such a new class of common stock during the second quarter of 2004, subject to obtaining stockholder approval at its 2004 Annual Meeting of Stockholders scheduled to be held on May 26, 2004.

The Company received reimbursements from Univision for expenses the Company incurred in connection with Univision’s merger with HBC in the aggregate amount of $1.5 million during the three-month period ended March 31, 2003.

New accounting pronouncement

In the first quarter, the Company adopted Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities” (FIN 46) with no effect on the Company’s financial statements.

Stock-based compensation

Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock option plans. As allowed by SFAS No. 123, the Company has elected to continue to account for its employee stock-based compensation plan using the intrinsic value method in accordance with Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations, which does not require compensation to be recorded if the consideration to be received is at least equal to the fair value of the common stock to be issued at the measurement date. Under the requirements of SFAS No. 123, nonemployee stock-based transactions require compensation to be recorded based on the fair value of the securities issued or the services received, whichever is more reliably measurable.

The following table illustrates the effect on net loss and net loss per share had employee compensation costs for the stock-based compensation plan been determined based on grant date fair values of awards under the provisions of SFAS No. 123, for the three-month periods ended March 31, 2004 and 2003 (unaudited; in thousands, except per share data):


	Three-Month Period Ended March 31,
	2004			2003
Net loss applicable to common stockholders
As reported	$	(8,256	)	$	(9,376	)
Deduct total stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects		(2,660	)		(2,078	)

Pro forma	$	(10,916	)	$	(11,454	)

Net loss per share applicable to common stockholders, basic and diluted
As reported	$	(0.09	)	$	(0.08	)

Pro forma	$	(0.13	)	$	(0.10	)

The Company granted 1,960,000 stock options for employees and directors and 78,000 stock options for non-employees during the three-month period ended March 31, 2004. These stock options have an average exercise price of $10.27 and an average fair value of $4.80.

Loss per share

Basic loss per share is computed as net loss less accretion of the discount which includes accrued dividends on Series A mandatorily redeemable convertible preferred stock divided by the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilution, if any, that could occur from shares issuable through stock options and convertible securities.

For the three-month periods ended March 31, 2004 and 2003, all dilutive securities have been excluded as their inclusion would have had an anti-dilutive effect on loss per share. For the three-months ended March 31, 2004, the securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not anti-dilutive is as follows: 528,466 equivalent shares of stock options, 36,926,600 equivalent shares of Series U convertible preferred stock and 5,865,102 equivalent shares of Series A mandatorily redeemable convertible preferred stock.

As discussed above, the Series U preferred stock is mandatorily convertible into common stock when and if the Company creates a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than the nominal liquidation preference). The Company currently intends to create such a new class of common stock in connection with its 2004 Annual Meeting of Stockholders. If the Series U preferred stock had been treated as common stock outstanding, the weighted average common shares outstanding, basic and diluted, would have been 124,067,130 for the three-month period ended March 31, 2004. The net loss per share, basic and diluted, would have changed from $(0.09) to $(0.07) for the three-month period ended March 31, 2004.

Disposition of assets

In February 2004, the Company sold the assets of radio station KZFO-FM in the Fresno, California market to Univision for approximately $8.0 million.

Subsequent event

The Company recently entered into a Share Repurchase Agreement with TSG Capital Fund III, L.P., the holder of all of the Company’s outstanding Series A mandatorily redeemable convertible preferred stock, or Series A preferred stock. Under the Share Repurchase Agreement, the Company agreed to purchase the Series A preferred stock from TSG Capital for a cash price that may vary depending on when the purchase closes. If the purchase closes by May 27, 2004, the price will be $126.2 million. If the purchase closes after May 27, 2004 but on or before June 28, 2004, the price will be $126.9 million. If the purchase closes after June 28, 2004 but on or before July 29, 2004, the price will be $127.7 million. If the purchase does not close by July 29, 2004, the Share Repurchase Agreement will terminate. In addition, the closing of the repurchase is conditioned upon the receipt of all necessary bank consents and the completion, on terms acceptable to the Company in its sole discretion, of an offering of preferred stock. As of March 31, 2004, the aggregate liquidation preference of the Series A preferred stock was $121.4 million. The amount by which the repurchase price exceeds the carrying value of the Series A preferred stock will affect net income available to common stockholders and the related earnings per share.

Pending transactions

In December 2003, the Company entered into a definitive agreement to sell radio station KRVA-AM in the Dallas, Texas market for approximately $3.5 million in cash. This disposition is currently expected to close in the second quarter of 2004.

In January 2004, the Company entered into definitive agreements to sell radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $29.0 million in cash. These dispositions are currently expected to close in the second quarter of 2004.

Summarized financial information regarding the Company’s assets held for sale in the Fresno, California, Dallas, Texas, Chicago, Illinois markets and land in the San Jose, California market (which has a carrying value and fair market value of $5.2 million) is as follows (in thousands):

Balance Sheet data as of the dates indicated consists of (in thousands):


	March 31, 2004		December 31, 2003
Property and equipment, net	$	7,219	$	2,721
Favorable lease rights subject to amortization		190		194
FCC licenses not subject to amortization		26,253		31,768

Total assets held for sale	$	33,662	$	34,683

None of the 2004 dispositions or planned dispositions qualifies as a sale of a business, nor do they qualify for discontinued operations presentation as they are not a component of an entity.

3. DISCONTINUED OPERATIONS

On July 3, 2003, the Company sold substantially all of the assets and certain specified liabilities related to its publishing segment to CPK NYC, LLC for aggregate consideration of approximately $19.9 million. In the sale, the Company received $18.0 million in cash and an unsecured, subordinated promissory note in the principal amount of $1.9 million. The note bears interest at a rate of 8.0% per annum compounded annually, and all principal and accrued interest on the note are due and payable on July 3, 2008. The Company used the cash proceeds from this disposition to repay a portion of the indebtedness then outstanding under its bank credit facility.

The cash portion of the purchase price is subject to adjustment based on the working capital of the publishing segment as of the closing date. The Company currently anticipates that this adjustment will be finalized during the second or third quarter of 2004 and that such adjustment will not have a material effect on the Company’s consolidated financial statements.

As a result of the Company’s decision to sell its publishing segment, the Company’s consolidated financial statements for the three-month period ended March 31, 2003 and related disclosures have been adjusted to reflect the publishing operations as discontinued operations in accordance with SFAS No. 144. The Company has not made any allocation of interest expense or corporate expense to discontinued operations.

Summarized Statement of Operations data for the discontinued publishing operations is as follows (unaudited, in thousands):


	Three-Month Period Ended March 31,
	2004		2003
Net revenue	$	—	$	4,758
Loss from discontinued operations		—		(265	)

4. SEGMENT INFORMATION

The Company operates in three reportable segments: television broadcasting, radio broadcasting and outdoor advertising.

Television broadcasting

The Company owns and/or operates 45 primary television stations located primarily in the southwestern United States, consisting primarily of Univision affiliates.

Radio broadcasting

The Company owns and/or operates 57 radio stations (42 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas.

Outdoor advertising

The Company owns approximately 10,900 outdoor advertising faces located primarily in Los Angeles and New York.

Separate financial data for each of the Company’s operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses and non-cash stock-based compensation. There were no significant sources of revenue generated outside the United States during the three-month periods ended March 31, 2004 and 2003. The Company evaluates the performance of its operating segments based on the following (unaudited, in thousands):


	Three-Month Period Ended March 31,						% Change
	2004			2003			% Change
Net Revenue
Television	$	27,578		$	25,479		8	%
Radio		18,319			16,259		13	%
Outdoor		6,151			6,532		-6	%

Consolidated		52,048			48,270		8	%

Direct operating expenses
Television		12,643			11,831		7	%
Radio		8,107			7,798		4	%
Outdoor		5,252			4,936		6	%

Consolidated		26,002			24,565		6	%

Selling, general and administrative expenses
Television		5,513			5,798		-5	%
Radio		5,641			4,956		14	%
Outdoor		1,504			1,063		41	%

Consolidated		12,658			11,817		7	%

Depreciation and amortization
Television		3,580			3,805		-6	%
Radio		1,975			1,820		9	%
Outdoor		5,232			5,229		0	%

Consolidated		10,787			10,854		-1	%

Segment operating profit (loss)
Television		5,842			4,045		44	%
Radio		2,596			1,685		54	%
Outdoor		(5,837	)		(4,696	)	24	%

Consolidated		2,601			1,034		152	%

Corporate expenses		4,013			2,426		65	%
Gain on sale of assets		(1,004	)		—		*
Non-cash stock-based compensation		(40	)		302		*

Operating loss	$	(368	)	$	(1,694	)	-78	%

Total assets:
Television	$	377,130		$	384,321
Radio		1,018,308			918,129
Outdoor		228,273			250,451
Assets held for sale		33,662			7,486

Consolidated	$	1,657,373		$	1,560,387

Capital Expenditures
Television	$	1,763		$	2,144
Radio		1,093			727
Outdoor		300			73

Consolidated	$	3,156		$	2,944

*	Percentage not meaningful.

5. LITIGATION

The Company is subject to various outstanding claims and other legal proceedings that arose in the ordinary course of business. The Company is a party to one action, which management does not believe is material, from plaintiffs seeking unspecified damages. An accrual has been made in the consolidated financial statements as necessary to provide for management’s best estimate of the probable liability associated with this action. While the Company’s legal counsel cannot express an opinion on this matter, management believes that any liability of the Company that may arise out of or with respect to this matter will not materially adversely affect the financial position, results of operations or cash flows of the Company.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a diversified Spanish-language media company with a unique portfolio of television, radio and outdoor advertising assets, reaching approximately 80% of all Hispanics in the United States. We operate in three reportable segments: television broadcasting, radio broadcasting and outdoor advertising. Our net revenue for the three-month period ended March 31, 2004 was $52 million. Of that amount, revenue generated by our television segment accounted for 53%, revenue generated by our radio segment accounted for 35% and revenue generated by our outdoor segment accounted for 12%.

As of the date of filing this report, we own and/or operate 45 primary television stations that are located primarily in the southwestern United States. We own and/or operate 57 radio stations (42 FM and 15 AM) located primarily in Arizona, California, Colorado, Florida, Illinois, Nevada, New Mexico and Texas. Our outdoor advertising segment consists of approximately 10,900 advertising faces located primarily in Los Angeles and New York. The comparability of our results between the three-month periods ended March 31, 2004 and 2003 is significantly affected by acquisitions and dispositions.

We generate revenue from sales of national and local advertising time on television and radio stations and advertising on our billboards. Advertising rates are, in large part, based on each medium’s ability to attract audiences in demographic groups targeted by advertisers. We recognize advertising revenue when commercials are broadcast and when outdoor advertising services are provided. We do not obtain long-term commitments from our advertisers and, consequently, they may cancel, reduce or postpone orders without penalties. We pay commissions to agencies for local, regional and national advertising. For contracts directly with agencies, we record commissions as deductions from gross revenue. Seasonal revenue fluctuations are common in the broadcasting and outdoor advertising industries and are due primarily to variations in advertising expenditures by both local and national advertisers.

Our primary expenses are employee compensation, including commissions paid to our sales staffs and our national representative firms, marketing, promotion and selling, technical, local programming, engineering and general and administrative. Our local programming costs for television consist of costs related to producing a local newscast in most of our markets.

Highlights

Despite the war with Iraq and a relatively weak economic environment, we experienced growth for the year ended December 31, 2003, with net revenue of $238 million. Of that amount, revenue generated by our television segment accounted for 51%, revenue generated by our radio segment accounted for 36% and revenue generated by our outdoor segment accounted for 13%.

We made several key acquisitions during 2003, most notably the three FM radio stations in the Los Angeles market that we acquired from Big City Radio, Inc. Those stations were successfully integrated into our existing Los Angeles radio operations, and by mid-year we had already exceeded the Arbitron ratings that we originally had only hoped to reach by year-end in the market. Our radio division as a whole also posted strong results despite the departure from our company of a popular Spanish-language radio personality, and we successfully moved the headquarters of our radio network from Campbell, California to Los Angeles, the nation’s largest Hispanic market and the heart of the U.S. entertainment industry.

Consistent with our strategy of focusing on core media assets, we completed the sale of our publishing operations in July 2003. We also finished the year with a ratio of net debt (which we define as total debt less cash exceeding $5 million) to EBITDA as adjusted of 5.4 to 1, despite our acquisition of the Los Angeles radio assets earlier in the year. In addition, we made improvements in managing our expenses in 2003 by completing a rigorous budgeting process to reduce operating costs and overhead.

On the other hand, there were factors that limited our growth in 2003, and which represent both challenges and opportunities for the current year. Foremost among these factors was the weak economy for most of 2003, but we are encouraged by the national recovery that appeared to take hold during the later part of 2003. We were also relatively disappointed by the performance by our outdoor segment in 2003. We have responded to this challenge by making high-level changes in our outdoor management and sales staff, and we intend to monitor developments closely during this transitional period. In addition, although we experienced significant ratings gains in the Los Angeles radio market during 2003, one of our key goals for 2004 is to accelerate revenue growth in that market commensurate with our ratings success.

Dispositions

In February 2004, we sold the assets of radio station KZFO-FM in the Fresno, California market to Univision for approximately $8.0 million.

In December 2003, we entered into a definitive agreement to sell radio station KRVA-AM in the Dallas, Texas market for approximately $3.5 million in cash. We currently expect this disposition to close in the second quarter of 2004.

In January 2004, we entered into definitive agreements to sell radio stations WNDZ-AM, WRZA-FM and WZCH-FM in the Chicago, Illinois market for an aggregate amount of approximately $29.0 million in cash. We currently expect these dispositions to close in the second quarter of 2004.

Relationship with Univision

Univision currently owns approximately 28% of our common stock on a fully converted basis. In connection with its merger with Hispanic Broadcasting Corporation in September 2003, Univision entered into an agreement with the U.S. Department of Justice, or DOJ, pursuant to which Univision agreed, among other things, to sell enough of its holdings of our stock so that its ownership of our company will not exceed 15% by March 26, 2006 and 10% by March 26, 2009.

Also pursuant to Univision’s agreement with DOJ, in September 2003 Univision exchanged all of its shares of our Class A and Class C common stock that it previously owned for shares of our new Series U preferred stock. This exchange did not change Univision’s overall equity interest in our company, nor did it have any impact on our existing television station affiliation agreements with Univision. The Series U preferred stock has limited voting rights, does not include the right to elect directors and is automatically convertible into shares of our Class A common stock in connection with any transfer to a third party that is not an affiliate of Univision. The Series U preferred stock is also mandatorily convertible into 36,926,600 shares of common stock when and if we create a new class of common stock that generally has the same rights, preferences, privileges and restrictions as the Series U preferred stock (other than the nominal liquidation preference). We anticipate creating such a new class of common stock during the second quarter of 2004, subject to obtaining stockholder approval at our 2004 Annual Meeting of Stockholders scheduled to be held on May 26, 2004.

Three-Month Periods Ended March 31, 2004 and 2003 (Unaudited)

The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2004 and 2003 (in thousands):


	Three-Month Period Ended March 31,
	2004			2003			% Change
Statement of operations data:
Net revenue	$	52,048		$	48,270		8	%
Direct operating expenses		26,002			24,565		6	%
Selling, general and administrative expenses		12,658			11,817		7	%
Corporate expenses		4,013			2,426		65	%
Gain on sale of assets		(1,004	)		—		*
Non-cash stock-based compensation		(40	)		302		*
Depreciation and amortization		10,787			10,854		-1	%

		52,416			49,964		5	%
Operating loss		(368	)		(1,694	)	-78	%
Interest expense		(6,872	)		(6,311	)	9	%
Interest income		90			15		500	%

Loss before income taxes		(7,150	)		(7,990	)	-11	%
Income tax benefit		2,036			1,652		23	%

Loss before equity in net loss of nonconsolidated affiliates		(5,114	)		(6,338	)	-19	%
Equity in net loss of nonconsolidated affiliates		(111	)		(49	)	127	%

Loss before discontinued operations		(5,225	)		(6,387	)	-18	%
Loss from discontinued operations		—			(265	)	-100	%

Net loss	$	(5,225	)	$	(6,652	)	-21	%

Other Data:
Broadcast cash flow (1)	$	13,388		$	11,888		13	%
EBITDA as adjusted (adjusted for non-cash stock-based compensation) (1)	$	9,375		$	9,462		-1	%
Cash flows provided by operating activities	$	5,872		$	1,002		486	%
Cash flows provided by (used in) investing activities	$	5,273		$	(6,004	)	*
Cash flows provided by (used in) financing activities	$	(17,603	)	$	316		*
Capital asset and intangible expenditures	$	3,396		$	2,989		14	%

* Percentage not meaningful.

(1)

Broadcast cash flow means operating loss before corporate expenses, gain on sale of assets, depreciation and amortization and non-cash stock-based compensation. EBITDA as adjusted means broadcast cash flow less corporate expenses. We use the term EBITDA as adjusted because that measure does not include non-cash stock-based compensation. We evaluate and project the liquidity and cash flows of our business using several measures, including broadcast cash flow and EBITDA as adjusted. We consider these measures as important indicators of liquidity relating to our operations, as they eliminate the effects of non-cash gain on sale of assets, non-cash depreciation and amortization and non-cash stock-based compensation awards. We use these measures to evaluate liquidity and cash flow improvement from year to year as they eliminate non-cash expense items. We believe that our investors should use these measures because they may provide a better comparability of our liquidity to that of our competitors.

Our calculation of EBITDA as adjusted included herein is substantially similar to the measures used in the financial covenants included in our bank credit facility and in the indenture governing our senior subordinated notes. In those instruments, EBITDA as adjusted is referred to as “operating cash flow” and “consolidated cash flow,” respectively. Under our bank credit facility as currently amended, we cannot incur additional indebtedness if the incurrence of such indebtedness would result in our ratio of net debt to operating cash flow having exceeded 6.5 to 1 on a pro forma basis for the prior full four quarters. Under the indenture, the corresponding ratio of net indebtedness to consolidated cash flow cannot exceed 7.1 to 1 on the same basis. The actual ratios of net indebtedness to each of operating cash flow and consolidated cash flow as of March 31, 2004 and 2003 were 5.4 to 1 and 5.3 to 1, respectively. We entered into the bank credit facility in September 2000 and issued our senior subordinated notes in March 2002, so we were not subject to the same calculations and covenants in prior years. For consistency of presentation, however, the foregoing historical ratios assume that our current definitions had been applied for all periods.

performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. In addition, our definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

Broadcast cash flow and EBITDA as adjusted are non-GAAP measures. The most directly comparable GAAP financial measure to each of broadcast cash flow and EBITDA as adjusted is net loss. A reconciliation of these non-GAAP measures to net loss follows (unaudited; in thousands):


	Three-Month Period Ended March 31,
	2004			2003
Broadcast cash flow	$	13,388		$	11,888
Corporate expenses		4,013			2,426

EBITDA as adjusted		9,375			9,462
Gain on sale of assets		(1,004	)		—
Non-cash stock-based compensation		(40	)		302
Depreciation and amortization		10,787			10,854

Operating loss		(368	)		(1,694	)
Interest expense		(6,872	)		(6,311	)
Interest income		90			15

Loss before income taxes		(7,150	)		(7,990	)
Income tax benefit		2,036			1,652

Loss before equity in net loss of nonconsolidated affiliates		(5,114	)		(6,338	)
Equity in net loss of nonconsolidated affiliates		(111	)		(49	)

Loss before discontinued operations		(5,225	)		(6,387	)
Loss from discontinued operations		—			(265	)

Net loss	$	(5,225	)	$	(6,652	)

Consolidated Operations

Net Revenue. Net revenue increased to $52.0 million for the three-month period ended March 31, 2004 from $48.3 million for the three-month period ended March 31, 2003, an increase of $3.7 million. The overall increase came from our television and radio segments, which together accounted for an increase of $4.1 million. The increase from these segments was attributable to increased advertising sold (referred to as “inventory” in our industry), increased rates for that inventory and increased revenue due to a full three-month period of operations of our 2003 acquisitions. The overall increase in net revenue was partially offset by a decrease in revenue from our outdoor segment of $0.4 million.

We currently anticipate that the number of advertisers purchasing Spanish-language advertising will continue to rise and will result in greater demand for our inventory. We expect that this increased demand will, in turn, allow us to increase our rates, resulting in continued increases in net revenue in future periods.

Direct Operating Expenses. Direct operating expenses increased to $26.0 million for the three-month period ended March 31, 2004 from $24.6 million for the three-month period ended March 31, 2003, an increase of $1.4 million. The overall increase came primarily from our television and radio segments, which together accounted for $1.1 million of the increase. The increase from these segments was primarily attributable to an increase in national representation fees, an increase in ratings services expenses, an increase in news costs due to the addition or expansion of newscasts and a full three-month period of operations of our 2003 acquisitions. The overall increase also came from an increase in outdoor direct operating expenses, which accounted for $0.3 million of the overall increase. As a percentage of net revenue, direct operating expenses decreased to 50% for the three-month period ended March 31, 2004 from 51% for the three-month period ended March 31, 2003. Direct operating expenses as a percentage of net revenue decreased because direct operating expense increases were outpaced by higher increases in net revenue.

We currently anticipate that, as our net revenue increases in future periods, our direct operating expenses correspondingly will continue to increase. However, on a long-term basis, we expect that net revenue increases will outpace direct operating expense increases such that direct operating expenses as a percentage of net revenue will decrease in future periods.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $12.7 million for the three-month period ended March 31, 2004 from $11.8 million for the three-month period ended March 31, 2003, an increase of $0.9 million. The overall increase came primarily from an increase in outdoor selling, general and administrative expenses, which accounted for $0.5 million of the overall increase. The increase from this segment was primarily attributable to severance amounts paid to the former president of our outdoor division. The overall increase also came from our television and radio segments, which

together accounted for $0.4 million of the increase. The increase from these segments was primarily attributable to an increase in insurance costs, an increase in rent expense and a full three-month period of operations of our 2003 acquisitions. As a percentage of net revenue, selling, general and administrative expenses remained unchanged at 24% for each of the three-month periods ended March 31, 2004 and 2003.

On a long-term basis, although we currently anticipate that selling, general and administrative expenses will increase in future periods, we expect that net revenue increases will outpace selling, general and administrative expense increases such that selling, general and administrative expenses as a percentage of net revenue will decrease in future periods.

Corporate Expenses. Corporate expenses increased to $4.0 million for the three-month period ended March 31, 2004 from $2.4 million for the three-month period ended March 31, 2003, an increase of $1.6 million. The increase was primarily attributable to a $1.5 million reimbursement from Univision in the first quarter of 2003 (offset by $0.3 million of Univision-related expenses in the first quarter of 2003) for legal and other costs associated with the third-party information request that we received in connection with the merger between Univision and Hispanic Broadcasting Corporation. The increase was also attributable to higher legal expenses and wages. As a percentage of net revenue, corporate expenses increased to 8% for the three-month period ended March 31, 2004 from 5% for the three-month period ended March 31, 2003. Excluding the prior year Univision reimbursement and related expenses, corporate expenses as a percentage of net revenue remained unchanged at 8% for each of the three-month periods ended March 31, 2004 and 2003.

We currently anticipate that corporate expenses will increase in future periods, primarily due to higher accounting, legal and other costs associated with our compliance with the Sarbanes-Oxley Act of 2002. Nevertheless, we expect that these increases will be outpaced by net revenue increases such that corporate expenses as a percentage of net revenue will decrease in future periods.

Gain on Sale of Assets. Gain on sale of assets was $1.0 million for the three-month period ended March 31, 2004. The gain was primarily due to the sale of radio station KZFO-FM in Fresno, California.

Depreciation and Amortization. Depreciation and amortization decreased to $10.8 million for the three-month period ended March 31, 2004 from $10.9 million for the three-month period ended March 31, 2003, a decrease of $0.1 million.

Non-Cash Stock-Based Compensation. Non-cash stock-based compensation decreased to $0 for the three-month period ended March 31, 2004 from $0.3 million for the three-month period ended March 31, 2003, a decrease of $0.3 million. Non-cash stock-based compensation consists primarily of compensation expense relating to restricted and unrestricted stock awards granted to our employees during the second quarter of 2000. As of May 2003, all non-cash compensation expense related to the restricted and unrestricted stock awards made in 2000 has been fully recognized. However, there will continue to be non-cash stock-based compensation costs in the future for any equity instruments that have been or may be granted to non-employees.

Operating Loss. As a result of the above factors, operating loss decreased to $0.4 million for the three-month period ended March 31, 2004 from $1.7 million for the three-month period ended March 31, 2003, a decrease of $1.3 million.

Interest Expense. Interest expense increased to $6.9 million for the three-month period ended March 31, 2004 from $6.3 million for the three-month period ended March 31, 2003, an increase of $0.6 million. The overall increase was primarily attributable to $100 million of additional borrowings under our bank credit facility in April 2003 to fund the cash portion of the purchase price for the three radio stations we acquired from Big City Radio. The increase was partially offset by a reduction of indebtedness paid from the proceeds from the disposal of our publishing operations in July 2003 and from cash flow generated from operations.

Income Tax Benefit. Our expected tax rate is approximately 40% of pre-tax income or loss, adjusted for permanent tax differences. For the years ended December 31, 2003 and 2002, the tax benefit was less than the expected 40% of the pre-tax loss because of the non-deductible portion of certain items, including non-cash stock-based compensation for financial statement purposes that will not be deductible for tax purposes, state taxes, foreign taxes, the expected disallowance of state net operating loss carryforward amounts and meals and entertainment. We currently have approximately $128 million in net operating loss carryforwards expiring through 2023 that we expect will be utilized prior to their expiration.

Loss Before Discontinued Operations. As a result of the above factors, loss before discontinued operations decreased to $5.2 million for the three-month period ended March 31, 2004 from $6.4 million for the three-month period ended March 31, 2003, a decrease of $1.2 million.

Segment Operations

Television

Net Revenue. Net revenue in our television segment increased to $27.6 million for the three-month period ended March 31, 2004 from $25.5 million for the three-month period ended March 31, 2003, an increase of $2.1 million. Of the overall increase, $1.9 million was attributable to our Univision stations and $0.2 million was attributable to our other stations. The overall increase was primarily attributable to an increase in both local and national advertising sales due to a combination of an increase in rates and inventory sold.

Direct Operating Expenses. Direct operating expenses in our television segment increased to $12.6 million for the three-month period ended March 31, 2004 from $11.8 million for the three-month period ended March 31, 2003, an increase of $0.8 million. The increase was primarily attributable to an increase in national representation fees associated with the increase in net revenue, an increase in the cost of ratings services and an increase in news costs due to the addition or expansion of newscasts in the San Diego, Santa Barbara and Boston markets.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment decreased to $5.5 million for the three-month period ended March 31, 2004 from $5.8 million for the three-month period ended March 31, 2003, a decrease of $0.3 million. The decrease was primarily attributable to operational improvements of our TeleFutura stations.

Radio

Net Revenue. Net revenue in our radio segment increased to $18.3 million for the three-month period ended March 31, 2004 from $16.3 million for the three-month period ended March 31, 2003, an increase of $2.0 million. The increase was primarily attributable to a combination of an increase in rates and inventory sold by Lotus/Entravision Reps LLC, as well as revenue associated with a full three-month period of operations of our 2003 acquisitions. Lotus/Entravision Reps is a joint venture we entered into in August 2001 with Lotus Hispanic Reps Corp.

Direct Operating Expenses. Direct operating expenses in our radio segment increased to $8.1 million for the three-month period ended March 31, 2004 from $7.8 million for the three-month period ended March 31, 2003, an increase of $0.3 million. The increase was primarily attributable to an increase in commissions and national representation fees associated with the increase in net revenue and a full three-month period of operations of our 2003 acquisitions.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our radio segment increased to $5.6 million for the three-month period ended March 31, 2004 from $5.0 million for the three-month period ended March 31, 2003, an increase of $0.6 million. The increase was primarily attributable to an increase in salaries, increase in rent expense and a full three-month period of operations of our 2003 acquisitions.

Outdoor

Net Revenue. Net revenue in our outdoor segment decreased to $6.2 million for the three-month period ended March 31, 2004 from $6.5 million for the three-month period ended March 31, 2003, a decrease of $0.3 million. The decrease was attributable to a decrease in national advertising sales, which was partially offset by an increase in local advertising sales.

We currently anticipate that net revenue from our outdoor segment will continue to be flat in the short term primarily due to weakened demand in our Los Angeles market. In the latter half of 2003, however, we currently anticipate moderate increases in net revenue from our outdoor segment.

Direct Operating Expenses. Direct operating expenses in our outdoor segment increased to $5.3 million for the three-month period ended March 31, 2004 from $4.9 million for the three-month period ended March 31, 2003, an increase of $0.4 million. The increase was primarily attributable to higher lease rents for our billboard locations.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our outdoor segment increased to $1.5 million for the three-month period ended March 31, 2004 from $1.1 million for the three-month period ended March 31, 2003, an increase of $0.4 million. The increase was primarily attributable to severance amounts paid to the former president of our outdoor division.

Liquidity and Capital Resources

While we have a history of operating losses, we also have a history of generating significant positive cash flow from our operations. We expect to fund anticipated cash requirements (including acquisitions, anticipated capital expenditures, payments of principal and interest on outstanding indebtedness and share repurchases) with cash flow from operations and externally generated funds, such as proceeds from any debt or equity offering and our bank credit facility. As noted above under “Subsequent Event,” we

have entered into a Share Repurchase Agreement with the holder of all of our outstanding Series A preferred stock under which we agreed to purchase the Series A preferred stock for a cash price that may vary depending on when we close the purchase. We expect that we will finance our obligations under the Share Repurchase Agreement with external sources of funds and that any such financing will be supplemented by additional borrowings under our bank credit facility. Currently, we are actively seeking external financing and expect that, in connection therewith, we will amend our bank credit facility to, among other things, adjust upward the covenant relating to maximum total debt ratio. We currently anticipate that, except in connection with the repurchase of our Series A preferred stock, funds generated from operations and available borrowings under our bank credit facility will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Bank Credit Facility

Our primary sources of liquidity are cash provided by operations and available borrowings under our bank credit facility. We have a $400 million bank credit facility, comprised of a $250 million revolving facility and a $150 million incremental loan facility. In November 2003, we obtained commitments from participating banks for $50 million of the total amount available under the incremental loan facility. Our ability to borrow the remaining $100 million under the incremental loan facility remains subject to additional bank commitments.

The revolving facility expires in 2007 and our ability to draw under the incremental loan facility expires in September 2004. The incremental loan facility had been due to expire in September 2003, but we amended our bank credit facility in that month to extend its maturity for an additional year. The original $250 million amount of the revolving facility is subject to an automatic quarterly reduction, and had been reduced to $203 million as of March 31, 2004. Our ability to make additional borrowings under the bank credit facility is subject to compliance with certain financial ratios and other conditions set forth in the bank credit facility.

Our bank credit facility is secured by substantially all of our assets, as well as the pledge of the stock of substantially all of our subsidiaries, including our special purpose subsidiary formed to hold our Federal Communications Commission, or FCC, licenses.

In connection with the issuance of our senior subordinated notes (discussed below under the caption “Debt and Equity Financing”), we amended our bank credit facility to conform to certain provisions in the indenture governing our senior subordinated notes. On April 16, 2003, we further amended our bank credit facility in connection with our acquisition of three radio stations from Big City Radio to, among other things, adjust upward the existing covenants relating to maximum total debt ratio and remove the existing cap on the incurrence of subordinated indebtedness. Please see “Broadcast Cash Flow and EBITDA as Adjusted” below.

The revolving facility bears interest at LIBOR (1.125% at March 31, 2004) plus a margin ranging from 0.875% to 3.25% based on our leverage. In addition, we pay a quarterly loan commitment fee ranging from 0.25% to 0.75% per annum, which is levied upon the unused portion of the amount available. As of March 31, 2004, $126 million was outstanding under our bank credit facility and $77 million was available for future borrowings.

Our bank credit facility contains a mandatory prepayment clause, triggered in the event that we liquidate any assets if the proceeds are not utilized to acquire assets of the same type within 180 days, receive insurance or condemnation proceeds which are not fully utilized toward the replacement of such assets or have excess cash flow, as defined in our bank credit facility, 50% of which excess cash flow shall be used to reduce our outstanding loan balance.

Our bank credit facility contains certain financial covenants relating to maximum total debt ratio, minimum total interest coverage ratio and fixed charge coverage ratio. The covenants become increasingly restrictive in the later years of the bank credit facility. Our bank credit facility also requires us to maintain our FCC licenses for our broadcast properties and contains restrictions on the incurrence of additional debt, the payment of dividends, the making of acquisitions and the sale of assets over a certain limit. Additionally, we are required to enter into interest rate agreements if our leverage exceeds certain limits.

We can draw on our revolving facility without prior approval for working capital needs and for acquisitions having an aggregate maximum consideration of less than $25 million. Acquisitions having an aggregate maximum consideration of $25 million or greater but less than or equal to $100 million are conditioned upon our delivery to the agent bank of a covenant compliance certificate showing pro forma calculations assuming such acquisition had been consummated and revised revenue projections for the acquired stations. For acquisitions having an aggregate maximum consideration in excess of $100 million, majority lender consent of the bank group is required.

Debt and Equity Financing

On April 16, 2003, we issued 3,766,478 shares of our Class A common stock as a portion of the purchase price for the three radio stations we acquired from Big City Radio.

On May 9, 2002, we filed a shelf registration statement with the SEC to register up to $500 million of equity and debt securities, which we may offer from time to time. That shelf registration statement has been declared effective by the SEC. We have not yet issued any securities under the shelf registration statement. We intend to use the proceeds of any issuance of securities under the shelf registration statement to fund acquisitions or capital expenditures, to reduce or refinance debt or other obligations and for general corporate purposes.

On March 18, 2002, we issued $225 million of our senior subordinated notes due 2009. The senior subordinated notes bear interest at 8¹/8% per year, payable semi-annually on March 15 and September 15 of each year. The net proceeds from our senior subordinated notes were used to repay all indebtedness then outstanding under our bank credit facility and for general corporate purposes.

Broadcast Cash Flow and EBITDA as Adjusted

Broadcast cash flow (as defined below) increased to $13.4 million for the three-month period ended March 31, 2004 from $11.9 million for the three-month period ended March 31, 2003, an increase of $1.5 million, or 13%. As a percentage of net revenue, broadcast cash flow increased to 26% for the three-month period ended March 31, 2004 from 25% for the three-month period ended March 31, 2003.

We currently anticipate that broadcast cash flow will increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will continue to outpace increases in direct operating and selling, general and administrative expenses.

EBITDA as adjusted (as defined below) decreased to $9.4 million for the three-month period ended March 31, 2004 from $9.5 million for the three-month period ended March 31, 2003, a decrease of $0.1 million, or 1%. Excluding the $1.2 million net reimbursement from Univision in 2003, EBITDA as adjusted increased $1.2 million, or 14%. As a percentage of net revenue, EBITDA as adjusted decreased to 18% for the three-month period ended March 31, 2004 from 20% for the three-month period ended March 31, 2003. Excluding the $1.2 million net reimbursement from Univision, EBITDA as adjusted as a percentage of net revenue increased to 18% for the three-month period ended March 31, 2004 from 17% for the three-month period ended March 31, 2003.

We currently anticipate that EBITDA as adjusted will increase in future periods, both in absolute dollars and as a percentage of net revenue, as we believe that net revenue increases will continue to outpace increases in direct operating and selling, general and administrative and corporate expenses.

While we and many in the financial community consider broadcast cash flow and EBITDA as adjusted to be important, they should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income. In addition, our definitions of broadcast cash flow and EBITDA as adjusted differ from those of many companies reporting similarly named measures.

Broadcast cash flow and EBITDA as adjusted are non-GAAP measures. For a reconciliation of each of broadcast cash flow and EBITDA as adjusted to net loss, their most directly comparable GAAP financial measure, please see page 16.

Cash Flow

Net cash flow provided by operating activities increased to $5.6 million for the three-month period ended March 31, 2004 from $1.0 million for the three-month period ended March 31, 2003.

Net cash flow provided from investing activities was $5.6 million for the three-month period ended March 31, 2004 compared to net cash flow used in investing activities of $6.0 million for the three-month period ended March 31, 2003. We received proceeds of $8.2 million from the sale of assets, primarily radio station KZFO-FM in the Fresno, California market. We also received a refund of a deposit of $0.5 million, received a return of capital of $0.3 million and spent $3.4 million on capital expenditures.

Net cash flow used by financing activities was $17.6 million for the three-month period ended March 31, 2004 compared to net cash flow provided from financing activities of $0.3 million for the three-month period ended March 31, 2003. During the three-month period ended March 31, 2004, we borrowed $34 million under our incremental loan facility and paid $52 million under our revolving facility. We received net proceeds of $0.4 million from the exercise of stock options issued under our 2000 Omnibus Equity Incentive Plan and from the sale of shares issued under our 2001 Employee Stock Purchase Plan, or the Employee Stock Purchase Plan.

During the remainder of 2004, we anticipate that our capital expenditures will be approximately $13 million, including approximately $0.4 million in digital television capital expenditures. We anticipate paying for these capital expenditures out of net cash flow from operations.

As part of the transition from analog to digital television, full-service television station owners may be required to stop broadcasting analog signals and relinquish their analog channels to the FCC by 2006 if the market penetration of digital television receivers reaches certain levels by that time. We currently expect that the cost to complete construction of digital television facilities for our full-service television stations between 2004 and 2006 will be approximately $17 million. In addition, we will be required to broadcast both digital and analog signals through this transition period, but we do not expect those incremental costs to be significant. We intend to finance the conversion to digital television out of cash flow from operations. The amount of our anticipated capital expenditures may change based on future changes in business plans, our financial condition and general economic conditions.

We continually review, and are currently reviewing, opportunities to acquire additional television and radio stations, as well as other broadcast or media opportunities targeting the Hispanic market in the United States. We expect to finance any future acquisitions through funds generated from operations, borrowings under our bank credit facility and additional debt and equity financing. Any additional financing, if needed, might not be available to us on reasonable terms or at all. Any failure to raise capital when needed could seriously harm our business and our acquisition strategy. If additional funds are raised through the issuance of equity securities, the percentage of ownership of our existing stockholders will be reduced. Furthermore, these equity securities might have rights, preferences or privileges senior to those of our Class A common stock.

Series A Mandatorily Redeemable Convertible Preferred Stock

As noted above under “Subsequent Event,” we have entered into a Share Repurchase Agreement with the holder of all of our outstanding Series A preferred stock under which we agreed to purchase the Series A preferred stock for a cash price that may vary depending on when we close the purchase. In the event that we do not close the repurchase of our Series A preferred stock, as we currently anticipate, it is important to note that the holders of a majority of our Series A preferred stock currently have the right on or after April 19, 2006 to require us to redeem any and all or their preferred stock at the original issue price plus accrued dividends. On April 19, 2006 such redemption price will be $143.5 million, and our Series A preferred stock would continue to accrue a dividend of 8.5% per year. The outstanding Series A preferred stock is convertible into 5,865,102 shares of our Class A common stock at the option of the holder at anytime. If, however, we do not repurchase our outstanding Series A preferred stock and the holders thereof do not elect to convert their shares of Series A preferred stock into shares of our Class A common stock and, as a result, we are required to pay the redemption price in 2006, we anticipate that we would finance such payment with borrowings under our bank credit facility or the proceeds of any debt or equity offering.

Contractual Obligations

We have agreements with certain media research and ratings providers, expiring at various dates through December 2006, to provide television and radio audience measurement services. We lease facilities and broadcast equipment under various operating lease agreements with various terms and conditions, expiring at various dates through December 2025.

Our material contractual obligations at March 31, 2004 are as follows (in thousands):


	Payments Due by Period
Contractual Obligations	Total amounts committed		Less than 1 year		1-3 years		3-5 years		More than 5 years
Senior subordinated notes	$	225,000	$	—	$	—	$	225,000	$	—
Series A preferred stock (1)		143,482		—		143,482		—		—
Bank credit facility and other borrowings		134,578		1,186		53,283		76,075		4,034
Media research and ratings providers (2)		19,891		7,828		12,063		—		—
Operating leases (2)(3)		68,600		9,100		16,900		11,900		30,700

Total contractual obligations	$	591,551	$	18,114	$	225,728	$	312,975	$	34,734

(1)	Please see “Series A Mandatorily Redeemable Convertible Preferred Stock” above.

(2)	The amounts committed for media research and ratings providers and for operating leases are as of December 31, 2003.

(3)	Does not include month-to-month leases.

We have also entered into employment agreements with certain of our key employees, including Messrs. Ulloa, Wilkinson, Liberman and DeLorenzo. Our obligations under these agreements are not reflected in the table above.

Other than lease commitments, legal contingencies incurred in the normal course of business and employment contracts for key employees, we do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned subsidiaries or any interests in or relationships with any special-purpose entities that are not included in the consolidated financial statements.

Other

On March 19, 2001, our Board of Directors approved a stock repurchase program. We are authorized to repurchase up to $35 million of our outstanding Class A common stock from time to time in open market transactions at prevailing market prices, block trades and private repurchases. The extent and timing of any repurchases will depend on market conditions and other factors. We intend to finance stock repurchases, if and when made, with our available cash on hand and cash provided by operations. To date, no shares of Class A common stock have been repurchased under the stock repurchase program.

On April 4, 2001, our Board of Directors adopted the Employee Stock Purchase Plan. Our stockholders approved the Employee Stock Purchase Plan on May 10, 2001 at our 2001 Annual Meeting of Stockholders. Subject to adjustments in our capital structure, as defined in the Employee Stock Purchase Plan, the maximum number of shares of our Class A common stock that will be made available for sale under the Employee Stock Purchase Plan is 600,000, plus an annual increase of up to 600,000 shares on the first day of each of the ten calendar years beginning on January 1, 2002. All of our employees are eligible to participate in the Employee Stock Purchase Plan, provided that they have completed six months of continuous service as employees as of an offering date. There are two offering periods annually under the Employee Stock Purchase Plan, one which commences on February 15 and concludes on August 14, and the other which commences August 15 and concludes the following February 14. As of March 31, 2004, approximately 272,106 shares had been purchased under the Employee Stock Purchase Plan.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

Market risk represents the potential loss that may impact our financial position, results of operations or cash flows due to adverse changes in the financial markets. We are exposed to market risk from changes in the base rates on our variable rate debt. Under our bank credit facility, if we exceed certain leverage ratios we would be required to enter into derivative financial instrument transactions, such as swaps or interest rate caps, in order to manage or reduce our exposure to risk from changes in interest rates. Under no circumstances do we enter into derivatives or other financial instrument transactions for speculative purposes.

Interest Rates

Our revolving facility loan bears interest at a variable rate at LIBOR (1.125% as of March 31, 2004) plus a margin ranging from 0.875% to 3.25% based on our leverage. As of March 31, 2004, we had $126 million of variable rate bank debt outstanding. Our bank credit facility requires us to enter into interest rate agreements if our leverage exceeds certain limits as defined in the agreement. We have two interest rate swap agreements, each with a notional amount of $82.5 million. The first agreement provides for a LIBOR-based rate floor of 1% and rate ceiling of 6% and terminates on March 31, 2005. The second agreement, which begins after the first

agreement expires, provides for a LIBOR-based rate floor of 1.78% and rate ceiling of 7% and terminates on March 31, 2006. Because this portion of our long-term debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. In the event that the LIBOR rate falls below the floor rate, we would still have to pay the floor rate plus the margin based on our leverage at such time. If the LIBOR rate falls below the floor rate during or close to the swap agreement period we would record the fair market value as a liability on the balance sheet and interest expense on the income statement. In the event that the LIBOR rate rises above the ceiling rate, we would only have to pay the ceiling rate plus the applicable margin. The fair market value of the swap would be recorded as an asset on the balance sheet and a reduction of interest expense on the income statement. Due to the short-term nature of these agreements and the projection that the interest rate floor or ceiling will not be reached during the term, the estimated fair value of these agreements is zero as of March 31, 2004.

ITEM 4.

CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC reports. There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us.

ITEM 2.

CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

None.

ITE 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

The

following exhibits are attached hereto and filed herewith:



10.1		Master Network Affiliation Agreement, dated as of August 14, 2002, by and between Entravision Communications Corporation and Univision Network Limited Partnership

10.2		Master Network Affiliation Agreement, dated as of March 17, 2004, by and between Entravision Communications Corporation and TeleFutura

31.1		Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

31.2		Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

32		Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

We filed one Current Report on Form 8-K with the SEC during the quarter ended March 31, 2004:

(i)

a Current Report on Form 8-K filed on February 13, 2004, attaching the press release announcing our financial results for the quarter and year ended December 31, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


ENTRAVISION COMMUNICATIONS CORPORATION

By:		/s/ JOHN F. DELORENZO

		John F. DeLorenzo Executive Vice President, Treasurer and Chief Financial Officer

Dated: May 10, 2004

EX-10.1 2 dex101.htm NETWORK AFFILIATION AGREEMENT - AUGUST 14, 2002 Network Affiliation Agreement - August 14, 2002

EXHIBIT 10.1

MASTER

NETWORK AFFILIATION AGREEMENT

This Network Affiliation Agreement is entered into this 14 day of August, 2002 (the “Commencement Date”), by and between ENTRAVISION COMMUNICATIONS CORPORATION and UNIVISION NETWORK LIMITED PARTNERSHIP.

WHEREAS, AFFILIATE, as licensee of the Stations pursuant to authorizations issued by the FCC, intends to offer a full time Spanish language television program service using the facilities of the Stations;

WHEREAS, UNIVISION operates the UNIVISION Network, which provides Spanish language television programming on a national, interconnected basis; and

WHEREAS, AFFILIATE desires to affiliate with the UNIVISION Network, and to appoint UNIVISION as the Stations’ exclusive national and regional sales representative.

NOW, THEREFORE, in consideration of the mutual covenants, undertakings, agreements, and representations herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, it is hereby agreed as follows:

1. Definitions. In computing compliance with time periods specified in this Agreement, calendar days shall be utilized rather than business days. For the purposes of this Agreement, the following terms shall have the following meanings:

AFFILIATE, first used in the preamble to this Agreement, means Entravision Communications Corporation.

Agreement, first used in Section 1 hereof, means the instant Master Network Affiliation Agreement.

Authorized Preemption, first used in Section 1 hereof, means a failure by AFFILIATE to broadcast any UNIVISION Program (i) pursuant to Section 6(a) of this Agreement, (ii) due to force majeure as provided for in Section 12 of this Agreement, or (iii) for which AFFILIATE has obtained the written consent of UNIVISION.

Commencement Date has the meaning established in the first paragraph of this Agreement hereof.

Commercial Availability, first used in Section 1 hereof, means a unit of time of whatever length available for the broadcast of commercial advertising announcements, promotional announcements, and/or station identification announcements.

Digital Channel, first used in Section 5(d) hereof, means any television channel allotted by the FCC to AFFILIATE for digital television transmissions for use in association with the Station as a result of MM Docket 87-269 and the rules and regulations adopted with respect thereto.

Digital Transition Period, first used in Section 5(d) hereof, means the period commencing on the first date AFFILIATE broadcasts a digital signal to the general public on a consistent commercial basis on the Digital Channel and ending on the last day of the Term of this Agreement.

FCC, first used in the preamble to this Agreement, means the Federal Communications Commission or any successor agency.

Force Majeure Event, first used in Section 12 hereof, means any act of God, labor dispute, non-delivery by program suppliers or others, failure or breakdown of satellite or other facilities, legal enactment, governmental order or regulation or any other similar or dissimilar cause beyond the control of UNIVISION or AFFILIATE, as the case may be.

Local Availability, first used in Section 7(b) hereof, means a Commercial Availability designated by UNIVISION pursuant to this Agreement for broadcast of a commercial advertisement by a Station and not by other UNIVISION affiliates on an interconnected or delayed telecast basis.

Local Programming first used in Section 1 hereof, means collectively, all local and syndicated programs, public service announcements, promotional announcements, station identifications and other interstitial material which are originated and broadcast by a Station.

Local Programming Window, first used in Section 5(b) hereof, means a time period indicated on the attached Schedule A as being occupied by Local Programming.

Local Sale, first used in Section 7(f) hereof, means a Sale of advertising for broadcast on one of AFFILIATE’s Stations, and not for broadcast on the UNIVISION Network generally, made by the local sales staff of AFFILIATE.

National Sale, first used in Section 7(f) hereof, means a Sale of advertising for broadcast on one of AFFILIATE’s Stations, and not for broadcast on the UNIVISION Network generally, made by UNIVISION as the national and regional sales representative of AFFILIATE, and any other Sale which is of a type normally considered within the broadcast industry to be a national or a regional advertising sale.

Net National Sale, first used in Section 8(a) hereof, means a National Sale of advertising net only of agency commission.

Network Availability, first used in Section 5(b)(ii) hereof, means a Commercial Availability designated by UNIVISION pursuant to this Agreement for the simultaneous broadcast of a commercial announcement by multiple UNIVISION affiliates on an interconnected basis, including delayed telecasts pursuant to Section 11 of this Agreement.

Network Exclusivity Zone, first used in Section 5(l) hereof, means the applicable area as set forth in by Section 76.92 through 76.97 of the FCC’s rules.

Network Sale, first used in Section 7(e) hereof, means a Sale of advertising for broadcast on the UNIVISION Network.

Network Time, first used in Section 7 hereof, means the entire clock hour or half-hour during which a UNIVISION Program is broadcast including Station breaks and adjacencies. (E.g., for a one-hour UNIVISION Program broadcast during the 7:00 and 8:00 time period, all commercials sold between 7:00 and 8:00 are within Network Time, even if the program actually began after 7:00 and ended before 8:00.)

Non-Network Programming, first used in Section 9 hereof, means programs, program series, and programming of any nature or kind, including, but not limited to, special sports programs and special events programs, such as political conventions, election coverage, presidential inaugurations, parades, and pageants, and other programs and program series, which are not then regularly scheduled by UNIVISION for broadcast on an interconnected basis by affiliates of the UNIVISION Network during those hours that then comprise the UNIVISION Network Programming Schedule.

Sale, first used in Section 1 hereof, means a sale of advertising.

Station or Stations, first used in the preamble to this Agreement, means the television station(s) listed in Schedule B. Additional stations will be incorporated into Schedule B and subject to the terms and conditions of this Agreement by the parties revising Schedule B to include such station.

Terms Sheet, first used in Section 9 hereof, means a writing setting forth the principal terms and conditions on which UNIVISION offers a non-network program or program series to AFFILIATE, including, but not limited to, the time permitted for acceptance of said offer by AFFILIATE.

Unauthorized Preemption, first used in Section 10 hereof, means any preemption or failure to broadcast any UNIVISION Program, in whole or in part, other than an Authorized Preemption.

UNIVISION, first used in the preamble to this Agreement, means UNIVISION NETWORK LIMITED PARTNERSHIP.

UNIVISION Network, first used in the preamble to this Agreement, means a program service distributed by or on behalf of UNIVISION on an interconnected basis to affiliates for broadcast to the public.

UNIVISION Network Program Schedule, first used in Section 5(b) hereof, means the programming provided by UNIVISION to its affiliates on a regular basis for broadcast during a UNIVISION Network Time Period, including, but not limited to, all UNIVISION Network Programming, commercial announcements, UNIVISION identification announcements, UNIVISION promotional announcements, public service announcements, credits and cross promotional announcements for any of UNIVISION’s other networks, or any other network or program service owned or operated by, or under common ownership or control with, UNIVISION, including but not limited to cable programming networks such as Galavision and Telefutura, and other interstitial material distributed by UNIVISION to AFFILIATE.

UNIVISION Network Programming, first used in Section 1 hereof, means, collectively, all UNIVISION Programs, public service announcements, promotional announcements, network identifications and other interstitial material which are distributed to affiliates of the UNIVISION Network.

UNIVISION Network Time Period, first used in Section 1 hereof, means the time periods indicated on the attached Schedule A as being occupied by Univision Network Programming.

UNIVISION Program, first used in Section 1 hereof, means a television program distributed by or on behalf of UNIVISION for broadcast on an interconnected basis by affiliates of the UNIVISION Network.

2. Programming. UNIVISION shall deliver to Stations for free over the air television broadcasting on Stations, all UNIVISION Network Programming which UNIVISION makes available to be broadcast on the UNIVISION Network on a television network basis in the community in which each Station is located, except as hereinafter provided. Subject to the limitations set forth in this Agreement, AFFILIATE is hereby authorized to broadcast during the term of this Agreement the UNIVISION Network Programming over the facilities of the Stations. AFFILIATE shall not and shall not authorize others to broadcast, rebroadcast, or otherwise use any program (or part thereof) or other material supplied by UNIVISION except as specified in this Agreement or specifically authorized in writing by UNIVISION.

3. Term. The initial term of this Agreement shall commence on the Commencement Date, and, subject to the early termination provisions set forth herein, shall terminate at 11:59 p.m. on December 31, 2021, (“Initial Term”). After the Initial Term, the term of this

Agreement may be extended for additional successive terms of two (2) years each by UNIVISION, in its sole discretion, giving written notice of such extension and the terms and conditions upon which such extension is offered to AFFILIATE at least ninety (90) days prior to the expiration of the then current term; provided, however, that if, within thirty (30) days of the AFFILIATE’s receipt of an extension notice from UNIVISION, AFFILIATE, in its sole discretion, gives UNIVISION written notice that AFFILIATE rejects such extension on such terms and conditions, then the extension notice shall not be effective and this Agreement shall terminate upon expiration of the then-current period. UNIVISION shall have no obligation, whether express or implied, to extend this Agreement beyond its initial term or to continue the affiliation of the Station with UNIVISION or the UNIVISION Network, whether or not on terms or conditions equivalent to those set forth in this Agreement, beyond the termination hereof. Any presently existing Network Affiliation Agreements between UNIVISION and AFFILIATE shall be deemed terminated as of the commencement of this Agreement. Upon the termination or expiration of the term of this Agreement, all of AFFILIATE’s and Stations’ rights to broadcast or otherwise use any UNIVISION Network Programming or any trademark, logo, or other material or item hereunder shall immediately cease and neither AFFILIATE nor Stations shall have any further rights whatsoever with respect to such program, material, or item.

4. Distribution. UNIVISION shall transmit the UNIVISION Network Programming via satellite, and the UNIVISION Network Programming shall be deemed delivered to AFFILIATE when transmitted to the satellite. The choice of satellite to be used to transmit the UNIVISION Network Programming shall solely be within the discretion of UNIVISION, and UNIVISION may, from time to time, at its sole discretion, change the satellite being used for said transmissions, in which case it shall, to the extent feasible, give prior notice to AFFILIATE. All costs and expenses of transmitting the UNIVISION Network Programming by satellite, including the maintenance of a network operations center, satellite transmission facilities and satellite transponder time, shall be borne by UNIVISION. Any and all costs of whatever kind or nature incurred with respect to the reception or pickup of the UNIVISION Network Programming from the satellite, and its rebroadcast by the Stations, shall be borne by and shall be the sole responsibility of AFFILIATE. Where, in the sole opinion of UNIVISION, it is impracticable or undesirable to furnish the UNIVISION Network Programming over satellite facilities, UNIVISION may deliver the program to Stations by any other means, including, but not limited to private or common carrier microwave, fiber optic links, film, video tape or other form of recording in sufficient time for Stations to broadcast the UNIVISION Network Programming at the time scheduled by UNIVISION. Prior to instituting a change in the method of program delivery to AFFILIATE, UNIVISION shall, if practicable, consult with AFFILIATE and give consideration to increased program delivery costs to be incurred by AFFILIATE as a result of such a change. If UNIVISION Network Programming is supplied via recordings of any kind, they shall be used by AFFILIATE only for a single television broadcast over each Station, and AFFILIATE shall comply with all UNIVISION instructions concerning the disposition to be made of each such recording received by each Station hereunder.

5. Additional Terms and Conditions Regarding Programming. Except as contemplated in Section 6, below, AFFILIATE’s broadcast of UNIVISION Network Programming and UNIVISION Programs pursuant to this Agreement shall be subject to the following terms and conditions:

(a) The selection, scheduling, substitution, cancellation and withdrawal of any UNIVISION Network Programming or portion thereof shall at all times remain within the sole discretion and control of UNIVISION. UNIVISION reserves the right to obtain programming from any source whatsoever, including but not limited to obtaining all or a portion of the UNIVISION Network Programming from one or more program suppliers.

(b) Schedule A hereto sets forth the current schedule of hours which constitute the UNIVISION Network Program Schedule, as well as the current schedule of segments which constitute the Local Programming Windows. Local Programming Windows may be changed by UNIVISION, at any time in its sole discretion. UNIVISION will provide written notification of such change in Local Programming Windows at least ten (10) days prior to implementation, when such Local Programming Window change is permanent. However, where UNIVISION cannot provide ten (10) days advance notice, UNIVISION will provide as much advance notice as practicable of such Local Programming Window. The selection, scheduling, substitution, cancellation, preemption and withdrawal of UNIVISION Network Programming scheduled for broadcast by affiliates of UNIVISION Network during those hours constituting the UNIVISION Network Program Schedule shall at all times remain within the sole discretion and control of UNIVISION. AFFILIATE agrees to broadcast over the facilities of the Stations the complete UNIVISION Network Program Schedule in its entirety without unauthorized interruption, editing, modification, addition or deletion, on the dates and at the times scheduled by UNIVISION; provided, however, that AFFILIATE may delete:

(i) such words, phrases or scenes as AFFILIATE, in the reasonable exercise of its judgment, determines it would not be in the public interest to broadcast over the AFFILIATE’s Stations; or

(ii) any Network Availabilities released by UNIVISION to the Stations.

(c) AFFILIATE agrees to carry network commercials at the time delivered by UNIVISION and in the same commercial positions as determined by UNIVISION.

(d) During the Digital Transition Period, AFFILIATE shall broadcast the UNIVISION Network Programming provided pursuant to this Agreement simultaneously over the Stations and any Digital Channel operated by AFFILIATE in association with such Stations. AFFILIATE shall insure that the picture resolution quality of the broadcasts of the UNIVISION Network Programming on the Digital Channel is of at least the same picture resolution quality as the best picture quality of any other programming simultaneously broadcast on the Digital Channel.

(e) AFFILIATE shall not broadcast any UNIVISION Network Programming except pursuant to the terms of this Agreement or pursuant to other written authorization from UNIVISION.

(f) AFFILIATE shall not authorize, cause, or enable anything to be done whereby any UNIVISION Network Programming supplied herein is used for any purpose other than broadcasting by AFFILIATE in the geographic area that each of AFFILIATE’s Stations is authorized to serve, which broadcast is intended for reception by the general public in places to which no admission is charged.

(g) AFFILIATE shall not insert or superimpose any crawls, split screens, graphics, logos, trademarks, call letters, insignia, voice overs or other material over any portion of any UNIVISION Network Programming, or alter the length, size or aspect ratio or squeeze down any UNIVISION Network Programming, without the prior written consent of UNIVISION, except in the case of live coverage of fast-breaking news events.

(h) AFFILIATE shall abide by any and all restrictions of which UNIVISION advises AFFILIATE pertaining to the promotion of UNIVISION Network Programming, including, but not limited to, on-the-air promotion, billboards, cable advertisements, and newspaper, shopper, or other printed advertisements, announcements or promotions. This provision shall not prohibit AFFILIATE from providing date and time information regarding UNIVISION Network Programming to newspapers, TV Guide, cable guides, and other program listing services. UNIVISION shall, from time to time, provide AFFILIATE with written guidelines regarding promotional restrictions, which, as amended or supplemented in writing from time to time, shall govern each Station’s promotional activities until superseded by replacement guidelines supplied by UNIVISION.

(i) Except with UNIVISION’s prior written consent and except upon such terms and conditions as UNIVISION may impose, AFFILIATE shall not authorize, cause, permit or enable anything to be done whereby a recording on film, tape or otherwise is made of UNIVISION Network Programming, provided, however, AFFILIATE may record UNIVISION Network Programming for:

(i) delayed telecasts permitted by this Agreement;

(ii) promotion of the UNIVISION Network, or UNIVISION Network Programming, in programs or promotional announcements broadcast on AFFILIATE’s Stations which UNIVISION has had the opportunity to preview and for which UNIVISION has given its prior written consent; or

(iii) sales presentations.

(j) AFFILIATE agrees that its local news sets, local promotional announcements, and local identifications will conform to the UNIVISION Network’s graphic

standards as established, and modified from time-to-time, by UNIVISION and provided in writing to AFFILIATE.

(k) Subject to the provisions of this Agreement, with respect to any UNIVISION Program broadcast by Stations and as to which UNIVISION controls the distribution rights with respect to the repeat broadcast of such program on United States broadcast television stations, UNIVISION agrees that, during the Exclusivity Period for such UNIVISION Program, it shall not provide the same UNIVISION Program to any television station licensed to serve the community of license of each Station. As used herein, “Exclusivity Period” with respect to any UNIVISION Program shall mean a period commencing with UNIVISION’s first broadcast of such UNIVISION Program and ending on the earlier of (i) the end of the broadcast season in which such UNIVISION Program is first provided to the Station or (ii) thirty (30) days after such UNIVISION’S broadcast of such UNIVISION Program. Nothwithstanding the foregoing, UNIVISION may make available to any other station any UNIVISION Program which (i) AFFILIATE has preempted, rejected or refused, or not taken for any reason whatsoever, or which UNIVISION has withdrawn from AFFILIATE pursuant to Section 10(a) hereof; (ii) UNIVISION may be legally required to make available; or (iii) which, in UNIVISION’s sole discretion, is believed to be of overriding public importance.

(l) AFFILIATE shall be entitled to exercise, within each Station’s Network Exclusivity Zone, the protection against duplication of network programming, as provided by Sections 76.92 through 76.97 of the FCC’s rules, with respect to a UNIVISION Program during the same broadcast day on which such UNIVISION Program is delivered by UNIVISION to each Station, provided, however, (1) that such right shall extend only as to UNIVISION Programs broadcast over Stations in accordance with this Agreement at the time scheduled for such broadcast by UNIVISION and that such protection shall not extend to any pre-empted programs or program series; (2) that nothing herein shall be deemed to preclude UNIVISION from granting to any other broadcast television station licensed to any other community similar non-duplication rights within that Station’s Network Exclusivity Zone and AFFILIATE’s right of network non-duplication shall not apply with respect to the transmission of the programs of another AFFILIATE of the UNIVISION Network (current or future) by a “community unit,” as that term is defined by the rules of the FCC, located wholly or partially within the area in which the Station’s Network Exclusivity Zone overlaps the Network Exclusivity Zone of such other UNIVISION affiliates; and (3) that AFFILIATE’s network non-duplication rights pursuant to this Section shall be subject to cancellation by UNIVISION on six (6) months written notice to AFFILIATE, which cancellation shall not affect any of the other rights and obligations of the parties under this Agreement. Nothing contained in this Agreement shall limit UNIVISION’S right, at its sole discretion, to distribute the UNIVISION Network and/or UNIVISION Network Programming directly to, and to authorize the retransmission of the UNIVISION Network and/or UNIVISION Network Programming by, any other distribution form, methodology, or medium, including but not limited to broadcast, television, cable television, direct broadcast satellite (DBS), MDS, MMDS, or SMATV systems or facilities in any area, provided that in determining whether to distribute directly or authorize the restransmission of the UNIVISION Network and/or UNIVISION Network Programming by the means described, above, UNIVISION shall use

substantially similar business practices as those UNIVISION uses in markets where UNIVISION owns and operates television stations.

6. Preemption and Substitution.

(a) With respect to programs or commercial matter offered or already contracted for pursuant to this Agreement, nothing herein contained shall prevent or hinder AFFILIATE from:

(i) rejecting or refusing any UNIVISION Program or commercial matter which AFFILIATE reasonably believes to be unsatisfactory or unsuitable or contrary to the public interest, or

(ii) substituting a program which, in AFFILIATE’s opinion, is of greater local or national importance.

(b) AFFILIATE shall give UNIVISION written notice of each such rejection, refusal or substitution, the identity and length of the programming (the “Substitute Programming”) to be substituted for a UNIVISION Program and the justification therefor, not later than seventy-two (72) hours after receiving notice of the UNIVISION Program, or as soon thereafter as possible (including an explanation of the cause for any lesser notice). In the case of proposed program substitution based on greater local or national importance, AFFILIATE shall also indicate why the programming could not reasonably be substituted for Local Programming or carried in a Local Programming Window. UNIVISION reserves the right to direct AFFILIATE to broadcast said UNIVISION Program in an alternate time period normally occupied by other UNIVISION Network Programming, or to provide such alternative UNIVISION Network Programming as may be appropriate in the circumstances (which, subject only to the terms of Sections 6 and 10 hereunder, shall be cleared in preference to the Substitute Programming).

(i) is delivered in a form which does not meet accepted standards of good engineering practice;

(ii) does not comply with the rules and regulations of the FCC; or

(iii) differs substantially in style or content from UNIVISION Network Programming which AFFILIATE has broadcast previously and which Affiliate reasonably believes would not meet prevailing contemporary standards of good taste in its community of license.

(d) AFFILIATE confirms that no UNIVISION Network Programming shall be deemed to be unsatisfactory, unsuitable or contrary to the public interest based on programming performance or ratings, advertiser reactions or the availability of alternative programming (including but not limited to sporting events, program length commercials and infomercials) which AFFILIATE believes to be more profitable or more attractive.

(e) Except in those circumstances requiring live coverage of fast-breaking news events, AFFILIATE shall make all reasonable efforts to substitute programming of high local or national importance for Local Programming or to carry such programming in time slots not scheduled to be occupied by UNIVISION Network Programming.

(f) AFFILIATE confirms that, in its judgment, the public interest is best served by carriage of Spanish language programming by the Stations. Any programming substituted by AFFILIATE for UNIVISION Network Programming shall be exclusively in the Spanish language.

7. Commercial Scheduling in Network Time.

(a) UNIVISION shall determine the number and length of Commercial Availabilities within Network Time.

(b) Subject to the provisions of Sections 7(c) and (d) hereof, the time available within Network Time to AFFILIATE for the carriage of Local Availabilities during regularly scheduled programming only shall be:


Program Daypart	Time Period	Time Available to AFFILIATE

Children’s Programming:	Weekends, As Scheduled	5 Minutes per Hour (or 50% of all Commercial Availabilities should FCC regulations permit less than 10 1/2 minutes of Commercial Availabilities per hour)

Children’s Programming:	Weekdays, As Scheduled	6 Minutes per Hour (or 50% of all Commercial Availabilities should FCC regulations permit less than 12 minutes of Commercial Availabilities per hour)

Morning:	08:00 A.M.-12:00 Noon	6 Minutes per Hour

Day Time:	12:00 Noon-04:00 P.M.	6 Minutes per Hour

Early Fringe:	04:00 P.M.-06:00 P.M.	6 Minutes per Hour



Network News:	06:30 P.M.-07:00 P.M.	0 Minutes per Half Hour

Prime Time:	07:00 P.M.-11: 00 P.M.	6 Minutes per Hour

All Other Network Time Periods:		6 Minutes per Hour

(c) UNIVISION may, from time to time, and upon at least sixty (60) days notice to AFFILIATE, determine the exact schedule and number of minutes available within Network Time to AFFILIATE for the carriage of Commercial Availabilities during regularly scheduled programming; provided, however, that in no event shall less than four (4) minutes per hour be made available within Network Time to AFFILIATE for the carriage of Commercial Availabilities during regularly scheduled programming (except for Children’s Programming and Network News).

(d) In the event that any UNIVISION Program contains less than twelve (12) minutes per hour of Commercial Availabilities, UNIVISION shall, within its sole discretion, determine the exact schedule and number of minutes of Commercial Availabilities within each hour of Network Time that shall be occupied by Local Availabilities. In no event, however, shall the number of minutes of Local Availabilities scheduled by UNIVISION within an hour containing less than twelve (12) minutes of Commercial Availabilities (except for Children’s Programming and Network News) be less than twenty percent (20.0%) of the total number of Commercial Availabilities scheduled by UNIVISION within that hour, rounded to the next higher commercial unit.

(e) All Commercial Availabilities not allocated to AFFILIATE may be used by UNIVISION for Network Availabilities. The proceeds from advertising broadcast during those Network Availabilities shall be allocated to Network Sales. UNIVISION shall be solely responsible for determining the advertising rates at which such Network Availabilities shall be offered and sold. The time allocated to UNIVISION for Network Availabilities shall not be covered or dropped or used for any purpose whatsoever by AFFILIATE without the express prior written consent of UNIVISION.

(f) The time allocated to AFFILIATE shall be used for Local Availabilities. Sales of Local Availabilities shall be allocated to Local Sales or to National Sales, as the case may be. AFFILIATE shall be solely responsible for determining the advertising rates at which Local Availabilities shall be offered and sold.

(g) UNIVISION may, at its discretion, free a portion of Network Availabilities to AFFILIATE for sale by AFFILIATE, and AFFILIATE may, at its discretion, free a portion of Local Availabilities for sale by UNIVISION, with the mutual objective of maximizing the effective use of total Commercial Availabilities in Network Time; provided, however, that AFFILIATE grants UNIVISION the option to purchase from AFFILIATE, at UNIVISION’s sole discretion, not more than two (2) minutes of Local Availabilities per hour of

network time, for which UNIVISION shall reimburse AFFILIATE at the lowest average unit rate prevailing during the previous ninety (90) days for local commercial advertisements of the same or most comparable class, daypart, and length actually broadcast by that Station. Said option shall take precedence over other sales of Local Availabilities by AFFILIATE.

(h) Each party may use its Commercial Availabilities within each hour of Network Time for the scheduling of commercials for which no cash compensation is charged and/or received. The use of this time by UNIVISION shall be restricted to company or related company advertising, promotional announcements, and non-cash barter transactions involving the exchange of goods and/or services for time. The use of this time by AFFILIATE shall be restricted to promotional announcements and non-cash barter transactions involving the exchange of goods and/or services for time. Station identification announcements are not included within the scope of this subsection.

8. Compensation. Subject to all other relevant provisions of this Agreement, the compensation due AFFILIATE and UNIVISION pursuant to this Agreement shall be governed by the following provisions:

a) As consideration for UNIVISION’s services as national and regional sales representative for AFFILIATE, AFFILIATE shall pay to UNIVISION fifteen percent (15%) of all Net National Sales of each Station.

(b) In the event AFFILIATE packages any Sales which would be included in Net National Sales with other advertising sales which would not be included in Net National Sales, including, but not limited to, a sale in other media such as radio or print by AFFILIATE or any company affiliated with, controlled by, controlling or under common control with AFFILIATE, either directly or indirectly, such package sales will be allocated pro rata to Net National Sales and to other sales on the basis that the rate card values of each bears to the rate card value for the entire package.

(c) Without limitation to any provision of this Agreement, in the event that AFFILIATE, for any reason, fails to broadcast or advises UNIVISION that it will not broadcast any UNIVISION Network Programming as provided herein, then, in each such case, AFFILIATE will “make good” the UNIVISION Network commercial announcements contained therein during a time period(s) which shall be of quality and rating value comparable to that of the time period(s) at which such programming was not broadcast.

(d) AFFILIATE and UNIVISION agree that responsibility for billing and collection of accounts shall be divided as follows:

(i) UNIVISION shall be responsible for the billing and collection of all Network Sales.

(ii) AFFILIATE shall be responsible for the billing and collection of all National Sales and Local Sales.

(e) AFFILIATE shall provide UNIVISION an accurate accounting of all time Sales from all sources on or before the fifteenth (15^th) of the month following the month of performance of said Sales.

(f) The amounts payable from AFFILIATE to UNIVISION, pursuant to Section 8(a), shall be paid monthly no later than the fifteenth (15th) of each month for all Sales made during the previous broadcast month. Payments from AFFILIATE to UNIVISION shall be accompanied by statements setting forth the name of each advertiser, amounts of time National Sales for which payments were received, the amount of agency commissions due thereon, the net proceeds from such National Sales, and the percentage due UNIVISION.

9. Non-Network Programs. UNIVISION shall retain the right, within its sole discretion, to produce and/or to distribute, by means other than the UNIVISION Network, Non-Network Programming of every nature and kind. UNIVISION may, but is not required to, offer such Non-Network Programming to AFFILIATE. In the event that UNIVISION chooses to offer such Non-Network Programming to AFFILIATE, it shall do so by providing a Terms Sheet to AFFILIATE which shall specify the time period in which AFFILIATE may accept such Non-Network Programming on the terms proposed by UNIVISION. In the event of a timely acceptance by AFFILIATE, the compensation and carriage for such Non-Network Programming shall be on the terms as agreed between the parties, and the provisions of this Agreement shall not govern the distribution or broadcast of such Non-Network Programming. In the event that AFFILIATE does not accept UNIVISION’s offer or terms within the time period specified in the Terms Sheet, it shall be assumed that AFFILIATE has rejected the Non-Network Programming, and UNIVISION shall be free, within its sole discretion, to offer the Non-Network Programming to any other station or medium on any terms whatsoever.

10. Unauthorized Preemptions. Without limiting any other rights of UNIVISION under this Agreement or otherwise, if within any twelve (12) month period during the term of this Agreement, any Station makes three (3) or more Unauthorized Preemptions of any UNIVISION Network Programming (or AFFILIATE or Station states, either in general or specific terms, that Station intends to make such Unauthorized Preemptions or UNIVISION reasonably concludes, based upon AFFILIATE’s or Station’s actions or otherwise, that such Unauthorized Preemptions shall occur), UNIVISION may, with respect to such Station, upon thirty (30) days prior written notice to AFFILIATE:

(a) terminate AFFILIATE’s right to broadcast any one or more series or other UNIVISION Network Programming, as UNIVISION shall elect, and, to the extent and for the period(s) that UNIVISION elects, thereafter license the broadcast to the applicable series or other UNIVISION Network Programming to any other television Station or Stations, low power television Station or Stations, or cable television system or systems located in the community of license of the Station or elsewhere; or

(b) terminate this Agreement without any obligation, monetary or otherwise, to AFFILIATE and/or its employees, agents, or customers, or to any other person or entity.

11. Delayed Telecasts. UNIVISION shall designate which UNIVISION Network Programming shall be be carried live, and which UNIVISION Network Programming, if any, shall be broadcast on a delayed basis. AFFILIATE shall conform its broadcast to the schedule designated by UNIVISION, and shall not delay the telecast of any UNIVISION Program, nor change the order of the UNIVISION Network Programming schedule, without the express written consent of UNIVISION. AFFILIATE is hereby authorized to record UNIVISION Network Programming to the extent necessary to permit such authorized delayed telecast, provided however, that AFFILIATE shall erase, destroy, or return to UNIVISION at AFFILIATE’s expense such recording within seventy-two (72) hours of the broadcast of the recorded material.

12. Force Majeure. UNIVISION shall not be liable to AFFILIATE nor shall it incur any liability hereunder for failure to deliver UNIVISION Network Programming or any part thereof, nor shall AFFILIATE be liable to UNIVISION nor shall it incur any liability hereunder for failure to broadcast any UNIVISION Network Programming or any part thereof, by reason of a Force Majeure Event.

13. Written Reports. AFFILIATE shall promptly upon UNIVISION’s request submit to UNIVISION in writing, upon forms approved by UNIVISION, such reports as UNIVISION may request regarding the broadcast by each of AFFILIATE’s Stations of UNIVISION Network Programming and commercial announcements.

14. Performing Rights Licenses. All UNIVISION Network Programming shall, to the extent possible, be (a) cleared at the source, (b) within the repertoire of ASCAP, BMI, SESAC, or another performing rights society from which UNIVISION has obtained a performance license, or (c) in the public domain.

15. Indemnification.

(a) UNIVISION shall indemnify, defend and hold AFFILIATE, its affiliates, successors and assigns, and the respective owners, officers, directors, agents, and employees of each, harmless against and from all direct claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) asserted by third parties alleging that the UNIVISION Network Programming violates or infringes upon the trade name, trademark, copyright, literary or dramatic right, or right of privacy or publicity of any party, or constitute a libel or slander of any party; provided, however, that the foregoing indemnification shall not apply: (i) to public performance rights in music, (ii) to any material furnished or added by any party other than UNIVISION after delivery of the UNIVISION Network Programming to AFFILIATE or the Stations, (iii) to the extent such UNIVISION Network Programming is changed or otherwise

affected by insertion or deletion of any material by any party other than UNIVISION after delivery of the UNIVISION Network Programming to the Stations, (iv) to compliance with the Communications Act of 1934 or to any rules or regulations adopted thereunder by the FCC or any successor agency, or (v) unless AFFILIATE promptly notifies UNIVISION of any claim or litigation to which this indemnity shall apply, and that AFFILIATE cooperates fully with UNIVISION in the defense or settlement of such claim or litigation. The foregoing indemnity shall not apply to any claim by AFFILIATE or the Stations for lost revenue, lost profits or other consequential damages, if any, regardless of whether such alleged damages are or were foreseeable. UNIVISION makes no representations, warranties or indemnities, express or implied, except as expressly set forth in this Section 15(a).

(b) AFFILIATE shall indemnify, defend and hold UNIVISION, its affiliates, successors and assigns, and the respective owners, officers, directors, agents, and employees of each, harmless against and from all direct claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) caused by or arising out of matters relating (i) to public performance rights in music, (ii) to any material furnished or added by any party other than UNIVISION after delivery of the UNIVISION Network Programming to AFFILIATE or the Stations, (iii) to the extent such UNIVISION Network Programming is changed or otherwise affected by insertion or deletion of any material by any party other than UNIVISION after delivery of the UNIVISION Network Programming to the Stations, (iv) any breach of any of AFFILIATE’s representations, warranties, covenants or agreements hereunder, (v) any programming broadcast by Stations other than UNIVISION Network Programming provided by UNIVISION to AFFILIATE and the Stations pursuant to the terms of this Agreement, (vi) from any actions or claims by customers, agents, or employees of Stations pursuant to a termination of this Agreement pursuant to Section 16 hereof or otherwise, or (vii) any other action on the part of AFFILIATE and/or Stations; provided, however, that the foregoing indemnification shall not apply unless UNIVISION promptly notifies AFFILIATE in writing of any claim or litigation to which this indemnity shall apply, and UNIVISION cooperates fully with AFFILIATE in the defense or settlement of such claim or litigation. The foregoing indemnity shall not apply to any claim by UNIVISION for lost revenue, lost profits or other consequential damages, if any, regardless of whether such alleged damages are or were foreseeable.

16. Termination. This Agreement shall terminate under the following conditions:

(a) The term of this Agreement shall expire without extension pursuant to Section 3 hereof;

(b) At option of UNIVISION, in its sole discretion, upon the occurrence of any of the following events:

(i) Upon not less than thirty (30) days’s written notice to AFFILIATE in the event of a material breach by AFFILIATE by any of its material covenants, representations, warranties, duties, or obligations pursuant to this Agreement with respect to a Station, or any other material term or condition hereof, which AFFILIATE has not cured within ten (10) days of

written notice of default from UNIVISION; or such longer period if AFFILIATE has commenced such cure within said ten (10) days and thereafter continues to diligently pursue such cure to the reasonable satisfaction of UNIVISION;

(ii) Pursuant to Section 10(b) hereof;

(iii) Immediately upon written notice to AFFILIATE in the event (a) AFFILIATE files a petition seeking relief under Title 7 or 11 of the United States Code or under any other Federal or state bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer or consent admitting the material allegations of a petition filed against in any proceeding under any such law, or (b) of entry against AFFILIATE of any order of relief under Title 7 or 11 of the United States Code, or entry of any other order, judgment or decree against AFFILIATE by any court of competent jurisdiction, approving a petition seeking bankruptcy, reorganization, readjustment of debt, dissolution, liquidation, or winding up of AFFILIATE, or (c) of appointment of a receiver, trustee or liquidator of AFFILIATE or of all or substantially all of the assets of AFFILIATE, or (d) if any petition seeking an order of relief under Title 7 or 11 of the States Code or any other such petition is filed against AFFILIATE and is not stayed or dismissed within one hundred twenty (120) days after the date of such filing, or (e) AFFILIATE makes a general assignment of its assets, or transfers a controlling interest, to creditors or other persons or entities;

(iv) Pursuant to Section 18 hereof;

(v) With respect to a Station, upon not less than six (6) months written notice to AFFILIATE in the event UNIVISION, in its sole and voluntary discretion, chooses to cease to operate the UNIVISION Network, or to cease to provide UNIVISION Network Programming to television stations licensed to the community to which a Station is licensed, provided, however, that in the event UNIVISION is required to cease to operate the UNIVISION Network or to cease to provide UNIVISION Network Programming to television stations licensed to the community to which a Station is licensed due to circumstances reasonably beyond its control, including, but not limited to, Force Majeure Events and court or government orders or decrees, and the circumstances preclude, or effectively preclude, UNIVISION from giving six (6) months notice of termination, UNIVISION shall give AFFILIATE as much notice as is reasonably possible under the circumstances;

(vi) Intentionally deleted;

(vii) Upon not less than thirty (30) days written notice to AFFILIATE in the event that a Station becomes substantially less valuable to UNIVISION as an affiliate than it is at the time of execution of this Agreement as a result of a materially adverse change affecting the transmitter location, power, frequency, or hours or mode of operation of the Station, or a materially adverse change in the business practices or public reputation or image of Station, AFFILIATE, or their owners and/or management;

(viii) Pursuant to Section 21 hereof;

(ix) Pursuant to Section 22 hereof;

(x) Pursuant to Section 25(a)(v) hereof; or

(xi) Pursuant to Section 29 hereof.

(c) At option of AFFILIATE, in its sole discretion upon thirty (30) days written notice to UNIVISION in the event of a material breach by UNIVISION in any of its covenants, representations, warranties, duties, or obligations pursuant to this Agreement, or any other term or condition hereof, which UNIVISION has not cured within ten (10) days of written notice of default from AFFILIATE.

17. Exclusive Representation. AFFILIATE and UNIVISION agree that UNIVISION shall be the exclusive representative of AFFILIATE for the sale of all national and regional advertising throughout the United States and the world. AFFILIATE agrees to refer requests by any potential national or regional advertisers to UNIVISION, which shall be responsible for servicing such accounts. In any event, all revenues received from national or regional advertising accounts, whether or not serviced by UNIVISION, shall be included in Net National Sales for the purpose of computing the commission due UNIVISION as national and regional sales representative pursuant to Section 8(a) hereof. UNIVISION, in its role of exclusive national sales representative for AFFILIATE, shall have no obligation to market, sell, or administer the sale of any commercial announcement, infomercial, program, or other product which would conflict with any UNIVISION Network Programming or commercial announcement scheduled by UNIVISION for broadcast over the Stations.

18. Assignment.

(a) This Agreement shall not be assigned, in whole or in part, by AFFILIATE, directly or indirectly (by operation of law, transfer of stock, merger or otherwise) without the prior written consent of UNIVISION. The decision to grant or not grant such consent shall be at the sole discretion of UNIVISION. Any purported assignment by AFFILIATE in the absence of UNIVISION’s prior written consent shall be null and void and not enforceable against UNIVISION. In the event of an attempted unconsented assignment or transfer, UNIVISION may, in its sole discretion, terminate this Agreement effective upon thirty (30) days notice to AFFILIATE and the purported assignee. Any assignment or transfer consented to by UNIVISION shall not relieve AFFILIATE of its obligations hereunder.

(b) AFFILIATE shall immediately notify UNIVISION in writing of any application tendered to the FCC pertaining to an assignment of AFFILIATE’s license for any Station or a transfer of control of AFFILIATE. Except as to “short form” assignments of license or transfers of control made pursuant to Section 73.3540(f) of the Rules and Regulations of the

FCC, UNIVISION shall have the right to terminate this Agreement or to remove a Station being assigned or transferred from Schedule B, effective upon thirty (30) days notice to AFFILIATE and the transferee or assignee of such termination, which notice may be given at any time within ninety (90) days after the later occurring of: (i) the date on which UNIVISION learns of such assignment or transfer, or (ii) the date on which UNIVISION receives written notice of such assignment or transfer. Upon UNIVISION’s request, AFFILIATE shall procure and deliver to UNIVISION, in form satisfactory to UNIVISION, the agreement of the proposed assignee or transferee that, upon consummation of the assignment or transfer of control of the Station’s authorization, the assignee or transferee will assume and perform this Agreement in its entirety without limitation of any kind. The failure of AFFILIATE to notify UNIVISION of the proposed assignment or transfer of control of a Station’s authorization, or to procure the agreement of the proposed assignee or transferee in accordance with this Section, shall be deemed a material breach of this Agreement, and in such event UNIVISION may, in its sole discretion and without limitation to any other remedies available to it, terminate this Agreement by giving notice of such termination, which termination shall be effective on the date specified in said notice of termination, or to remove any or all Stations subject to such an assignment or transfer or control from Schedule B hereto.

(c) Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. AFFILIATE confirms that UNIVISION has no obligation, whether express or implied, to consent to the assignment of AFFILIATE’s rights, duties, benefits or obligations pursuant to this Agreement to any other person or entity, and that the grant of such consent shall be within the sole discretion of UNIVISION. AFFILIATE further confirms that UNIVISION shall have no obligation, whether express or implied, to continue the affiliation of a Station with UNIVISION or the UNIVISION Network, whether or not on terms or conditions equivalent to those set forth in this Agreement, in the event of an assignment of a Station’s license or a transfer of control of AFFILIATE.

19. Affirmative UNIVISION Rights. Nothing in this Agreement shall preclude UNIVISION from taking any action not specifically prohibited herein, including, but not limited to:

(a) Establishing additional interconnected networks, including but not limited to, television or audio broadcasting networks and cable programming networks.

(b) Affiliating the UNIVISION Network with any international network on the terms and conditions determined solely by UNIVISION.

(c) Transferring any UNIVISION Programs from the UNIVISION Network to any other networks, whether established by UNIVISION or any other entity.

20. Audit Rights. UNIVISION shall have the right to perform periodic audits of AFFILIATE and the Stations to insure compliance with the provisions of this Agreement. AFFILIATE shall provide UNIVISION with access to the pertinent books and records of

AFFILIATE and the Stations so that UNIVISION’s auditors may verify the accuracy and validity of the time Sales reported to UNIVISION by AFFILIATE as well as all other aspects of compliance with the provisions of this Agreement, including, but not limited to, Sections 5, 6, 7, 8, 10, 11, 14, 17, 18, and 25 hereof. The cost of any such audit shall be borne by UNIVISION; provided, however, that in the event such an audit reveals AFFILIATE to be in material breach of, or in default under, this Agreement, that AFFILIATE has failed to pay UNIVISION all amounts due to UNIVISION pursuant to Section 8(a) hereof, or a Station has made more than three Unauthorized Preemptions of UNIVISION Network Programming during the preceding twelve (12) month period, the costs of said audit shall be borne by AFFILIATE.

21. Facilities.

(a) AFFILIATE represents and warrants to UNIVISION that Schedule B accurately sets forth the facilities authorized for, and utilized by, the Stations, and that AFFILIATE has attached to Schedule B contour maps for Stations, prepared in compliance with standards of good engineering practice, pursuant to National Bureau of Standards Tech Note 101 (commonly known as Longley-Rice) propagation methodology, and in form reasonably acceptable to UNIVISION, which depicts the City Grade, Grade A and Grade B contours (each as defined by the FCC) of Stations, and includes data as to the areas and populations within each such contour. In the event that the transmitter location, antenna height above average terrain, effective radiated power, or frequency or hours of operation of any individual Station as set forth on Schedule B are changed at any time so as to (i) reduce the number of Hispanic Households within a Station’s Grade B contour or (ii) to reduce the number of hours of Spanish language programming, UNIVISION, in its sole discretion, shall have the right to terminate this Agreement with respect to such station upon thirty (30) days advance written notice. The above operating hours provision shall not apply to the extent that the reduction in AFFILIATE’s hours of operation is in response to a reduction in programming provided to AFFILIATE by UNIVISION.

(b) UNIVISION may, from time to time at its sole discretion, establish minimum standards governing matters that, in UNIVISION’s sole judgment, require standardization and uniformity among affiliates of the UNIVISION Network, including but not limited to (i) specifications and layout (including form, color, number, location and size) of signage, billboards, and print and other advertising relating to UNIVISION or any UNIVISION Program or Programming; (ii) the design, color, appearance and maintenance of exterior and public portions of studios and other facilities utilized by the Stations; and (iii) technical standards relating to commercial announcements, public service announcements, and Local Programming of the Stations.

(c) AFFILIATE represents and warrants to UNIVISION that Schedule C sets forth a true and accurate list of all cable systems on which Stations are currently carried pursuant to a retransmission consent agreement, and, with respect to each retransmission consent agreement, whether either party is currently in default thereunder.

22. Retransmission Consent. Should AFFILIATE be accorded the right under any local, state or federal rule, regulation or law to elect (a) to require any cable television system, direct broadcast satellite or other distribution system to obtain AFFILIATE’S consent to such system’s transmission or retransmission of the Stations’ broadcast of any UNIVISION Network Programming, or is given any similar rights (a “Retransmission Consent Election”) or (b) to require any such system to comply with any “must carry” rule, regulations or laws (a “Must Carry Election”), then AFFILIATE shall notify UNIVISION at least sixty (60) days in advance of any such election by AFFILIATE and UNIVISION shall negotiate in good faith, for a period of no less than sixty (60) days, regarding (x) whether AFFILIATE shall make a Retransmission Consent Election or a Must Carry Election and (y) in the event that AFFILIATE determines to make a Retransmission Consent Election, to which systems such consent is to be given, and if so, the terms under which it is to be given (including without limitation, the amount of compensation to be paid by any such system for such consent and the division of that compensation between AFFILIATE and UNIVISION). If AFFILIATE and UNIVISION do not reach agreement with respect to all of the foregoing matters for any individual Station, then without limitation to any of UNIVISION’s rights under this Agreement, UNIVISION shall have the right to terminate this Agreement with respect to such Station upon thirty (30) days written notice to AFFILIATE. Without limiting the generality of the foregoing, AFFILIATE acknowledges and agrees that in no event shall AFFILIATE grant retransmission consent or otherwise permit any retransmission of a Station’s broadcast of any UNIVISION Network Programming without the prior written consent of UNIVISION.

23. Severability. Should any part of this Agreement become inconsistent with the rules or policies of the FCC or the agreed upon governing law and the parties not to be the beneficiaries of an appropriate waiver, that part of the Agreement shall terminate upon the date that such an inconsistency would otherwise exist, but all other parts of the Agreement shall remain in full force and effect. In such event, the parties shall use their best efforts to modify this Agreement so as to conform it with the applicable FCC rule, policy, or law, if possible, while achieving their respective objectives under this Agreement.

24. No Implied Waiver. Except as expressly provided for herein, no failure or delay on the part of the parties hereto to exercise any right, power or privilege hereunder or under any instrument executed pursuant hereto shall operate as a waiver; nor shall any single or partial exercise or any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. All rights and remedies granted herein shall be in addition to other rights and remedies to which the parties may be entitled at law or in equity

25. Broadcaster’s Liability Insurance.

(a) AFFILIATE shall procure and maintain in force during the term hereof Broadcaster’s liability insurance for the Stations, including broad form errors and omissions coverage, with minimum aggregate limits of liability of $5,000,000.00 or more for each occurrence.

(i) Said coverage shall be on an occurrence form, primary and not contributing, with respect to:

a. any material furnished or added by any party other than UNIVISION after delivery of UNIVISION Network Programming to AFFILIATE or the Stations;

b. to the extent any such UNIVISION Network Programming is changed, altered or otherwise affected by insertion or deletion of any material by any party other than UNIVISION; and

c. any programming broadcast by the Stations other than UNIVISION Network Programming provided by UNIVISION to the Stations.

(ii) Prior to use of UNIVISION Network Programming, AFFILIATE shall cause its broadcaster’s liability insurance carrier(s) to add “Univision Network Limited Partnership, Univision Television Group, Inc., their parent companies, affiliates, officers, directors, employees, successors and assignees” as additional insured parties. All such policies shall be issued by companies of recognized responsibility, having a Bests Key Rating Guide of not less than A, Class VII, licensed to do business in the state where each Station is located.

(iii) An original certificate of insurance and notarized copies of the insurance policy endorsement(s) naming UNIVISION, Univision Television Group, Inc., their parent companies, affiliates, officers, directors, employees, successors and assignees as additional insured parties shall be delivered to UNIVISION by AFFILIATE within ten (10) days of the execution of this Agreement. Each such certificate and endorsement must be signed by an authorized agent of the insurance company issuing such coverage, and shall provide that thirty (30) days notice of cancellation shall be given to UNIVISION prior to termination, cancellation, or non-renewal thereof. No action or inaction by UNIVISION, including, without limitation, failure to demand such documentation or continued provision of programming in the absence of such policy, certificate, and/or endorsement(s), shall be construed as a waiver by UNIVISION of AFFILIATE’s obligation to provide the insurance coverage specified herein.

(iv) The foregoing insurance requirements shall not be deemed a limitation of AFFILIATE’s liability, if any, under this Agreement.

(v) In the event AFFILIATE or the Stations fail to comply with the provisions of this Section 25(a), UNIVISION may, in its sole discretion, terminate this Agreement upon thirty (30) days written notice to AFFILIATE.

26. Governing Law. This Agreement and the rights and obligations of the parties, including without limitation the validity, construction, interpretation, performance and termination of this Agreement, shall be governed by and construed by the laws of the State of

New York applicable to contracts between New York parties made and performed in that state, without regard to conflicts of law principles.

27. Notices. Any notice required or permitted to be given hereunder shall be in writing and shall be deemed duly given if delivered on the date of personal delivery or on the date of receipt if mailed by registered or certified mail, postage prepaid and return receipt requested, and shall be deemed to have been received on the date of personal delivery or on the date set forth on the return receipt, to the following addresses, or to such other address as any party may request in writing to the other party:

Notices to AFFILIATE shall be sent to:

Entravision Communications Corporation

Attention: Walter F. Ulloa and

Phillip C. Wilkinson

2425 Olympic Boulevard

Suite 6000 West

Santa Monica, California 90404

with a copy, which shall not constitute notice, to:

Michael Rowles, Esq.

2425 Olympic Boulevard

Suite 6000 West

Santa Monica, California 90404

Notices to UNIVISION shall be sent to:

Ray Rodriguez

President and Chief Operating Officer

Univision Network Limited Partnership

9405 NW 41st Street

Miami, FL 33178

with a copy, which shall not constitute notice, to:

General Counsel

Univision Network, L.P.

5999 Center Drive

Los Angeles, CA 90045

28. Limitations of Damages. The parties to this Agreement expressly agree that in the event of termination or breach of this Agreement, neither party shall be liable to the other for

any lost revenue, lost profits or other consequential damages allegedly resulting from such termination or breach, including, but not limited to, any expenditures, investments, leases or commitments made in anticipation of the continuance of this Agreement, regardless of whether such alleged lost revenue, lost profits or other consequential damages are foreseeable.

29. Confidentiality. In its capacity as an affiliate of UNIVISION pursuant to this Agreement, AFFILIATE may acquire or receive information relating to UNIVISION and its affiliates which is of a confidential and proprietary nature. Such information may include, but is not limited to, financial information, business and marketing plans, advertising rates and practices, viewer mailing lists, and plans related to programming and special promotional events. AFFILIATE shall at all times, both during and after the term of this Agreement, maintain in the strictest confidence and trust all of such confidential and proprietary information and shall not directly or indirectly disclose the same to any other person or entity, whether during the term of this Agreement or thereafter. AFFILIATE acknowledges that a breach of this Section may subject UNIVISION to immediate and irreparable harm for which damages may not be an adequate remedy and, accordingly, AFFILIATE acknowledges and agrees that UNIVISION may enforce the provisions hereof by means of injunctive or other equitable relief. Any breach of this Section shall constitute a material breach of this Agreement and shall entitle UNIVISION to immediately terminate this Agreement. The provisions of this Section shall survive the expiration and termination of this Agreement.

30. No Joint Venture or Partnership. Nothing contained in this Agreement shall create any partnership, association, joint venture, fiduciary or agency relationship between UNIVISION and AFFILIATE. Except as otherwise specifically set forth herein, neither UNIVISION or AFFILIATE shall be authorized or empowered to make any representation or commitment or to perform any act which shall be binding on the other unless expressly authorized or empowered in writing.

31. Entire Agreement. This Agreement contains all of the terms agreed upon by the parties with respect to the subject matter hereof; it incorporates and merges any and all previous communications and understandings, oral and written, and cannot be amended or changed except in a writing executed by the parties hereto.

32. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each such counterpart were upon the same instrument.


UNIVISION NETWORK LIMITED PARTNERSHIP

Signature:		/s/ ROBERT V. CAHILL

Name		Robert V. Cahill

Title:		Vice President & Secretary

Date:		August 14, 2002

AGREED AND ACCEPTED:


ENTRAVISION COMMUNICATIONS CORPORATION

Signature:		/s/ WALTER F. ULLOA

Name:		Walter F. Ulloa

Title:		Chairman and CEO

Date:		August 14, 2002

SCHEDULE A

[This Schedule A, which contains program schedule information, has been excluded from this filing.]

SCHEDULE B

[This Schedule B, which contains a list of facilities for those stations that are subject to the Network Affiliation Agreement and certain technical data about such facilities (including channel number, frequency, latitudinal and longitudinal location of transmitters, tower statistics in meters and feet and power levels), has been excluded from this filing.]

SCHEDULE C

[This Schedule C, which contains cable carriage information, has been excluded from this filing.]

EX-10.2 3 dex102.htm NETWORK AFFILIATION AGREEMENT - MARCH 17, 2004 Network Affiliation Agreement - March 17, 2004

EXHIBIT 10.2

MASTER

NETWORK AFFILIATION AGREEMENT

This Network Affiliation Agreement is entered into this 17^th day of March, 2004, by and between ENTRAVISION COMMUNICATIONS CORPORATION and TELEFUTURA.

WHEREAS, AFFILIATE, as licensee of the Stations pursuant to an authorization issued by the FCC, intends to offer a full time Spanish language television program service using the facilities of the Stations;

WHEREAS, TELEFUTURA operates the Network which provides Spanish language television programming on a national, interconnected basis; and

WHEREAS, AFFILIATE desires to affiliate with the Network, and to appoint TELEFUTURA as the Stations’ exclusive national and regional sales representative.

AFFILIATE, first used in the preamble to this Agreement, means Entravision Communications Corporation, a Delaware corporation.

Agreement, first used in Section 1 hereof, means the instant Master Network Affiliation Agreement.

Authorized Preemption, first used in Section 1 hereof, below, means a failure by AFFILIATE to broadcast any Program (i) pursuant to Section 6(a) of this Agreement, (ii) due to force majeure as provided for in Section 12 of this Agreement, or (iii) for which AFFILIATE has obtained the written consent of TELEFUTURA.

Commencement Date has the meaning established in Section 3 hereof.

FCC, first used in the preamble to this Agreement, means the Federal Communications Commission or any successor agency.

Local Availability, first used in Section 7(b) hereof, means a Commercial Availability designated by TELEFUTURA pursuant to this Agreement for broadcast of a commercial advertisement by a Station and not by other TELEFUTURA affiliates on an interconnected or delayed telecast basis.

Local Programming Window, first used in Section 5(b) hereof, means a time period indicated on the attached Schedule A as being occupied by Local Programming.

Local Sale, first used in Section 7(e) hereof, means a Sale of advertising for broadcast on AFFILIATE’s Stations, and not for broadcast on the Network generally, made by the local sales staff of AFFILIATE.

National Sale, first used in Section 7(e) hereof, means a Sale of advertising for broadcast on AFFILIATE’s Stations, and not for broadcast on the Network generally, made by TELEFUTURA as the exclusive national and regional sales representative of AFFILIATE, and any other Sale which is of a type normally considered within the broadcast industry to be a national or a regional advertising sale.

Net National Sale, first used in Section 8(a) hereof, means a National Sale of advertising net only of agency commission.

Network, first used in the preamble to this Agreement, means that certain program service to be distributed by or on behalf of TELEFUTURA on an interconnected basis to affiliates for broadcast to the public.

Network Availability, first used in Section 5(b)(ii) hereof, means a Commercial Availability designated by TELEFUTURA pursuant to this Agreement for the simultaneous broadcast of a commercial announcement by multiple TELEFUTURA affiliates on an interconnected basis, including delayed telecasts pursuant to Section 11 of this Agreement.

Network Exclusivity Zone, first used in Section 5(m) hereof, means the applicable area as set forth in Sections 76.92 through 76.97 of the rules and regulations of the FCC.

Network Program Schedule, first used in Section 5(b) hereof, means the programming provided by TELEFUTURA to its affiliates on a regular basis for broadcast during a Network Time Period, including, but not limited to, all Network Programming, commercial announcements, TELEFUTURA identification announcements, TELEFUTURA promotional announcements, public service announcements, credits and cross promotional announcements for any of TELEFUTURA’s other networks, or any other network or program service owned or operated by, or under common ownership or control with, TELEFUTURA, including but not limited to cable programming networks such as Univision and Galavision, and other interstitial material distributed by TELEFUTURA to AFFILIATE.

Network Programming, first used in Section 1 hereof, means, collectively, all Programs, public service announcements, promotional announcements, network identifications and other interstitial material which are distributed to affiliates of the Network.

Network Sale, first used in Section 7(d) hereof, means a Sale of advertising for broadcast on the Network.

Network Time, first used in Section 7 hereof, means the entire clock hour or half-hour during which a Program is broadcast including Station breaks and adjacencies. (E.g., for a one-hour Program broadcast during the 7:00 and 8:00 time period, all commercials sold between 7:00 and 8:00 are within Network Time, even if the program actually began after 7:00 and ended before 8:00.)

Network Time Period, first used in Section 1 hereof, means the time periods indicated on the attached Schedule A as being occupied by Network Programming.

Non-Network Programming, first used in Section 9 hereof, means programs, program series, and programming of any nature or kind, including, but not limited to, special sports programs and special events programs, such as political conventions, election coverage, presidential inaugurations, parades, and pageants, and other programs and program series, which are not then regularly scheduled by TELEFUTURA for broadcast on an interconnected basis by

affiliates of the Network during those hours that then comprise the Network Programming Schedule.

Program, first used in Section 1 hereof, means a television program distributed by or on behalf of TELEFUTURA for broadcast on an interconnected basis by affiliates of the Network.

Sale, first used in Section 1 hereof, means a sale of advertising.

Station or Stations, first used in the preamble to this Agreement, means the television stations listed in Schedule B. Additional stations will be incorporated into Schedule B and subject to the terms and conditions of this Agreement by the parties revising Schedule B to include such station.

Terms Sheet, first used in Section 9 hereof, means a writing setting forth the principal terms and conditions on which TELEFUTURA offers a non-network program or program series to AFFILIATE, including, but not limited to, the time permitted for acceptance of said offer by AFFILIATE.

Unauthorized Preemption, first used in Section 10 hereof, means any preemption or failure to broadcast any Program, in whole or in part, other than an Authorized Preemption.

TELEFUTURA, first used in the preamble to this Agreement, means TELEFUTURA, a Delaware corporation.

2. Programming. TELEFUTURA shall deliver to Stations for free over the air television broadcasting on Stations, all Network Programming which TELEFUTURA makes available to be broadcast on the Network on a television network basis in the community in which each Station is located, except as hereinafter provided. Subject to the limitations set forth in this Agreement, AFFILIATE is hereby authorized to broadcast during the term of this Agreement the Network Programming over the facilities of the Stations. AFFILIATE shall not and shall not authorize others to broadcast, rebroadcast, or otherwise use any program (or part thereof) or other material supplied by TELEFUTURA except as specified in this Agreement or specifically authorized in writing by TELEFUTURA.

3. Term. The initial term of this Agreement shall commence on January 14, 2002 (the “Commencement Date”), and, subject to the early termination provisions set forth herein, shall terminate at 11:59 p.m. on December 31, 2021 (“Initial Term”). After the Initial Term, the term of this Agreement may be extended for additional successive terms of two (2) years each by TELEFUTURA, in its sole discretion, giving written notice of such extension and the terms and conditions upon which such extension is offered to AFFILIATE at least ninety (90) days prior to the expiration of the then current term; provided, however, that if, within thirty (30) days of the AFFILIATE’s receipt of an extension notice from TELEFUTURA, AFFILIATE, in its sole

discretion, gives TELEFUTURA written notice that AFFILIATE rejects such extension on such terms and conditions, then the extension notice shall not be effective and this Agreement shall terminate upon expiration of the then-current period. TELEFUTURA shall have no obligation, whether express or implied, to extend this Agreement beyond its Initial Term or to continue the affiliation of the Stations with TELEFUTURA or the Network, whether or not on terms or conditions equivalent to those set forth in this Agreement, beyond the termination hereof. Any presently existing Network Affiliation Agreements between TELEFUTURA and AFFILIATE shall be deemed terminated as of the commencement of this Agreement. Upon the termination or expiration of the term of this Agreement, all of AFFILIATE’s and Stations’ rights to broadcast or otherwise use any Network Programming or any trademark, logo, or other material or item hereunder shall immediately cease and neither AFFILIATE nor Stations shall have any further rights whatsoever with respect to such program, material, or item.

4. Distribution. TELEFUTURA shall transmit the Network Programming via satellite, and the Network Programming shall be deemed delivered to AFFILIATE when transmitted to the satellite. The choice of satellite to be used to transmit the Network Programming shall solely be within the discretion of TELEFUTURA, and TELEFUTURA may, from time to time, at its sole discretion, change the satellite being used for said transmissions, in which case it shall, to the extent feasible, give prior notice to AFFILIATE. All costs and expenses of transmitting the Network Programming by satellite, including the maintenance of a network operations center, satellite transmission facilities and satellite transponder time, shall be borne by TELEFUTURA. Any and all costs of whatever kind or nature incurred with respect to the reception or pickup of the Network Programming from the satellite, and its rebroadcast by the Stations, shall be borne by and shall be the sole responsibility of AFFILIATE. Where, in the sole opinion of TELEFUTURA, it is impracticable or undesirable to furnish the Network Programming over satellite facilities, TELEFUTURA may deliver the program to Stations by any other means, including, but not limited to private or common carrier microwave, fiber optic links, film, video tape or other form of recording in sufficient time for Stations to broadcast the Network Programming at the time scheduled by TELEFUTURA. Prior to instituting a change in the method of program delivery to AFFILIATE, TELEFUTURA shall, if practicable, consult with AFFILIATE and give consideration to the increased program delivery costs to be incurred by AFFILIATE as a result of such change. If Network Programming is supplied via recordings of any kind, they shall be used by AFFILIATE only for a single television broadcast over each Station, and AFFILIATE shall comply with all TELEFUTURA instructions concerning the disposition to be made of each such recording received by each Station hereunder.

5. Additional Terms and Conditions Regarding Programming. Except as contemplated in Section 6, below, AFFILIATE’s broadcast of Network Programming and Programs pursuant to this Agreement shall be subject to the following terms and conditions:

(a) The selection, scheduling, substitution, cancellation and withdrawal of any Network Programming or portion thereof shall at all times remain within the sole discretion and control of TELEFUTURA. TELEFUTURA reserves the right to obtain programming from any

source whatsoever, including but not limited to obtaining all or a portion of the Network Programming from one or more program suppliers.

(b) Schedule A hereto sets forth the current schedule of hours which constitute the Network Program Schedule, as well as the current schedule of segments which constitute the Local Programming Windows. Local Programming Windows may be changed by TELEFUTURA, at any time in its sole discretion. TELEFUTURA will provide written notification of such change in the Local Programming Window at least ten (10) days prior to implementation, when such Local Programming Window change is permanent. However, where TELEFUTURA cannot provide ten days advance notice, TELEFUTURA will provide as much advance notice as practicable of such Local Programming Window. The selection, scheduling, substitution, cancellation, preemption and withdrawal of Network Programming scheduled for broadcast by affiliates of Network during those hours constituting the Network Program Schedule shall at all times remain within the sole discretion and control of TELEFUTURA. AFFILIATE agrees to broadcast over the facilities of each Station the complete Network Program Schedule in its entirety without unauthorized interruption, editing, modification, addition or deletion, on the dates and at the times scheduled by TELEFUTURA; provided, however, that AFFILIATE may delete such words, phrases or scenes as AFFILIATE, in the reasonable exercise of its judgment, determines it would not be in the public interest to broadcast over the AFFILIATE’s Stations.

(c) AFFILIATE agrees to carry network commercials at the time delivered by TELEFUTURA and in the same commercial positions as determined by TELEFUTURA.

(d) During the Digital Transition Period, AFFILIATE shall broadcast the Network Programming provided pursuant to this Agreement simultaneously over the Stations and any Digital Channel operated by AFFILIATE in association with the Stations. AFFILIATE shall insure that the picture resolution quality of the broadcasts of the Network Programming on the Digital Channel shall be equivalent to the TELEFUTURA standard, as determined by TELEFUTURA, in its reasonable discretion and in accordance with then-current industry standards, from time to time.

(e) AFFILIATE shall not broadcast any Network Programming except pursuant to the terms of this Agreement or pursuant to other written authorization from TELEFUTURA.

(f) In no event shall AFFILIATE transmit any Network Programming via the internet, including without limitation, video or audio streaming, simulcasting, or interactive television.

(g) AFFILIATE shall not authorize, cause, or enable anything to be done whereby any Network Programming supplied herein is used for any purpose other than broadcasting by AFFILIATE in the geographic area that AFFILIATE’s Stations is authorized to

serve, which broadcast is intended for reception by the general public in places to which no admission is charged.

(h) AFFILIATE shall not insert or superimpose any crawls, split screens, graphics, logos, trademarks, call letters, insignia, voice overs or other material over any portion of any Network Programming, or compress, speed up, squeeze down, clip or otherwise alter the duration, length, size, appearance or aspect ratio of any Network Programming, without the prior written consent of TELEFUTURA, except in the case of live coverage of fast-breaking news events.

(i) AFFILIATE shall abide by any and all restrictions of which TELEFUTURA advises AFFILIATE pertaining to the promotion of Network Programming, including, but not limited to, on-the-air promotion, billboards, cable advertisements, and newspaper, shopper, or other printed advertisements, announcements or promotions. This provision shall not prohibit AFFILIATE from providing date and time information regarding Network Programming to newspapers, TV Guide, cable guides, and other program listing services. TELEFUTURA shall, from time to time, provide AFFILIATE with written guidelines regarding promotional restrictions, which, as amended or supplemented in writing from time to time, shall govern each Station’s promotional activities until superseded by replacement guidelines supplied by TELEFUTURA.

(j) Except with TELEFUTURA’s prior written consent and except upon such terms and conditions as TELEFUTURA may impose, AFFILIATE shall not authorize, cause, permit or enable anything to be done whereby a recording on film, tape or otherwise is made of Network Programming, provided, however, AFFILIATE may record Network Programming for:

(i) delayed telecasts permitted by this Agreement;

(ii) promotion of the Network, or Network Programming, in programs or promotional announcements broadcast on AFFILIATE’s Stations which TELEFUTURA has had the opportunity to preview and for which TELEFUTURA has given its prior written consent; or

(iii) sales presentations.

(k) AFFILIATE agrees that its local news sets, local promotional announcements, and local identifications will conform to the Network’s graphic standards as established, and modified from time-to-time, by TELEFUTURA and provided in writing to AFFILIATE.

(l) Subject to the provisions of this Agreement, with respect to any Program broadcast by Stations and as to which TELEFUTURA controls the distribution rights with respect to the repeat broadcast of such program on United States broadcast television stations, TELEFUTURA agrees that, during the Exclusivity Period for such Program, it shall not provide

the same Program to any television station licensed to serve the community of license of each Station. As used herein, “Exclusivity Period” with respect to any Program shall mean a period commencing with TELEFUTURA’s first broadcast of such Program and ending on the earlier of (i) the end of the broadcast season in which such Program is first provided to the Station or (ii) thirty (30) days after such TELEFUTURA’s broadcast of such TELEFUTURA Program. Notwithstanding the foregoing, TELEFUTURA may make available to any other station any Program which (i) AFFILIATE has preempted, rejected or refused, or not taken for any reason whatsoever, or which TELEFUTURA has withdrawn from AFFILIATE pursuant to Section 10(a)hereof; (ii) TELEFUTURA may be legally required to make available; or (iii) which, in TELEFUTURA’s sole discretion, is believed to be of overriding public importance.

Nothing contained in this Agreement shall limit TELEFUTURA’s right, at its sole discretion, to distribute the Network and/or Network Programming directly to, and to authorize the retransmission of the Network and/or Network Programming by, any other distribution form, methodology, or medium, including but not limited to broadcast television, cable television, direct broadcast satellite (DBS), MDS, MMDS, or SMATV systems or facilities in any area, provided that in determining whether to distribute directly or authorize the retransmission of the Network and/or Network Programming by the means described, above, TELEFUTURA shall use substantially similar business practices as those TELEFUTURA uses in markets where TELEFUTURA owns and operates television stations.

6. Preemption and Substitution.

(a) With respect to programs or commercial matter offered or already contracted for pursuant to this Agreement, nothing herein contained shall prevent or hinder AFFILIATE from:

(i) rejecting or refusing any Program or commercial matter which AFFILIATE reasonably believes to be unsatisfactory or unsuitable or contrary to the public interest, or

(ii) substituting a program which, in AFFILIATE’s opinion, is of greater local or national importance.

(b) AFFILIATE shall give TELEFUTURA written notice of each such rejection, refusal or substitution, the identity and length of the programming (the “Substitute Programming”) to be substituted for a Program and the justification therefore, not later than seventy-two (72) hours after receiving notice of the Program, or as soon thereafter as possible (including an explanation of the cause for any lesser notice). In the case of proposed program substitution based on greater local or national importance, AFFILIATE shall also indicate why the programming could not reasonably be substituted for Local Programming or carried in a Local Programming Window. TELEFUTURA reserves the right to direct AFFILIATE to broadcast said Program in an alternate time period normally occupied by other Network Programming, or to provide such alternative Network Programming as may be appropriate in the circumstances (which, subject only to the terms of Sections 6 and 10 hereunder, shall be cleared in preference to the Substitute Programming).

(i) is delivered in a form which does not meet accepted standards of good engineering practice;

(ii) does not comply with the rules and regulations of the FCC; or

(iii) differs substantially in style or content from Network Programming which AFFILIATE has broadcast previously and which AFFILIATE reasonably believes would not meet prevailing contemporary standards of good taste in a Station’s community of license.

(d) AFFILIATE confirms that no Network Programming shall be deemed to be unsatisfactory, unsuitable or contrary to the public interest based on programming performance or ratings, advertiser reactions or the availability of alternative programming (including but not limited to sporting events, program length commercials and infomercials) which AFFILIATE believes to be more profitable or more attractive.

(f) AFFILIATE confirms that, in its judgment, the public interest is best served by carriage of Spanish language programming by the Stations. Any programming substituted by AFFILIATE for Network Programming shall be exclusively in the Spanish language.

7. Commercial Scheduling in Network Time.

(a) TELEFUTURA shall determine the number and length of Commercial Availabilities within Network Time.


Program Daypart	Time Period	Time Available to AFFILIATE

Children’s Programming:	Weekends, As Scheduled	4.5 Minutes per Hour (or 50% of all Commercial Availabilities should FCC regulations permit less than 9 minutes of Commercial Availabilities per hour)

Children’s Programming:	Weekdays, As Scheduled	4.5 Minutes per Hour (or 50% of all Commercial Availabilities should FCC regulations permit less than 9 minutes of Commercial Availabilities per hour)

Morning:	06:00 A.M.-12:00 Noon	4.5 Minutes per Hour

Day Time:	12:00 Noon— 04:00 P.M.	4.5 Minutes per Hour

Early Fringe:	04:00 P.M.-07:00 P.M.	4.5 Minutes per Hour

Prime Time:	07:00 P.M.-11:30 P.M.	4.5 Minutes per Hour

Overnight:	03:30 A.M.-05:00 A.M.	0.0 Minutes per Hour

All Other Network Time Periods:		4.5 Minutes per Hour

(c) TELEFUTURA may, from time to time, upon at least sixty (60) days notice to AFFILIATE, revise the schedule and number of minutes available within Network Time to AFFILIATE for the carriage of Commercial Availabilities during regularly scheduled

programming. Notwithstanding the foregoing, TELEFUTURA may, within its sole discretion, without prior notice to AFFILIATE, determine the exact schedule and number of minutes of Commercial Availabilities within each hour of Network Time that may be occupied by Local Availabilities. In no event will the number of minutes of Local Availabilities scheduled by TELEFUTURA be less than twenty percent (20.0%) of the total number of Commercial Availabilities scheduled by TELEFUTURA within that hour, rounded to the next higher commercial unit, except for Children’s Programming, Overnight, and Network News, Sports Programming, and Special Programming. If, during the term of this Agreement, TELEFUTURA authorizes another affiliate, including but not limited to an affiliate owned and operated by TELEFUTURA or an entity under common control with TELEFUTURA, to utilize a greater number of minutes of Local Availabilities per hour during Network Time than AFFILIATE may utilize under the terms of Sections 7(b) and/or (c) hereof, TELEFUTURA shall, upon request, make such additional Local Availabilities available to AFFILATE upon the same terms and conditions for the same period.

(d) All Commercial Availabilities not allocated to AFFILIATE may be used by TELEFUTURA for Network Availabilities. The proceeds from advertising broadcast during those Network Availabilities shall be allocated to Network Sales. TELEFUTURA shall be solely responsible for determining the advertising rates at which such Network Availabilities shall be offered and sold. The time allocated to TELEFUTURA for Network Availabilities shall not be covered or dropped or used for any purpose whatsoever by AFFILIATE without the express prior written consent of TELEFUTURA.

(e) The time allocated to AFFILIATE shall be used for Local Availabilities. Sales of Local Availabilities shall be allocated to Local Sales or to National Sales, as the case may be. AFFILIATE shall be solely responsible for determining the advertising rates at which Local Availabilities shall be offered and sold.

(f) AFFILIATE grants TELEFUTURA the option to purchase from AFFILIATE, at TELEFUTURA’s sole discretion, not more than two (2) minutes of Local Availabilities per hour of network time, for which TELEFUTURA shall reimburse AFFILIATE at the lowest unit rate prevailing during the previous ninety (90) days for local commercial advertisements of the same or most comparable class, daypart, and length actually broadcast by Stations. Said option shall take precedence over other sales of Local Availabilities by AFFILIATE.

8. Compensation. Subject to all other relevant provisions of this Agreement, as consideration for TELEFUTURA’s services as national and regional sales representative for AFFILIATE, AFFILIATE shall pay to TELEFUTURA fifteen percent (15%) of all Net National Sales of each Station.

(a) In the event AFFILIATE packages any Sales which would be included in Net National Sales with other advertising sales which would not be included in Net National Sales, including, but not limited to, a sale in other media such as radio or print by AFFILIATE or

any company affiliated with, controlled by, controlling or under common control with AFFILIATE, either directly or indirectly, such package sales will be allocated pro rata to Net National Sales and to other sales on the basis that the rate card values of each bears to the rate card value for the entire package.

(b) Without limitation to any provision of this Agreement, in the event that AFFILIATE, for any reason, fails to broadcast or advises TELEFUTURA that it will not broadcast any Network Programming as provided herein, then, in each such case, AFFILIATE will “make good” the Network commercial announcements contained therein during a time period(s) which shall be of quality and rating value comparable to that of the time period(s) at which such programming was not broadcast.

(c) AFFILIATE and TELEFUTURA agree that responsibility for billing and collection of accounts shall be divided as follows:

(i) TELEFUTURA shall be responsible for the billing and collection of all Network Sales.

(ii) AFFILIATE shall be responsible for the billing and collection of all National Sales and Local Sales.

(d) AFFILIATE shall provide TELEFUTURA an accurate accounting of all time Sales from all sources on or before the fifteenth (15^th) of the month following the month of performance of said Sales.

(e) The amounts payable from AFFILIATE to TELEFUTURA, pursuant this Section 8, shall be paid monthly no later than the fifteenth (15th) of each month for all Sales made during the previous broadcast month. Payments from AFFILIATE to TELEFUTURA shall be accompanied by statements setting forth the name of each advertiser, amounts of National Sales for which payments were received, the amount of agency commissions due thereon, the net proceeds from such Network Sales, and the percentage due TELEFUTURA.

9. Non-Network Programs. TELEFUTURA shall retain the right, within its sole discretion, to produce and/or to distribute, by means other than the Network, Non-Network Programming of every nature and kind. TELEFUTURA may, but is not required to, offer such Non-Network Programming to AFFILIATE. In the event that TELEFUTURA chooses to offer such Non-Network Programming to AFFILIATE, it shall do so by providing a Terms Sheet to AFFILIATE which shall specify the time period in which AFFILIATE may accept such Non-Network Programming on the terms proposed by TELEFUTURA. In the event of a timely acceptance by AFFILIATE, the compensation and carriage for such Non-Network Programming shall be on the terms as agreed between the parties, and the provisions of this Agreement shall not govern the distribution or broadcast of such Non-Network Programming. In the event that AFFILIATE does not accept TELEFUTURA’s offer or terms within the time period specified in the Terms Sheet, it shall be assumed that AFFILIATE has rejected the Non-Network

Programming, and TELEFUTURA shall be free, within its sole discretion, to offer the Non-Network Programming to any other station or medium on any terms whatsoever.

10. Unauthorized Preemptions. Without limiting any other rights of TELEFUTURA under this Agreement or otherwise, if within any twelve (12) month period during the term of this Agreement, any Station makes three (3) or more Unauthorized Preemptions of any Network Programming (or AFFILIATE or such Station states, either in general or specific terms, that such Station intends to make such Unauthorized Preemptions or TELEFUTURA reasonably concludes, based upon AFFILIATE’s or such Station’s actions or otherwise, that such Unauthorized Preemptions shall occur), TELEFUTURA may, upon thirty (30) days prior written notice to AFFILIATE:

(a) terminate such Station’s right to broadcast any one or more series or other Network Programming, as TELEFUTURA shall elect, and, to the extent and for the period(s) that TELEFUTURA elects, thereafter license the broadcast to the applicable series or other Network Programming to any other television station or stations, low power television station or stations, or cable television system or systems located in the community of license of such Station or elsewhere; or

(b) terminate this Agreement with respect to such Station without any obligation, monetary or otherwise, to AFFILIATE and/or its employees, agents, or customers, or to any other person or entity.

11. Delayed Telecasts. TELEFUTURA shall designate which Network Programming shall be carried live, and which Network Programming, if any, shall be broadcast on a delayed basis. AFFILIATE shall conform its broadcast to the schedule designated by TELEFUTURA, and shall not delay the telecast of any Program, nor change the order of the Network Programming schedule, without the express written consent of TELEFUTURA. AFFILIATE is hereby authorized to record Network Programming to the extent necessary to permit such delayed telecast, provided however, that AFFILIATE shall erase, destroy, or return to TELEFUTURA at AFFILIATE’s expense such recording within seventy-two (72) hours of the broadcast of the recorded material.

12. Force Majeure. TELEFUTURA shall not be liable to AFFILIATE nor shall it incur any liability hereunder for failure to deliver Network Programming or any part thereof, nor shall AFFILIATE be liable to TELEFUTURA nor shall it incur any liability hereunder for failure to broadcast any Network Programming or any part thereof, by reason of a Force Majeure Event.

13. Written Reports. AFFILIATE shall promptly upon TELEFUTURA’s request submit to TELEFUTURA in writing, upon forms approved by TELEFUTURA, such reports as TELEFUTURA may request regarding the broadcast by AFFILIATE’s Stations of Network Programming and commercial announcements.

14. Performing Rights Licenses. All Network Programming shall, to the extent possible, be (a) cleared at the source, (b) within the repertoire of ASCAP, BMI, SESAC, or another performing rights society from which TELEFUTURA has obtained a performance license at its own cost, or (c) in the public domain.

15. Indemnification.

(a) TELEFUTURA shall indemnify, defend and hold AFFILIATE, its affiliates, successors and assigns, and the respective owners, officers, directors, agents, and employees of each, harmless against and from all direct claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) asserted by third parties alleging that the Network Programming violates or infringes upon the trade name, trademark, copyright, literary or dramatic right, or right of privacy or publicity of any party, or constitute a libel or slander of any party; provided, however, that the foregoing indemnification shall not apply: (i) to public performance rights in music, (ii) to any material furnished or added by any party other than TELEFUTURA after delivery of the Network Programming to AFFILIATE or the Stations, (iii) to the extent such Network Programming is changed or otherwise affected by insertion or deletion of any material by any party other than TELEFUTURA after delivery of the Network Programming to the Stations, (iv) to compliance with the Communications Act of 1934 or to any rules or regulations adopted thereunder by the FCC or any successor agency, or (v) unless AFFILIATE promptly notifies TELEFUTURA of any claim or litigation to which this indemnity shall apply, and that AFFILIATE cooperates fully with TELEFUTURA in the defense or settlement of such claim or litigation. The foregoing indemnity shall not apply to any claim by AFFILIATE or the Station for lost revenue, lost profits or other consequential damages, if any, regardless of whether such alleged damages are or were foreseeable. TELEFUTURA makes no representations, warranties or indemnities, express or implied, except as expressly set forth in this Section 15(a).

(b) AFFILIATE shall indemnify, defend and hold TELEFUTURA, its affiliates, successors and assigns, and the respective owners, officers, directors, agents, and employees of each, harmless against and from all direct claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) caused by or arising out of matters relating (i) to public performance rights in music, (ii) to any material furnished or added by any party other than TELEFUTURA after delivery of the Network Programming to AFFILIATE or the Stations, (iii) to the extent such Network Programming is changed or otherwise affected by insertion or deletion of any material by any party other than TELEFUTURA after delivery of the Network Programming to the Stations, (iv) any breach of any of AFFILIATE’s representations, warranties, covenants or agreements hereunder, (v) any programming broadcast by Stations other than Network Programming provided by TELEFUTURA to AFFILIATE and the Stations pursuant to the terms of this Agreement, (vi) from any actions or claims by customers, agents, or employees of AFFILIATE pursuant to a termination of this Agreement pursuant to Section 16 hereof or otherwise, or (vii) any other action on the part of AFFILIATE and/or Station; provided, however, that the foregoing indemnification shall not apply unless TELEFUTURA promptly notifies AFFILIATE in writing of any claim or litigation to which this indemnity shall apply, and TELEFUTURA cooperates fully with AFFILIATE in the defense or settlement of such claim or

litigation. The foregoing indemnity shall not apply to any claim by TELEFUTURA for lost revenue, lost profits or other consequential damages, if any, regardless of whether such alleged damages are or were foreseeable.

16. Termination. This Agreement shall terminate under the following conditions:

(a) The term of this Agreement shall expire without extension pursuant to Section 3 hereof;

(b) Upon the occurrence of any of the following events:

(i) Upon not less than thirty (30) days’ written notice to AFFILIATE in the event of a material breach by AFFILIATE by any of its material covenants, representations, warranties, duties, or obligations pursuant to this Agreement, including failure to pay all amounts due under this Agreement, or any other material term or condition hereof, which AFFILIATE has not cured within ten (10) days of written notice of default from TELEFUTURA; or such longer period if AFFILIATE has commenced such cure within said 10 days and thereafter continues to diligently pursue such cure to the reasonable satisfaction of TELEFUTURA.

(ii) Pursuant to Section 10(b) hereof;

(iii) Immediately upon written notice to AFFILIATE in the event (a) AFFILIATE files a petition seeking relief under Title 7 or 11 of the United States Code or under any other Federal or state bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer or consent admitting the material allegations of a petition filed against in any proceeding under any such law, or (b) of entry against AFFILIATE of any order of relief under Title 7 or 11 of the United States Code, or entry of any other order, judgment or decree against AFFILIATE by any court of competent jurisdiction, approving a petition seeking bankruptcy, reorganization, readjustment of debt, dissolution, liquidation, or winding up of AFFILIATE, or (c) of appointment of a receiver, trustee or liquidator of AFFILIATE or of all or substantially all of the assets of AFFILIATE or, (d) if any petition seeking an order of relief under Title 7 or 11 of the States Code or any other such petition is filed against AFFILIATE and is not stayed or dismissed within one hundred twenty (120) days after the date of such filing, or (e) AFFILIATE makes a general assignment of its assets, or transfers a controlling interest, to creditors or other persons or entities;

(iv) Pursuant to Section 18 hereof;

(v) With respect to a Station, upon not less than six (6) months written notice to AFFILIATE in the event TELEFUTURA, in its sole and voluntary discretion, chooses to cease to operate the Network, or to cease to provide Network Programming to television stations licensed to the community to which a Station is licensed, provided, however, that in the event TELEFUTURA is required to cease to operate the Network or to cease to provide Network Programming to television stations licensed to the community to which a Station is licensed due

to circumstances reasonably beyond its control, including, but not limited to, Force Majeure Events and court or government orders or decrees, and the circumstances preclude, or effectively preclude, TELEFUTURA from giving six (6) months notice of termination, TELEFUTURA shall give AFFILIATE as much notice as is reasonably possible under the circumstances;

(vi) With respect to a Station, upon not less than thirty (30) days written notice to AFFILIATE in the event that a Station becomes substantially less valuable to TELEFUTURA as an affiliate than it is at the time of execution of this Agreement as a result of a materially adverse change affecting the transmitter location, power, frequency, or hours or mode of operation of the Station, or a materially adverse change in the business practices or public reputation or image of the Station, AFFILIATE, or their owners and/or management;

(vii) Pursuant to Section 21 hereof;

(viii) Pursuant to Section 22 hereof;

(ix) Pursuant to Section 25(a)(v) hereof;

(x) Pursuant to Section 29 hereof;

(xi) With respect to a Station that is a low power television station, upon not less than thirty (30) days’ written notice by TELEFUTURA to AFFILIATE in the event TELEFUTURA acquires a full power television station in the DMA to which that Station is licensed (an “Acquired Station”); provided that in such event (a) the 2004 Marketing and Sales Agreement between AFFILIATE and certain affiliates of TELEFUTURA shall be amended to include the Acquired Station pursuant to the terms and conditions of the 2004 Marketing and Sales Agreement, and (b) TELEFUTURA shall program the Acquired Station as an affiliate of the Network; or

(xii) At the option of AFFILIATE, in its sole discretion upon thirty (30) days written notice to TELEFUTURA in the event of a material breach by TELEFUTURA in any of its covenants, representations, warranties, duties, or obligations pursuant to this Agreement, or any other term or condition hereof, which TELEFUTURA has not cured within ten (10) days of written notice of default from AFFILIATE.

17. Exclusive Representation. AFFILIATE and TELEFUTURA agree that TELEFUTURA (or an entity controlled by Univision Communications Inc.) shall be the exclusive representative of AFFILIATE for the sale of all national and regional advertising throughout the United States and the world. AFFILIATE agrees to refer requests by any potential national or regional advertisers to TELEFUTURA, which shall be responsible for servicing such accounts. In any event, all revenues received from national or regional advertising accounts, whether or not serviced by TELEFUTURA, shall be included in Net National Sales for the purpose of computing the commission due TELEFUTURA as national and regional sales representative pursuant to Section 8(a) hereof. TELEFUTURA, in its role of exclusive national

sales representative for AFFILIATE, shall have no obligation to market, sell, or administer the sale of any commercial announcement, infomercial, program, or other product which would conflict with any Network Programming or commercial announcement scheduled by TELEFUTURA for broadcast over the Stations.

18. Assignment.

(a) This Agreement shall not be assigned, in whole or in part, by AFFILIATE, directly or indirectly (by operation of law, transfer of stock, merger or otherwise) without the prior written consent of TELEFUTURA. The decision to grant or not grant such consent shall be at the sole discretion of TELEFUTURA. Any purported assignment by AFFILIATE in the absence of TELEFUTURA’s prior written consent shall be null and void and not enforceable against TELEFUTURA. In the event of an attempted unconsented assignment or transfer, TELEFUTURA may, in its sole discretion, terminate this Agreement effective upon thirty (30) days notice to AFFILIATE and the purported assignee. Any assignment or transfer consented to by TELEFUTURA shall not relieve AFFILIATE of its obligations hereunder.

(b) AFFILIATE shall immediately notify TELEFUTURA in writing of any application tendered to the FCC pertaining to an assignment of AFFILIATE’s license for any Station or a transfer of control of AFFILIATE. Except as to “short form” assignments of license or transfers of control made pursuant to Section 73.3540(f) of the Rules and Regulations of the FCC, TELEFUTURA shall have the right to terminate this Agreement or to remove a Station being assigned or transferred from Schedule B, effective upon thirty (30) days notice to AFFILIATE and the transferee or assignee of such termination, which notice may be given at any time within ninety (90) days after the later occurring of: (i) the date on which TELEFUTURA learns of such assignment or transfer, or (ii) the date on which TELEFUTURA receives written notice of such assignment or transfer. Upon TELEFUTURA’s request, AFFILIATE shall procure and deliver to TELEFUTURA, in form satisfactory to TELEFUTURA, the agreement of the proposed assignee or transferee that, upon consummation of the assignment or transfer of control of the Station’s authorization, the assignee or transferee will assume and perform this Agreement in its entirety without limitation of any kind. In the event AFFILIATE fails to notify TELEFUTURA of the proposed assignment or transfer of control of Station’s authorization TELEFUTURA may, in its sole discretion and without limitation to any other remedies available to it, terminate this Agreement by giving notice of such termination, which termination shall be effective on the date specified in said notice of termination, or to remove any or all Stations subject to such an assignment or transfer of control from Schedule B hereto. The failure of AFFILIATE to procure the agreement of the proposed assignee or transferee in accordance with this Section shall be deemed a material breach of this Agreement, and in such event TELEFUTURA shall have the right to seek and obtain specific performance of such obligations pursuant to Section 27 of this Agreement.

(c) Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. AFFILIATE confirms that TELEFUTURA has no obligation, whether express or implied, to consent to the assignment of

AFFILIATE’s rights, duties, benefits or obligations pursuant to this Agreement to any other person or entity, and that the grant of such consent shall be within the sole discretion of TELEFUTURA. AFFILIATE further confirms that TELEFUTURA shall have no obligation, whether express or implied, to continue the affiliation of a Station with TELEFUTURA or the Network, whether or not on terms or conditions equivalent to those set forth in this Agreement, in the event of an assignment of a Station’s license or a transfer of control of AFFILIATE.

(d) AFFILIATE represents, warrants, covenants and agrees that it shall not enter into a time brokerage agreement, local management agreement (commonly known as an LMA), joint sales agreement or any other agreement or understanding of any nature whatsoever pursuant to which it sells, transfers, assigns, leases or otherwise conveys to any third party (other than TELEFUTURA) the right to use all or any material portion of its program time or advertising time or availabilities without the prior written consent of TELEFUTURA.

19. Affirmative TELEFUTURA Rights. Nothing in this Agreement shall preclude TELEFUTURA from taking any action not specifically prohibited herein, including, but not limited to:

(a) Establishing additional interconnected networks, including but not limited to, television or audio broadcasting networks and cable programming networks.

(b) Affiliating the Network with any international network on the terms and conditions determined solely by TELEFUTURA.

(c) Transferring any Programs from the Network to any other networks, whether established by TELEFUTURA or any other entity.

d) Repurposing any Programs, sharing them with, or authorizing their transmission in whole or in any part at any time on or by, any other cable, satellite, broadcasting or other program service or station, whether or not commonly owned or affiliated with TELEFUTURA, including but not limited to Univision or Galavision, or using such Programs or program material for any other purpose whatsoever.

20. Audit Rights. TELEFUTURA shall have the right to perform periodic audits of AFFILIATE and the Stations to insure compliance with the provisions of this Agreement. AFFILIATE shall provide TELEFUTURA with reasonable access to the pertinent books and records of AFFILIATE and the Stations so that TELEFUTURA’s auditors may verify the accuracy and validity of the time Sales reported to TELEFUTURA by AFFILIATE as well as all other aspects of compliance with the provisions of this Agreement, including, but not limited to, Sections 5,6,7,8,10,11,14,17,18, and 25 hereof. The cost of any such audit shall be borne by TELEFUTURA; provided, however, that in the event such an audit reveals AFFILIATE to be in material breach of, or in default under, this Agreement, that AFFILIATE has failed to pay TELEFUTURA all amounts due to TELEFUTURA pursuant to Section 8(a) hereof, or that a

Station has made more than three Unauthorized Preemptions of Network Programming during the preceding twelve (12) month period, the costs of said audit shall be borne by AFFILIATE.

21. Facilities.

(a) AFFILIATE represents and warrants to TELEFUTURA that Schedule B sets forth the facilities authorized for, and utilized by, the Stations, and that AFFILIATE has attached to Schedule B contour maps for Stations, prepared in compliance with standards of good engineering practice, pursuant to National Bureau of Standards Tech Note 101 (commonly known as Longley-Rice) propagation methodology, and in a form reasonably acceptable to TELEFUTURA, which depicts the City Grade, Grade A and Grade B contours (each as defined by the FCC) of Stations, and includes data as to the areas and populations within each such contour and Hispanic household information. AFFILIATE represents and warrants that Schedule B is accurate in all material respects as of 3-17-04. In the event that the transmitter location, antenna height above average terrain, effective radiated power, or frequency or hours of operation on any individual Station as set forth on Schedule B are changed at any time so as to (i) materially reduce the number of Hispanic Households within the Station’s Grade B contour or (ii) materially reduce the number of hours of Spanish language programming, TELEFUTURA, in its sole discretion, shall have the right to terminate this Agreement with respect to such Station upon 30 days advance written notice. The above operating hours provision shall not apply to the extent that the reduction in AFFILIATE’s hours of operation is in response to a reduction in programming provided to AFFILIATE by TELEFUTURA.

(b) TELEFUTURA may, from time to time at its sole discretion, establish minimum standards governing matters that, in TELEFUTURA’s sole judgment, require standardization and uniformity among affiliates of the Network, including but not limited to (i) specifications and layout (including form, color, number, location and size) of signage, billboards, and print and other advertising relating to TELEFUTURA or any Program or Programming; (ii) the design, color, appearance and maintenance of exterior and public portions of studios and other facilities utilized by the Station; and (iii) technical standards relating to commercial announcements, public service announcements, and Local Programming of the Station.

(c) AFFILIATE represents and warrants to TELEFUTURA that Schedule C sets forth the Nielsen Focus report which is a list of all cable systems on which Stations are carried as of 3-17-04, which list is true and accurate in all material respects. In consultation with TELEFUTURA, AFFILIATE will make all commercially reasonable efforts to obtain carriage on cable and DBS for Stations, provided, however, that AFFILIATE shall not be required to incur any out-of-pocket expenses in connection therewith.

(d) AFFILIATE represents and warrants to TELEFUTURA that Schedule D sets forth copies of all executed retransmission consent agreements between AFFILIATE and all cable and DBS systems on which Stations are carried as of 3-17-04.

22. Retransmission Consent. Should AFFILIATE be accorded the right under any local, state or federal rule, regulation or law to elect (a) to require any cable television system, open video system, direct broadcast or other satellite, or other single or multi-channel video distribution service or system of any form or nature to obtain AFFILIATE’s consent to such system’s transmission or retransmission of the Stations’ broadcast of any Network Programming, or is given any similar rights (a “Retransmission Consent Election”) or (b) to require any such system to comply with any “must carry” rule, regulations or laws (a “Must Carry Election”), then AFFILIATE shall notify TELEFUTURA at least sixty (60) days in advance of any such election by AFFILIATE and TELEFUTURA shall negotiate in good faith, for a period of no less than sixty (60) days, regarding (x) whether AFFILIATE shall make a Retransmission Consent Election or a Must Carry Election and (y) in the event that AFFILIATE determines to make a Retransmission Consent Election, to which systems such consent is to be given, and if so, the terms under which it is to be given (including without limitation, the amount of compensation to be paid by any such system for such consent and the division of that compensation between AFFILIATE and TELEFUTURA). If AFFILIATE and TELEFUTURA do not reach agreement with respect to all of the foregoing matters for any individual Station, then without limitation to any of TELEFUTURA’s rights under this Agreement, TELEFUTURA shall have the right to terminate this Agreement with respect to such Station upon thirty (30) days written notice to AFFILIATE. Without limiting the generality of the foregoing, AFFILIATE acknowledges and agrees that in no event shall AFFILIATE transmit, grant retransmission consent or otherwise permit any transmission or retransmission of a Station’s broadcast of any Network Programming by a cable television system, open video system, direct broadcast or other satellite or other single or multi-channel video distribution service or system of any form or nature without the prior written consent of TELEFUTURA.

25. Broadcaster’s Liability Insurance.

(a) AFFILIATE shall procure and maintain in force during the term hereof broadcaster’s liability insurance for the Stations, including broad form errors and omissions coverage, with minimum limits of liability in the aggregate of $5,000,000.00 or more for each occurrence.

(i) Said coverage shall be on an occurrence form, primary and not contributing, with respect to:

a. any material furnished or added by any party other than TELEFUTURA after delivery of Network Programming to AFFILIATE or the Stations;

b. to the extent any such Network Programming is changed, altered or otherwise affected by insertion or deletion of any material by any party other than TELEFUTURA; and

c. any programming broadcast by the Stations other than Network Programming provided by TELEFUTURA to the Station.

(ii) Prior to use of Network Programming, AFFILIATE shall cause its broadcaster’s liability insurance carrier(s) to add “Telefutura, Telefutura Television Group, their parent companies, affiliates, officers, directors, employees, successors and assignees” as additional insured parties. All such policies shall be issued by companies of recognized responsibility, having a Bests Key Rating Guide of not less than A, Class VII, licensed to do business in the state where each Station is located.

(iii) An original certificate of insurance naming TELEFUTURA, Telefutura Television Group, their parent companies, affiliates, officers, directors, employees, successors and assignees as additional insured parties shall be delivered to TELEFUTURA by AFFILIATE within ten (10) days of the execution of this Agreement. Each such must be signed by an authorized agent of the insurance company issuing such coverage, and shall provide that thirty (30) days notice of cancellation shall be given to TELEFUTURA prior to termination, cancellation, or non-renewal thereof. No action or inaction by TELEFUTURA, including, without limitation, failure to demand such documentation or continued provision of programming in the absence of such policy, certificate, and/or endorsement(s), shall be construed as a waiver by TELEFUTURA of AFFILIATE’s obligation to provide the insurance coverage specified herein.

(iv) The foregoing insurance requirements shall not be deemed a limitation of AFFILIATE’s liability, if any, under this Agreement.

(v) In the event AFFILIATE or the Stations fail to comply with the provisions of this Section 25(a), TELEFUTURA may, in its sole discretion, terminate this Agreement upon thirty (30) days written notice to AFFILIATE.

26. Governing Law; Specific Performance. This Agreement and the rights and obligations of the parties, including without limitation the validity, construction, interpretation, performance and termination of this Agreement, shall be governed by and construed by the laws of the State of New York applicable to contracts between New York parties made and performed in that state, without regard to conflicts of law principles. AFFILIATE recognizes that each Station and its facilities is unique in nature and access to each Station for transmission of the Network Programming would be difficult or impossible to replicate, and therefore, that money damages would be insufficient to provide an adequate remedy to TELEFUTURA in the event of a default hereof by AFFILIATE. AFFILIATE acknowledges and agrees that a default hereunder by AFFILIATE will cause substantial and irreparable injury to TELEFUTURA, and that any remedy at law would be inadequate. AFFILIATE agrees if it should fail to perform any of its material duties or obligations hereunder, TELEFUTURA’s right to specific performance is essential to protect its rights and interests hereunder. Therefore, in addition to any other remedies which either party may have hereunder, at law, in equity or otherwise, TELEFUTURA shall, to the fullest extent permissible under law, have the right to have all obligations, undertakings, agreements and other provisions of this Agreement, including but not limited to the obligation of AFFILIATE to procure the agreement of any proposed assignee or transferee of AFFILIATE or the Stations to assume and perform this Agreement in its entirety without limitation of any kind in accordance with Section 18(b) hereof, specifically performed and shall have the right to obtain an order or decree for such specific performance in any of the courts of the United States or any state or other political subdivision thereof without being required to prove actual damages, post bond or furnish any other security, any requirement for which is hereby expressly waived.

Notices to AFFILIATE shall be sent to:

Entravision Communications Corporation

Attention: Walter F. Ulloa and Philip C. Wilkinson

2425 Olympic Boulevard

Suite 6000 West

Santa Monica, California 90404

with a copy, which shall not constitute notice, to:

Entravision Communications Corporation

Attention: Michael G. Rowles, Esq.

2425 Olympic Boulevard

Suite 6000 West

Santa Monica, California 90404

Notices to TELEFUTURA shall be sent to:

Director, Affiliate Relations

TELEFUTURA

9405 NW 41st Street

Miami, FL 33178

with a copy, which shall not constitute notice, to:

General Counsel

TELEFUTURA

5999 Center Drive

Los Angeles, CA 90045

28 Limitations of Damages. The parties to this Agreement expressly agree that in the event of termination or breach of this Agreement, neither party shall be liable to the other for any lost revenue, lost profits or other consequential damages allegedly resulting from such termination or breach, including, but not limited to, any expenditures, investments, leases or commitments made in anticipation of the continuance of this Agreement, regardless of whether such alleged lost revenue, lost profits or other consequential damages are foreseeable.

29. Confidentiality. In its capacity as an affiliate of TELEFUTURA pursuant to this Agreement, AFFILIATE may acquire or receive information relating to TELEFUTURA and its affiliates which is of a confidential and proprietary nature. Such information may include, but is not limited to, financial information, business and marketing plans, advertising rates and practices, viewer mailing lists, and plans related to programming and special promotional events. AFFILIATE shall at all times, both during and after the term of this Agreement, maintain in the strictest confidence and trust all of such confidential and proprietary information and shall not directly or indirectly disclose the same to any other person or entity, whether during the term of this Agreement or thereafter. AFFILIATE acknowledges that a breach of this Section may subject TELEFUTURA to immediate and irreparable harm for which damages may not be an adequate remedy and, accordingly, AFFILIATE acknowledges and agrees that TELEFUTURA may enforce the provisions hereof by means of injunctive or other equitable relief. Any breach of this Section shall constitute a material breach of this Agreement and shall entitle TELEFUTURA to immediately terminate this Agreement. The provisions of this Section shall survive the expiration and termination of this Agreement.

30. No Joint Venture or Partnership. Nothing contained in this Agreement shall create any partnership, association, joint venture, fiduciary or agency relationship between TELEFUTURA and AFFILIATE. Except as otherwise specifically set forth herein, neither TELEFUTURA or AFFILIATE shall be authorized or empowered to make any representation or commitment or to perform any act which shall be binding on the other unless expressly authorized or empowered in writing.

32. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each such counterpart were upon the same instrument.


TELEFUTURA

Signature:		/s/ C. DOUGLAS KRANWINKLe

Name:		C. Douglas Kranwinkle
Title:		EVP
Date:		3-17-04

AGREED AND ACCEPTED:

ENTRAVISION COMMUNICATIONS CORPORATION



Signature:		/s/ WALTER F. ULLOA

Name:		Walter F. Ulloa
Title:		Chairman and CEO
Date:		March 16, 2004

SCHEDULE A

LOCAL INSERTIONS


Infomercials or other local programming		M-F 5:00 a.m. to 6:00 a.m.

Public Affairs Programming		Sat and Sun 6:30 to 7:00 a.m
(No infomercials)

SCHEDULE B

[This Schedule B, which contains a list of facilities for those stations that are subject to the Network Affiliation Agreement and certain technical data about such facilities (including channel number, frequency, latitudinal and longitudinal location of transmitters, tower statistics in meters and feet, power levels and contour maps) has been excluded from this filing.]

SCHEDULE C

[This Schedule C, which contains the Nielsen Focus report which is a list of all cable systems on which Stations are carried as of 3-17-04, has been excluded from this filing.]

SCHEDULE D

[This Schedule D, which contains copies of all executed retransmission consent agreements between AFFILIATE and all cable and DBS systems on which Stations are carried as of 3-17-04, has been excluded from this filing.]

EX-31.1 4 dex311.htm SECTION 302 CERTIFICATION OF CEO Section 302 Certification of CEO

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, Walter F. Ulloa, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004

/s/ WALTER F. ULLOA

Walter F. Ulloa

Chief Executive Officer

EX-31.2 5 dex312.htm SECTION 302 CERTIFICATION OF CFO Section 302 Certification of CFO

EXHIBIT 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I, John F. DeLorenzo, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Entravision Communications Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004

/s/ JOHN F. DELORENZO

John F. DeLorenzo

Chief Financial Officer

EX-32 6 dex32.htm SECTION 906 CERTIFICATION OF CEO AND CFO Section 906 Certification of CEO and CFO

EXHIBIT 32

Certification of Periodic Financial Report by the Chief Executive Officer and

Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Entravision Communications Corporation (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2004 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: May 10, 2004				/s/ WALTER F. ULLOA
				Walter F. Ulloa Chief Executive Officer



Date: May 10, 2004				/s/ JOHN F. DELORENZO
				John F. DeLorenzo Chief Financial Officer

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